Final Results

Octopus AIM VCT plc

Final Results

Octopus AIM VCT plc today announces the final results for the year ended 29 February 2024.

Octopus AIM VCT plc (the ‘Company’) is a venture capital trust (VCT) which aims to provide shareholders with attractive tax-free dividends and long-term capital growth by investing in a diverse portfolio of predominantly AIM-traded companies. The Company is managed by Octopus Investments Limited (‘Octopus’ or the ‘Investment Manager’).

Financial summary

	Year to 29 February 2024	Year to 28 February 2023
Net assets (£’000)	129,109	141,222
(Loss) after tax (£’000)	(17,734)	(33,414)
Net asset value (NAV) per share (p)	63.3	78.5
Dividends per share paid in year (p)	5.0	5.5
Total return (%)1	(13.0)	(19.8)
Special dividend proposed (p)2	4.9	-
Final dividend proposed (p)2	2.5	2.5
Ongoing charges (%)3	2.1	2.1

¹ Total return is an alternative performance measure calculated as movement in NAV per share in the period plus dividends paid in the period, divided by the NAV per share at the beginning of the period.
²The proposed final dividend and proposed special dividend will be paid on 15 August 2024 to shareholders on the register on 26 July 2024.
³Ongoing charges is an alternative performance measure calculated using the AIC recommended methodology.

Chair’s statement

Introduction
Firstly, I would like to welcome all new shareholders who have joined us in the past year.

The year to 29 February 2024 was another extremely challenging period for investors in smaller companies. Appetite for risk was affected by persistent Inflation which resulted in interest rates rising further and remaining at their peak for longer than had originally been expected, prolonging the pain for the share prices of companies exposed to growth sectors. Against this background the Alternative Investment Market (AIM) index was once again the worst performing UK index and the NAV gave up further ground and finished the year 13.0% down on a total return basis.

The AIM market raised £1.7 billion for new and existing companies in the year under review, a decrease on the £2.1 billion raised in the previous year. It was the second year that the majority of fundraisings in the year under review were for existing AIM companies seeking further capital as new issues stood back in response to volatile market conditions. Your Investment Manager was, however, able to make some investments in existing AIM companies at attractive valuations, with a total of £7.7 million invested in qualifying companies in the period, up from the £4.9 million invested in the previous year. Although significant geo-political risks remain, market sentiment has improved more recently, with market commentators and economists taking a more optimistic stance on inflation and interest rates in 2024. The Investment Manager expects the pipeline of potential new issues to strengthen later this year, supplementing existing companies seeking further finance.

Performance
The NAV on 29 February 2024 was 63.3p per share, a significant decrease on the NAV of 78.5p per share reported at 28 February 2023. Adding back the 5p of dividends paid in the year gives a total negative return of 13.0%. In the same year, the FTSE AIM All-Share Index fell by 12.6%, the FTSE SmallCap (excluding investment companies) Index rose by 0.5% and the FTSE All-Share Index rose by 0.6%, all on a total return basis. AIM was the worst performing UK Index by some margin, highlighting the trend for investors to seek value in more traditional sectors which has now been the case for the past two years.

Once again stock specific factors had an impact on our performance, both positive and negative, and these are covered in more detail in the Investment Manager’s review. In addition, economic concerns played a significant part in the valuations of shares during the year. The year started as inflation levels were still increasing, which encouraged central banks to raise interest rates to a high point of 5.25% in August 2023. As it became apparent that inflationary pressures were proving more stubborn than had been hoped, expected interest rate cuts were firmly pushed into 2024. This meant that the low appetite for risk which had been apparent since the end of 2021 persisted, continuing to impact the share prices of both profitable growth companies as well as earlier stage companies exposed to the new economy.

Some companies in the portfolio found themselves having to raise new capital at a deep discount to previous valuation levels. The purpose of a VCT is to provide capital for small growing companies and as a result those companies exposed to the new economy in the software, technology and healthcare sectors make up a significant proportion of our investment portfolio. This worked against us in the year under review.

Dividends
In January 2024 an interim dividend for the year to 29 February 2024 of 2.5p was paid to all shareholders. This was in addition to the 2.5p final dividend that had been paid in August 2023 and which related to the previous financial year ended 28 February 2023. The Board has considered the level of dividend in the context of the NAV fall during the period and on this occasion is recommending a final dividend of 2.5p.

In addition, as a result of taking exceptional profits in a number of long-term holdings during the year, most notably the full disposal of Ergomed, the Board is proposing a special dividend of 4.9p which will be paid at the same time as the final dividend. Including the special dividend, the total dividend in respect of the year is 9.9p which is a 16.6% yield based on the share price of 59.5p on 29 February 2024.

It remains the Board’s target to pay an annual dividend of 5.0p or 5% of the year-end share price, whichever is greater at the time.

Board changes
Stephen Hazell-Smith, who has been a director of the Company since 1998, will be stepping down from the Board with effect from the Annual General Meeting on 18 July 2024. I would like to thank Stephen, on behalf of the Board and the shareholders, for his extensive contribution to the success of the Company since its inception. We wish him well for the future.

As announced on 5 June 2024, I am pleased to report that Louise Nash will be joining the Board as a director with effect from 1 July 2024. Louise will bring to the Board her extensive experience as a former fund manager specialising in UK small and mid-cap companies. In accordance with the Company’s Articles of Association, a resolution to elect Louise will be put to the Annual General Meeting on 18 July 2024.

Cancellation of share premium account
At the last Annual General Meeting, shareholders voted to cancel share premium to increase the pool of distributable reserves to the amount of £19.8 million. This is a regular occurrence, and common practice, to enable the continued payment of dividends and buyback of shares. A further resolution to cancel share premium is being proposed at this year’s Annual General Meeting.

Dividend reinvestment scheme
In common with many other VCTs in the industry, the Company has established a Dividend Reinvestment Scheme (DRIS). Many shareholders have already taken advantage of this opportunity. For investors who do not require income, but value the additional tax relief on their reinvested dividends, this is an attractive scheme and I hope more shareholders will find it useful. In the course of the year 2,781,086 new shares have been issued under this scheme, returning £1.8 million to the Company. The final dividend referred to above will be eligible for the DRIS.

Share buybacks
During the year to 29 February 2024 the Company continued to buy back shares in the market from selling shareholders and purchased 6,351,314 ordinary shares for a total consideration of £4.1 million. We have maintained a discount of approximately 4.5% to NAV (equating to up to a 5.0% discount to the selling shareholder after costs), which the Board monitors and intends to retain as a policy which fairly balances the interests of both remaining and selling shareholders. Buybacks remain an essential practice for VCTs, as providing a means of selling is an important part of the initial investment decision and has enabled the Company to grow. As such, I hope you will all support the appropriate resolution at the AGM.

Share issues
On 14 September 2023, a prospectus offer was launched alongside Octopus AIM VCT 2 plc to raise a combined total of up to £20 million, with a £10 million over-allotment facility. The offer closed fully subscribed on 21 December 2023. The Company issued 27,555,671 shares under the offer, raising £17.4 million after costs, net of the DRIS.

VCT status
Shoosmiths LLP were engaged throughout the year to provide the Board and Investment Manager with advice concerning continuing compliance with HMRC regulations for 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 to maintain at least an 80% qualifying investment level. As at 29 February 2024, 86.0% of the Company’s portfolio was in VCT qualifying investments.

Last year I reported to you that the Government had yet to renew the ‘sunset clause’ which provides that income tax relief for new VCT subscriptions will cease on 5 April 2025. I am pleased to report that the Government announced in last November’s Autumn Statement that the sunset clause will be renewed until 2035. Under EU State Aid regulations, this renewal does require EU approval which, at the time of writing, is still awaited.

Annual General Meeting (AGM)  
The AGM will take place on 18 July 2024 at 10.30am. The Investment Manager will also give a live presentation to shareholders on the day of the AGM. This will enable shareholders to receive an update from the Investment Manager and provide an opportunity for questions to the Board and the Investment Manager. Formal notices will be sent to shareholders by their preferred method (email or post) and shareholders are encouraged to submit their votes by proxy. We always welcome questions from our shareholders at the AGM. Please send any questions via email to AimAGM@octopusinvestments.com by 5.00pm on 12 July 2024.

Outlook
Although significant geo-political and economic risks remain, recent strong positive stock market reactions to lower inflation figures have demonstrated how quickly share prices can turn when commentators begin to believe that interest rates will start to fall in response to a more encouraging macro-economic environment. Interest rate cuts are now expected later this year, particularly in light of the recent announcement by the UK Prime Minister calling for an earlier than predicted General Election in the Summer.

Company results have been robust in the first results season of the year and forecasts appear to be conservatively set at this stage. Valuations have not yet recovered from last year’s falls, leaving many of the larger and faster growing shares in the portfolio on ratings still well below their long-term averages, a fact that has been reinforced by the appearance of significant takeover bid activity in the past few months. The Investment Manager’s assessment is that the underlying businesses of these companies remain generally robust, giving good prospects for uplifts in valuations as overall market sentiment improves.

The portfolio contains 88 holdings across a range of sectors with exposure to some exciting new technologies in the environmental and healthcare sectors in particular. Many of these companies remain well funded, although the challenge of raising further capital in the current market environment cannot be dismissed. The balance of the portfolio towards profitable companies remains, and the Investment Manager remains confident that there will continue to be sufficient opportunities to invest our funds in good companies seeking more growth capital at attractive valuations.

Neal Ransome
Chair

Investment Manager’s review

Introduction
Amidst a backdrop of continued geopolitical conflict in Europe and the Middle East, fluctuating inflation indicators, rising interest rates and a subsequent squeeze in consumer incomes, capital UK market performance remained lacklustre, and sentiment struggled to regain a positive stance in the period under review. Investors continued to be more risk averse, seeking refuge in larger listed companies in safer sectors as they grappled with the market uncertainty throughout the year. Consequently, lower appetite for risk had a negative impact on the share price performance of earlier stage investments within the portfolio, leading to de-ratings and a further retreat of AIM growth stocks throughout 2023.

However, the tide of market sentiment began to turn at the start of 2024 as global macroeconomic data showed more consistent signs of recovery. The direction of stock market movements remains closely linked to inflation figures and expectations of interest rate cuts; with UK inflation data confirming its continued downward trend, economic analysts are confident that rate cuts will follow suit and we will likely see the first fall in the third quarter of 2024. Consensus on the quantum of the rate cuts is between 0.25% to 0.5% in this calendar year. This will be dependent on the steady decline of inflation as wage growth continues to slow down and food prices remain stable. Interest rate cuts will provide much needed and long-awaited support for equity markets.

Despite the less favourable background for smaller growth companies over the period under review, AIM raised further capital for existing listed companies and the AIM Initial Public Offering (IPO) market started to gain pace at the beginning of 2024 and has continued post the period end in line with improving market confidence. Furthermore, with many UK small companies trading below their long-term valuation range, there has been a notable uptick in corporate activity over the last year. This highlights the size of the stored value within UK smaller companies, and the opportunity for potential revaluation when stock markets recover.

The Alternative Investment Market
Despite the occasional glimmers of optimism, the last couple of years have tested investors’ resilience. Global markets have remained fragile, and in the face of persistent global challenges (both macroeconomic and geopolitical), investor appetite for risk has stayed subdued. In addition to global headwinds, the spectre of a looming recession and rising interest rates cast a shadow over the UK market, and smaller company indices bore the brunt of equity market de-rating. Over the year to 29 February 2024, the AIM index declined by 12.6% compared to a FTSE SmallCap index (excluding investment companies) rise of 0.5% and a FTSE All-Share increase of 0.6% on a total return basis. The performance of AIM was impacted by its high exposure to growth companies in the technology and healthcare sectors, highlighting the movement away from growth and momentum driven shares. While VCTs face additional investment constraints, the AIM index remains the most relevant broad equity market index for comparative analysis, given the nature of the underlying investments. The FTSE SmallCap and FTSE All-Share indices provide wider context for understanding market dynamics.

In light of uncertain market conditions, the pace of initial public offerings (IPOs) and further fundraisings for existing listed businesses across all UK industries continued to be slow. There was a total of 17 IPOs on AIM over the period, compared to 13 the previous financial year. Additionally, AIM saw a number of exits fairly consistent with historic levels and now stands at 742 companies as at the end of February, down 8% on the previous year due to lower IPO activity. We still believe that equity markets (and VCTs in particular), continue to be a critical platform for funding smaller companies. This significance was underscored by the ongoing flow of further fundraisings on AIM throughout the year, albeit at a slower pace than the previous year. In the year to 29 February 2024, AIM raised £1.7 billion of capital for new and existing companies, compared to £2.1 billion in the previous year.

Performance
Adding back the 5p of dividends paid in the year, the NAV total return fell by 13.0%. This compares with a fall in the FTSE AIM All-Share Index of 12.6%, a rise in the FTSE SmallCap (excluding investment companies) of 0.5% and a rise in the FTSE All-Share Index of 0.6%, all on a total return basis.

The year to 29 February 2024 was marked by significant market volatility, driven by both global and local economic uncertainty. The prevailing themes were rising inflation and expectations of higher interest rates, which dampened consumer confidence. The reality of the consumer credit crunch impacted many in the UK, which was exacerbated by the realisation that the impending expiration of fixed mortgage rates would add further uncertainty. Although the fall in energy and food prices provided somewhat of a soft landing, the squeeze on consumer spending persisted as interest rate expectations continued to rise more steeply than anticipated. Between December 2021 and August 2023, the Bank of England increased interest rates a total of 14 times from a low of 0.1% to the year-end level of 5.25%. Against this background, performance in the FTSE AIM All-Share Index was affected by the momentum away from smaller growth companies and the move towards lower risk appetite drove the investment in traditional sectors and larger, well-established companies. This largely explains the fall in the NAV in the year under review. The portfolio’s relatively high exposure to small growth companies (particularly in the healthcare and technology sectors), was detrimental to performance in a market environment where risk averse investors have little appetite for earlier stage growth stocks. Predictably, volatile market dynamics lead to greater investor focus not just on product and service offering, but on healthy balance sheets and the ability to access financing.

Some of the larger, profitable holdings in the portfolio, including GB Group and Brooks MacDonald, were affected by the poor market sentiment towards AIM growth stocks generally.

SDI Group, which designs and manufactures specialist scientific products, was the largest detractor to performance over the period under review. The company had a couple of disappointing downgrades over the year due to the end of a contract with Atik cameras, which had been lucrative over the COVID period. However, we are encouraged by the recent change in the management team and the new CEO comes with a wealth of operational experience in the sector, which has started to feed through positively over the last few months.

Learning Technologies, a provider of e-learning services and technologies, was another big detractor to the performance of the portfolio as trading performance was affected by the challenging macro environment which impacted both transaction and project-based work. However, this has prompted a much needed refocus on profitability and technology redevelopment. Furthermore, the company recently embarked on a plan to accelerate its support of higher growth areas of the business that are more aligned with its core proposition of digital learning and talent management through the sale of non-core assets, which should enable it to fund future value-enhancing acquisitions.

Libertine Holdings, which develops linear generator technologies for use in industry, had a very challenging year, despite which the company continues to support the integration of its HEXAGEN™ technology platform with Hyliion Holdings Corp. and develop its intelliGEN™ technology platform alongside a number of other commercial projects. However, the need for further capital to enable the development of its technology weighs down on the share price performance.

Sosandar, the women’s clothing retailer, announced its decision to open own-branded retail outlets in the UK and its move away from being a pure play retail online business came as a surprise to the market. Though the decision will likely increase the costs of the business in the short term, the instore retail offering allows the company to capitalise on the growth of its brand visibility and popularity in existing major UK retail stores (both instore and online) which include Sainbury’s Tu, NEXT and Marks & Spencer. The company’s products serve a fairly resilient market demographic, and its increasing popularity has opened up opportunities to expand internationally. Encouragingly, and despite slowing down its discount strategy, the company had a strong calendar year-end trading period and has returned to quarterly profitability.

Feedback, the specialist medical imaging technology company, has made considerable progress over the last year. The company announced that it had secured a series of contracts for a pilot programme with the Community Diagnostic Centres (CDCs) in the UK and has now received an extension to the pilot contract with Queen Victoria Hospital (QVH). The pilots will build on the pilot contract for Sussex ICS with QVH and are also expected to enable direct GP access into CDC diagnostic services, further streamlining the patient pathway. Furthermore, the company continues to focus on the development of its Bleepa product, and its commercial release should underpin its sales prospects going forward. Despite the trading progress, concerns regarding well publicised issues with the NHS and muted investor interest in the healthcare sector, has impacted the share price negatively.

On the positive side, we have seen many companies in the portfolio report solid trading performances over the period which have been reflected in their share prices and contribute positively to the portfolio performance. This included construction materials group Breedon, who continued to benefit from its dynamic pricing strategy and focus on operational excellence throughout the year, putting them in a strong position despite macro-economic and industry headwinds. As a result, the company had a series of revenue and profit upgrades during the year.

Craneware, a provider of data systems to US healthcare providers, recently posted interim results which highlighted a return to positive trading and new momentum against a backdrop of improving market conditions across its market. The company reported significant increases in sales to both existing and new customers, with customer retention at an all-time high. The management team remains committed to growth and is confident in the short-term and longer-term trading outlook. Craneware is positioned as a leader in Value Cycle Solutions for the US healthcare market and remains well placed to benefit from positive market dynamics as the industry recovers. We believe that the size of the market opportunity is significant, and the company continues to invest in R&D and innovation to capitalise on this opportunity.

Ergomed, a pharmaceutical services company, performed strongly during the first half of the year, recording strong revenue and profit growth. Later in the year the company was approached by Permira, a private equity firm, and the bid was duly accepted, and hence we sold our shares for £9.8 million proceeds, recognising a profit on disposal of £8.6 million.

In our private company holdings both Popsa and Hasgrove had their valuations increased over the year; Popsa was valued upwards during the period due to good trading performance over the year and Hasgrove has a growing recurring revenue base and a strong balance sheet. This, coupled with general market weakness that impacted quoted company share price performance, resulted in an increased proportion of unquoted investments in the portfolio.

Portfolio activity
Having made one qualifying investment at a total cost of £0.5 million in the first half of the year, we added one further qualifying investment of £1.6 million as well as five follow-on investments totalling £3.7 million in the second half of the year. This made a total investment of £5.8 million in qualifying investments for the year, an increase on last year’s £4.9 million. Post the year end, we have invested a further £0.2 million into one qualifying investment.

We invested in two new qualifying issues in the year, Tan Delta Systems plc and Eden Research plc. In the second half of the year we made follow-on investments into Haydale Graphene Industries plc, Rosslyn Data Technologies plc, GENinCode plc, Equipmake Holdings plc and Verici Dx plc. In August 2023, we made a £0.5 million investment in Tan Delta Systems plc, a global manufacturer of real-time oil quality monitoring sensors and systems and a new entrant to AIM. In September 2023, we invested approximately £1.6 million in Eden Research plc, a company that develops and supplies biopesticide products and natural microencapsulation technologies.

During the year we took profits from rising share prices, selling part of our holdings in nine companies. We also fully disposed of eight holdings, Adept Telecom plc, Ergomed plc, Osirium Technologies plc, Itsarm plc, Clean Power Hydrogen plc, Velocys plc, Polarean Imaging plc and Glantus Holdings plc. Disposals made a £3.5 million gain over original cost and generated £14.0 million of cash proceeds. Due to taking exceptional profits on some of these disposals, most notably the full disposal of Ergomed, the Board is proposing a special dividend of 4.9p which will be paid at the same time as the final dividend.

Non-qualifying investments are used to manage liquidity while awaiting new qualifying investment opportunities. Although we still hold some existing non-qualifying AIM holdings where we see the opportunity for further share price progress, we continued to reduce some of these holdings in the year under review. During the year we increased our holdings in the FP Octopus Micro Cap Fund, FP Octopus Multi Cap Income Fund and the FP Octopus Future Generation Fund, investing a total of £1.7 million over the period. We also disposed of part of our holding in FP Octopus UK Multi Cap Income Fund for £2.6 million.

Liquidity
The issue of liquidity within investment funds has remained a topic of discussion this year. Shareholders may be interested to know that at the year end 53.8% of the Company’s net assets were held in individual quoted shares, 7.6% were held in unquoted single company investments and 37.8% were held in cash or collective investment funds providing short-term liquidity. Shareholders should be aware that a proportion of the quoted holdings may have limited liquidity owing to the size of the investee company and the overall proportion held by the Company.

VCT regulations
There have been no further changes to the VCT regulations since the publication of the previous set of audited accounts, however the sunset clause was extended to 2035 in the Autumn statement. The key requirements are that 30% of funds raised should be invested in qualifying holdings within twelve months of the end of the accounting period in which the shares were issued, and the Company has to maintain a minimum of 80% of the portfolio (at cost) invested in qualifying holdings. We remain committed to maintaining a threshold of quality and to invest where we see the potential for returns from growth. Over time there has been a gradual change to the profile of the portfolio towards earlier-stage companies. However, we continue to hold the larger market capitalisation companies, in which we invested several years ago as qualifying companies, or which we bought in the market prior to the rule changes, where we see the potential for them to continue to grow.

In order to qualify, companies must:
• have fewer than 250 full-time equivalent employees;
• have less than £15 million of gross assets at the time of investment and no more than £16 million immediately post investment;
• be less than seven years old from the date of their first commercial sale (or ten years if a knowledge intensive company) if raising State Aided (i.e. VCT) funds for the first time;
• have raised no more than £5 million of State Aided funds in the previous 12 months and less than the lifetime limit of £12 million (or £10 million in 12 months and a £20 million lifetime limit if a knowledge intensive company); and
• produce a business plan to show that the funds are being raised for growth and development.

Outlook and future prospects
The portfolio contains 88 holdings with investments across a wide range of sectors. The balance of holdings in the portfolio is towards profitable companies and many are still trading in line or above market expectations. With many small companies trading below their long-term average, we still see good growth potential when the market recovers.

Macro-economic dynamics remain a key focus and the timing of interest rate cuts will be critical. Although the consensus among economists indicates that interest rates have peaked, a cut in interest rates sooner rather than later will likely be a strong catalyst for a much-needed market sentiment boost. However, the timing of the interest rate cut will likely be impacted by the Prime Minister’s recent decision to call a general election on 4 July, earlier than the expected Autumn date.

The Octopus Quoted Companies team

Viability statement

In accordance with provision 4.31 of the UK Corporate Governance Code 2018, the Directors have assessed the prospects of the Company over a longer period than the twelve months required by the ‘going concern’ provision. The Board conducted this review for a period of ?ve years, which was considered to be a reasonable time horizon given that the Company has raised funds under an o?er for subscription which closed to new applications on 21 December 2023 and, under VCT rules, subscribing investors are required to hold their investment for a ?ve-year period in order to bene?t from the associated tax reliefs. The Board regularly considers the Company’s strategy, including investor demand for the Company’s shares, and a ?ve-year period is considered to be a reasonable time horizon for this.

The Board carried out a robust assessment of the emerging and principal risks facing the Company and its current position. This includes the impact of the cost of living crisis, the unstable economic environment and any other risks which may adversely impact its business model, future performance, solvency or liquidity. Particular consideration was given to the Company’s reliance on, and close working relationship with, the Investment Manager. The principal risks faced by the Company and the procedures in place to monitor and mitigate them are set out below.

The Board has also considered the liquidity of the underlying investments and the Company’s cash flow projections considering the material in?ows and out?ows of the Company including investment activity, buybacks, dividends and fees and found these to be realistic and reasonable. The Company’s cash ?ow includes cash equivalents which are short-term, highly liquid investments.

Based on the above assessment the Board con?rms that it has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the ?ve-year period to 28 February 2029.

Risk and risk management
Principal risks, risk management and regulatory environment
In accordance with the Listing Rules under which the Company operates, the Board is required to comment on the potential risks and uncertainties which could have a material impact on the Company’s performance.

The Board carries out a review of the risk environment in which the Company operates. The main areas of risk identi?ed by the Board are as follows:

Risk	Mitigation
Investment performance: The focus of the Company’s investments is into VCT qualifying companies quoted on AIM and the AQSE, which by their nature entail a higher level of risk and lower liquidity than investments in larger quoted companies.	The Investment Manager has signi?cant experience and a strong track record of investing in AIM and AQSE companies, and appropriate due diligence is undertaken on every new investment. The overall risk in the portfolio is mitigated by maintaining a wide spread of holdings in terms of ?nancing stage, age, industry sector and business models. The Board reviews the investment portfolio with the Investment Manager on a regular basis.
VCT qualifying status risk: The Company is required at all times to observe the conditions for the maintenance of HMRC approved VCT status. The loss of such approval could lead to the Company and its investors losing access to the tax bene?ts associated with VCT status and, in certain circumstances, to investors being required to repay the initial income tax relief on their investment.	Prior to investment, the Investment Manager seeks assurance from the Company’s VCT status adviser that the investment will meet the legislative requirements for VCT investments. On an ongoing basis, the Investment Manager monitors the Company’s compliance with VCT regulations on a current and forecast basis to ensure ongoing compliance with VCT legislation. Regular updates are provided to the Board throughout the year. The VCT status adviser formally reviews the Company’s compliance with VCT regulations on a bi-annual basis and reports their results to the Board.
Operational risk (reliance on Octopus): The Board is reliant on the Investment Manager to manage investments e?ectively, and manage the services of a number of third parties, in particular the registrar and tax advisers. A failure of the systems or controls at the Investment Manager or third-party providers could lead to an inability to provide accurate reporting and to ensure adherence to VCT and other regulatory rules.	The Board reviews the system of internal control, both ?nancial and non-?nancial, operated by the Investment Manager (to the extent the latter are relevant to the Company’s internal controls). These include controls that are designed to ensure that the Company’s assets are safeguarded, that proper accounting records are maintained, and that regulatory reporting requirements are met. Feedback on other third parties is reported to the Board on at least an annual basis, including adherence to Service Level Agreements where relevant.
Information security: A loss of key data could result in a data breach and ?nes. The Board is reliant on the Investment Manager and third parties to take appropriate measures to prevent a loss of con?dential customer information.	Annual due diligence is conducted on third parties which includes a review of their controls for information security. The Investment Manager has a dedicated information security team and a third party is engaged to provide continual protection in this area. A security framework is in place to help prevent malicious events. The Investment Manager reports to the Board on an annual basis to update them on relevant information security arrangements. Signi?cant and relevant information security breaches are escalated to the Board when they occur.
Economic and price risk: Events such as an economic recession, movement in interest rates, in?ation, political instability and rising living costs could cause volatility in the market, adversely impacting the valuation of investments. This could result in a reduction in the value of the Company’s assets.	The Company invests in a diverse portfolio of companies across a range of sectors, which helps to mitigate against the impact of performance in any one sector. The Company also maintains adequate liquidity to make sure it can continue to provide follow-on investment to those portfolio companies which require it and which is supported by the individual investment case. The Investment Manager monitors the impact of macroeconomic conditions on an ongoing basis and provides updates to the Board at least quarterly.
Regulatory and reputational risk/legislative: A change to the VCT regulations could adversely impact the Company by restricting the companies the Company can invest in under its current strategy. Similarly, changes to VCT tax reliefs for investors could make VCTs less attractive and impact the Company’s ability to raise further funds. Failure to adhere with other relevant legislation and regulation could result in reputational damage and/or ?nes.	The Investment Manager engages with HM Treasury and industry bodies to demonstrate the positive bene?ts of VCTs in terms of growing UK companies, creating jobs and increasing tax revenue, and to help shape any change to VCT legislation. The Investment Manager employs individuals with expertise across the legislation and regulation relevant to the Company. Individuals receive ongoing training and external experts are engaged where required.
Liquidity/cash flow risk: The risk that the Company’s available cash will not be su?cient to meet its ?nancial obligations. The Company invests in smaller companies, which are inherently less liquid than stocks on the main market. Therefore, these may be di?cult to realise for their fair market value at short notice.	The Investment Manager prepares cash ?ow forecasts to make sure cash levels are maintained in accordance with policies agreed with the Board. The Company’s overall liquidity levels are monitored on a quarterly basis by the Board, with close monitoring of available cash resources. The Company maintains su?cient cash and readily realisable securities, including money market funds and OEICs, which can be accessed at short notice. As at 29 February 2024, 27.0% of net assets were held in cash and cash equivalents and 10.8% in OEICs, realisable in seven business days.
Valuation risk: For smaller companies or illiquid shares, establishing a fair value can be di?cult due to the lack of readily available market data for similar shares, resulting in a limited number of external reference points.	Investments in companies traded on AIM and AQSE are valued by the Investment Manager using closing bid prices as reported on Bloomberg. Where investments are in unquoted companies or where there are indicators bid price is not appropriate, alternative valuation techniques are used in accordance with the International Private Equity and Venture Capital (IPEV) guidelines. Valuations of unquoted portfolio companies are performed by appropriately experienced sta?, with detailed knowledge of both the portfolio company and the market in which it operates. These valuations are then subject to review and approval by the Octopus Valuations Committee, comprised of sta? who are independent of the Investment team and with relevant knowledge of unquoted company valuations. The Board reviews valuations after they have been agreed by the Octopus Valuations Committee. Investment in FP Octopus UK Micro Cap Growth Fund, FP Octopus UK Multi Cap Income Fund and FP Octopus UK Future Generations Fund are all valued with reference to the daily prices which are published by Fund Partners, the Authorised Corporate Director.

Emerging risks
The Board has considered emerging risks. The Board seeks to mitigate emerging risks and those noted below by setting policy, regular review of performance and monitoring progress and compliance. In the mitigation and management of these risks, the Board applies the principles detailed in the Financial Reporting Council’s Guidance on Risk Management, Internal Control and Related Financial and Business Reporting.

The following are some of the potential emerging risks that the Board and the Investment Manager are currently monitoring:
• Geo-political protectionism.
• Climate change.

Directors' responsibilities statement
The Directors are responsible for preparing the annual report and accounts 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 are required to prepare the financial statements and have elected to prepare the Company’s financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) 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 of the Company and of the profit or loss for 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;
• state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and
• prepare a strategic report, a Director’s report and Director’s remuneration report which comply with the requirements of the Companies Act 2006.

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 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 are responsible for ensuring that the annual report and accounts, taken as a whole, are fair, balanced, understandable and provide the information necessary for shareholders to assess the Company’s position and performance, business model and strategy.

Website publication
The Directors are responsible for ensuring the annual report and the accounts are made available on a website. Financial statements are published on the Investment Manager’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein.

Directors’ responsibilities pursuant to Disclosure Guidance and Transparency Rule 4 (DTR4)

Neal Ransome (Chair), Andrew Boteler, Stephen Hazell-Smith and Joanne Parfrey, the Directors, confirm to the best of their knowledge that:

• the financial statements have been prepared in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (‘FRS 102’) and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company; and

• the annual report includes a fair review of the development and performance of the business and the financial position of the Company, together with a description of the principal risks and uncertainties that it faces.

By Order of the Board

Neal Ransome
Chair

Income statement

	Year to 29 February 2024			Year to 28 February 2023
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£’000	£’000	£'000	£’000	£’000
Gain on disposal of fixed asset investments	-	813	813	-	207	207
Loss on disposal of current asset investments	-	(246)	(246)	-	-	-
Loss on valuation of fixed asset investments	-	(16,322)	(16,322)	-	(29,192)	(29,192)
Loss on valuation of current asset investments	-	(1,137)	(1,137)	-	(2,233)	(2,233)
Investment income	2,060	-	2,060	1,068	24	1,092
Investment management fees	(555)	(1,666)	(2,221)	(650)	(1,949)	(2,599)
Other expenses	(681)	-	(681)	(689)	-	(689)
Profit/(loss) before tax	824	(18,558)	(17,734)	(271)	(33,143)	(33,414)
Tax	-	-	-	-	-	-
Total comprehensive loss after tax	824	(18,558)	(17,734)	(271)	(33,143)	(33,414)
Earnings per share – basic and diluted	0.4p	(10.0p)	(9.6p)	(0.2p)	(20.0p)	(20.2p)

• The ‘Total’ column of this statement represents the statutory income statement of the Company; the supplementary revenue return and capital return columns have been prepared in accordance with the AIC Statement of Recommended Practice.
• 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, as well as OEIC funds.

The Company has no recognised gains or losses other than the results for the period as set out above. Accordingly, a statement of comprehensive income is not required.

The accompanying notes are an integral part of the Financial Statements.

Balance sheet

	As at 29 February 2024		As at 28 February 2023
	£’000	£’000	£’000	£’000
Fixed asset investments		80,350		102,667
Current assets:
Investments	13,897		16,188
Money market funds	33,641		21,433
Debtors	666		354
Applications cash1	4		3
Cash at bank	1,276		1,437
	49,484		39,415
Creditors: amounts falling due within one year	(725)		(860)
Net current assets		48,759		38,555
Total assets less current liabilities		129,109		141,222
Called up equity share capital		2,038		1,798
Share premium		18,041		18,924
Capital redemption reserve		341		279
Special distributable reserve		124,213		118,015
Capital reserve realised		(24,622)		(23,143)
Capital reserve unrealised		10,470		27,545
Revenue reserve		(1,372)		(2,196)
Total equity shareholders’ funds		129,109		141,222
NAV per share – basic and diluted		63.3p		78.5p

¹Cash held but not yet allotted

The statements were approved by the Directors and authorised for issue on 6 June 2024 and are signed on their behalf by:

Neal Ransome
Chair
Company number: 03477519

The accompanying notes are an integral part of the Financial Statements.

Statement of changes in equity

	Share capital	Share premium	Capital redemption reserve	Special distributable reserves1	Capital reserve realised1	Capital reserve unrealised	Revenue reserve1	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000
As at 1 March 2023	1,798	18,924	279	118,015	(23,143)	27,545	(2,196)	141,222
Comprehensive income for the year:
Management fee allocated as capital expenditure	-	-	-	-	(1,666)	-	-	(1,666)
Current period gain on disposal	-	-	-	-	571	-	-	571
Current period loss on revaluation of investments	-	-	-	-	-	(17,459)	-	(17,459)
Capital investment income	-	-	-	-	-	-	-	-
Profit after tax	-	-	-	-	-	-	824	824
Total comprehensive loss for the year	-	-	-	-	(1,095)	(17,459)	824	(17,730)
Contributions by and distributions to owners:
Repurchase and cancellation of own shares	(62)	-	62	(4,083)	-	-	-	(4,083)
Issue of shares	302	20,082	-	-	-	-	-	20,384
Share issue costs	-	(1,158)	-	-	-	-	-	(1,158)
Dividends paid	-	-	-	(9,526)	-	-	-	(9,526)
Total contributions by and distributions to owners:	240	18,924	62	(13,609)	-	-	-	5,617
Other movements
Cancellation of share premium	-	(19,807)	-	19,807	-	-	-	-
Prior years’ holding gains now realised	-	-	-	-	2,871	(2,871)	-	-
Transfer in reserves	-	-	-	-	(3,255)	3,255	-	-
Total other movements	-	(19,807)	-	19,807	(384)	384	-	-
Balance as at 29 February 2024	2,038	18,041	341	124,213	(24,622)	10,470	(1,372)	129,109

	Share capital	Share premium	Capital redemption reserve	Special distributable reserves1	Capital reserve realised1	Capital reserve unrealised	Revenue reserve1	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000
As at 1 March 2022	1,605	25,450	236	105,258	(20,762)	58,307	(1,925)	168,169
Comprehensive income for the year:
Management fee allocated as capital expenditure	-	-	-	-	(1,949)	-	-	(1,949)
Current period gain on disposal	-	-	-	-	207	-	-	207
Current period loss on revaluation of investments	-	-	-	-	-	(31,425)	-	(31,425)
Capital investment income	-	-	-	-	24	-	-	24
Loss after tax	-	-	-	-	-	-	(271)	(271)
Total comprehensive loss for the year	-	-	-	-	(1,718)	(31,425)	(271)	(33,414)
Contributions by and distributions to owners:
Repurchase and cancellation of own shares	(43)	-	43	(3,567)	-	-	-	(3,567)
Issue of shares	236	19,742	-	-	-	-	-	19,978
Share issue costs	-	(668)	-	-	-	-	-	(668)
Dividends paid	-	-	-	(9,276)	-	-	-	(9,276)
Total contributions by and distributions to owners:	193	19,074	43	(12,843)	-	-	-	6,467
Other movements
Cancellation of share premium	-	(25,600)	-	25,600	-	-	-	-
Prior years’ holding gains now realised	-	-	-	-	(663)	663	-	-
Total other movements	-	(25,600)	-	25,600	(663)	663	-	-
Balance as at 28 February 2023	1,798	18,924	279	118,015	(23,143)	27,545	(2,196)	141,222

¹Included in these reserves is an amount of £98,219,000 (2023: £92,676,000) which is considered distributable to shareholders.

Cash flow statement

	Year to 29 February 2024	Year to 28 February 2023
	£'000	£'000
Cash flows from operating activities
Loss before tax	(17,734)	(33,414)
Adjustments for:
Decrease/(increase) in debtors	131	(25)
(Decrease)/increase in creditors	(134)	(794)
Gain on disposal of fixed asset investments	(813)	(207)
Loss on disposal of current asset investments	246	–
Loss on valuation of fixed asset investments	16,322	29,192
Loss on valuation of current asset investments	1,137	2,233
Non-cash distributions	–	(24)
Cash utilised in operations	(845)	(3,039)
Income taxes paid	–	–
Net cash utilised in operating activities	(845)	(3,039)
Cash flows from investing activities
Purchase of fixed asset investments	(7,149)	(4,880)
Proceeds from sale of fixed asset investments	13,517	2,478
Purchase of current asset investments	(1,080)	(1,878)
Proceeds from sale of current asset investments	1,988	–
Total cash flows generated from/(utilised in) investing activities	7,276	(4,280)
Cash flows from financing activities
Movement in applications account	(1)	243
Purchase of own shares	(4,083)	(3,567)
Proceeds from share issues	18,558	18,217
Share issue costs	(1,157)	(668)
Dividends paid (net of DRIS)	(7,700)	(7,515)
Net cash flows from financing activities	5,617	6,710
Increase/(decrease) in cash and cash equivalents	12,048	(609)
Opening cash and cash equivalents	22,873	23,482
Closing cash and cash equivalents	34,921	22,873
Cash and cash equivalents is represented by:
Cash at bank	1,276	1,437
Applications cash	4	3
Money market funds	33,641	21,433
Total cash and cash equivalents	34,921	22,873

The accompanying notes are an integral part of the Financial Statements.

Post balance sheet events
The following events occurred between the balance sheet date and the signing of these financial statements.
•        A follow-on investment totalling £196,000 completed in PCI-Pal plc.
•        A follow-on investment totalling £108,000 completed in FP Octopus UK Future Generations Fund
•        A partial disposal of 257,924 shares in Spectral AI inc. for total consideration of £340,000.
•        A full disposal of 226,273 shares in Renalytix plc for total consideration of £123,000.
•        A full disposal of 295,600 shares in LoopUp Group plc for total consideration of £1,000.
•        A full disposal of 2,955,131 shares in Cordel Group plc for total consideration of £97,000.
•        A full disposal of 45,376 shares in Cirata plc for total consideration of £22,000.

The following shares have been bought back since the year end:
•        21 March 2024: 691,776 shares at a price of 62.1p per share.
•        25 April 2024: 406,159 shares at a price of 61.2p per share.
•        23 May 2024: 346,056 shares at a price of 63.2p per share.

Notes to the financial statements

1. Principal accounting policies
The Company is a Public Limited Company (plc) incorporated in England and Wales and its registered office is 33 Holborn, London EC1N 2HT.

The Company’s principal activity is to invest in a diverse portfolio of predominantly AIM-traded companies with the aim of providing shareholders with attractive tax-free dividends and long-term capital growth.

Basis of preparation
The financial statements have been prepared under the historical cost convention, except for the measurement at fair value of certain financial instruments, and in accordance with UK Generally Accepted Accounting Practice (‘GAAP’), including Financial Reporting Standard 102 – The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland’ (‘FRS 102’), and with the Companies Act 2006 and the Statement of Recommended Practice (‘SORP’) ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ (issued in July 2022).

The principal accounting policies have remained unchanged from those set out in the Company’s 2023 annual report and accounts.

2. Income
Accounting policy
Investment income includes interest earned on money market securities is shown net of income tax withheld at source. Dividend income is shown net of any related tax credit. Dividends are allocated to revenue or capital depending on whether the dividend is of a revenue or capital nature.

Dividends receivable are brought into account when the Company’s right to receive payment is established and it is probable that payment will be received. Fixed returns on debt and money market securities are recognised on a time apportionment basis so as to reflect the effective yield, provided there is no reasonable doubt that payment will be received in due course.

Disclosure

	29 February	28 February
	2024	2023
	£’000	£’000
Dividends receivable from fixed asset investments	866	834
In-specie dividend1	–	24
Loan note interest receivable	41	45
Income receivable on money market securities	1,153	189
	2,060	1,092

¹In the prior year, the Company received shares in Verici Dx PLC as a result of an in-specie dividend from EKF Diagnostics Holdings plc. These have been treated as capital income.

3. Investment management fees

	29 February 2024			28 February 2023
	Revenue	Capital	Total	Revenue	Capital	Total
	£’000	£’000	£’000	£’000	£’000	£’000
Investment management fee	555	1,666	2,221	650	1,949	2,599

Octopus provides investment management and accounting and administration services to the Company under a management agreement which initially ran with Close Investment Limited from 3 February 1998 and was then novated to Octopus for a period of five years with effect from 29 July 2008 and may be terminated at any time thereafter by not less than twelve months’ notice given by either party. No compensation is payable in the event of terminating the agreement by either party, if the required notice period is given. The fee payable, should insufficient notice be given, will be equal to the fee that would have been paid should continuous service be provided, or the required notice period was given. The management fee is an annual charge set at 2% of the Company’s net assets, less deductions outlined below, calculated on a quarterly basis. The Investment Manager is not entitled to any annual performance incentive scheme.

During the year Octopus charged gross management fees of £2,614,000 (2023: £3,067,000). When the various allowances detailed below are included, the net management fees for the year are £2,221,000 (2023: £2,599,000). At the year end there was £499,000 payable to Octopus (2023: £580,000). Octopus received £243,000 as a result of upfront fees charged on allotments of Ordinary shares (2023: £282,000).

The Company now pays ongoing adviser charges to independent financial advisers (‘IFAs’). Ongoing adviser charges are an ongoing fee of up to 0.5% per annum for a maximum of nine years paid to advisers who are on an advised and ongoing fee structure. The Company is rebated for this cost by way of a reduction in the annual management fee. For the year to 29 February 2024 the rebate received was £140,000 (2023: £183,000).

The Company also facilitates upfront fees to IFAs where an investor has invested through a financial adviser and has received upfront advice. Where an investor agrees to an upfront fee only, the Company can facilitate a payment of an initial adviser charge of up to 4.5% of the investment amount. If the investor chooses to pay their intermediary/adviser less than the maximum initial adviser charge, the remaining amount will be used for the issue and allotment of additional new shares for the investor. In these circumstances the Company does not facilitate ongoing annual payments. To make sure that the Company is not financially disadvantaged by such payment, a notional ongoing adviser charge equivalent to 0.5% per annum will be deemed to have been paid by the Company for a period of nine years. The Company is rebated for this cost, also by way of a reduction in the annual management fee. For the year to 29 February 2024 the rebate received was £171,000 (2023: £202,000).

The Company also receives a reduction in the management fee for the investments in other Octopus managed funds, being the Multi Cap, Micro Cap and Future Generations products, to ensure the Company is not double charged on these products. This amounted to £80,000 for the year to 29 February 2024 (2023: £83,000).

The management fee has been allocated 25% to revenue and 75% to capital, in line with the Board’s expected long-term return in the form of income and capital gains, respectively, from the Company’s investment portfolio.

4. Other expenses
Accounting policy
All expenses are accounted for on an accruals basis and are charged wholly to revenue, apart from management fees which are charged 25% to revenue and 75% to capital.

The transaction costs incurred when purchasing or selling assets are written off to the income statement in the period that they occur.

Disclosure

	29 February	28 February
	2024	2023
	£’000	£’000
IFA charges	140	183
Directors’ remuneration	103	98
Registrars’ fees	69	65
Audit fees	48	43
Printing and postage	19	23
VCT monitoring fees	17	13
Directors’ and officers’ liability insurance	49	50
Broker’s fees	6	6
Other administration expenses	230	208
	681	689

The fees payable to the Company’s auditor are stated net of VAT and the VAT is included within other administration expenses. No non-audit services were provided by the Company’s auditor.

The ongoing charges of the Company were 2.1% of average net assets during the year to 29 February 2024 (2023: 2.1%). Ongoing charges are calculated using the AIC methodology and exclude exceptional costs and trail commission.

5. Tax
Accounting policy

Corporation tax payable is applied to profits chargeable to corporation tax, if any, at the current rate. The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue return on the ‘marginal’ basis as recommended in the SORP.

Deferred tax is recognised on an undiscounted basis in respect of all timing differences that have originated but not reversed at the balance sheet date, except as otherwise indicated.

Deferred tax assets are only recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

The corporation tax charge for the year was £nil (2023: £nil).

Disclosure

	29 February	28 February
	2024	2023
Tax reconcilation	£’000	£’000
Loss before tax	(17,733)	(33,414)
Current tax at 24.49% (2023:19.0%)	(4,329)	(6,349)
Effects of
Non-taxable income	(492)	(199)
Non-taxbale capital gains	4,123	5,932
Non-deductible expenses	(6)	(4)
Excess management expenses on which deferred tax not recognised	704	620
Total tax charge	-	-

Approved VCTs are exempt from tax on capital gains within the Company. Since the Directors intend that the Company will continue to conduct its affairs so as to maintain its approval as a VCT, no deferred tax has been provided in respect of any capital gains or losses arising on the revaluation or disposal of investments.

As at 29 February 2024 there is an unrecognised deferred tax asset of £7,211,000 (2023: £6,551,000) in respect of accumulated surplus management expenses of £28,844,000 (2023: £26,204,000), based on a prospective corporation tax rate of 25% (2023: 25%). This deferred tax asset could in future be used against taxable profits.

Provided the Company continues to maintain its current investment profile, it is unlikely that the expenses will be utilised and that the Company will obtain any benefit from this asset.

6. Dividends
Accounting policy

Dividends payable are recognised as distributions in the financial statements when the Company’s liability to make payment has been established. This liability is established on the record date, the date on which those shareholders on the share register are entitled to the dividend.

Disclosure

	29 February	28 February
	2024	2023
	£’000	£’000
Dividends paid on Ordinary shares during the year
Final dividend – 2.5p paid 10 August 2023 (2023: 3.0p)	4,451	4,775
Interim dividend – 2.5p paid 8 January 2024 (2023: 2.5p)	5,075	4,501
	9,526	9,276
During the year £1,826,000 (2023: £1,761,000) of dividends were reinvested under the DRIS.
	29 February	28 February
	2024	2023
	£’000	£’000
Dividends paid and proposed in respect of the year
Interim dividend – 2.5p paid 12 January 2024 (2023: 2.5p)	5,075	4,501
Special dividend proposed: 4.9p payable 15 August 2024 (2023: nil)	9,934	-
Final dividend proposed: 2.5p payable 15 August 2024 (2023: 2.5p)	5,068	4,462
	20,077	8,963
Under Section 32 of FRS 102 ‘Events After Balance Sheet Date’, dividends payable at year end are not recognised as a liability in the financial statements. The above proposed final dividend is based on the number of shares in issue at the date of this report. The actual dividend paid may differ from this number as the dividend payable will be based on the number of shares in issue on the record date and will reflect any changes in the share capital between the year end and the record date.

7. Earnings per share

	29 February 2024			28 February 2023
	Revenue	Capital	Total	Revenue	Capital	Total
Loss attributable to ordinary shareholders (£’000)	824	(18,558)	(17,734)	(271)	(33,143)	(33,414)
Earnings per ordinary share (p)	0.4p	(10.0p)	(9.6p)	(0.2p)	(20.0p)	(20.2p)

The earnings per share is based on 185,664,255 Ordinary shares (2023: 165,688,082, being the weighted average number of shares in issue during the year), and the loss on ordinary activities after tax for the year of £17,734,000 (2023: loss £33,414,000).

There are no potentially dilutive capital instruments in issue and, as such, the basic and diluted earnings per share are identical.

8. Net asset value per share

	29 February	28 February
	2024	2023
Net assets (£’000)	129,109	141,222
Shares in issue	203,828,309	179,802,084
NAV per share (p)	63.3	78.5

There are no potentially dilutive capital instruments in issue and, as such, the basic and diluted NAV per share are identical.

9. Related party transactions
As at 29 February 2024, Octopus Investments Nominees Limited (OINL) held 0 shares (2023: 7,598) in the Company as beneficial owner from shareholders to protect their interests after delays or errors with shareholder instructions and other similar administrative tasks. Throughout the period to 29 February 2024 OINL purchased 2,791 shares (2023: 9,875) at a cost of £2,000 (2023: £9,000) and sold 10,389 shares (2023: 3,166) for proceeds of £7,000 (2023: £3,000). In accordance with the listing rules, this is classed as a related party transaction as Octopus, the Investment Manager, and OINL are part of the same group of companies. Any such future transactions, where OINL takes over the legal and beneficial ownership of Company shares will be announced to the market and disclosed in annual and half yearly reports.

Octopus received £nil (2023: £nil) transaction fees and directors’ fees from portfolio companies.

The Company holds £4,000 (2023: £3,000) of cash on behalf of the Company and AIM VCT 2 plc. Of this, £2,000 (2023:£2,000) is attributable to the Company.

10. 2024 financial information
The figures and financial information for the year ended 29 February 2024 are extracted from the Company’s annual financial statements for the period and do not constitute statutory accounts. The Company’s annual financial statements for the year to 29 February 2024 have been audited but have not yet been delivered to the Registrar of Companies. The Auditors’ report on the 2024 annual financial statements was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain any statements under Sections 498(2) or 498(3) of the Companies Act 2006.

11. 2023 financial information
The figures and financial information for the period ended 28 February 2023 are compiled from an extract of the published financial statements for the period and do not constitute statutory accounts. Those financial statements have been delivered to the Registrar of Companies and included the Auditors’ report which was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain any statements under Sections 498(2) or 498(3) of the Companies Act 2006.

12. Annual Report and financial statements
The Annual Report and financial statements will be posted to shareholders in June and will be available on the Company’s website. The Notice of Annual General Meeting is contained within the Annual Report.

13. General information
Registered in England & Wales. Company No. 03477519
LEI: 213800C5JHJUQLAFP619

14. Directors
Neal Ransome (Chair), Stephen Hazell-Smith, Joanne Parfrey and Andrew Boteler

15. Secretary and registered office
Octopus Company Secretarial Services Limited
33 Holborn, London EC1N 2HT