Half-Yearly Results
30/09/2024 07:00
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Octopus Titan VCT plc
Half-Yearly Results
Octopus Titan VCT plc announces the half-yearly results for the six months
ended 30 June 2024.
Titan’s mission is to invest in the people, ideas and industries
that will change the world.
Octopus Titan VCT plc (‘Titan’ or the ‘Company’) is managed by Octopus
AIF Management Limited (the ‘Manager’), which has delegated investment
management to Octopus Investments Limited (‘Octopus’ or ‘Portfolio
Manager’) via its investment team Octopus Ventures.
Key financials
HY2024 HY2023 FY2023
Net assets (£’000) £892,520 £1,055,683 £993,744
Loss after tax (£’000) £(116,233) £(87,609) £(149,499)
NAV per share 53.5p 68.2p 62.4p
Total value per share (1) 157.4p 168.2p 164.4p
Total return per share (p) (2) (7.0)p (5.7)p (9.5)p
Total return per share % (3) (11.2)% (7.4)% (12.4)%
Dividends paid in the period 1.9p 3.0p 5.0p
Dividend yield % (4) 3.0% 3.9% 6.5%
Dividend declared 1.2p 2.0p 1.9p
1. Total value is an alternative performance measure, calculated as NAV plus
cumulative dividends paid since launch.
2. Total return is an alternative performance measure, calculated as movement
in NAV per share in the period plus dividends paid in the period.
3. Total return % is an alternative performance measure, calculated as total
return/opening NAV.
4. Dividend yield is an alternative performance measure, calculated as
dividends paid/opening NAV.
Interim Management Report
Chair’s statement
Titan's Total Return for the six months to 30 June 2024 was -11.2% with net
assets at the period end totalling £892.5 million.
The Net Asset Value (‘NAV’) per share at 30 June 2024 was 53.5p which,
adjusting for dividends paid of 1.9p per share in 30 May 2024, represents a
net decrease of 7.0p per share from 31 December 2023 or a total return of
–11.2%.
This decline in value has been caused by the decrease in the valuation
multiples applied to some of the Company’s more mature portfolio companies
as well as ongoing private market volatility and the associated impact on
capital availability for our portfolio companies. Many of the portfolio
companies have experienced lower revenue growth rates as they have prioritised
extending cash runway, looking to either achieve profitability or delay
fundraising until more favourable market conditions return. The Mergers and
Acquisitions (M&A) and Initial Public Offerings (IPO) markets for private
companies remain substantially below the levels seen in recent years, and as a
result, we have seen a marked decline in realisations from the Titan portfolio
with cash receipts from exits in the first half totalling only £0.8 million.
With this further decline in NAV the 10-year tax-free annual compound return
for shareholders is now 2%. Since the high watermark as at 31 December 2021,
Titan’s total return per share has been -38.1% with which the Board are, and
shareholders will be, deeply disappointed.
Considering the ongoing challenges in the early-stage venture market to which
the Company is exposed, and the resultant performance issues faced, the Board,
in conjunction with the Manager, are currently reviewing the strategy of
Titan. This review, which will have the benefit of independent external
advice, will consider a wide range of issues including but not limited to
Titan’s investment strategy, dividend and share buy back policies and fund
raising plans. We look forward to sharing the results of this review ahead of
any potential fund raise in the 2024/25 or 2025/26 tax years.¹
In the six months to 30 June 2024, the fund utilised £90.4 million of its
cash resources, comprising £24.5 million in new and follow-on investments,
£24.1 million in dividends (net of the Dividend Reinvestment Scheme (DRIS)),
£28.0 million in share buybacks and £13.8 million in investment management
fees and other running costs, and the fund received disposal proceeds of £0.8
million. The cash and corporate bond balance of £184.6 million at 30 June
2024 represented 21% of net assets at that date, compared to 20% at 31
December 2023.
The total value (NAV plus cumulative dividends paid per share since launch) at
the end of the period was 157.4p (31 December 2023: 164.4p).
Dividends
Since inception, the Company has now paid 103.9p in tax-free dividends per
share. Following careful consideration and recognising the value that
shareholders’ place on receiving tax-free dividends, I am pleased to confirm
that the Board has decided to declare an interim dividend of 1.2p per share
(2023: 2.0p per share). This will be paid on 19 December 2024 to shareholders
on the register as at 29 November 2024, which equates to 2% of the Company’s
NAV as at 31 December 2023.
The Board has concluded, however, that in light of the review being
undertaken, the DRIS in respect of this interim dividend will be suspended.
Fundraise and buybacks
We were pleased to raise over £107 million in the fundraise which closed on 5
April 2024, which represented the largest VCT fundraise in the market for the
2023/24 tax year. We would like to take this opportunity to thank all
shareholders for their support.
During the period, Titan repurchased 47.8 million shares for £28 million
(representing 3% of the net asset value as at 31 December 2023). Further
details can be found in Note 6 of the financial statements. The Board will
review the policy and operation of any future share buy backs during the
aforementioned review.
The Board has also determined that decisions on any future fundraising will
take place at the end of the review currently underway.
Principal Risks and Uncertainties
The Board continues to review the risk environment in which Titan operates on
a regular basis. The principal risks as set out in the Annual Report for the
year ended 31 December 2023 on pages 46 to 49 remain. However, the risks
around investment performance, loss of key people, valuations and liquidity
have all increased since the year end. All the principal risks will be
reported on in detail in the annual report to 31 December 2024.
VCT Status
In November 2023, a ten-year extension was announced to the ‘sunset
clause’ (a retirement date for the VCT scheme), meaning VCT tax reliefs will
be available until 5 April 2035. This extension passed through Parliament in
February 2024 and on 3 September 2024 His Majesty’s Treasury brought the
extension into effect through The Finance Act 2024.
Board of Directors and Portfolio Manager
As announced in our annual report, Rupert Dickinson was appointed to the Board
with effect from 1 May 2024 and was elected by shareholders at the Annual
General Meeting (AGM) held in June. Rupert has over 20 years’ experience in
the wealth and investment management industries. We look forward to benefiting
from his extensive experience.
In March 2024, Jo Oliver was appointed as lead Fund Manager and Adviser to the
Board on fund and strategy on an interim basis. In August 2024, Jo stepped
down from this interim role. We wish to take this opportunity to thank Jo for
his contribution to the Company and wish him well for the future.
Outlook
The further decline in NAV is disappointing and has mainly been driven by a
decrease in the value of the Company’s largest holdings. These holdings are
typically valued using comparable market multiples which fell significantly
over the six-month period. This is also evidenced by the Bessemer Index (a US
technology index) showing a 12% decline over this time². This has been driven
by factors such as high interest rates and economic and political uncertainty.
The priority for our portfolio companies has remained cash preservation to
extend their runway to achieve profitability whilst the fundraising and exit
environment has been subdued. A side-effect of this focus has, in some cases,
been to reduce growth rates. Titan’s largest companies have also had to
focus on profitability due to the funding scarcity. In the short term, this
has meant their valuations have been reduced to reflect this slowed growth,
but in the long run the disciplined focus on sustainable growth should be
beneficial. In these difficult conditions, we have unfortunately seen more
companies underperform or fail as they have struggled to raise further funding
or successfully conclude an exit.
Despite this, the Board remains reasonably optimistic about the potential
within what is unquestionably a diversified portfolio, with over 145 companies
spanning a wide range of sectors, business models and investment stages.
Furthermore, despite this slowing in growth across the portfolio, recent
analysis shows 23% of the portfolio generated an increase in revenue of over
100% when comparing year-on-year 2023 to 2022 and the portfolio overall saw
19% revenue growth³. Additionally, over 50% of the portfolio NAV is comprised
of companies not expecting to need further funding to achieve profitability.
This figure rises to 88% when including those companies with more than 12
months’ cash runway. This demonstrates that, despite the decline in NAV, the
portfolio is showing a degree of resilience. Some companies have shown great
agility and modified their business models to take advantage of new
opportunities, as we have seen examples of more willingness to adopt new
technologies in these turbulent times. As detailed in the Portfolio
Manager’s report, the Octopus Ventures team is now focusing its resource on
follow-on funding opportunities within the portfolio to drive improved
performance in the short to mid-term.
In due course we will update you on the progress of the strategic review, and
ultimately share the results, but this is not expected to be until early in
2025. I would like to conclude by thanking both the Board and the Octopus team
on behalf of all shareholders for their hard work during this very challenging
period.
Tom Leader
Chair
1 The information contained within this paragraph is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU No. 596/2014) (which forms part of UK domestic law pursuant to the
European Union (Withdrawal) Act 2018). Upon the publication of this
announcement via Regulatory Information Service this inside information is now
considered to be in the public domain.
2 https://cloudindex.bvp.com/
3 Data provided by portfolio companies, based on information available for
calendar year 2022 and 2023.
Portfolio Manager’s review
Focus on performance
The NAV of 53.5p per share at 30 June 2024 represents a decrease in NAV of
7.0p per share versus a NAV of 62.4p per share as at 31 December 2023, after
adding back dividends paid during the year of 1.9p per share, a decrease of
11.2% in the period.
The performance over the five and a half years to 30 June 2024 is shown below:
Period (1)ended 31 December 2019 Year ended 31 December 2020 Year ended 31 December 2021 Year ended 31 December 2022 Year ended 31 December 2023 Period ended 30 June 2024
NAV (p) 95.2 97.0 105.7 76.9 62.4 53.5
Cumulative dividends paid (p) 76.0 81.0 92.0 97.0 102.0 103.9
Total Value (p) 171.2 178.0 197.7 173.9 164.4 157.4
Total return (2) 7.6% 7.1% 20.3% (22.5)% (12.4)% (11.2)%
Dividend yield (3) 5.4% 5.3% 11.3% 4.7% 6.5% 3.0%
Equivalent dividend yield for a higher rate tax payer (4) 8.0% 7.8% 16.8% 7.0% 9.8% 4.6%
1 The period to 31 December 2019 was 14 months.
2 Total return % is an alternative performance measure, calculated as total
return/opening NAV.
3 Dividend yield is an alternative performance measure, calculated as
dividends paid/opening NAV.
4 The equivalent dividend yield for higher rate taxpayers has been calculated
based on current tax rates and allowances. This information is provided for
illustrative purposes only and does not constitute investment advice.
The decrease in valuation over the six month period has been driven by
downward valuation movements across 67 companies which saw a collective
decrease in valuation of £141.8 million. The businesses that contributed most
significantly to this were Amplience, ManyPets and Big Health. Amplience has
been through some senior management changes and has led a cost reduction
exercise to increase its cash runway. The decline in valuation reflects the
lower market comparables and lower growth rate of the business. ManyPets is
focusing on stabilisation and has implemented a range of initiatives to drive
higher efficiency and target profitability in the short term at the expense of
growth. The decline in valuation is driven by increased loss ratios and a
decline in its gross written premium. For Big Health, due to high competition
in the mental health space in the US and economic pressures meaning a
reduction in benefits being offered by employers, the company has had to make
cost reductions and reforecast its growth plans. These three valuation
movements account for 33.2% of the total decline in the reporting period.
Octopus Ventures believes that many of the companies which have seen decreased
valuations in the period have the potential to overcome the issues they face
and get their growth plans back on track. Octopus Ventures will continue to
work with them to help them realise their ambitions. In some cases, the
support offered could include further funding, to ensure a business has the
capital it needs to execute on its strategy.
Conversely, 38 companies saw an increase in valuation in the period,
delivering a collective increase in valuation of £34.9 million. These
valuation increases reflect businesses which have successfully concluded
further funding rounds at increased prices, grown revenues or met certain
important milestones. Notable strong performers in the portfolio include
Vitesse and BondAval, both of which have shown impressive capital efficient
growth. These strong performers demonstrate that there are opportunities
available for companies to thrive, and Titan’s diverse portfolio allows
different routes for each company to succeed in their market.
The gain on Titan’s uninvested cash reserves was £4.3 million in the six
months to 30 June 2024, primarily driven by a fair value movement of £1.8
million in the corporate bond portfolio and a return of £2.5 million on the
money market funds. The objective for the money market funds is to earn
appropriate market rates on highly-liquid treasury holdings, at limited risk
to capital.
Disposals
In June 2024, Taxfix (a European focused tax return technology platform)
acquired TaxScouts, for a combination of cash and equity, which has allowed it
to enter the UK market. As a result, Titan now holds shares in Taxfix. Outside
of the reporting period in July, cash consideration was received for the
disposal of Taxscouts and Foodsteps. Foodsteps was acquired by Registrar Corp
(a provider of regulatory and compliance software for the food, cosmetic and
life sciences industry). This transaction was also for a combination of cash
and equity, and has offered Registrar Corp access to Foodsteps’ global
market platform of over 32,000 companies in 190 countries. In June, it was
agreed that Cobee will be acquired by Pluxee Group (an employee benefits and
engagement platform) as part of its strategic growth plan. The transaction has
now been approved by the Spanish regulatory authorities, so we look forward to
reporting further after completion has taken place.
In the six months, Titan also received deferred proceeds from the sale of
Calastone (to The Carlyle Group in 2020) which was held in Octopus Zenith
Holding Company, and iSize (to Sony Interactive Entertainment in 2023). In the
six months, disposals and deferred proceeds have returned £0.8 million to
Titan in cash during the period, including deferred amounts received in cash
relating to disposals from previous periods.
There have been two disposals made at a loss: Titan sold its remaining shares
in Cazoo, which was listed on the New York Stock Exchange, and Unmade was
acquired by High-Tech Apparel. In aggregate, these losses generated negligible
proceeds compared to an investment cost of £8.8 million.
Unfortunately, Audiotelligence, Stackin (now fully dissolved), Contingent,
Phoelex, Excession and Dead Happy were placed into administration having all
been unsuccessful in securing further funding and having explored and
exhausted all available options. In the six months since December 2023, Third
Eye and LifeBook were fully dissolved having been placed into administration
in previous reporting periods.
The underperformance of a portfolio company is always disappointing for
Octopus and shareholders alike, but it is a key characteristic of a venture
capital portfolio, and we believe the successful disposals will continue to
outweigh the losses over the medium to long-term.
Period (1)ended 31 December 2019 Year ended 31 December 2020 Year ended 31 December 2021 Year ended 31 December 2022 Year ended 31 December 2023 Period ended 30 June 2024 Total
Disposal proceeds (2)(£'000) 26,334 23,915 221,504 62,213 45,637 767 380,370
1 The period to 31 December 2019 was 14 months.
2 This table includes proceeds received in the period.
VCT qualifying status
Shoosmiths LLP provides both the Board and Octopus with advice concerning
ongoing compliance with HMRC rules and regulations concerning VCTs and has
advised that Titan continues to be compliant with the conditions set by HMRC
for maintaining approval as a VCT.
As at 30 June 2024, over 91% of the portfolio (as measured by HMRC rules) was
invested in VCT-qualifying investments, above the 80% current VCT- qualifying
threshold.
New and follow-on investments
Titan completed 6 new investments and made 9 follow-on investments in the
reporting period. Together, these totalled £24.5 million (made up of £16.2
million into new companies and £8.3 million invested into the existing
portfolio).
Below are details on our new investments:
Health
Manual is looking to become the go-to global platform to increase healthy
lifespan and build a series of direct-to-consumer health brands for high
importance, non-critical areas of health. To achieve this, it will provide
easy to access advice and medical support for diagnosis, custom treatment
plans and holistic care to induce long-term behaviour change.
Bio
Expression Edits is using a proprietary AI algorithm to design DNA sequences,
named introns, which boost the expressions of proteins in mammalian cells.
Climate
Drift Energy is designing sailing vessels and the routing algorithms required
to capture deep water wind energy and convert it into onboard hydrogen gas.
This would then be transported back to shore using a fully integrated
desalination, electrolysis and storage system.
Fintech
Swiipr has developed a digital payments platform specifically for the airline
industry. The platform enables airlines to instantly compensate passengers in
cases of disrupted or cancelled flights, using virtual or pre-paid cards.
Swiipr aims to streamline payment processing for airlines and improve the
reimbursement experience for affected passengers.
Bio
LabGenius is a next-generation platform leveraging machine learning to develop
novel therapeutic antibodies.
Fintech
Remofirst is an Employer of Record (EOR) and compliance platform that allows
companies to hire and pay employees globally.
With a further decline in Titan’s NAV, the Octopus Ventures team is highly
focused on improving performance and driving greater returns to shareholders.
Given Titan’s scale, the greatest returns are expected to be driven by its
existing, largest holdings, and brand-new investments will have less impact in
the near-term. As such, Titan will predominantly be looking to invest to build
value in its existing portfolio for at least the coming six to twelve months.
This will allow capital to be prioritised on existing companies where the
route to success is clearer, as we have been closely involved with the
businesses for some time already. We believe that this will drive positive
near-term NAV performance as these portfolio companies are more established,
so have a greater potential to secure a successful exit and drive meaningful
returns, while significant investment in more than 80 new companies in the
last three years also provides the foundations for targeting long-term
returns.
Valuations
Titan’s unquoted portfolio companies are valued in accordance with UK
Generally Accepted Accounting Principles (GAAP) accounting standards and the
International Private Equity and Venture Capital (IPEV) valuation guidelines.
This means we value the portfolio at Fair Value, which is the price we expect
people would be willing to buy or sell an asset for at the reference date,
assuming they had all the information available we do, are knowledgeable
parties with no pre-existing relationship, and that the transaction is carried
out under the normal course of business.
The data below illustrates the split of valuation methodology (shown as a
percentage of portfolio value and number of companies). ‘External price’
includes valuations based on funding rounds that typically completed in the
last 12 months to the period end or shortly after the period end, and exits of
companies where terms have been agreed with an acquirer. ‘External price’
also includes quoted holdings, which are held at their quoted price as at the
valuation date. ‘Multiples’ is predominantly used for valuations that are
based on a multiple of revenues for portfolio companies. Where there is
uncertainty around the potential outcomes available to a company, a
probability weighted ‘scenario analysis’ is considered.
Valuation methodology – by value:
* Multiples: 53%
* External price: 29%
* Scenario analysis: 18%
Valuation methodology – by number of companies:
* Multiples: 33%
* External price: 23%
* Scenario analysis: 23%
* Write off: 21%
Top 20 investments
We are disappointed to report a net decrease in the value of the portfolio of
£106.9 million since 31 December 2023, excluding additions and disposals.
This represents a decline of 13.6% on the value of the portfolio at the start
of the year. Here, we set out the cost and valuation of the top 20 holdings,
which account for over 57.0% of the value of the portfolio.
Company Investment cost Total valuation including cost Investment focus
1 Skin+Me £11.5m £45.8m Health
2 Pelago (1 ) £17.9m £38.9m Health
3 Permutive £19.0m £30.8m B2B software
4 Vitesse £10.1m £30.6m Fintech
5 Amplience £13.6m £28.3m B2B software
6 ManyPets £10.0m £26.2m Fintech
7 Elliptic £9.9m £22.6m Fintech
8 vHive £8.0m £21.2m Deep tech
9 Orbex £12.0m £17.7m Deep tech
10 Token £12.6m £16.4m Fintech
11 Legl £7.3m £16.2m B2B software
12 Ometria £11.5m £13.9m B2B software
13 Automata £12.3m £12.4m Health
14 Seatfrog £9.6m £12.3m Consumer
15 Full Circl £5.5m £12.3m B2B software
16 XYZ £15.3m £12.2m Consumer
17 Lapse £8.0m £11.8m Consumer
18 Taster £8.1m £11.6m Consumer
19 Bondaval £7.1m £10.6m Fintech
20 Ibex £11.8m £10.0m Health
1. Digital Therapeutics, Inc., formerly Quit Genius, has rebranded as Pelago.
Outlook
Some of the Company’s largest holdings have seen their valuations decrease
as market multiples have declined and their growth rates have fallen. These
early-stage companies require significant investment to develop, however as
investors have retreated from the market over the last two years, it has been
increasingly challenging for such companies to raise funding, so the focus has
been on cash preservation to achieve profitability.
Against this backdrop, the Octopus Ventures team have undertaken a deep review
of the entire portfolio, including each company’s funding and exit plans,
and worked to ascertain and establish the most impactful actions which Octopus
can support to best drive performance. Titan’s capital and resource will be
prioritised for those portfolio companies which have the potential to drive
the greatest returns. The in-house People and Talent team will be utilised to
build high performing portfolio company teams and support on key recruitment
initiatives.
This portfolio focus will leverage the advantages Titan has of being a very
large and mature VCT holding a highly diversified portfolio. With over 80
investments having been made in the last three years, there is the opportunity
for long term returns to the Company. The ongoing focus will be optimising
growth plans for the portfolio and taking advantage of exit opportunities.
Directors’ responsibilities statement
The Directors confirm that to the best of their knowledge:
* the half-yearly financial statements have been prepared in accordance with
‘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; and
* the half-yearly report includes a fair review of the information required by
the Financial Conduct Authority Disclosure Guidance and Transparency Rules,
being: * we have disclosed 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;
* we have disclosed a description of the principal risks and uncertainties for
the remaining six months of the year; and
* we have disclosed 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
Tom Leader
Chair
Income statement
Unaudited Unaudited Audited
Six months to 30 June 2024 Six months to 30 June 2023 Year to 31 December 2023
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Loss on disposal of fixed asset investments — (572) (572) — (1,922) (1,922) — (1,870) (1,870)
Gain on disposal of current asset investments — 17 17 — — — — 355 355
Loss on valuation of fixed asset investments — (106,859) (106,859) — (72,556) (72,556) — (131,655) (131,655)
Gain on valuation of current asset investments — 1,836 1,836 — 589 589 — 8,098 8,098
Investment income 2,446 — 2,446 1,543 — 1,543 4,467 — 4,467
Investment management fees (504) (9,585) (10,089) (522) (9,917) (10,439) (1,054) (20,028) (21,082)
Other expenses (3,022) — (3,022) (3,168) — (3,168) (6,264) — (6,264)
Foreign exchange translation — 10 10 — (1,656) (1,656) — (1,548) (1,548)
Loss before tax (1,080) (115,153) (116,233) (2,147) (85,462) (87,609) (2,851) (146,648) (149,499)
Tax — — — — — — — — —
Loss after tax (1,080) (115,153) (116,233) (2,147) (85,462) (87,609) (2,851) (146,648) (149,499)
Loss per share – basic and diluted (0.1)p (7.0)p (7.1)p (0.1)p (5.9)p (6.0)p (0.2)p (9.7)p (9.9)p
* 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.
Titan has no other comprehensive income for the period.
The accompanying notes form an integral part of the financial statements.
Balance sheet
Unaudited Unaudited Audited
As at 30 June 2024 As at 30 June 2023 As at 31 December 2023
£’000 £’000 £’000 £’000 £’000 £’000
Fixed asset investments 705,407 819,886 791,403*
Current assets:
Corporate bonds 103,393 105,196 108,669
Cash at bank 551 228 2,970
Applications cash (1) 21 338 17,842
Debtors 3,396 4,246 1,218*
Money market funds 80,619 127,037 91,172
187,980 237,045 221,871*
Current liabilities (867) (1,248) (19,530)
Net current assets 187,113 235,797 202,341*
Net assets 892,520 1,055,683 993,744
Share capital 1,667 1,548 1,594
Share premium 120,552 248,511 45,780
Special distributable reserve 965,730 823,000 1,025,614
Capital redemption reserve 122 52 74
Capital reserve realised (105,731) (65,269) (89,570)
Capital reserve unrealised (47,328) 88,667 51,674
Revenue reserve (42,492) (40,826) (41,422)
Total equity shareholders’ funds 892,520 1,055,683 993,744
Net asset value per share 53.5p 68.2 p 62.4p
1. Cash held but not yet allotted.
* In line with accounting best practice, the opening balance of accrued loan
interest has been reclassified to be included in the fair value of
investments. This reclassification amends the balance previously reported as
of 31 December 2023.
The accompanying notes form an integral part of the financial statements.
The statements were approved by the Directors and authorised for issue on 28
September 2024 and are signed on their behalf by:
Tom Leader
Chair
Company Number 06397765
Statement of changes in equity
Share capital £’000 Share premium £’000 Capital redemption reserve £’000 Special distributable reserve (1) £’000 Capital reserve realised (1 )£’000 Capital reserve unrealised £’000 Revenue reserve (1 )£’000 Total £’000
As at 1 January 2024 1,594 45,780 74 1,025,614 (89,570) 51,674 (41,422) 993,744
Comprehensive income for the year:
Management fees allocated as capital expenditure — — — — (9,585) — — (9,585)
Current year loss on disposal of fixed asset investments — — — — (572) — — (572)
Current year gain on disposal of current asset investments — — — — 17 — — 17
Loss on fair value of fixed asset investments — — — — — (106,859) — (106,859)
Gain on fair value of current asset investments — — — — — 1,836 — 1,836
Loss after tax — — — — — — (1,080) (1,080)
Foreign exchange translation — — — — — — 10 10
Total comprehensive income for the period — — — — (10,140) (105,023) (1,070) (116,233)
Contributions by and distributions to owners:
Share issue (includes DRIS) 121 76,665 — — — — — 76,786
Share issue costs — (1,893) — — — — — (1,893)
Repurchase of own shares (48) — 48 (28,008) — — — (28,008)
Dividends paid (includes DRIS) — — — (31,876) — — — (31,876)
Total contributions by and distributions to owners 73 74,772 48 (59,884) — — — 15,009
Other movements:
Prior year fixed asset losses now realised — — — — (5,998) 5,998 — —
Prior year current asset losses now realised — — — — (23) 23 — —
Total other movements — — — — (6,021) (6,021) — —
Balance as at 30 June 2024 1,667 120,552 122 965,730 (105,731) (47,328) (42,492) 892,520
1. Reserves available for distribution.
The accompanying notes form an integral part of the financial statements.
Share capital £’000 Share premium £’000 Capital redemption reserve £’000 Special distributable reserve (1) £’000 Capital reserve realised (1 )£’000 Capital reserve unrealised £’000 Revenue reserve (1 )£’000 Total £’000
As at 1 January 2023 1,368 92,896 27 887,288 (53,430) 160,634 (37,023) 1,051,760
Comprehensive income for the period:
Management fees allocated as capital expenditure — — — — (9,917) — — (9,917)
Current year loss on disposal of fixed asset investments — — — — (1,922) — — (1,922)
Loss on fair value of fixed asset investments — — — — — (72,556) — (72,556)
Gain on fair value of current asset investments — — — — — 589 — 589
Loss after tax — — — — — — (2,147) (2,147)
Foreign exchange translation — — — — — — (1,656) (1,656)
Total comprehensive income for the period — — — — (11,839) (71,967) (3,803) (87,609)
Contributions by and distributions to owners:
Share issue (includes DRIS) 205 160,895 — — — — — 161,100
Share issue costs — (5,280) — — — — — (5,280)
Repurchase of own shares (25) — 25 (18,161) — — — (18,161)
Dividends paid (includes DRIS) — — — (46,127) — — — (46,127)
Total contributions by and distributions to owners 180 155,615 25 (64,288) — — — 91,532
Balance as at 30 June 2023 1,548 248,511 52 823,000 (65,269) 88,667 (40,826) 1,055,683
1. Reserves available for distribution.
The accompanying notes form an integral part of the financial
statements.
Share capital £’000 Share premium £’000 Capital redemption reserve £’000 Special distributable reserve (1) £’000 Capital reserve realised (1 )£’000 Capital reserve unrealised £’000 Revenue reserve (1 )£’000 Total £’000
As at 1 January 2023 1,368 92,896 27 887,288 (53,430) 160,634 (37,023) 1,051,760
Comprehensive income for the year:
Management fees allocated as capital expenditure — — — — (20,028) — — (20,028)
Current year loss on disposal of fixed asset investments — — — — (1,870) — — (1,870)
Current year gain on disposal of current asset investments — — — — 355 — — 355
Loss on fair value of fixed asset investments — — — — — (131,655) — (131,655)
Gain on fair value of current asset investments — — — — — 8,098 — 8,098
Loss after tax — — — — — — (2,851) (2,851)
Foreign exchange translation — — — — — — (1,548) (1,548)
Total comprehensive income for the year — — — — (21,543) (123,557) (4,399) (149,499)
Contributions by and distributions to owners:
Share issue (includes DRIS) 273 207,132 — — — — — 207,405
Share issue costs — (5,737) — — — — — (5,737)
Repurchase of own shares (47) — 47 (32,422) — — — (32,422)
Dividends paid (includes DRIS) — — — (77,763) — — — (77,763)
Total contributions by and distributions to owners 226 201,395 47 (110,185) — — — 91,483
Other movements:
Share premium cancellation — (248,511) — 248,511 — — — —
Prior year current asset losses now realised — — — — (355) 355 — —
Transfer between reserves — — — — (14,242) 14,242 — —
Total other movements — (248,511) — 248,511 (14,597) 14,597 — —
Balance as at 31 December 2023 1,594 45,780 74 1,025,614 (89,570) 51,674 (41,422) 993,744
1. Reserves are available for distribution.
The accompanying notes form an integral part of the financial statements.
Cash flow statement
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 31 December
2024 2023 2023
£’000 £’000 £’000
Reconciliation of profit to cash flows from operating activities
Loss before tax (116,233) (87,609) (149,499)
Decrease in debtors 129 1,246 3,671
Decrease in creditors (842) (1,217) (440)
Gain on disposal of current asset investments (17) — (355)
Gain on valuation of current asset investments (1,836) (589) (8,098)
Loss/(gain) on disposal of fixed asset investments 572 1,922 (1,111)
Loss on valuation of fixed asset investments 106,859 72,556 131,655
Outflow from operating activities (11,368) (13,691) (24,177)
Cash flows from investing activities
Purchase of current asset investments — (364) —
Sale of current asset investments 7,129 — 4,028
Purchase of fixed asset investments (24,509) (64,993) (97,650)
Sale of fixed asset investments 767 39,960 45,637
Outflow from investing activities (16,613) (25,397) (47,985)
Cash flows from financing activities
Movement in applications account (17,821) (22,961) (5,457)
Dividends paid (net of DRIS) (24,115) (34,378) (58,210)
Purchase of own shares (28,008) (18,161) (32,422)
Share issues (net of DRIS) 69,025 149,351 187,852
Share issues costs (1,893) (5,280) (5,737)
Inflow/(outflow) from financing activities (2,812) 68,571 86,026
Increase/(decrease) in cash and cash equivalents (30,793) 29,483 13,864
Opening cash and cash equivalents 111,984 98,120 98,120
Closing cash and cash equivalents 81,191 127,603 111,984
Cash and cash equivalents comprise of:
Cash at bank 551 228 2,970
Applications cash 21 338 17,842
Money market funds 80,619 127,037 91,172
Closing cash and cash equivalents 81,191 127,603 111,984
The accompanying notes form an integral part of the financial statements.
Condensed notes to the financial statements
1. Basis of preparation
The unaudited half-yearly results which cover the six months to 30 June 2024
have been prepared in accordance with the Financial Reporting Council’s
(FRC) Financial Reporting Standard 104 Interim Financial Reporting (January
2024) and the Statement of Recommended Practice (SORP) for Investment
Companies re-issued by the Association of Investment Companies in July 2022.
2. Publication of non-statutory accounts
The unaudited half-yearly results for the six months ended 30 June 2024 do not
constitute statutory accounts within the meaning of Section 415 of the
Companies Act 2006 and have not been delivered to the Registrar of Companies.
The comparative figures for the year ended 31 December 2023 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, Part 16 of the
Companies Act 2006, was unqualified. This half-yearly report has not been
reviewed by the Company’s auditor.
3. Loss per share
The loss per share is based on 1,630,116,808 Ordinary shares (30 June 2023:
1,458,917,593 and 31 December 2023: 1,506,111,802), being the weighted
average number of shares in issue during the period. There are no potentially
dilutive capital instruments in issue and so no diluted returns per share
figures are relevant. The basic and diluted earnings per share are therefore
identical.
4. Net asset value per share
30 June 30 June 31 December
2024 2023 2023
Net assets (£’000) 892,520 1,055,683 993,744
Ordinary shares in issue 1,666,741,092 1,547,797,287 1,593,601,092
Net asset value per share 53.5p 68.2p 62.4p
5. Dividends
The interim dividend declared of 1.2p (2%) per share for the six months ending
30 June 2024 will be paid on 19 December 2024 to those shareholders on the
register as at 29 November 2024.
On 30 May 2024, a 1.9p second interim dividend relating to the 2023 financial
year was paid.
6. Buybacks and allotments
During the six months to 30 June 2024, the Company bought back 47,758,782
Ordinary shares at a weighted average price of 58.6p per share (six months
ended 30 June 2023: 24,948,066 Ordinary shares at a weighted average price
of 72.8p per share; year ended 31 December 2023: 46,895,882 Ordinary shares
at a weighted average price of 69.1p per share).
During the six months to 30 June 2024, 120,898,782 shares were issued at a
weighted average price of 65.5p per share (six months ended 30 June 2023:
204,539,959 shares at a weighted average price of 81.0p per share; year ended
31 December 2023: 272,547,045 shares at a weighted average price of 78.6p
per share).
7. Related party transactions
Octopus acts as the Portfolio Manager of the Company. Under the management
agreement, Octopus receives a fee of 2% per annum of the net assets of the
Company for the investment management services, but in respect of funds raised
by the Company under the 2018 Offer and thereafter (and subject to the Company
having a cash reserve of 10% of its NAV), the annual management charge on
uninvested cash will be the lower of either (i) the actual return that the
Company receives on its cash and funds that are the equivalent of cash subject
to a 0% floor and (ii) 2%. During the period, the Company incurred management
fees of £10,089,000 payable to Octopus (30 June 2023: £10,439,000; 31
December 2023: £21,082,000), which were fully settled by 30 June 2024.
Octopus provides non-investment services to the Company and receives a fee for
these services which is capped at the lower of (i) 0.3% per annum of the
Company’s NAV or (ii) the administration and accounting costs of the Company
for the year ended 31 December 2020 with inflation increases in line with the
Consumer Price Index. During the period, the Company incurred non-investment
services fees of £1,047,000 payable to Octopus (30 June 2023: £1,046,000; 31
December 2023: £2,020,000), which were fully settled by 30 June 2024.
In addition, Octopus is entitled to performance-related incentive fees. The
incentive fee arrangements were designed to make sure that there were
significant tax-free dividend payments made to shareholders as well as strong
performance in terms of capital and income growth, before any
performance-related fee payment was made. There were no performance-related
fees accrued for the six months to 30 June 2024 (30 June 2023: £nil;
31 December 2023: £nil).
Titan owns Zenith Holding Company Limited, which owns a share in Zenith LP, a
fund managed by Octopus.
In the period, Octopus Investments Nominees Limited (OINL) purchased Titan
shares from shareholders to correct administrative issues, with the intention
that the shares will be sold back to Titan in subsequent share buybacks. As at
30 June 2024, no Titan shares were held by OINL (30 June 2023: no shares; 31
December 2023: no shares) as beneficial owner. Throughout the period to 30
June 2024, OINL purchased 7,840 shares (30 June 2023: 1,602,591; 31 December
2023: 1,883,000 shares) at a cost of £5,000 (30 June 2023: £1,372,000; 31
December 2023: £1,563,000) and sold 7,840 shares (30 June 2023: 1,602,591;
31 December 2023: 1,883,000 shares) for proceeds of £5,000 (30 June 2023:
£1,171,000; 31 December 2023: £1,353,000). This is classed as a related
party transaction as Octopus, the Portfolio 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.
Several members of the Octopus investment team hold non-executive
directorships as part of their monitoring roles in Titan’s portfolio
companies, but they have no controlling interests in those companies.
The Directors received the following dividends from Titan:
Period to Period to Year to
30 June 30 June 31 December
2024 2023 2023
Tom Leader (Chair) 1,792 1,625 1,889
Matt Cooper (1) 19,893 70,597 —
Jane O'Riordan 4,268 4,428 6,901
Lord Rockley 2,945 2,126 2,776
Julie Nahid Rahman 85 — 89
Gaenor Bagley 904 733 901
Rupert Dickinson (2) — — —
1. Matt Cooper stepped down as a Director on 14 June 2023.
2. Rupert Dickinson was appointed as a Director on 1 May 2024.
8. Voting rights and equity management
The following table shows the percentage voting rights held by Titan of each
of the top ten investments held in Titan, on a fully diluted basis.
% voting rights
Investments held by Titan
Mr & Mrs Oliver Ltd (trading as Skin+Me) (1) 20.6%
Digital Therapeutics (trading as Pelago, formerly Quit Genius) 14.0%
Permutive Inc. (1) 17.8%
Vitesse PSP Limited 14.6%
Amplience Limited 20.5%
Many Group Limited (trading as Many Pets) (1) 7.5%
Elliptic Enterprises Limited (1) 11.3%
vHive Tech Limited 19.0%
Orbital Express Launch Limited (trading as Orbex) 10.0%
Token.IO Limited (1) 13.5%
1 These companies have also been invested in by other funds managed by
Octopus.
9. Post balance sheet events
The following events occurred between the balance sheet date and the signing
of this half‑yearly report:
* a final order to cancel share premium amounting to £120.6 million was
granted on 30 July 2024.
10. Half-Yearly Report
The unaudited half-yearly report for the six months ended 30 June 2024 will
shortly be available to view at octopustitanvct.com.
A copy of the report will be submitted to the National Storage Mechanism and
will shortly be available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
For further information please contact:
Rachel Peat
Octopus Company Secretarial Services Limited
Tel: +44 (0)80 0316 2067
LEI: 213800A67IKGG6PVYW75