Octopus Titan VCT plc ("Titan" and "the Company")

Annual Report and Accounts for the year ended 31 October 2018

Titan today announces the final results for the year to 31 October 2018 as below.

These results were approved by the Board of Directors on 29 January 2019.

You may view the Annual Report in full at www.octopusinvestments.com shortly. All other statutory information will also be found there.

Octopus Titan VCT plc (‘Titan’ or ‘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 unquoted companies. The Company is managed by Octopus Investments Limited (‘Octopus’ or ‘Portfolio Manager’) and Octopus AIF Management Limited (the ‘Manager’).

Financial Summary

 As at 31 October 2018As at 31 October 2017
Net assets (£’000)609,401432,703
Profit after tax (£’000)11,23116,181
Net asset value (‘NAV’) per share93.1p96.4p
Cumulative dividends paid since launch71.0p66.0p
NAV plus cumulative dividends paid (‘Total Value’)164.1p162.4p
Total return*1.7p3.5p
Total return**1.8%3.6%
Dividends paid in the year5.0p5.0p
Final dividend proposed***3.0p3.0p

*Calculated as the change in NAV in the year plus dividends paid in the year.

**Calculated as total return/opening NAV.

***Payable on 29 April 2019 to those shareholders on the share register on 12 April 2019, subject to shareholder approval at the Annual General Meeting.

Key Dates

Final dividend payment date                                          29 April 2019

Annual General Meeting                                                14 March 2019
                                                                                   (11.30 a.m. at 33 Holborn, London EC1N 2HT)

Interim Results to 30 April 2019 published                       June 2019

Chairman's Statement 

I am pleased to present the annual results for Octopus Titan VCT for the year ended 31 October 2018.

The NAV at 31 October 2018 was 93.1p, a net increase of 1.7p per share from 31 October 2017 after accounting for the dividends of 5.0p per share paid in the year, following the payment of dividends in April and August of 3.0p and 2.0p per share respectively. The Total Value (NAV plus cumulative dividends paid per share since launch) at the end of the period is 164.1p. This return brings the tax-free annual compound return for the original shareholders to 5.6% since Titan’s launch.

As shareholders may recall, we were delighted to have raised over £205 million before expenses in our fund raising which closed to new applications on 23 March 2018. Following this, we raised a further £8 million from the shares allotted through the dividend reinvestment scheme associated with the dividends paid on 27 April and 24 August. As at 31 October 2018, Titan’s net assets totalled £609 million, and we remain excited about continuing to build on the existing portfolio of early stage technology companies which exemplify those for which VCT funding is intended. We would like to thank all shareholders for their continued support in this endeavour.

As is to be expected following such a large fundraising, we now have un-invested cash totalling over £176.5 million as at 31 October 2018 (compared to £130.2 million as at 31 October 2017 and excluding shareholders’ funds awaiting allotment). This gives us the ability to continue to support our portfolio of high-growth businesses for the immediate future, many of which need further funding to achieve their ambitious plans, as well as to add new companies to the portfolio. In the year to 31 October 2018, we deployed a total of £179.1 million comprising £122.7 million in new and follow-on investments, £32.6 million in dividends (including the dividend re-investment scheme (DRIS) shares allotted), £8.9 million in share buybacks and £14.9 million in running costs. Following this, and taking account the amount of funds raised during the year and proceeds received from divestments, Titan is broadly neutral in terms of cash and cash equivalents (including OEICs) versus 31 October 2017 and we have, therefore, announced a further fundraise of up to £200 million.

The UK entrepreneurial community continues to thrive, and as a result of that and successful previous fundraising, Octopus has been able to increase its new investment rate significantly, completing more than double the number of investments into new companies compared to the previous year. While these companies will take time to come to fruition and show their success or otherwise, the Board is pleased Octopus has achieved this goal and enthusiastic to be able to take up such opportunities, placing Titan at the forefront of providing support for young high growth UK businesses.

Investment Portfolio Review
We are pleased to report a net uplift in the value of the portfolio of £29.7 million during the period, excluding additions and disposals.

In total the portfolio now consists of 72 companies, of which one has been added since 31 October 2018, in to which £5.0 million has been invested.

The uplift in valuation has been driven by the strength of performance of a number of companies, specifically Amplience, WaveOptics, DePop, Digital Shadows and Zynstra. Collectively, 34 investee companies drove an uplift of £64.8 million. Offsetting this, 16 companies saw a collective decrease in valuation of £35.1 million where performance has been more challenging including MIRACL which, despite additional financial support during the year, unfortunately saw a further decline in performance since that investment. Octopus believes a number of these businesses may have the potential to overcome the issues they face and return to their ambitious growth plans, so continues to work with them to try to achieve this. In some cases, following careful consideration, this may include providing further funding to ensure the business has sufficient capital to execute on such a strategy. This can be seen in the cases of both Uniplaces Limited and Property Partner (LHE Holdings Limited).

Titan has benefitted from successful transactions in both Tails.com (Tailsco) and Secret Escapes this year, which together saw proceeds of more than £20 million returned to Titan. In April, the Company sold its stake in Tailsco to Nestle Purina Petcare, resulting in total proceeds of almost £9 million (a small balance of which is expected to be received in 2019), compared to an initial investment of £1.5 million. In July, the Company sold part of its stake in Secret Escapes held via Zenith Holding Company Limited. This transaction completed at a price around 80 times that of the initial price Titan purchased shares at, returning £11.5 million to Titan. We are proud to be able to add these successes to our history of profitable realisations.

In addition, Titan also realised investments in Mi-Pay Group plc and Time Out Group plc at a loss during the year. Shareholders may recall Mi-Pay Group became a listed business in 2014, while Titan acquired its shares in Time Out Group as consideration for the sale of YPlan (Leanworks Limited), also in 2014. Unfortunately, both businesses saw a sustained decline in share price, and as a result, Octopus elected to realise Titan’s investment when liquidity was available. While it is disappointing to see unprofitable realisations in the portfolio, we know that some such losses are to be expected when making investments into early stage, high growth businesses and remain confident that the high performers in the portfolio will outweigh the failures.

Turning to investments made during the previous 12 months, £61.0 million was invested into 20 new companies and £61.7 million was invested into 25 follow-on investments as detailed in the Portfolio Manager’s Review. As anticipated by Octopus, given the volume of high quality investment opportunities available in the UK and Europe, this is a significant increase in investment rate compared to the 12 months to 31 October 2017, during which a total of £22.9 million was invested into 8 new companies and £38.9 million was invested into 23 follow-on investments.

Performance Incentive fees
Titan’s performance in the year has meant that a performance fee of £2.8 million has been charged, of which £2.7 million has been earned by Octopus and will be paid in February 2019, with the balance of £0.1 million accrued and payable subject to the achievement of existing performance hurdles in the future. The performance fee is calculated as 20% on all gains above the High Water Mark, the highest total value as at previous year ends, of 162.4p as at 31 October 2017. The accrued performance fee relates to Titan 5 shares.

We are pleased to confirm that the Board has decided to declare a final dividend of 3.0p (2017: 3.0p) per share in respect of the current financial year, which will be paid on 29 April 2019 to shareholders on the register as at 12 April 2019, resulting in full year dividends of 5.0p. This represents a tax-free yield of 5.2% on the opening Net Asset Value.

Our ambition has been to pay annual dividends of 5p per share. However, we are conscious of not eroding the Net Asset Value per share too far through the payment of dividends.

Those shareholders who prefer the value of their investment to remain more steady have the opportunity to reinvest their dividends through the DRIS (which also affords them the extra 30% tax relief). A significant proportion of current shareholders already take advantage of this, with 26% of the total value of the Interim dividend paid in August 2018 reinvested under the Scheme.

Fundraise and Buybacks
As previously stated, Titan successfully raised £205 million (£198 million net of up-front fees) during the year, excluding funds raised through the DRIS. The Board announced a further fundraise of up to £200 million (including the over-allotment facility) giving new and existing shareholders the opportunity to invest into Titan. On 13 December, £78.1 million (£75.7 million net of costs) was allotted under this offer and additional unallocated applications received to 29 January 2019 amount to over £21.5 million. Given the strength of inflows to date, the Board believes there is a good possibility of achieving the extended fundraise target of £200 million and that the over-allotment facility will be utilised.

During the year, Titan repurchased 9.9 million shares (representing 2.2% of the share capital as at 31 October 2017). The Board continues to buy back shares from shareholders at no greater than a 5% discount to NAV, subject to a maximum of 5% of the share capital in any one year.

VCT Qualifying Status
PwC provides both the Board and Octopus with advice concerning ongoing compliance with HMRC rules and regulations concerning VCTs. The Board has been advised that Titan continues to be in compliance with the conditions laid down by HMRC for maintaining approval as a VCT.

As at 31 October 2018, over 95% of the portfolio (as measured by HMRC rules) was invested in VCT-qualifying investments as reviewed and confirmed by PwC, significantly above the 70% current VCT-qualifying threshold. The required level will rise to 80% for accounting periods beginning after 6 April 2019. Given the current qualification level and the analysis undertaken with Octopus, the Board is confident Titan will be in a position to exceed this requirement.

Annual General Meeting (‘AGM’)
The AGM will take place on 14 March 2019 at 11.30 a.m. and will be held at the offices of Octopus Investments Limited, 33 Holborn, London, EC1N 2HT. I hope to meet as many shareholders as possible at this event, which provides an opportunity for you to meet the Board and Octopus, and to hear an update on Titan’s activities and future plans. To ensure we are able to respond to any questions you may have for either the Portfolio Manager or Titan VCT Board, please feel free to send these via email to TitanAGM@Octopusinvestments.com prior to the event, although we will also welcome questions at the AGM itself. We will do our best to address as many shareholder questions as possible in the meeting. 

Board of Directors
Since the merger of the Titan funds in 2014, the Board has consisted of three of the five Chairpersons of the original funds and Matt Cooper who remains Octopus Group’s representative. We believe it was important to maintain continuity in this regard, particularly in light of the significant increase in the size of the Company in recent years. However, we recognise the importance of ensuring the Board remains independent and, as previously announced, an additional Non-Executive Director, Tom Leader, subsequently joined the Board on 8 August 2018. Tom has over 26 years of private equity experience. He is currently Director and Head of Portfolio, Unquoted Pool at Caledonia Investments plc and full details of his CV can be found in this years’ Annual Report.

We believe that the combination of the experience brought by existing Board members and fresh perspective brought by Tom is a strong one, and something which will be in the best interests of shareholders. The independence of Non-Executive Directors with more than nine years service has been assessed in the Directors Report in this years’ Annual Report.

Finally, as at 9 April 2018, Nicola Board resigned as Company Secretary and Parisha Kanani was subsequently appointed. The Board would like to thank Nicola for her hard work over the past three years, and welcome Parisha.

Investment Management Agreement and Accounting and Administration Agreement
The investment management (IMA) and administration agreements (AA) between Octopus and Titan were signed in November 2014 (following the merger of the five Titan VCTs) for a fixed four-year term, terminable by the parties on 12 months’ written notice thereafter. As detailed in the current prospectus and subsequently in the Shareholder Circular on 9 November 2018, in light of the size of the fund we have terminated the existing agreements and agreed new terms with Octopus. These changes are intended to further enhance alignment between Titan and Octopus, helping to ensure the focus remains on the optimal outcome for shareholders.

Full details can be found in Note 19 of the Annual Report, but in summary:

•     The annual management charge (AMC) on uninvested cash raised in the current share offer and thereafter has been amended to reduce cash drag;

•     A cap has been placed on the administration and accounting fees that Octopus receives;

•     The cap relating to Titan’s total expense ratio (TER) has been reduced from 3.2% to 2.5%; and

•     From 31 October 2018, Octopus will no longer receive new fees from the companies that Titan invests in and any such new fees will instead be passed to Titan.

Given many of these changes directly contribute to a reduction of Titan’s running costs, we believe these changes are very positive, and hope they are welcomed by shareholders. Subsequent to the period end, the resolution to make these amendments as proposed to shareholders was carried at the General Meeting held on 6 December 2018.

Auditor to the Fund
At the last AGM, James Cowper Kreston, our Auditor for the last five years, was re-appointed. However, they subsequently informed us that they have taken the decision to withdraw from auditing certain Public Interest Entities for the time being (including VCTs) because of the increasing regulatory landscape and associated costs. The Board has, therefore, carried out a tender process to appoint new Auditors and it has been decided to appoint BDO, pending their re-appointment at the AGM being held in March 2019. We would like to thank James Cowper Kreston for its excellent service over the last five years and we look forward to continuing to work with BDO.

Principal Risks and Uncertainties
The Board continues to regularly review the risk environment in which Titan operates. There have been no significant changes to the key risks which are fully described on pages 9 and 10 of the Annual Report. The Board does not anticipate there will be significant changes to these risks.

The last 12 months have been a particularly busy period for Titan.

We continue to be very pleased by the support from new and existing shareholders and the resulting success of our fundraising in the past year. While the macro environment remains somewhat uncertain in the near term, such fundraising success means Titan is well positioned to continue investing in both the most compelling new UK technology businesses, as well as the growth plans of the appropriate businesses within the portfolio.

We have been pleased to further enhance and align our relationship with Octopus this year, which was awarded Best VCT Investment Manager by the Growth Investor Awards 2018. It has also been encouraging to see Octopus increase its significant resource commitment to manage Titan, expanding the Octopus Ventures team by around 50% in the last twelve months to ensure it continues to be able to make new investments and manage the resultant enlarged portfolio. With this additional resource, the team has also refined its focus towards technology and tech-enabled businesses in the three key areas of industry, money and health to discover the next generation of innovators.

The Board remains positive about the prospects of the existing portfolio. We look forward to working with the investee companies toward their ambitious goals and hope to see further profitable realisations in the coming years as a result. As previously counselled however, this is expected to take some time, and shareholders should bear in mind that the typical period from investment until realisation for early stage technology businesses can be a number of years. As a result, we are still likely to see some businesses encountering turbulent times and possibly failure, prior to the hoped for profitable exits. In the case of particularly profitable realisations from the portfolio, we will continue to pay special dividends, to enhance the annual dividend.

Finally, the Board believes there are many reasons to remain confident about the future for Titan despite current uncertainties, including the implications of Brexit. I would like to conclude by thanking Octopus on behalf of the Board and all shareholders for their hard work, without which our investment strategy would not achieve the success we are seeing.

John Hustler
29 January 2019

Portfolio Manager's Review

Personal Service
At Octopus, we focus on both managing your investments and providing our investors with regular and open communication. Our updates are designed to keep you informed about the progress of your investment.

Octopus was established in 2000 and has a strong commitment to both smaller companies and to VCTs. At the time of writing we manage four VCTs, including Titan, and manage over £1 billion in the VCT sector.

Investment Strategy
Titan invests in pioneering entrepreneurs looking to change the world by creating new markets or radically improving traditional industries. The excellent quality of our deal flow means that we are typically in a position to select the most talented of teams leading technology or tech-enabled businesses to achieve this. The opportunity is significant - in 2010, there were only two European technology companies founded after 2000 valued at more than a billion dollars, one of which was from the UK; by 2017, this had grown to 50, with 20 being UK businesses. We’re excited to be part of supporting Britain’s brightest businesses of tomorrow, and are proud to have seen a number of successes in the portfolio. For example, having invested in 2009, our final exit from Zoopla Property Group (now known as ZPG) in 2017 represented an increase of 33 times that of the initial share price paid for the company. In addition, shareholders have also benefitted from multiple high-profile sales, which have enabled Titan to pay out tax-free dividends. For example, Titan successfully realised its investments in Magic Pony, Vision Direct and SwiftKey in 2016. Collectively, these sales returned a total of £48 million to the Company, compared to initial investment that totalled just £10 million. Based on a strategy of investing in unusually talented entrepreneurs addressing the largest markets and industries ripe for disruption, we have created a diverse portfolio spanning multiple industries and business sectors.

Within the VCT rules of a maximum annual investment of £10 million per company and a lifetime limit of £20 million for Knowledge Intensive companies (most of which Titan portfolio companies qualify as), we typically look to invest in significant minority equity stakes in these qualifying companies, first investing a relatively small amount, and then investing further as the portfolio companies achieve the milestones we agree with management teams. Our investment provides the capital for businesses to build and grow their operations. We usually expect to realise our investments through trade sale (for example, to a larger technology company such as Amazon, Google or Microsoft, all recent acquirers of Titan portfolio companies), third party investment or IPO on a stock exchange. Our view is that if we identify, support and exit category leading businesses, with the UK continuing to lead Europe in entrepreneurism, then the returns we can generate for Titan shareholders can be significant.

Many portfolio companies meet and exceed the expectations initially set. In these situations, we actively seek to increase our investment exposure as these companies demonstrate their ability to create significant and valuable businesses. Recent examples here include Amplience, Bought By Many, and WaveOptics amongst others, where we have proactively looked to invest further in subsequent rounds of funding and increase our ownership stake, with the intent of maximising the impact of a positive realisation on Titan’s returns.

Whilst many of our investments go on to become very successful companies and sometimes household names, it is inevitable that some companies will not perform. We typically look to take a board seat when we make an investment, which enables us to closely monitor progress and bring in the appropriate support from within our team or wider network to help each portfolio company reach its potential. In situations where a company is performing less well and not meeting the pre-agreed milestones, we will usually take one of a few courses of action. We may work with the company to help them secure funding from a new investor and still invest alongside that investor to maintain Titan’s holding in the business. This helps a company to build the company’s potential sources of help and funding which can help maximise its chances for success. In other cases, we may have to make more difficult decisions. Where performance and progress continues to be behind where it should be, we would not usually expect to invest further if we did not feel that a portfolio company could achieve the level of returns we target. In some instances we believe companies have potential to recover value to varying degrees. In these cases, we may choose to invest further to protect our existing investment and maximise the chances of a return of some capital to Titan.

The Total Value has seen a significant increase since Titan’s first year end (31 October 2008), from 89.9p to 164.1p at 31 October 2018. This represents an increase of 83% in value since the first full year of Titan, and dividends paid since inception of 71.0p. Since launch, a total of over £97 million has been distributed back to Titan shareholders as tax-free dividends.

As at 31 October 2018 the NAV was 93.1p per share, compared to 96.4p per share as at 31 October 2017 which represents an increase in NAV of 1.7p per share after adding back dividends paid during the year of 5.0p (2017: 5.0p) per share. This represents an increase of 1.8% (2017: 3.6%). The performance of the portfolio continued to be strong this year with uplifts in fair value which totaled over £64.8 million. Downward revaluations in the period totaled £35.1 million. In aggregate the value of the portfolio, excluding new and follow-on investments and disposals in the year, increased by 10%.

The performance over the five years to 31 October 2018 is shown below:

NAV, p101.4102.797.996.493.1
Dividends paid, p47.552.
Total value, p148.9154.7158.9162.4164.1
Total return %11.8%5.7%4.1%3.6%1.8%
Dividend yield5.3%4.4%8.8%5.1%5.2%
Equivalent dividend yield for a higher rate tax payer7.8%6.6%13.0%7.6%7.7%

There has been a decrease in valuation of Titan’s cash and cash equivalents of £3.8 million in the year to 31 October 2018. Given the uncertainty and expected increased volatility of the global markets, it has been decided to take less risk with the cash and cash equivalent investments for the foreseeable future, with the objective of these investments generating sufficient returns to cover costs, at limited risk to capital. The allocation across these products is reviewed regularly by the Titan Board and may include investments into other products managed by Octopus.

Portfolio Review
The portfolio as at 31 October 2018 encompassed investments in 71 companies (69 unquoted and two quoted, excluding four companies in liquidation and one in administration, but including the three underlying companies in Zenith).

Liquidations and administrations(2)

The progress made by many of the portfolio companies in the last 12 months has been impressive. Within the portfolio, some particular highlights include;

•     The Sunday Times Hiscox Tech Track 100 league table ranks Britain’s 100 private tech (TMT) companies with the fastest-growing sales over their latest three years. It is compiled by Fast Track and published in The Sunday Times each September. In 2018, BoughtByMany, Secret Escapes, DePop and Amplience were all featured;

•     Wired released its European 100 Hottest Startups list and Titan has invested in six of the 10 London-based companies (Fluidly, BBM, Chiaro, Streetbees, Elliptic, Trouva);

•     Amplience, the global leader in Content and Asset Management as-a-Service, was named a Strong Performer in The Forrester Wave™: Web Content Management Systems, Q4 2018 report shortly after the year end in November. Amplience Dynamic Content achieved the highest-possible scores in a number of criteria and Amplience’s ability to enable collaborative content planning, tasks, delivery and high-level attribution in a single platform was described as a ‘game-changer’ for commerce scenarios;

•     BehavioSec, the pioneer in continuous authentication through Behavioral Biometrics, raised a $17.5 million Series B investment, led by Trident Capital Cybersecurity. Cisco Investments and ABN AMRO also joined the round alongside existing investors including Titan. Proceeds of the investment will be used to expand global operations and relocate corporate headquarters to the United States;

•     CurrencyFair, which provides cheap, fast, secure international money transfers, announced the acquisition of the Hong Kong-based payments company, Convoy Payments Ltd in August 2018. The deal marks CurrencyFair’s first step into the Asian market and is part of a wider €20 million investment plan;

•     Medisafe, the leading medication management platform with over four and a half million registered users, announced a further step in its collaboration with Merck KGaA, Darmstadt, Germany, a leading science and technology company. The initiative, which is supporting medication adherence and engagement for patients taking Merck KGaA, Darmstadt, Germany’s cardiometabolic medications has now been launched in Brazil, Mexico and Russia;

•     OLIO, a new portfolio company and the world’s only neighbor-to-neighbor food sharing app, were announced as winners of the United Nations ‘Momentum for Change’ climate action award. These projects showcase how ideas, big and small, are successful in tackling climate change. Activities range from a mobile app that promotes the fight against food waste and hunger worldwide to an entire government that is taking 100% responsibility for its greenhouse gas emissions. The 15 winners were chosen from a pool of over 560 applications from all over the world ranging from businesses and governments to communities and organizations; and

•     WaveOptics, the world leading designer and manufacturer of diffractive waveguides for use in Augmented Reality (AR) wearables, raised $26 million from existing shareholders and new investors, Goertek and Optimas Capital Partners. Goertek is a global leader in the design and manufacturing of high-tech consumer electronics. Goertek’s investment is a significant development for the business and follows the announcement that WaveOptics and Goertek have agreed an exclusive manufacturing partnership that will enable the global mass production of waveguides. The capital raised will be used to scale up the business operations on a national and international basis. WaveOptics is building a large volume manufacturing supply chain to meet customer demand from Asia and US markets. The business is also investing in its overseas infrastructure having recently opened offices in Los Angeles and Taipei and plans to open a new office in Beijing in 2019.

Titan made three full disposals in the year (Time Out, Tailsco and Mi-Pay) and one partial realisation (Secret Escapes).

Time Out and Mi-Pay were both listed on the London Stock Exchange and Titan’s holdings were unfortunately sold at a loss totalling £0.3 million in the year.

However, Tailsco and Secret Escapes were much more successful. In April, Titan sold its stake in Tailsco to Nestle Purina Petcare, resulting in total proceeds of £8.7 million (a proportion of which is expected to be received in 2019), compared to an initial investment of £1.5 million. In July, Titan sold part of its stake in Secret Escapes held via Zenith Holding Company Limited. This transaction completed at a price around 80 times that of the initial price Titan purchased shares at, returning around £11.5 million back to the VCT. We are proud to be able to add these successes to our history of profitable realisations.

New and follow-on investments
We have proactively increased the size of the Octopus investment team significantly over the last five years to enable us to increase the rate of new investments from 8-10 a year previously to 15-20 currently. This is also only possible given the quality of the deal flow we see, the health of the UK entrepreneurial ecosystem and an enlarged team, having expanded by around 50% in the last twelve months to ensure we continue to be able to make new investments and manage the resultant portfolio. With this additional resource, the team has also refined its focus towards technology and tech-enabled businesses in the three key areas of industry, money and health to discover the next generation of innovators.

Having visibility over the best available investment opportunities in the market is largely due to the increasing prominence of Octopus in supporting many of the fastest growth technology businesses in Europe (e.g. Swiftkey, Zoopla and Secret Escapes) which in turn makes Octopus an increasingly attractive investment partner for technology entrepreneurs looking to build global businesses. The combined impact of the increase in investment team resource and the strengthening brand of Octopus means that we believe we see approximately 60-70% of the best deals in the UK. The investment team receives thousands of investment opportunities a year and is in the privileged position of being able to diligence these in order to identify the small number of investment opportunities that will be taken to Investment Committee ahead of making an investment.

Given the health of the underlying portfolio and the cash requirement to scale these businesses, we have good visibility on the opportunity to invest further into companies we already know and understand. It is for this reason that approximately 50 -75% of funds raised will be invested in follow-on deals. We were very successful in our previous fundraise, exceeding our target and closing the fundraise earlier than expected. The funds raised during the year have given us the capability to increase our new investment rate to match the quality of the opportunity we are seeing in the market, and we are on target to deploy the capital raised in line with our budget.

The twenty new investments in FY 2018 are comprised of:

•     Allplants Ltd - delivers healthy, chef-made, vegan meals, for you to reheat at home either as a one-off or on a subscription basis;

•     Casual Speakers Ltd (trading as Jolt) - an educational technology business offering curated career development sessions by live-streamed vetted expert practitioners;

•     Context-Based 4 Casting (C-B4) Ltd (trading as C-B4) - applies machine-learning & AI algorithms to point-of sale data to capture lost sales and improve customer experience for brick and mortar retail stores and their IT teams.

•     Dead Happy Limited - an innovative, online, direct-to-consumer life insurance provider with differentiated pricing scheme;

•     DePop Limited – a social marketplace for unique things;

•     Dogtooth Technologies Limited - builds intelligent autonomous robots which are used to harvest soft fruits;

•     GTN Ltd – technology used in the hunt for new drugs which combines and builds upon techniques from machine learning and quantum physics to simulate, filter and search for drug-like molecules, previously entirely hidden from view;

•     Katalyst Inc – offers premium boutique full body Electro Muscular Stimulation fitness;

•     Intrepid Owls Ltd (trading as Rest Less) – a platform seeking to engage the large and growing number of retirees with flexible, part time opportunities to work or volunteer;

•     Memrise Inc – a language learning platform;

•     Mush Limited – a local social network for new and expectant mums;

•     Olio Exchange Limited - an online marketplace facilitating neighbour-to-neighbour interactions through gifting of food that would otherwise be wasted;

•     OpenSignal Inc – building a platform to become the global ‘gold standard’ for mobile network coverage mapping;

•     Patch Gardens Ltd - a highly-curated ecommerce site aimed at urban dwellers, enabling them to discover, purchase and care for appropriate plants for their space;

•     Phoelex Ltd – new technology for components used to connect servers in large datacentres;

•     Picsoneye Segmentation Innovation Limited (trading as Pixoneye) – uses computer-understanding to analyse on-device user-data;

•     PLU&M Limited (trading as The Plum Guide) – handpicks the world’s most inspiring accommodation and hosts, using a mix of algorithms and visits by experts;

•     Rook Wealth Limited (trading as Multiply) – provides automated, personalised and holistic financial plans for those who historically have not had access to financial advice;

•     Seatfrog Limited - allows travellers to upgrade from standard to first class travel through a live auction via its mobile app; and

•     SLAMcore Limited - developing algorithms that allow robots and drones to truly understand the space around them.

Subsequent to the year end one new investment and 12 follow-on investments were made, totalling £21.8 million.

Supporting our portfolio companies
In order to attract the best entrepreneurs in Europe and to then maximize their full potential, we have invested significant resources in building one of the most significant and experienced venture capital teams in Europe, including our people based in the US and Asia offering dedicated resource for companies looking to expand into these markets. Another key element to how we look to attract and support the most promising investments is through our group of Venture Partners, who no longer co-invest alongside Titan as they did previously, but are now exclusively devoted to helping companies reach their potential and achieve their global ambitions. This group now comprises around eight people and examples of Venture Partners include Stephen Morana, previously Chief Financial Officer at Zoopla and Betfair, Howard Bell, previously Head of Product for PayPal Europe and John Hamm, a management coach that has worked with many executives that have been successful in building global billion-dollar companies. Each of these individuals represent best-in-class expertise within their specific domain and together are working to support a large number of portfolio companies.

The Venture Partners are a key part of how we look to support our companies and are just part of a wider range of assistance through which, we look to have a meaningful impact on how quickly our portfolio companies can scale whilst also limiting the risks in their journey. This also includes: dedicated help from our overseas offices; our wider network of corporates, consultants and advisors who may assist with things from key staff recruitment to consulting or coaching; an annual US CEO Summit to the US West Coast, where portfolio company CEOs meet and learn from world class CEOs, advisors and venture capitalists; as well as a member of our own team typically sitting on the Board of the companies Titan invests in. Our approach to being operationally involved in our portfolio companies is also a very useful tool for winning the most competitive deals and proving our value beyond simply investment.

The entrepreneurial ecosystem in the UK and across Europe continues to thrive, and technology remains a driving force behind many businesses as they look to disrupt, replace or reinvent industries. Despite the ongoing political and economic uncertainty which could bring some challenges in the coming year, we believe the UK remains one of the most exciting markets in which to start, scale and exit a technology business. While some companies may struggle with these challenges, such environments can often also provide opportunities for small businesses such as those in the Titan portfolio, with many ultimately able to thrive as they are small and nimble enough to take advantage of them where other larger incumbents may not. However, as is always the case when investing in small businesses, it is likely to take time for successes to come to fruition, and it may not be unexpected to see some turbulence in the portfolio in the meantime. Ensuring Titan’s investee companies continue to have sufficient funds to drive forward with their growth plans and take up any appropriate new opportunities, as well as providing support through our own team and wider network of experienced advisors, will be important during this period. If we are able to do this and the talented teams behind the companies we have invested in react well, we believe there remains a great deal of potential for success for our investee companies.

Often early-stage companies need more than just access to funding to achieve such success. We offer a suite of assistance ranging from access to best in class specialists to help shape their strategies and execute on them, to assisting with key staff recruitment, as well as any necessary consulting, coaching and mentoring support. This is highly valued by the talented teams seeking funding for their small ambitious businesses, and not only helps add value to the existing companies in the portfolio in a practical way, but also helps attract and secure some of the best investment opportunities in the market. As a result, we’re proud to be one of the most trusted and valued partners for any entrepreneur intent on building a global business valued at £1 billion or more, and this enables Titan to win the most competitive deals. We are fortunate enough to work alongside some of the most successful European entrepreneurs aiming to do just that. Whilst there are a number of portfolio companies which have become household names already, we are confident many more have the potential to be at least equally successful.

We were delighted by the demand from investors and the success of the fundraising which closed early in March 2018. Further, we have already seen significant inflows for the fund raise launched in September 2018. Given the continued progress of the underlying portfolio, our increased investment rate for new deals, and the continued support for the valuable role VCTs play in the UK economy, we are confident that these factors should enable Titan to achieve its full fundraising target again this year. We’d like to take this opportunity to thank existing shareholders and welcome new shareholders for their support in our fundraising efforts.

Changes to VCT legislation
A few technical changes to VCT qualification rules have been introduced in recent years, for example from 6 April 2018 VCTs had to invest at least 30% of funds raised into qualifying holdings within 12 months, and from 6 April 2019, the proportion of funds that VCTs must hold in qualifying investments will rise from 70% to 80%. Given Titan’s current qualifying proportion of over 95% and its current and intended investment rate, we do not believe that these changes will have a material impact on Titan. It also announced that, with effect from 6 April 2018, “knowledge intensive” companies, which are those that have high Research & Development or innovation spending, are able to raise up to £10 million each year from VCTs and EIS, up from £5 million previously. Titan typically invests in knowledge intensive companies and so this is a positive and welcomed change.

Valuation Methodology
Each unquoted portfolio investment will be valued at least twice a year, usually at the Titan interim and year end dates (30 April and 31 October, respectively), although this may vary according to fund raising schedules.

The portfolio investments are valued in accordance with International Private Equity and Venture Capital Valuation (IPEV) Guidelines. In general, this means the investments are valued at fair value.

The value of the unquoted portfolio investments will be combined with the value of the quoted portfolio investments, together with the value of the Fund’s other assets, investments and liabilities to generate the overall Net Asset Value of the Fund.

General Principles
For companies that have raised funds within the previous 12 months of the valuation point, the price of the most recent funding round may be an indicator of Fair Value. However, it may be appropriate to update this value, even if less than 12 months since the last investment, if this value is no longer deemed to be Fair Value. This may include both downward revisions reflecting underperformance, or valuation increases.

For all investment companies, we will consider several triangulated valuation methodologies including recent funding rounds, relevant trading comparables, recent M&A comparables and investment comparables to inform the company valuation, and may adjust up or down accordingly.

For Companies where we consider that there is a material funding risk, additional provisions may be applied.

If you would like to find out more regarding the IPEV Guidelines, please visit their website at: www.privateequityvaluation.com.

The valuations and detailed descriptions of the 10 largest investments in Titan are detailed in the Review of Investments section later in this Report.

The investment costs and amounts invested in the year for each portfolio company are tabulated below.

Investment Portfolio

Fixed asset investmentsSectorInvestment cost as at
31 October 2018

Amount invested in
the year ending
31 October 2018
MIRACL Limited3Security 17,042   4,863
Wave Optics LimitedHardware  13,576   9,802
Amplience Limited3Business Software  13,499   2,513
LHE Holdings Limited (trading as Property Partner)Property 12,357   5,447
Zenith Holding Company Limited2Other  8,963   - 
UltraSoC Technologies LimitedHardware 8,361   - 
Zynstra Limited3Business Software 8,317   - 
Oxcis Aviation Limited (trading as Stratajet)Leisure & Consumer  7,817   - 
Chronext AG Ecommerce  7,708   4,544
Sofar Sounds LimitedLeisure & Consumer 7,705   - 
Uniplaces LimitedProperty  7,621   - 
CurrencyFair Limited3Financial Services  7,551   805
Sourceable Limited (trading as Swoon Editions)3Ecommerce  6,957   - 
Surrey NanoSystems LimitedHardware 6,918   4,925
Digital Shadows Inc.Security  6,223   1,998
Context-Based 4 Casting (C-B4) LtdBusiness Software  6,096   6,096
Bought By Many LimitedFinancial Services 6,024   3,243
Origami Energy Limited3Hardware  5,533   3,500
Artesian Solutions Limited3Business Software  5,481   - 
Streethub Limited (trading as Trouva)Ecommerce  5,476   3,496
Iovox LimitedBusiness Software  5,272   2,000
Antidote Technologies LtdHealth & Medical  5,096   2,107
DePop LimitedEcommerce  5,000   5,000
Allplants LimitedLeisure & Consumer   5,000   5,000
OpenSignal IncBusiness Software  4,862   4,862
Token, Inc3Financial Services  4,837   439
Katalyst IncHealth & Medical  4,820   4,820
Michelson Diagnostics LimitedHealth & Medical  4,795   253
Smartkem LimitedHardware  4,775   1,061
Chiaro Technology Limited (trading as Elvie)3Health & Medical  4,739   1,969
Memrise IncLeisure & Consumer   4,375   4,375
Secret Escapes Limited3,4Leisure & Consumer   4,256   - 
Picsoneye Segmentation Innovation Limited (trading as Pixoneye)Business Software  4,200   4,200
BridgeU Inc.Business Software  4,195   1,260
Conversocial LimitedBusiness Software  4,165   - 
Appear Here LimitedProperty  3,814   - 
Impatients N.V. (trading as MyTomorrows)Health & Medical  3,751   1,662
Semafone LimitedBusiness Software  3,594   - 
Seatfrog UK Holdings LimitedLeisure & Consumer   3,500   3,500
Olio Exchange LimitedLeisure & Consumer 3,500  3,500
PLU&M limited Ecommerce3,500   3,500
Behaviosec Inc3Security  3,336   2,735
Dogtooth Technologies LimitedHardware  3,278   3,278
Big Health LimitedHealth & Medical  3,276   - 
Casual Speakers Limited (trading as Jolt)Ecommerce 3,166   3,166
The Faction Collective SA (trading as Faction)Ecommerce2,968   - 
Medisafe Project LimitedHealth & Medical  2,886   173
Ecrebo Limited3Business Software  2,857   - 
Metrasens LimitedHardware  2,688   - 
Affectv LimitedBusiness Software  2,627   - 
e-Therapeutics plcHealth & Medical  2,415   - 
Eve Sleep Plc3Ecommerce2,394   - 
Bowman Power LimitedHardware  2,305   - 
Trafi Limited3Leisure & Consumer   2,288   - 
Patch Gardens LimitedLeisure & Consumer   2,100   2,100
Elliptic Enterprise LimitedSecurity  2,084   423
Permutive Inc.Business Software  1,863   1,473
Streetbees.com LimitedBusiness Software  1,827   937
Phoelex LtdHardware  1,525   1,525
Dead Happy LimitedFinancial Services  1,500   1,500
Mush LimitedLeisure & Consumer   1,500   1,500
Pop Global Limited (trading as We Got Pop)Business Software  1,500   - 
Segura Systems Limited3Business Software  1,470   - 
Fluidly LimitedBusiness Software  1,400   - 
Rook Wealth Limited (trading as Multiply)Financial Services  1,000   1,000
GTN LtdHealth & Medical  800   800
Slamcore LimitedTechnology  750   750
Intrepid Owls Limited (trading as Rest-Less)Education 550   550
Excession Technologies LimitedBusiness Software  298   90
Phasor Inc.Hardware  250   - 
Total fixed asset investments 318,172122,740

1 Investment cost reflects the amount invested into each investee company from Titan’s 1 – 5 before the 2014 merger and from Titan after the merger. This is different to the book cost which includes the holding gains/(losses) on assets which transferred from Titan’s 1, 3, 4 and 5 to Titan 2 (now Titan) during the 2014 merger, as Titan purchased these assets at fair value.

2 Owns stakes in Nature Delivered Limited (trades as Graze), Secret Escapes Limited and Calastone Limited.

3 These companies have also been invested into by other funds managed by Octopus.

4 The figures for Secret Escapes relate to Titan’s direct investment only.

The table above excludes four companies in liquidation (Shopa Limited, Mailcloud Limited, Hubbub Deliveries Limited and Applied Superconductor Limited) and one in administration (Adbrain Limited).

Review of Investments
Listed below are details of Titan’s ten largest investments by value.

Zenith Holding Company Limited
Zenith Holding Company has a holding in Octopus Zenith LP, an Octopus managed fund, which holds stakes in Secret Escapes, Nature Delivered (Graze) and Calastone, which were formerly held by Titan 1-3 prior to the merger of the five Titan VCTs in November 2014. Following the merger, Zenith Holding Company became a 100% owned investment of Titan.

•  Founded in April 2007, Graze was the UK’s first company to deliver healthy and nutritionally balanced food by post, straight to the home or office. Graze promotes a varied and balanced diet through facilitating the intake of a wide variety of smaller portions of natural, high energy foods throughout the day, allowing for a healthier approach to eating delicious foods. Customers can select graze boxes created by the company’s team of nutrition specialists to place orders for personalised assortments of foods to match their specific tastes and needs including health, diet and indulgent treats. Graze launched in the US in 2013 and in UK retail in 2015, and has offices in the UK and the US.

•  Calastone is a financial technology company. Its mission is to make markets friction-free by connecting trading partners through its global fund transaction network. More than 1400 customers in 34 countries of domiciles are now processing domestic and cross border transactions via Calastone, benefitting from the cost and risk reduction opportunities transaction automation can offer. Its purpose is to use smart technology solutions and industry collaboration to enable global distribution, reduce operational risk, and enhance client profitability. Calastone is part of Fintech50, ranked in The Sunday Times Hiscox Tech Track 100 and is one of the UK Government Tech City’s Future Fifty companies, recognised for high growth and transforming industries. Calastone has offices in London, Luxembourg, Hong Kong, Sydney, Taiwan and Singapore.

•  Launched in 2011, Secret Escapes is an online travel club. Members of Secret Escapes may purchase luxury holidays at significant discounts. Members have the opportunity to purchase for a limited period of time (less than seven days) but can choose when to stay at a particular hotel over an extended period of time. The business has offices in London, Sweden, Spain, Poland, Germany, Singapore and the US, has over 50 million customers globally and operates in 21 countries.

•  Following the sale of Zenith’s remaining shares in ZPG in February 2017, Titan no longer has an investment in ZPG.
Country of incorporation:
Initial investment date:
Investment cost:
Last submitted accounts:
Loss before tax:
Net assets:
The Cayman Islands
June 2013
31 October 2018



Secret Escapes Limited
Titan also holds a direct stake in Secret Escapes.
Initial investment date:
Investment cost:

Last submitted group accounts:
Consolidated turnover:
Consolidated loss before tax:
Consolidated net assets:
April 2011
31 December 2017


Amplience Limited
Amplience helps retailers generate profitable growth through improved online shopping experiences using smartphones, tablet and desktop computers. The Amplience Media Platform (AMP) allows retailers to create campaign and product media that increases customer engagement, sales and average order values. Over 200 leading UK, European and US brands, including Argos, Tesco, Shop Direct Group (Littlewoods.com), LK Bennett, Jimmy Choo, Tom Ford, Labelux and Halfords, report significant benefits from using Amplience. These include saving up to 90% on campaign and product media production, conversion rate increases of up to 200% and a 20% increase in average order values.
Initial investment date:
Investment cost:
Last submitted accounts:
Consolidated turnover:
Consolidated loss before tax:
Consolidated net assets:
December 2010
30 June 2017
not disclosed
not disclosed

Wave Optics Limited
WaveOptics designs a critical component, known as a waveguide, for Augmented Reality (AR) glasses. AR superimposes a computer-generated image on a user’s view of the real world. AR glasses are used in industrial applications, such as on-site maintenance and repairs, manufacturing and logistics. But it is hoped there will be a large consumer market once the technology is sufficiently mature.
Initial investment date:
Investment cost:
Last submitted accounts:
Loss before tax:
Net assets:
December 2015
30 September 2017
not disclosed
not disclosed

Sourceable Limited (trading as Swoon Editions)
Swoon Editions sells high-quality furniture at insider prices. Sourcing direct from factories in India, China and Vietnam, it buys in container quantities and sells direct to consumers and through media partnerships. Its model of volume purchasing and direct sales allows it to sell more efficiently than other retailers.
Initial investment date:
Investment cost:
Last submitted accounts:
Loss before tax:
Net assets:
March 2013
31 July 2017

LHE Holdings Limited (trades as Property Partner)
Property Partner combines residential crowdfunding with a secondary exchange where investors can trade their holdings. The company allows anyone to invest in a property, with as little or as much as they wish, so they can own a share of the property, receive rental income and benefit if its capital value grows. Property Partner carries out the letting and management of the properties on behalf of investors. The company brings accessibility, simplicity and transparency to a residential property market that has traditionally had high barriers to entry.
Initial investment date:
Investment cost:
Last submitted accounts:
Loss before tax:
Net assets:
September 2014
31 December 2017

DePop Limited
DePop is a free to download mobile and tablet app on which you can sell unique items including art, vintage and luxury fashion, illustrations, books, records and trainers.
Initial investment date:
Investment cost:
Last submitted accounts:
Profit before tax:
Net assets:
January 2018
31 December 2017
not disclosed
not disclosed

Chronext AG
Chronext is an online marketplace for new and used watches. Every watch listed online is examined in the company’s watchmaking workshop, which guarantees quality and authenticity. Customers can browse a selection of watches, or pick up their online purchase at the company’s flagship store in London.
Initial investment date:
Investment cost:
Last submitted accounts:
Profit before tax:
Net assets:
March 2014
31 December 2016
not disclosed
not disclosed

Semafone Limited
Semafone provides a service that allows consumers to give their credit card details to call centre operators securely via the telephone keypad. The core value proposition is based on the prevention of ‘card-not-present’ fraud, together with the avoidance of any associated loss of reputation. The service enables the call centres to become PCI DSS (Payment Card Industry Data Security Standard) compliant, as no card data is seen, heard or recorded anywhere in the call centre.
Initial investment date:
Investment cost:
Last submitted group accounts:
Consolidated turnover:
Consolidated loss before tax:
Consolidated net assets:
June 2010
31 December 2017

Digital Shadows
Digital Shadows monitors and manages an organisation’s digital risk (such as cyber threats & data breaches), providing relevant threat intelligence across the widest range of data sources within the open, deep, and dark web to protect their brand, and reputation.
Initial investment date:
Investment cost:
Last submitted accounts:
Profit before tax:
Net liabilities:
March 2011
31 December 2017 (abbreviated)
not disclosed
not disclosed

The top 10 investments detailed above represent 46% by value of the investment portfolio and account for an uplift in valuation of over £38 million for the year.

If you have any questions on any aspect of your investment, please call one of the Octopus team on 0800 316 2295.

Octopus Ventures Team
Octopus Investments Limited
29 January 2019


The financial information set out below does not constitute the Company's statutory accounts for the years ended 31 October 2018 or 31 October 2017 but is derived from those accounts. Statutory accounts for the year ended 31 October 2017 have been delivered to the Registrar of Companies and statutory accounts for the year ended 31 October 2018 will be delivered to the Registrar of Companies in due course. The Auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the Auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The text of the Auditor's reports can be found in the Company's full Annual Report and Accounts at www.octopusinvestments.com

Income Statement 

 Year to 31 October 2018Year to 31 October 2017
Gains on disposal of fixed asset investments2,9852,985581581
Gains on disposal of current asset investments3,1553,155
Fixed asset investments holding gains29,74929,74923,66923,669
Current asset investments holding (losses)/gains(7,161)(7,161)6,6886,688
Investment income595595212212
Investment management fees(2,734)(8,202)(10,936)(1,933)(5,798)(7,731)
Performance fee (2,805)(2,805)(3,852)(3,852)
Other expenses(4,256)(4,256)(2,767)(2,767)
FX translation(95)(95)(619)(619)
(Loss)/Profit before tax(6,395)17,62611,231(4,488)20,66916,181
(Loss)/Profit after tax(6,395)17,62611,231(4,488)20,66916,181
Earnings per share – basic and diluted(1.1)p2.9p1.8p(1.1)p5.0p3.9p

•     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.

Balance Sheet 

 Year to 31 October 2018Year to 31 October 2017
Fixed asset investments 434,897 301,791
Current assets:    
Money market funds72,679 2,453 
OEICs61,581 104,484 
Applications cash*57,679 39,272 
Cash at bank42,210 23,290 
Debtors2,850 5,821 
 236,999 175,320 
Current liabilities(62,494) (44,408) 
Net current assets 174,505 130,912
Net assets 609,402 432,703
Share capital 65,467 44,899
Share premium 299,804 114,404
Capital redemption reserve 2,056 1,071
Special distributable reserve 169,637 211,122
Capital reserve realised 11,245 2,284
Capital reserve unrealised 79,428 70,668
Revenue reserve (18,235) (11,745)
Total equity shareholders’ funds 609,402 432,703
NAV per share 93.1p 96.4p

*Cash held but not yet allotted.

The statements were approved by the Directors and authorised for issue on 29 January 2019 and are signed on their behalf by:

John Hustler

Company No: 6397765

Statement of Changes in Equity 

 Share capital
Share premium
Capital redemption reserve
Special distributable reserve*
Capital reserve realised*
Capital reserve unrealised
Revenue reserve*
As at 1 November 201744,899114,4041,071211,1222,28470,668(11,745)432,703
Share issue (includes DRIS)** 21,553 185,400 206,953
Repurchase of own shares(985)985(8,889)(8,889)
Revenue loss after tax(6,395)(6,395)
Management fees allocated as capital expenditure(8,202)(8,202)
Current year gains on disposal of fixed asset investments2,9852,985
Current year gains on disposal of current asset investments3,1553,155
Prior year fixed asset gains now realised 8,868(8,868)
Prior year current asset gains now realised 4,960(4,960)
Gains on fair value of fixed asset investments29,74929,749
Losses on fair value of current asset investments(7,161)(7,161)
Dividends paid (includes DRIS)(32,596)(32,596)
Performance fee(2,805)(2,805)
FX translation(95)(95)
Balance as at
31 October 2018

*Reserve is available for distribution.

**This is net of allotment fees of £6.6m.

 Share capital
Share premium
Capital redemption reserve
Special distributable reserve*
Capital reserve realised*
Capital reserve unrealised
Revenue reserve*
As at 1 November 201632,2621,619749240,1721,77746,035(6,638)315,976
Share issue (includes DRIS)** 12,959  112,785 125,744
Repurchase of own shares(322)322(2,926)(2,926)
Revenue loss after tax(4,488)(4,488)
Management fees allocated as capital expenditure(5,798)(5,798)
Current year losses on disposal of fixed asset investments581581
Prior year fixed asset gains now realised 5,724(5,724)
Gains on fair value of fixed asset investments 23,669 23,669
Gains on fair value of current asset investments6,688 6,688
Dividends paid (includes DRIS)(22,272)(22,272)
Performance fee(3,852)(3,852)
FX translation(619)(619)
Balance as at
31 October 2017

*Reserve is available for distribution.

**This is net of allotment fees of £4.2m.

Cash Flow Statement

 Year to 31 October 2018
Year to 31 October 2017
Reconciliation of profit to cash flows from operating activities  
Profit before tax11,23116,181
Decrease in debtors2,9716,816
(Decrease)/Increase in creditors(321)255
Gains on disposal of current assets(3,155)-
Losses/(Gains) on valuation of current assets7,161(6,688)
Gains on disposal of fixed assets(2,985)(581)
Gains on valuation of fixed asset investments(29,749)(23,669)
Surplus funds received from fixed asset investments-513
Outflow from operating activities(14,847)(7,173)
Cash flows from investing activities  
Purchase of current asset investments(46,000)(70,000)
Sale of current asset investments84,89735,000
Purchase of fixed asset investments(122,739)(61,880)
Sale of fixed asset investments*22,367180
Outflow from investing activities(61,475)(87,518)
Cash flows from financing activities  
Applications inflows not yet alloted18,40721,312
Dividends paid(24,178)(16,545)
Purchase of own shares(8,889)(2,926)
Net proceeds from share issues198,535120,017
Inflow from financing activities183,875121,858
Increase in cash and cash equivalents 107,55327,167
Opening cash and cash equivalents65,015 37,848
Closing cash and cash equivalents172,56865,015
Cash and cash equivalents comprise  
Cash at Bank42,210 23,290
Applications Cash57,67939,272
Money Market Funds72,679 2,453
Closing cash and cash equivalents172,56865,015

*This includes the distribution from Zenith of £11.8m following the part disposal of Secret Escapes