Octopus AIM VCT 2 plc
Half-Yearly Results
Octopus AIM VCT 2 plc announces its unaudited half-yearly results for the six months ended 31 May 2026.
Octopus AIM VCT 2 plc (the ‘Company’) is a Venture Capital Trust (VCT) which aims to provide shareholders with attractive tax-free dividends and long-term capital growth by investing in a diverse portfolio of predominantly AIM-traded companies.
The Company is managed by Octopus Investments Limited (‘Octopus’ or the ‘Investment Manager’).
Key financials
| Six months to 31 May 2026 | Six months to 31 May 2025 | Year to 30 November 2025 | |
| Net assets (£’000) | £70,323 | £80,772 | £77,423 |
| Profit/(loss) after tax (£’000) | £675 | £(1,371) | £167 |
| Net asset value (NAV) per share1 | 31.8p | 37.9p | 36.9p |
| Dividends per share paid in period | 5.4p | 1.8p | 3.6p |
| NAV total return2 | 0.8% | (2.0)% | 0.0% |
| Interim dividend declared3 | 1.1p | 1.8p | 1.8p |
| Dividend yield4 | 14.6% | 4.4% | 8.9% |
| Cumulative dividends paid since launch5 | 79.9p | 72.7p | 74.5p |
1 NAV per share is calculated on the underlying assets less liabilities of the Company divided by the number of shares.
2 NAV total return is an alternative performance measure calculated as movement in NAV per share in the period plus dividends paid in the period, divided by the NAV per share at the beginning of the period.
3 The proposed interim dividend will be paid on 26 November 2026 to shareholders on the register on 6 November 2026.
4 Dividend yield is calculated as dividends paid in the period, divided by the NAV per share at the beginning of the period.
5 Octopus AIM VCT 2 plc was launched in March 2006.
Chair’s statement
Firstly I would like to record my thanks to Keith Mullins, who stepped down as Chair at the 2026 Annual General Meeting (AGM), for his many years of service and the significant contribution, leadership and guidance he provided throughout his tenure. I am pleased to welcome Robert (Ted) Holmes to the Board as a Director with effect from the AGM. Ted brings extensive investment management and financial experience, having held senior roles across asset management, finance and listed investment companies. We now have a significantly rejuvenated Board as the result of changes over the last three years and our continuing succession plan.
The market, events and changing legislation
During the period there have been major UK and world events that have materially affected global markets and the specific taxation and investment parameters within which the Company operates, providing an increased investment environment in which to deploy funds. In the opinion of the Board, this wider short term market volatility and the tax efficient structure offered by the VCT highlight the attraction and potential of investing patient capital in a growth market such as AIM, and does so with expert portfolio management from the Octopus team.
As reported in the Investment Manager’s review, the interim period to the end of May 2026 had a mixed backdrop for UK equity markets. The early part of the period was characterised by returning investor confidence, better market performance, increased fundraising activity and the long-awaited announcement of VCT reforms.
However, equity markets weakened sharply in March with the Iranian war. This environment weighed particularly on UK domestic equities and economically sensitive growth stocks, while companies with exposure to oil, gas, and commodities (which are outside our VCT investible universe) proved more resilient.
Markets rebounded strongly in April, proving more supportive for smaller companies. Amidst ongoing macroeconomic uncertainty, investor sentiment improved towards higher-quality smaller businesses with strong balance sheets, recurring revenues, and good earnings visibility. As the Investment Manager’s analysis highlights, our portfolio is strongly represented by businesses that have consistent and progressive underlying performance.
The Company therefore delivered a positive performance relative to the prior year. After adding back the final dividend of 1.8p per share and a special dividend of 3.6p over the period, the NAV generated a total return of +0.8%. This compares to a 9.7% increase in the FTSE AIM All Share and a 8.8% rise in the FTSE All Share, both on a total return basis and bolstered by the major influence of energy and resources investments.
The Investment Manager and the portfolio
The Board, especially in times of volatility, is careful to consider the effectiveness of the decisions taken by the Investment Manager and the performance of the portfolio, providing challenge where necessary and ensuring our understanding of the rationale of the investment and monitoring processes.
While recent returns are modest in absolute terms, this performance should be viewed in the context of the uneven market environment and with full understanding of the comparative measures. Returns across AIM over the period were heavily influenced by a concentrated group of non-energy minerals companies, including precious metals and mining exploration, which accounted for approximately 7.6% of the index but materially contributed to the overall gain.
The Company’s performance therefore reflects the underlying resilience of the portfolio which, in the context of the trading performance of individual investments, provides some confidence for the future. Returns were supported by stable earnings and the successful realisation of several investments crystallising net profits over original cost of £11.0 million, equivalent to an average uplift of 26x. This will be highlighted in greater detail in the Investment Manager’s Review.
The portfolio remains well positioned, with a focus on high-quality, fundamentally strong businesses with growing earnings. As market conditions normalise and investor sentiment towards smaller companies continues to improve, the Board would expect this to be better reflected in multiples, valuations and stronger returns over time.
VCT investment scope
The Board welcomes the updates to the VCT rules, announced in the November 2025 Budget, in respect of the increase in scope of businesses eligible for funding and the scale of individual investments. These changes are intended to ensure enhanced support for early-stage, high-growth businesses while also providing greater flexibility for follow-on investments.
In doing so, they enhance the ability of VCTs to support portfolio companies over a longer period, strengthening alignment between investors and the growth trajectories of the underlying businesses. We are encouraged to see that these reforms are already having a positive impact on the market and our investment activity, with an increasing number of attractive opportunities emerging to invest in innovative companies at realistic valuations.
Unquoted investments
As stated in the investment policy, the Company is able to make investments in unquoted companies intending to float. At 31 May 2026, 6.3% (31 May 2025: 13.0% and 30 November 2025: 17.1%) of the Company’s net assets were invested in unquoted companies. Hasgrove, the Company’s largest unquoted holding, was disposed of following a bid approach from Castik Capital. The transaction, which completed in January, realised a profit of £9.1 million for the Company which had partially been recognised within our reserves, reflecting the success of our long-term investment approach and supporting our valuation methodology. Popsa, our largest remaining unquoted holding, also continued to scale effectively, delivering strong revenue growth with international expansion remaining a key driver of progress.
Transactions with the Investment Manager
Details of amounts paid to the Investment Manager are disclosed in Note 8 to the financial statements and the Company continues to place short-term holdings in other funds managed by the Octopus team, pending direct corporate investments. As described above, the Board carefully assesses and interrogates the investment performance of the Investment Manager which naturally receives attention at a time of market change and uncertainty.
Share buybacks
In the six months to 31 May 2026, the Company bought back 7,005,971 Ordinary shares for a total consideration of £2,369,000. It is evident from the conversations between the Investment Manager and investors and advisors that this facility remains an important feature of the VCT.
Principal risks and uncertainties and taxation
The principal risks and uncertainties are set out in Note 7 to the financial statements. Alongside the improvements made to the scale and target of eligible VCT investments, the level of tax relief offered to individual investors reduced to 20% (from 30%) from 6 April 2026.
Investing in a VCT which in turn provides a professionally managed portfolio of publicly traded (and therefore liquid) interests in growth businesses continues to represent a highly attractive proposition, in the Board’s opinion. The Board believes the combination of tax relief for investing in more developed and scalable businesses remains a significant incentive within the current landscape.
Dividend
On 1 April 2026, the Company paid a dividend of 3.6p per share following the realisation of exceptional profits from several long-term investments during the previous year-end, primarily Breedon Group, Learning Technologies Group and Intelligent Ultrasound Group which were all included in detail within the Investment Manager’s Review in the 2025 annual report.
On 29 May 2026, the Company paid a dividend of 1.8p per share, being the final dividend for the year ended 30 November 2025. As communicated the Company has updated its dividend policy. As previously communicated, the Board now target an annual dividend of 6% of the opening NAV, with the flexibility to pay additional special dividends where there are significant portfolio realisations.
For the period to 31 May 2026, the Board has therefore declared an interim dividend of 1.1p per share in respect of the period ended 31 May 2026. The dividend will be payable on 26 November 2026 to shareholders on the register on 6 November 2026. Further consideration will be given to the potential for special dividends during the course of the year.
Outlook
This was indeed a period of change within the Company, in the markets, in the legislation that governs our business and around the globe. The fact that a VCT has the ability to invest patient capital with a longer-term mindset allows the Company to ride out these waves of uncertainty while continuing to focus on being custodians of your capital.
Nevertheless, whilst we have rational expectations that the underlying strength of trading performance of our investments will eventually be better reflected in their market values, we must continue to examine every aspect of the business for further opportunity.
We therefore recommit to ensuring we have the most effective structure and management to maximise shareholder benefit and attract new investors both now and for the longer term.
We welcome your comments and feedback at all times and look forward to the future.
Andy Raynor
Chair
Investment Manager’s review
Overview
The interim period began positively following the Autumn Budget announcement of long-awaited reforms to the VCT rules. These changes, which took effect on 6 April 2026, were well received by the sector and came at an important time for both VCTs and UK capital markets. Over recent years, VCTs have continued to play a valuable role in providing capital to small growth companies, particularly against a backdrop of sustained outflows from UK small cap funds.
The reforms significantly broaden the scope for investment. Companies may now qualify with up to £30 million of gross assets before investment, compared with £15 million previously, and up to £35 million following investment, compared with £16 million. The annual fundraising limit has increased to £10 million, or £20 million for knowledge intensive businesses, while their lifetime limit has risen to £24 million, or £40 million for knowledge intensive businesses. Although the reduction in income tax relief from 30% to 20% is expected to temper demand to some extent, the wider expansion of the qualifying criteria represents a meaningful and welcome development. It reinforces the VCT sector’s important role in supporting innovative smaller businesses and providing growth capital where it is often most needed. In line with our expectations, the impact has been immediate, and the deal pipeline has strengthened materially.
Market conditions were also supportive in the early part of the period, helped by a relatively resilient UK macroeconomic backdrop. However, sentiment softened towards the end of January as global technology valuations came under pressure following the derating of AI related stocks. This was then compounded at the end of February by the outbreak of the war on Iran, which raised concerns about potential disruption to energy prices and supply chains. Encouragingly, UK markets have since recovered steadily through March and into the remainder of the period, supported by a sustained improvement in investor sentiment.
The UK economy remained stable over the period, despite a complex global backdrop and heightened political uncertainty at home. Market expectations for rate cuts during the year were later revised as a result of higher energy prices and the associated impact on inflation. Nonetheless, interest rates were held at 3.75%, and concerns about potential further increases have since diminished. UK GDP growth for 2026 is currently expected to be modest, with forecasts generally ranging from around 0.8% to 1.4%, reflecting a background of weaker consumer confidence, higher energy prices and ongoing uncertainty over the pace of interest rate cuts.
As expected, the larger UK share indices outperformed AIM overall, reflecting a more cautious investor stance towards risk. However, there were encouraging signs throughout the period, with both IPO activity and secondary fundraisings picking up. Encouragingly, AIM IPOs outpaced those on the Main Market, with six AIM IPOs compared to three on the Main Market, underscoring AIM’s continuing role as an important source of growth capital for smaller companies.
Performance
After adding back dividends of 5.4p paid during the interim period, net asset value total return increased by 0.8%, reflecting an encouraging recovery from the decline reported at the previous interim period and the flat performance reported at the previous year end. This compares with a rise of 9.6% in the FTSE AIM All Share Index and 8.8% in the FTSE All Share Index over the same period. Investor sentiment remained cautious towards smaller high growth companies, and the portfolio’s lack of exposure to resource and mining companies, which are outside VCT qualifying criteria, was a key factor in the relative divergence in performance against this benchmark. More broadly, the AIM index outperformance was supported by resource and mining stocks, which accounted for more than 75% of the index’s performance over the period, reflecting continued investor interest in energy and commodity exposure amid favourable pricing conditions. The FTSE All Share also benefited from broad based sector strength, led by banks, pharmaceuticals, defence and industrial services.
The Company’s well-diversified portfolio of established holdings continues to provide resilience, although individual investments inevitably influence overall returns. During the period, contributions came principally from Abingdon Health, Popsa, Animalcare, and TPXimpact Holdings, each of which delivered positive operational and commercial progress. Abingdon Health is a leading international developer, manufacturer and regulatory services provider for rapid diagnostic tests and medtech, whose shares rose strongly amid renewed interest in smaller healthcare diagnostics. Recently, the company announced the UK launch of its LVOne Stroke Triage Test, as well as satisfying the earn-out on its IVDeology acquisition, after it hit the maximum two-year revenue target. Popsa, a leading UK photobook and memory products company, continues to trade strongly and grow their market share in the UK. Furthermore, their US division is trading well and gaining market share. Animalcare, a UK-based veterinary health business that develops, sells and distributes licensed pharmaceuticals and related products for companion animals and horses, agreed a £235.2 million takeover bid from Charterhouse Capital Partners. Shareholders were offered 336p in cash per share representing a 36% bid premium. The company will delist on AIM in early August. Leading technology-enabled services company TPXimpact Holdings has won several public-sector contracts, upgraded earnings guidance, and reported stronger preliminary results with better cash generation and a healthier pipeline.
Offsetting these gains, the main detractors were Craneware, Beeks Financial Cloud Group and Equipmake. Craneware, a leading US healthcare technology company, saw its share price underperform for much of the period amid a broader derating in global technology valuations, despite reporting solid operational performance at its interim results. Following the period end, the share price was further affected by news that US drug manufacturers had restricted access to certain drugs in hospitals, which delayed its planned rebate pilot programme. This programme is now expected to resume later in the year. Beeks Financial Cloud Group, a cloud computing and connectivity provider for financial markets, also underperformed after revenues were affected by delayed contract recognition and a move to revenue share models for Exchange Cloud contracts, a transformative cloud infrastructure solution specifically designed for trading venues. Although this had been flagged previously by the company, gross margins also declined from 38% to 30% as the business invested in infrastructure ahead of customer launches and due to lower upfront Proximity Cloud revenue. Nevertheless, the company continues to win new contracts and remains on track to meet market expectations for the full year. Equipmake, a developer and manufacturer of electric drivetrains, announced a series of orders over recent months and, more positively, received a further strategic investment of £3 million from Caterpillar in February this year. The order book now stands at £10.7 million. However, the share price remained weak as the market continued to focus on the company’s loss-making profile, strategic uncertainty and future cash requirements.
Outlook
Despite mixed performance across UK capital markets, we remain confident in the outlook for the period ahead. Ongoing uncertainty around interest rates, geopolitical tensions and energy price volatility continues to weigh on near term sentiment. As a result, valuations across UK smaller companies remain subdued, reflecting an extended period of investor caution rather than any fundamental weakening in underlying business performance.
Against this backdrop, the operational progress delivered across the portfolio provides reassurance. Many of our holdings continue to demonstrate strong execution, reinforcing our conviction that the portfolio represents a compelling source of long-term value for investors.
We believe valuations within the UK smaller companies universe remain highly attractive, both in historical terms and relative to global peers. This is particularly evident among businesses with strong competitive domestic and international positions, resilient cash generation and clear earnings visibility. We have also been encouraged by the strength of the deal pipeline following the recent VCT reforms, which is providing access to a range of innovative, high growth opportunities at appealing entry valuations.
The Octopus Quoted Companies team
Directors’ responsibilities statement
We confirm that to the best of our 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.
By Order of the Board
Andy Raynor
Chair
Income statement
| Unaudited Six months to 31 May 2026 | Unaudited Six months to 31 May 2025 | Audited Year to 30 November 2025 | |||||||
| Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| (Loss)/gain on disposal of fixed asset investments | – | (38) | (38) | – | 251 | 251 | – | (1,181) | (30) |
| Gain/(loss) on disposal of current asset investments | – | 109 | 109 | – | (20) | (20) | – | (24) | 57 |
| Gain/(loss) on valuation of fixed asset investments | – | 497 | 497 | – | (788) | (788) | – | 2,402 | (837) |
| Gain/(loss) on valuation of current asset investments | – | 676 | 676 | – | (567) | (567) | – | (510) | 881 |
| Investment income | 543 | – | 543 | 610 | – | 610 | 1,303 | – | 1,303 |
| Investment management fees | (175) | (526) | (701) | (158) | (471) | (629) | (326) | (977) | (1,303) |
| Other expenses | (411) | – | (411) | (228) | – | (228) | (520) | – | (520) |
| (Loss)/profit before tax | (43) | 718 | 675 | 224 | (1,595) | (1,371) | 457 | (290) | 167 |
| Tax | – | – | – | – | – | – | – | – | – |
| (Loss)/profit after tax | (43) | 718 | 675 | 224 | (1,595) | (1,371) | 457 | (290) | 167 |
| Earnings per share – basic and diluted | 0.0p | 0.3p | 0.3p | 0.1p | (0.8p) | (0.7p) | 0.2p | (0.1p) | 0.1p |
• 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 in accordance with the AIC Statement of Recommended Practice.
• All revenue and capital items in the above statement derive from continuing operations.
• The Company has only one class of business and derives its income from investments made in shares and securities and from bank and money market funds (MMF), as well as Open Ended Investment Company (OEIC) funds.
The Company has no recognised gains or losses other than the results for the period as set out above. Accordingly, a statement of comprehensive income is not required.
The accompanying notes form an integral part of the financial statements.
Balance sheet
| Unaudited As at 31 May 2026 | Unaudited As at 31 May 2025 | Audited As at 30 November 2025 | ||||
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Fixed asset investments | 43,495 | 50,312 | 49,780 | |||
| Current assets: | ||||||
| Investments | 8,567 | 9,263 | 9,366 | |||
| Money market funds | 17,070 | 19,816 | 16,898 | |||
| Debtors | 239 | 228 | 250 | |||
| Cash at bank | 1,431 | 1,520 | 1,617 | |||
| 27,307 | 30,827 | 28,131 | ||||
| Creditors: amounts falling due within one year | (479) | (367) | (488) | |||
| Net current assets | 26,828 | 30,460 | 27,643 | |||
| Total assets less current liabilities | 70,323 | 80,772 | 77,423 | |||
| Called up equity share capital | 22 | 21 | 21 | |||
| Share premium | 6,938 | 14,616 | 692 | |||
| Capital redemption reserve | 6 | 4 | 5 | |||
| Special distributable reserve | 65,907 | 70,894 | 79,930 | |||
| Capital reserve realised | (3,675) | (7,667) | (14,184) | |||
| Capital reserve unrealised | 2,481 | 4,450 | 12,272 | |||
| Revenue reserve | (1,356) | (1,546) | (1,313) | |||
| Total equity shareholders’ funds | 70,323 | 80,772 | 77,423 | |||
| NAV per share – basic and diluted | 31.8p | 37.9p | 36.9p | |||
The statements were approved by the Directors and authorised for issue on 22 July 2026 and are signed on their behalf by:
Andy Raynor
Chair
Company Number: 05528235
The accompanying notes form an integral part of the financial statements.
Statement of changes in equity
| Share capital | Share premium | Capital redemption reserve | Special distributable reserves1 | Capital reserve realised1 | Capital reserve unrealised | Revenue reserve1 | Total | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| As at 1 December 2025 | 21 | 692 | 5 | 79,930 | (14,184) | 12,272 | (1,313) | 77,423 |
| Total comprehensive (loss)/profit for the period | – | – | – | – | (455) | 1,173 | (43) | 675 |
| Contributions by and distributions to owners: | ||||||||
| Repurchase and cancellation of own shares | (1) | – | 1 | (2,369) | – | – | – | (2,369) |
| Issue of shares | 2 | 6,459 | – | – | – | – | – | 6,461 |
| Share issue costs | – | (213) | – | – | – | – | – | (213) |
| Dividends paid | – | – | – | (11,654) | – | – | – | (11,654) |
| Total contributions by and distributions to owners | 1 | 6,246 | 1 | (14,023) | – | – | – | (7,775) |
| Other movements: | ||||||||
| Prior years’ holding losses now realised | – | – | – | – | 10,964 | (10,964) | – | – |
| Total other movements | – | – | – | – | 10,964 | (10,964) | – | – |
| Balance as at 31 May 2026 | 22 | 6,938 | 6 | 65,907 | (3,675) | 2,481 | (1,356) | 70,323 |
The accompanying notes form an integral part of the financial statements.
1 The sum of these reserves is an amount of £60,876,000 (31 May 2025: £61,680,000 and 30 November 2025: £64,433,000) which is considered distributable to shareholders. The Income Taxes Act 2007 restricts distribution of capital from reserves created by the conversion of the share premium account into a special distributable reserve until the third anniversary of the share allotment that led to the creation of that part of the share premium account. As at 31 May 2026, £36,808,000 of the special reserve is distributable under this restriction.
.
| Share capital | Share premium | Capital redemption reserve | Special distributable reserves | Capital reserve realised | Capital reserve unrealised | Revenue reserve | Total | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| As at 1 December 2024 | 20 | 6,314 | 4 | 76,116 | (13,501) | 11,879 | (1,770) | 79,062 |
| Total comprehensive (loss)/profit for the period | – | – | – | – | (240) | (1,355) | 224 | (1,371) |
| Contributions by and distributions to owners: | ||||||||
| Repurchase and cancellation of own shares | – | – | – | (1,419) | – | – | – | (1,419) |
| Issue of shares | 1 | 8,803 | – | – | – | – | – | 8,804 |
| Share issue costs | – | (501) | – | – | – | – | – | (501) |
| Dividends paid | – | – | – | (3,803) | – | – | – | (3,803) |
| Total contributions by and distributions to owners | 1 | 8,302 | – | (5,222) | – | – | – | 3,081 |
| Other movements: | ||||||||
| Prior years’ holding losses now realised | – | – | – | – | 6,074 | (6,074) | – | – |
| Total other movements | – | – | – | – | 6,074 | (6,074) | – | – |
| Balance as at 31 May 2025 | 21 | 14,616 | 4 | 70,894 | (7,667) | 4,450 | (1,546) | 80,772 |
The accompanying notes form an integral part of the financial statements.
| Share capital | Share premium | Capital redemption reserve | Special distributable reserves1 | Capital reserve realised1 | Capital reserve unrealised | Revenue reserve | Total | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| As at 1 December 2024 | 20 | 6,314 | 4 | 76,116 | (13,501) | 11,879 | (1,770) | 79,062 |
| Total comprehensive (loss)/profit for the year | – | – | – | – | (2,182) | 1,892 | 457 | 167 |
| Contributions by and distributions to owners: | ||||||||
| Repurchase and cancellation of own shares | (1) | – | 1 | (3,230) | – | – | – | (3,230) |
| Issue of shares | 2 | 9,492 | – | – | – | – | – | 9,494 |
| Share issue costs | – | (501) | – | – | – | – | – | (501) |
| Dividends paid | – | – | – | (7,569) | – | – | – | (7,569) |
| Total contributions by and distributions to owners | 1 | 8,991 | 1 | (10,799) | – | – | – | (1,806) |
| Other movements: | ||||||||
| Cancellation of share premium | – | (14,613) | – | 14,613 | – | – | – | – |
| Prior years’ holding gains now realised | – | – | – | – | 1,499 | (1,499) | – | – |
| Total other movements | – | (14,613) | – | 14,613 | 1,499 | (1,499) | – | – |
| Balance as at 30 November 2025 | 21 | 692 | 5 | 79,930 | (14,184) | 12,272 | (1,313) | 77,423 |
The accompanying notes form an integral part of the financial statements.
Cash flow statement
| Unaudited Six months to 31 May 2026 | Unaudited Six months to 31 May 2025 | Audited Year to 30 November 2025 | |
| £’000 | £’000 | £’000 | |
| Cash flows from operating activities | |||
| Profit/(loss) before tax | 675 | (1,371) | 167 |
| Adjustments for: | |||
| Decrease/(increase) in debtors | 11 | (76) | (98) |
| Decrease in creditors | (9) | (169) | (48) |
| Loss/(gain) on disposal of fixed asset investments | 38 | (251) | 1,181 |
| (Gain)/loss on disposal of current asset investments | (109) | 20 | 24 |
| (Gain)/loss on valuation of fixed asset investments | (497) | 788 | (2,402) |
| (Gain)/loss on valuation of current asset investments | (676) | 567 | 510 |
| Net cash utilised in operating activities | (567) | (492) | (666) |
| Cash flows from investing activities | |||
| Purchase of fixed asset investments | (4,964) | (3,190) | (4,569) |
| Proceeds from sale of fixed asset investments | 11,708 | 9,482 | 13,151 |
| Purchase of current asset investments | – | – | (300) |
| Proceeds from sale of current asset investments | 1,584 | 296 | 546 |
| Net cash flows generated from investing activities | 8,328 | 6,588 | 8,828 |
| Cash flows from financing activities | |||
| Purchase of own shares | (2,369) | (1,419) | (3,230) |
| Share issues (net of DRIS) | 4,426 | 8,804 | 8,102 |
| Share issue costs | (213) | (501) | (501) |
| Dividends paid (net of DRIS) | (9,619) | (3,803) | (6,177) |
| Net cash flows (utilised) in/generated from financing activities | (7,775) | 3,081 | (1,806) |
| (Decrease)/increase in cash and cash equivalents | (14) | 9,177 | (6,356) |
| Opening cash and cash equivalents | 18,515 | 12,159 | 12,159 |
| Increase in cash and cash equivalents | 18,501 | 21,336 | 18,515 |
| Closing cash and cash equivalents is represented by: | |||
| Cash at bank | 1,431 | 1,520 | 1,617 |
| Money market funds | 17,070 | 19,816 | 16,898 |
| Total cash and cash equivalents | 18,501 | 21,336 | 18,515 |
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 report which covers the six months to 31 May 2026 has been prepared in accordance with the Financial Reporting Council’s (FRC) Financial Reporting Standard (FRS) 104 Interim Financial Reporting (January 2022) and the Statement of Recommended Practice (SORP) for Investment Companies issued by the Association of Investment Companies in 2014 (updated in July 2022).
The Directors consider it appropriate to adopt the going concern basis of accounting. The Directors have not identified any material uncertainties to the Company’s ability to continue to adopt the going concern basis over a period of at least twelve months from the date of approval of the financial statements. In reaching this conclusion the Directors have had regard to the potential impact on the Company of the current economic and geopolitical climate.
The principal accounting policies have remained unchanged from those set out in the Company’s 2025 Annual Report and Accounts.
2. Publication of non-statutory accounts
The unaudited half-yearly report for the six months ended 31 May 2026 does not constitute statutory accounts within the meaning of Section 415 of the Companies Act 2006. The comparative figures for the year ended 30 November 2025 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.
3. Earnings per share
The earnings per share at 31 May 2026 are calculated on the basis of 212,395,356 shares (31 May 2025: 204,542,613 and 30 November 2025: 207,798,492), 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.
4. Net asset value per share
The net asset value per share is based on net assets as at 31 May 2026 divided by 221,296,307 shares in issue at that date (31 May 2025: 212,855,191 and 30 November 2025: 209,759,363).
5. Dividends
The Directors have declared an interim dividend of 1.1p per share (2025: 1.8p per share) payable from the special distributable reserve. This dividend will be paid on 26 November 2026 to those shareholders on the register at 6 November 2026. The 2026 AGM approved final dividend of 1.8p per share was paid on 29 May 2026.
6. Buybacks and share issues
During the six months ended 31 May 2026 the Company repurchased the following shares:
| Date | No. of shares | Price (p) | Cost (£) |
| 18 December 2025 | 1,968,953 | 35.4 | 697,000 |
| 22 January 2026 | 1,455,988 | 36.2 | 527,000 |
| 19 February 2026 | 877,140 | 35.5 | 311,000 |
| 19 March 2026 | 869,270 | 31.1 | 270,000 |
| 23 April 2026 | 678,509 | 31.8 | 216,000 |
| 21 May 2026 | 1,156,111 | 30.1 | 348,000 |
| Total | 7,005,971 | 2,369,000 |
The weighted average price of all buybacks during the period was 34.6p per share.
During the six months ended 31 May 2026 the Company issued the following shares:
| Date | No. of shares | Price (p) | Net proceeds (£) |
| 9 March 2026 | 8,227,930 | 36.8 | 3,028,000 |
| 26 March 2026 | 2,393,872 | 31.2 | 747,000 |
| 1 April 2026 (DRIS) | 4,292,426 | 31.0 | 1,331,000 |
| 3 April 2026 | 1,355,692 | 31.1 | 422,000 |
| 15 May 2026 | 49,611 | 31.6 | 16,000 |
| 29 May 2026 (DRIS) | 2,226,384 | 31.6 | 704,000 |
| Total | 18,545,915 | 6,248,000 |
Excluding the value of shares issued under the DRIS, the total value of shares issued net of share issue costs was £4,213,000 (31 May 2025: £8,303,000 and 30 November 2025: £7,601,000). This is shown in the Cash Flow Statement.
7. Principal risks and uncertainties
The Company’s principal risks are: Investment risk, VCT qualifying status risk, Operational risk, Cyber and information security risk, Valuation risk, Legislative risk, Liquidity risk and Economic risk. These risks, and the way in which they are managed, are described in more detail in the Company’s Annual Report and Accounts for the year ended 30 November 2025. The Board has also considered emerging risks, including geo-political tensions, adverse changes in the global macroeconomic environment and climate change, which the Board seeks to mitigate by setting policy and reviewing performance. Otherwise, the Company’s principal risks and uncertainties have not changed materially since the date of that report.
8. Related party transactions
The Company has employed Octopus Investments Limited (‘Octopus’ or the ‘Investment Manager’) throughout the period as Investment Manager. Octopus has also been appointed as Custodian of the Company’s investments under a Custodian Agreement. The Company has been charged £702,000 by Octopus as a management fee in the period to 31 May 2026 (31 May 2025: £631,000 and 30 November 2025: £1,303,000). The management fee is payable quarterly and is based on 2% of net assets measured at quarterly intervals.
The Company receives a reduction in the management fee for the investments in other Octopus managed funds, being the FP Octopus UK Multi Cap Income Fund, FP Octopus UK Micro Cap Growth Fund and FP Octopus UK Future Generations Fund, to ensure the Company is not double charged on these products. This amounted to £25,000 in the period to 31 May 2026 (31 May 2025: £27,000 and 30 November 2025: £54,000). For further details please refer to the Company’s Annual Report and Accounts for the year ended 30 November 2025.
9. Post-balance sheet events
The following events occurred between the balance sheet date and the signing of these financial statements:
• On 18 June 2026, the Company purchased for cancellation 802,568 Ordinary shares at a price of 30.6p.
10. Fixed asset investments
Accounting policy
The Company’s principal financial assets are its investments and the policies in relation to those assets are set out below.
Purchases and sales of investments are recognised in the financial statements at the date of the transaction (trade date).
These investments will be managed and their performance evaluated on a fair value basis in accordance with a documented investment strategy and information about them has to be provided internally on that basis to the Board. Accordingly, as permitted by FRS 102, the investments are measured as being fair value through profit or loss (FVTPL) on the basis that they qualify as a group of assets managed, and whose performance is evaluated, on a fair value basis in accordance with a documented investment strategy. The Company’s investments are measured at subsequent reporting dates at fair value.
In the case of investments quoted on a recognised stock exchange, fair value is established by reference to the closing bid price on the relevant date or the last traded price, depending upon convention of the exchange on which the investment is quoted. In the case of unquoted investments and loan notes, fair value is established by assessing different methods of valuation, such as price of recent transaction, earnings or revenue-based multiples, discounted cash flows and net assets. Where price of recent investment is used as a starting point for estimating fair value at subsequent measurement dates, this has been benchmarked using an appropriate valuation technique. These methodologies are consistent with International Private Equity and Venture Capital Valuation (IPEV) guidelines.
Gains and losses arising from changes in fair value of investments are recognised as part of the capital return within the Income Statement and allocated to the capital reserve unrealised. The Investment Manager reviews changes in fair value of investments for any permanent reductions in value and will give consideration to whether these losses should be transferred to the capital reserve realised.
In the preparation of the valuations of assets the Directors are required to make judgements and estimates that are reasonable and incorporate their knowledge of the performance of the investee companies.
Fair value hierarchy
Paragraph 34.22 of FRS 102 suggests following a hierarchy of fair value measurements, for financial instruments measured at fair value in the balance sheet, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). This methodology is adopted by the Company and requires disclosure of financial instruments to be dependent on the lowest significant applicable input, as laid out below:
Level 1: The unadjusted, fully accessible and current quoted price in an active market for identical assets or liabilities that an entity can access at the measurement date.
Level 2: Inputs for similar assets or liabilities other than the quoted prices included in Level 1 that are directly or indirectly observable, which exist for the duration of the period of investment.
Level 3: This is where inputs are unobservable, where no active market is available and recent transactions for identical instruments do not provide a good estimate of fair value for the asset or liability.
There have been no reclassifications between levels in the period. The change in fair value for the current and previous period is recognised through the profit and loss account.
Disclosure
| Level 1: Quoted equity investments | Level 3: Unquoted investments | Total | |
| £’000 | £’000 | £’000 | |
| Cost at 1 December 2025 | 43,028 | 3,487 | 46,515 |
| Opening unrealised (loss)/gain at 1 December 2025 | (6,462) | 9,727 | 3,265 |
| Valuation at 1 December 2025 | 36,566 | 13,214 | 49,780 |
| Purchases at cost | 4,904 | 60 | 4,964 |
| Disposal proceeds | (2,407) | (9,301) | (11,708) |
| Loan to equity conversion | 200 | (200) | – |
| Gain/(loss) on realisation of investments | 81 | (119) | (38) |
| Change in fair value in period | (291) | 788 | 497 |
| Valuation at 31 May 2026 | 39,053 | 4,442 | 43,495 |
| Cost at 31 May 2026 | 42,665 | 7,946 | 50,611 |
| Closing unrealised (loss)/gain at 31 May 2026 | (3,612) | (3,504) | (7,116) |
| Valuation at 31 May 2026 | 39,053 | 4,442 | 43,495 |
Level 1 valuations are valued in accordance with the bid price on the relevant date. Further details of the fixed asset investments held by the Company are shown within the Interim Management Report.
Level 3 investments are reported at fair value in accordance with FRS 102 Sections 11 and 12, which is determined in accordance with the latest IPEV guidelines. In estimating fair value, there is an element of judgement, notably in deriving reasonable assumptions, and it is possible that, if different assumptions were to be used, different valuations could have been attributed to some of the Company’s investments.
Level 3 investments include £600,000 (31 May 2025: £800,000 and 30 November 2025: £800,000) of convertible loan notes held at cost, which is deemed to be current fair value. In addition to this the Company holds nine unquoted investments which are classified as level 3 in terms of fair value hierarchy. These are valued based on a range of valuation methodologies, determined on an investment specific basis. The price of recent investment is used where a transaction has occurred sufficiently close to the reporting date to make this the most reliable indicator of fair value. Where recent investment is not deemed to indicate the most reliable indicator of fair value (i.e. the most recent investment is too distant from the reporting date for this to be deemed a reasonable indicator), other market based approaches including earnings multiples, annualised recurring revenues, discounted cashflows or net assets are used to determine a fair value for the investments.
All capital gains or losses on investments are classified at Fair Value Through Profit or Loss (FVTPL). Given the nature of the Company’s venture capital investments, the changes in fair value of such investments recognised in these financial statements are not considered to be readily convertible to cash in full at the balance sheet date and accordingly these unrealised gains and losses are treated as holding gains or losses.
11. Half-Yearly Report
The unaudited half-yearly report for the six months ended 31 May 2026 will shortly be available to view at https://octopusinvestments.com/our-products/venture-capital-trusts/octopus-aim-vcts/
A copy of the half-yearly 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:
Andrew Humphries
Octopus Company Secretarial Services Limited
Tel: +44 (0)80 0316 2067
LEI: 213800BW27BKJCI35L17
