Octopus AIM VCT plc
Final Results
Octopus AIM VCT plc today announces the final results for the year ended 28 February 2026.
Octopus AIM VCT plc (the ‘Company’) is a Venture Capital Trust (VCT) which aims to provide shareholders with attractive tax-free dividends and long-term capital growth by investing in a diverse portfolio of predominantly AIM-traded companies. The Company is managed by Octopus Investments Limited (‘Octopus’ or the ‘Investment Manager’).
Key financials
| Year to 28 February 2026 | Year to 28 February 2025 | |
| Net assets (£’000) | £107,484 | £115,383 |
| Profit/(loss) after tax (£’000) | £2,790 | £(6,079) |
| Net asset value (NAV) per share1 | 46.8p | 50.6p |
| Dividends per share paid in year (excluding special dividends) | 5.0p | 5.0p |
| NAV total return2 | 2.4% | (4.4)% |
| Final dividend proposed3 | 2.5p | 2.5p |
| Special dividend paid4 | 4.6p | 4.9p |
| Ongoing charges5 | 2.2% | 2.3% |
| Cumulative dividends paid since launch6 | 106.7p | 101.7p |
- NAV per share is calculated on the underlying assets less liabilities of the Company divided by the number of shares.
- 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.
- Subject to shareholder approval at the Annual General Meeting, the proposed final dividend will be paid on 28 August 2026 to shareholders on the register on 7 August 2026.
- The Board has paid a special dividend of 4.6p, paid on 1 April 2026 to shareholders on the register on 13 March 2026.
- Ongoing charges is an alternative performance measure calculated using the AIC recommended methodology.
- Octopus AIM VCT plc was launched in March 1998.
Chair’s statement
Overview of the Year
I am pleased to present the Company’s Annual Report and Accounts for the year ended 28 February 2026.
Performance summary
| 28 February 2026 | 28 February 2025 | |
| NAV total return | 2.4% | (4.4%) |
| Dividends paid per share | 5.0p | 5.0p |
| Special dividends paid per share | 4.6p1 | 4.9p |
| NAV per share | 46.8p | 50.6p |
| FTSE AIM All-Share total return | 18.6% | (2.6%) |
| FTSE Small Cap (ex. Investment Companies) total return | 27.0% | 10.7% |
- Paid on 1 April 2026 to shareholders on the register as at 13 March 2026.
The movement in NAV reflects capital returned to shareholders, changes in portfolio valuations, share buybacks, and the net impact of inflows from dividend reinvestment and new share issuance.
Market review
The year to 28 February 2026 tested the resilience of UK markets, navigating a complex and at times unsettling backdrop. These ranged from dislocations in global growth stock valuations to rising geopolitical tension and, at the year-end, the outbreak of the Iran war and its potential implications for energy prices and supply chains.
Despite this, the UK equity market made good progress during the financial year to 28 February 2026, supported by inflation returning towards the Bank of England’s 2% target and robust corporate earnings. The FTSE 100 was a particular beneficiary 28.1%, its sectoral composition, with relatively modest technology exposure and greater weightings to financials, commodities and pharmaceuticals, proving well suited to the market environment.
The FTSE AIM All-Share Index returned +18.6% over the year, having rallied more than 20% from a five-year low in March 2025. This recovery was, however, heavily concentrated in Metals & Mining stocks, which delivered exceptional returns but fall outside the VCT-investable universe in which your Company operates. Absent their contribution, the experience for qualifying growth companies was more subdued. That said, the year ended on a more encouraging note: the Bank of England’s reduction of base rates to 3.75% in December 2025 supported the start of a recovery in AIM growth company valuations, corporate activity picked up, aided by strategic and private equity interest attracted by compressed valuations, and capital markets showed genuine improvement, with AIM raising £2.9 billion for new and existing companies, up from £2.0 billion the prior year.
Performance review
Although the Company delivered a positive return of 2.4%, this lagged broader equity indices over the same period. While modest in absolute terms, the Board believes, this performance should be viewed in the context of the drivers of the indices and the nature of the VCT investable universe. As referred to above, strong gains across the FTSE AIM All-Share Index were seen in a narrow cluster of non-energy minerals stocks, principally precious metals and mining exploration companies. This sector represents around 18.5% of the index and increased 142.8%. The vast majority of the stocks within the sector sit outside the allowable AIM VCT-investable universe and therefore your Company had limited exposure to them.
Notwithstanding this, the broader UK small and mid-cap market continued to face headwinds: persistent fund outflows weighed on valuations and liquidity, while proceeds from corporate activity were largely absorbed by redemptions rather than redeployed into equities. Risk appetite for smaller growth companies remained subdued, and fundraising conditions stayed difficult throughout the year.
Against this backdrop, your Company’s portfolio, demonstrated encouraging overall resilience. As you will read in the Investment Manager review, returns were supported by a mix of stable underlying earnings and the successful realisation of several investments held for many years, generating net profits of £13.4 million. The quality of these exits is reflective of the Investment Manager’s disciplined investment selection and its active portfolio stewardship.
As a result of the gains realised during the year, subsequent to the year-end, a special dividend of 4.6p per share was paid on 1 April 2026. This is consistent with the Company’s established track record of delivering special dividends, and we expect that further opportunities to return capital to shareholders will arise over time.
It is also pleasing that, despite the negative UK headlines, your Investment Manager continues to find opportunities to invest in high quality growth-oriented companies. In the year under review, your Manager deployed £6.1 million into qualifying companies, which is slightly down on the £7.3 million in the prior year. The second half of the financial year saw an encouraging increase in secondary fund raisings and IPO listings and it is anticipated that this will continue, further strengthened by the recent VCT reforms announced in the November 2025 budget, that became effective from 6 April 2026.
Changes to the VCT qualifying rules
The Board welcomed the recent updates to the VCT rules, the details of which are set out in the Investment Manager’s review. These changes expand VCTs’ investable universe and enhance their ability to support portfolio companies over a longer period, strengthening alignment between investors and the growth journeys of underlying businesses. We are grateful to the Octopus team for their efforts in lobbying for such changes and their ongoing support of the AIC drive for further reforms.
The Board is disappointed by the reduction in the income tax relief rate, from 30% to 20%, available to new VCT investors. The asset class plays an important role in channelling capital towards UK growth companies and the change risks dampening investor appetite at a time when there is an attractive pipeline of growth companies seeking investment. We will continue to engage with policymakers on this matter and monitor the impact on investor demand.
The year also marked the 30th anniversary of AIM which, since its inception, has raised over £136 billion to support the growth of UK smaller companies. Over three decades, AIM has played a critical role in providing growth capital to entrepreneurial businesses, driving innovation, job creation and long-term economic development. Despite current market challenges, it remains a vital ecosystem for scaling companies, particularly in sectors aligned with the VCT mandate.
Taken together, the enduring importance of AIM and the evolving VCT framework reinforce the long-term opportunity set available to the Company, underpinned by the Investment Manager’s experience and disciplined approach.
Dividends
In January 2026 an interim dividend for the year to 28 February 2026 of 2.5p was paid to all shareholders. This was in addition to the 2.5p final dividend that was paid in August 2025 which related to the previous financial year ended 28 February 2025. The Board is recommending a final dividend of 2.5p, resulting in a total dividend of 5.0p in respect of the Company’s financial year ending 28 February 2026. The total dividend of 5.0p represents 11.7% of the year-end share price of 42.8p. This is in line with the current policy of paying a minimum annual dividend of 5.0p per share or a 5% yield based on the year-end share price, whichever is the greater.
Special Dividends
Following the realisation of exceptional profits from several long term investments during the year, the Board has announced a special dividend of 4.6 pence per share, which was distributed on 1 April 2026. The dividend reflects significant recent disposals of portfolio investments, primarily Intelligent Ultrasound Group, Learning Technologies Group and Breedon Group. For further detail, please see the Investment Manager’s review.
As communicated in the half year report, the Board has reviewed the Company’s dividend policy to support long term sustainability, following a prolonged period of market volatility and consistently high dividend distributions which have contributed to a reduction in NAV per share. Accordingly, the revised dividend policy will be introduced, targeting an annual dividend of 6 per cent of the opening NAV per share, with the flexibility to pay special dividends following significant portfolio realisations. The first dividends under the revised policy are expected to be paid around January 2027.
Board Changes
As announced in 2025, David Docherty joined the Board as a director with effect from 23 July 2025, and Neal Ransome stepped down from the Board following the Annual General Meeting on 23 July 2025.
On behalf of the Board and the shareholders, I would again like to extend our sincere thanks to Neal for his valuable contribution to the AIM VCT during his tenure. We wish him well for the future.
The Board is delighted to welcome David, who brings a wealth of asset management experience as a former UK equity fund manager including investing in small and mid cap companies, which will be invaluable in supporting your Company.
Dividend Reinvestment Scheme
In common with many other VCTs in the industry, the Company has established a Dividend Reinvestment Scheme (DRIS). Many shareholders have already taken advantage of this opportunity. For investors who do not require income but value the additional tax relief on their reinvested dividends, this is an attractive scheme and I hope more shareholders will find it useful. In the course of the year 4,465,364 new shares have been issued under this scheme, returning £2.1 million to the Company. The final and special dividend referred to above will be eligible for the DRIS.
Share Issues
On 12 January 2026, a prospectus offer was launched alongside Octopus AIM VCT 2 plc to raise a combined total of up to £30 million, with a £30 million over-allotment facility.
In the period under review the Company raised £6.5 million after costs and issued a total of 13,401,685 shares. After the reporting period the offer closed, though it was disappointing that the offer was not fully subscribed at this date. We will consider further fund-raising efforts during the course of the year, consistent with previous years.
I would like to thank the continued support of existing shareholders and welcome new shareholders.
Share Buybacks
During the year to 28 February 2026 the Company continued to buy back shares in the market from selling shareholders and purchased 12,100,604 ordinary shares for a total consideration of £5.6 million. We maintained a discount of approximately 4.8% to NAV (equating to up to a 5.0% discount to the selling shareholder after costs), which the Board monitors and will retain as a policy as it balances the interests of both remaining and selling shareholders. Buybacks remain important for VCTs, as providing a means of selling is an important part of the initial investment decision and has enabled the Company to grow. As such, I hope you will all support the appropriate resolution at the AGM.
Cancellation of Share Premium Account
At the last Annual General Meeting, shareholders voted to cancel share premium to increase the pool of distributable reserves to the amount of £21.6 million. This is a regular occurrence, and common practice, to enable the continued payment of dividends and buyback of shares. A further resolution to cancel share premium is being proposed at this year’s Annual General Meeting.
VCT Status
Shoosmiths LLP were engaged throughout the year to provide the Board and Investment Manager with advice concerning continuing compliance with HMRC regulations for VCTs. The Board has been advised that the Company is in compliance with the conditions laid down by HMRC for maintaining approval as a VCT. A key requirement is to maintain at least an 80% qualifying investment level. As at 28 February 2026, 89.2% of the Company’s portfolio was in VCT qualifying investments.
Annual General Meeting and Shareholder Engagement
The AGM will take place on 23 July 2026 at 10.30am. The Investment Manager will also give a live presentation to shareholders on the day of the AGM. This will enable shareholders to receive an update from the Investment Manager and provide an opportunity for questions to the Board and the Investment Manager. Formal notices will be sent to shareholders by their preferred method (email or post) and shareholders are encouraged to submit their votes by proxy. We always welcome questions from our shareholders at the AGM. Please send any questions via email to [email protected] by 5.00pm on 15 July 2026.
Outlook
The near-term UK economic outlook remains uncertain. Ongoing geopolitical risks are influencing market sentiment and contributing to market volatility. The impact of wars and supply constraints on inflation, energy costs and consumer spending, together with uncertainty on the future direction and level of interest rates, is reflected in ongoing caution.
Against this backdrop, the portfolio remains well diversified with 75 holdings across a range of sectors and continues to provide exposure to a number of attractive long-term growth themes, particularly within environmental and healthcare technologies. The balance of the portfolio is skewed towards profitable businesses which account for 64% of the portfolio, thereby providing resilience in a more uncertain economic backdrop.
The Investment Manager continues to identify a strong pipeline of opportunities and remains confident in its ability to deploy capital selectively into high-quality growth-oriented businesses at attractive valuations, supported by its disciplined and consistent investment approach.
The recent reform to the VCT rules, including the expansion of qualifying thresholds, have broadened the investable universe, enhancing the opportunity set available to the Company. Combined with the attractive valuations currently available across AIM’s growth company universe, this positions the Company well for the year ahead.
Overall, the Board is optimistic that, as stability returns, valuations across the smaller company segment should recover, and the Company is well placed to benefit from this normalisation. We remain committed to our strategy of supporting high-quality, scalable growth companies, and the Board believes this focus will continue to deliver long-term value for shareholders.
Joanne Parfrey
Chair
Investment Manager’s review
Introduction
For the year ended 28 February 2026, the UK economy showed remarkable resilience amid a complex global landscape to deliver robust growth. The period opened with an AI sector derating in early 2026 that dented growth stock valuations, culminating in the outbreak of the Iran war on 28 February heralding potential shocks to energy prices and supply chains. Encouragingly, since the year end, UK markets have since staged a steady rebound from the start of 2026, buoyed by stabilising sentiment.
Domestic growth outperformed economic forecasts, delivering a UK GDP rise of 1.5% over the period. Inflation trended towards the Bank of England’s target, facilitating additional rate cuts in 2025, while capital markets built gradual momentum as investor confidence showed increasing signs of recovery. Larger UK share indices outperformed AIM overall, as investors remained cautious on risk. However, on a more positive note, IPO listings and secondary fundraisings picked up in the second half of the year with AIM IPOs outpacing those on the Main List. This reflects the strength of the UK equity market as a platform for smaller growth companies and its continued role in supporting long-term investment and providing much-needed growth capital.
VCT reforms announced in the Autumn Budget (effective from 6 April 2026) and secured through sustained advocacy by the VCTA in collaboration with the VCT investment community at the Treasury’s invitation markedly enhance the scheme’s capacity to support small, high growth AIM companies. Companies can now qualify with up to £30 million in assets pre-investment (from £15 million) and £35 million post-investment (from £16 million), raise £10 million annually (£20 million for knowledge-intensive ones like tech innovators), and access £24 million lifetime (£40 million for knowledge-intensive). While investor income tax relief has dissapointingly been reduced from 30% to 20%, the significant expansion of qualifying criteria represents a meaningful change, reinforcing the VCT sector’s critical role in providing growth capital to innovative smaller businesses. As anticipated following these reforms, our deal pipeline has strengthened materially, with a broader range of companies now eligible for VCT funding.
These much-awaited changes come at a pivotal moment for both VCTs and UK capital markets, particularly as VCTs have remained a consistent source of capital for small growth companies amid sustained outflows from UK small-cap funds. We continue to view valuations across UK smaller companies as highly attractive relative to both historical levels and global peers, particularly for those within the portfolio that exhibit strong competitive positions, resilient cash generation, and clear earnings visibility. Despite ongoing macroeconomic and geopolitical uncertainties, the operational progress across portfolio companies underpins our conviction that the portfolio represents a compelling source of long-term value for investors.
The Alternative Investment Market
During the period under review, AIM celebrated its 30th anniversary, underscoring its longstanding role as a cornerstone of growth capital for UK smaller companies and its continued support for a diverse pipeline of entrepreneurial businesses seeking to scale. Over the twelve months, the market demonstrated improved capital-raising activity, with total funds raised increasing to approximately £2.9bn, compared with £2.0bn in the prior year. While IPO activity remained relatively subdued with 13 new admissions it reflected a gradual reopening of the issuance window and selective investor appetite for high-quality growth opportunities.
Trading across the market was mixed but broadly resilient, with a number of companies delivering positive operational updates despite a changing macroeconomic and challenging geopolitical backdrop. Valuations, however, remained below long-term averages for much of the period, which continued to attract interest from private equity and strategic acquirers seeking to deploy capital into underappreciated assets. This dynamic was reflected in several corporate transactions, including those within the Company’s portfolio.
As discussed above, the Autumn Budget in November delivered a highly positive set of reforms to the VCT regime. While upfront income tax relief was disappointingly reduced, this was offset by a meaningful expansion of key qualifying thresholds, including increases to gross asset and lifetime funding limits, significantly broadening the opportunity set for investment. Our investment team played an active role in the consultation process that helped shape these outcomes, and we strongly welcome the Government’s continued commitment to supporting patient capital as we continue to participate in the AIC campaign for further reforms. In parallel, there has been a renewed strategic focus on strengthening AIM’s competitive positioning. The London Stock Exchange’s consultation, Shaping the Future of AIM, and the subsequent feedback statement outlined a series of proposed initiatives to enhance market accessibility, liquidity and regulatory efficiency. Collectively, these developments are intended to ensure AIM remains an attractive venue for both issuers and investors in an evolving global capital markets landscape, while reinforcing its position as Europe’s leading growth market.
Performance
After adding back dividends of 5.0p paid during the year, the NAV total return was up 2.4%, an encouraging recovery from the decline reported in the half year results. This compares to an increase of 18.6% in the FTSE AIM All Share Index, 27.0% in the FTSE SmallCap (excluding investment companies), and 27.3% in the FTSE All Share Index. Investor sentiment remained cautious toward smaller high-growth companies. The portfolio’s limited exposure to mining and financials, two of the strongest sectors over the period and typically outside VCT qualifying criteria, further contributed to the relative divergence. AIM’s strongest sector last year was natural resources, particularly mining and oil and gas, as investors were drawn to commodity exposure and a steady flow of positive news driven by high commodity price. The FTSE All-Share benefited from broader sector strength led by major banks, pharmaceuticals and defence which are predominantly represented in the FTSE 100, alongside contributions from industrial services in the FTSE SmallCap index.
Portfolio review
The Company’s well-diversified portfolio of established holdings continues to provide resilience. During the period, positive contributions came principally from Aurrigo International, Gear4music, Applied Nutrition, Idox and Haydale, each of which delivered supportive operational or commercial progress. Aurrigo benefited from strong momentum driven by global demand for its autonomous airside solutions and new contract wins, while the launch of AutoCargo opened an additional and potentially attractive growth avenue. Encouragingly, the company raised £14.1 million in August last year with support from new and existing investors. The proceeds will help the company scale its autonomous airport technology business by expanding its engineering and deployment capability, building demonstrator vehicles and preparing for larger manufacturing capacity. Gear4music improved profitability through operational efficiencies, disciplined inventory management, stable demand and strengthening gross margins. Applied Nutrition continued to perform well, supported by the strength of its brand and growth across its product range, while Idox contributed positively through steady trading and continued operational execution. In October last year, Idox agreed a recommended cash offer from Frankel UK Bidco Limited, a vehicle indirectly owned by funds managed by Long Path Partners, at 71.5p per share in cash, valuing the company at approximately £340 million. The transaction is now complete. Haydale also advanced commercially, with its JustHeat range securing pilot deployments, UL certification for sales into the US and Canada, and a number of contract wins that underpinned positive valuation momentum.
Offsetting these gains, the main detractors were Strip Tinning, Enteq Technologies, Feedback, Diaceutics and Netcall. Strip Tinning’s performance was affected by weaker sentiment and a more cautious market backdrop, while Enteq Technologies remained challenged by subdued progress in its market and commercial development. Feedback’s shares came under pressure despite continued progress in expanding its commercial opportunity. The business has experienced disruption linked to changes in NHS funding amid broader healthcare reforms, although conditions now appear to be stabilising. Bleepa, the company’s main technology, a clinical communication platform enabling the secure sharing of patient data and medical images, remains well aligned with NHS priorities around improving efficiency and increasing investment in digital infrastructure, with a growing number of trials underway across the country.
Diaceutics was impacted by softer momentum in its end markets. However, the company continues to strengthen its strategic positioning, now partnering with 18 of the top 20 global pharmaceutical companies. It expects to deliver strong revenue growth this year, supported by accelerating adoption of precision medicine, ongoing enhancements to the DXRX platform, and expansion into new therapeutic areas. The investment case remains compelling. Netcall, despite continuing to trade well across its automation and customer engagement platforms, was also a detractor over the period, reflecting the market’s uneven response to its valuation and near-term share price performance.
Non-qualifying investments are used to manage liquidity while awaiting new qualifying investment opportunities and we continue to hold some existing non-qualifying AIM holdings where we see the opportunity for further share price progress. During the year we increased our holdings in the FP Octopus Future Generations Fund, investing a total of £0.5 million over the period, and disposed of part of our holding in FP Octopus UK Multi Cap Income Fund for £1.3 million and FP Octopus UK Micro Cap Growth Fund for £1.4 million.
Unquoted investments
Hasgrove’s valuation increased materially during the year, driven by consistent operational performance and a bid approach from Castik Capital. The transaction, which completed in January, valued the business at approximately 7x ARR and delivered a profit in excess of £9.5 million for the Company, an excellent outcome reflective of our long-term investment approach. Popsa continued to scale effectively, reaching 2.5 million customers in 2025 and delivering strong revenue growth. International expansion remains a core driver, and the company’s valuation was adjusted upward over the period reflecting this.
New and follow-on investments
Below we have highlighted the eight investments made during the year into VCT‑qualifying companies, comprising five follow‑on investments and three new investments, at a total cost of £6.1 million. We added three new VCT non-qualifying investments totalling £1.6 million for the year. This made a total investment of £7.7 million, a decrease on last year’s £11.3 million. Below we have put a spotlight on the VCT qualifying investments made in the period.
KRM22 plc, £0.2 million, Follow-on: Develops risk management software for financial services. Raised £9.2m (November 2025) to expand across asset classes, with revenue growth of 11% to £7.5m and ARR up 19% to £7.6m. A debt-free balance sheet and £5.2m cash position supported continued multi-asset expansion.
Abingdon Health plc, £0.9 million, Follow-on: Provides lateral flow diagnostics and CDMO services. Raised £3.4m to support US expansion and extend its Madison facility, delivering five new CDMO projects and an OTCQB listing (March 2026), enhancing liquidity and providing greater manufacturing optionality.
Haydale plc, £0.6 million, Follow-on: Commercialises graphene-enhanced materials for industrial applications. Secured £5.75m to acquire SaveMoneyCutCarbon (January 2026), creating a vertically integrated clean-tech platform for energy and water efficiency, supported by established bank and utility partnerships and positioned for scalable deployment.
Aurrigo International plc, £0.1 million, Follow-on: Designs airside technology solutions for aviation. Raised £14.1m to scale autonomous vehicle manufacturing, securing a £6.3m contract and expanding into India and South Asia, increasing production capacity and accelerating international commercialisation.
Eden Research plc, £0.2 million, Follow-on: Develops sustainable biopesticides and encapsulation technologies. Targeted £11m (completed post-period) to advance R&D in line with global sustainability trends, supporting scalable and regulatory-compliant crop protection solutions across international agricultural markets.
Quantum Base Holdings plc, £1.2 million, New: Develops quantum authentication technologies to combat counterfeiting. Secured £4.75m to advance product identification solutions, offering enhanced security across supply chains and broad commercial applications in anti-counterfeiting.
Pathos Communications plc, £1.8 million, New: Provides AI-enabled PR solutions for SMEs. Raised £5.6m on AIM to expand its platform, with post-listing trading ahead of expectations supported by strong revenue performance and a growing order book validating scalability.
Vulcan Two Group plc, £1.1 million, New: Building a UK regulated ePharmacy platform through acquisitions. Raised £12m initially (with up to £41.7m follow-on) to scale operations via a buy-and-build strategy, leveraging digital adoption trends in pharmaceutical distribution to support growth.
Disposals
During the year, we sold partial holdings of one company taking profits from rising share prices. We executed full disposals of 14 companies in the period and together all disposals generated net profits of £13.4 million over the original cost and generated cash proceeds of £29.2 million. As ever we maintained our sell discipline in the period, taking advantage of price volatility and blocks of liquidity in the market to take profits for holdings and also fully exit positions as required.
The sale of Hasgrove, which had been held for a number of years, represented a particularly strong outcome during the period and delivered a significant profit for the Company. This successful realisation, alongside the sale of Breedon following its earlier migration to the Main Market, highlights the long term value that can be generated through patient investment in well managed, high quality businesses.
Learning Technologies Group and Intelligent Ultrasound Group were both realised following bid approaches from private equity investors, reflecting the continued appetite for attractively valued UK listed growth companies. The investment in RC Fornax was fully disposed of during the period following a disappointing start to life on the public markets, with the business unable to capitalise on the supportive environment for defence spending.
Significant realisations
Breedon Group
Cash proceeds: £6.4 million
Invested: £0.9 million
Investment date: 2010
Profit return: 610%
Sector: Construction & Building
Learning Technologies Group
Cash proceeds: £4.6 million
Invested: £1.1 million
Investment date: 2011
Profit return: 315%
Sector: Support Services
Intelligent Ultrasound Group
Cash proceeds: £2.8 million
Invested: £2.2 million
Investment date: 2010
Profit return: 25%
Sector: Engineering & Machinery
Hasgrove
Cash proceeds: £9.6 million
Invested: £0.1 million
Investment date: 2006
Profit return: 9,500%
Sector: Unquoted
Liquidity management
Shareholders may be interested to note that at the year-end, 51.8% of the Company’s net assets were held in individual quoted shares, 6.2% were held in unquoted single company investments and 43.3% were held in cash or collective investment funds providing short term liquidity. The relatively high level of cash at the year-end reflects a number of significant disposals completed towards the end of the period. Shareholders should be aware that a proportion of the quoted holdings may have limited liquidity owing to the size of the investee company and the overall proportion held by the Company.
Outlook and future prospects
Sentiment towards UK capital markets remains cautiously optimistic, notwithstanding heightened geopolitical tensions in the Middle East. Over the course of the financial year, AIM performance has remained mixed, reflecting a combination of global macroeconomic pressures, elevated interest rates, and periods of subdued liquidity. These factors have weighed on valuations, particularly within growth-oriented sectors, although more recently there have been signs of stabilisation as inflationary pressures ease and expectations for monetary policy begin to shift.
Despite this backdrop, the AIM market has demonstrated underlying resilience, supported by continued investor interest in high-growth and innovation-led businesses. The fundraising environment for qualifying companies remains robust, with a healthy pipeline of opportunities emerging at increasingly attractive valuations. This reflects both improved capital discipline across the market and a selective but supportive investor base.
Looking ahead, while VCT fundraising activity over the recent period has been more muted than initially anticipated, the implementation of the revised VCT rules from 6 April 2026 provides a supportive structural backdrop for the market. We expect these changes to contribute to a gradual improvement in investor engagement and capital flows over the coming period. Accordingly, we maintain a cautiously positive outlook for fundraising activity as the market adjusts to the new regulatory environment.
The Octopus Quoted Companies team
Octopus Investments Limited
Risk and risk management
Principal risks, risk management and regulatory environment
The Board carries out a regular review of the risk environment in which the Company operates. The Board seeks to mitigate risks by setting policy, reviewing performance and monitoring progress and compliance. In the mitigation and management of these risks, the Board applies the principles detailed in the Financial Reporting Council’s Guidance on Risk Management, Internal Control and Related Financial and Business reporting. Detailed below are what the Board deems to be the principal risks of the Company and the mitigating actions in relation to those risks.
| Risk | Mitigation | Change1 |
| Investment risk: The focus of the Company’s investments is into VCT qualifying companies quoted on AIM and the AQSE, which by their nature entail a higher level of risk and lower liquidity than investments in larger quoted companies. | The Investment Manager has significant experience and a strong track record of investing in AIM and AQSE companies, and appropriate due diligence is undertaken on every new investment. The overall risk in the portfolio is mitigated by maintaining a wide spread of holdings in terms of financing stage, age, industry sector and business models. The Board reviews the investment portfolio with the Investment Manager on a regular basis. | The overall risk remains unchanged but elevated given ongoing macroeconomic uncertainty and reduced liquidity within AIM markets. This continues to be effectively mitigated by the experience of the Investment Manager and continued oversight by the Board. |
| VCT qualifying status risk: The Company is required at all times to observe the conditions for the maintenance of HMRC approved VCT status. The loss of such approval could lead to the Company and its investors losing access to the tax benefits associated with VCT status and, in certain circumstances, to investors being required to repay the initial income tax relief on their investment. The ability of the fund to invest is dependent on the pipeline of qualifying investments. | Prior to investment, the Investment Manager seeks assurance from the Company’s VCT status adviser that the investment will meet the legislative requirements for VCT investments. On an ongoing basis, the Investment Manager monitors the Company’s compliance with VCT regulations on a current and forecast basis to ensure ongoing compliance with VCT legislation. Regular updates are provided to the Board throughout the year. The VCT status adviser formally reviews the Company’s compliance with VCT regulations on a bi-annual basis and reports their results to the Board. | The overall risk remains unchanged. Strengthened monitoring arrangements, external assurance and proactive oversight continue to mitigate the potential impact of any breach of the VCT qualifying conditions. |
| Operational risk: The Board is reliant on the Investment Manager to manage investments effectively, and manage the services of a number of third parties, in particular the registrar and tax advisers. A failure of the systems or controls at the Investment Manager or third-party providers could lead to an inability to provide accurate reporting and to ensure adherence to VCT and other regulatory rules. | The Board reviews the system of internal control, both financial and nonfinancial, operated by the Investment Manager (to the extent the latter are relevant to the Company’s internal controls). These include controls that are designed to ensure that the Company’s assets are safeguarded, that proper accounting records are maintained, and that regulatory reporting requirements are met. Feedback on other third parties is reported to the Board on at least an annual basis, including adherence to Service Level Agreements where relevant. | The overall risk remains unchanged. The control environment has continued to mature during the year, alongside enhanced third party oversight and ongoing enhancements to operational resilience arrangements which has reduced residual risk overall. |
| Information security: A loss of key data could result in a data breach and fines. The Board is reliant on the Investment Manager and third parties to take appropriate measures to prevent a loss of confidential customer information. | Annual due diligence is conducted on third parties which includes a review of their controls for information security. The Investment Manager has a dedicated information security team and a third party is engaged to provide continual protection in this area. A security framework is in place to help prevent malicious events. The Investment Manager reports to the Board on an annual basis to update them on relevant information security arrangements. Significant and relevant information security breaches are escalated to the Board when they occur. | The overall risk remains unchanged. The external cyber threat landscape continues to evolve and remains materially significant, including risks amplified by artificial intelligence. Mitigants are continually evaluated and enhanced to ensure they remain appropriate in light of these evolving threat vectors. |
| Economic: Events such as an economic recession, movement in interest rates, inflation, political instability and rising living costs could cause volatility in the market, adversely impacting the valuation of investments. This could result in a reduction in the value of the Company’s assets. | The Company invests in a diverse portfolio of companies across a range of sectors, which helps to mitigate against the impact of performance in any one sector. The Company also maintains adequate liquidity to make sure it can continue to provide follow-on investment to those portfolio companies which require it and which is supported by the individual investment case. The Investment Manager monitors the impact of macroeconomic conditions on an ongoing basis and provides updates to the Board at least quarterly. | The overall risk remains unchanged. Market and economic conditions have remained uncertain during the year, driven by inflation, interest rate movements and geopolitical factors, with the potential to increase volatility in investment valuations. Mitigations however continue to be effective in managing this risk. |
| Legislative: A change to the VCT regulations could adversely impact the Company by restricting the companies the Company can invest in under its current strategy. Similarly, changes to VCT tax reliefs for investors could make VCTs less attractive and impact the Company’s ability to raise further funds. Failure to adhere with other relevant legislation and regulation could result in reputational damage and/or fines. | The Investment Manager engages with HM Treasury and industry bodies to demonstrate the positive benefits of VCTs in terms of growing UK companies, creating jobs and increasing tax revenue, and to help shape any change to VCT legislation. The Investment Manager employs individuals with expertise across the legislation and regulation relevant to the Company. Individuals receive ongoing training and external experts are engaged where required. | This overall risk remains unchanged. The agreed extension of the sunset clause to 2035, together with the expansion of the qualifying investment universe, represent positive legislative developments for the Company. However, these are partially offset by recent tax changes affecting VCT investors. The Investment Manager continues to engage actively with HM Treasury and industry bodies to help shape the legislative environment. |
| Liquidity/cash flow risk: The risk that the Company’s available cash will not be sufficient to meet its financial obligations. The Company invests in smaller companies, which are inherently less liquid than stocks on the main market. Therefore, these may be difficult to realise for their fair market value at short notice. | The Investment Manager prepares cash flow forecasts to make sure cash levels are maintained in accordance with policies agreed with the Board. The Company’s overall liquidity levels are monitored on a quarterly basis by the Board, with close monitoring of available cash resources. The Company maintains sufficient cash and readily realisable securities, including money market funds and OEICs, which can be accessed at short notice. As at 28 February 2026, 31.1% of net assets were held in cash and cash equivalents and 12.2% in OEICs, realisable in seven business days. | The overall risk remains unchanged. Active cash flow forecasting, enhanced Board monitoring and the maintenance of adequate levels of readily realisable assets continue to mitigate this risk. |
| Valuation risk: For smaller companies or illiquid shares, establishing a fair value can be difficult due to the lack of readily available market data for similar shares, resulting in a limited number of external reference points. | Investments in companies traded on AIM and AQSE are valued by the Investment Manager using closing bid prices as reported on Bloomberg. Where investments are in unquoted companies or where there are indicators bid price is not appropriate, alternative valuation techniques are used in accordance with the IPEV guidelines. Valuations of unquoted portfolio companies are performed by appropriately experienced staff, with detailed knowledge of both the portfolio company and the market in which it operates. These valuations are then subject to review and approval by the Octopus Valuations Committee, comprised of staff who are independent of the Investment team and with relevant knowledge of unquoted company valuations. The Board reviews valuations after they have been agreed by the Octopus Valuations Committee. Investment in FP Octopus UK Microcap Growth Fund, FP Octopus UK Multi Cap Income Fund and FP Octopus UK Future Generations Fund are all valued with reference to the daily prices which are published by Fund Partners, the Authorised Corporate Director. | The overall risk remains unchanged. The risk continues to be mitigated by a robust valuation governance framework, incorporating independent review, committee oversight and challenge by the Board. |
1Since 28 February 2025.
Emerging risks
The Board has considered emerging risks. The Board seeks to mitigate emerging risks and those noted below by setting policy, regular review of performance and monitoring progress and compliance.
The following are some of the potential emerging risks management and the Board are currently monitoring:
• Artificial intelligence;
• Geopolitics; and
• Climate change.
Viability statement
As part of their continuing programme of monitoring risk the Directors have assessed the prospects of the Company over a longer period than the minimum of twelve months required by the ‘going concern’ provision. The Board conducted this review for a period of five years, which was considered to be a reasonable time horizon given that the Company has raised funds under an offer for subscription and, under VCT rules, subscribing investors are required to hold their investment for a five-year period in order to benefit from the associated tax reliefs. The Board regularly considers the Company’s strategy, including investor demand for the Company’s shares, and a five-year period is considered to be a reasonable time horizon for this.
The Board carried out a robust assessment of the emerging and principal risks facing the Company and its current position. This includes the impact of economic, market, political, and geo-political uncertainty and any other risks which may adversely impact its business model such as future performance, solvency or liquidity. Particular consideration was given to the Company’s reliance on, and close working relationship with, the Investment Manager and the ability to raise new capital. The principal risks faced by the Company and the procedures in place to monitor and mitigate them are set out above.
The Board has also considered the liquidity of the underlying investments and the Company’s cash flow projections and found these to be realistic and reasonable. The Company’s cash flow includes cash equivalents which are short-term, highly liquid investments.
Based on the above assessment the Board confirms that it has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five-year period to 28 February 2031.
Directors' responsibilities statement
The Directors are responsible for preparing the Strategic Report, the Directors’ Report, the Directors’ Remuneration Report and the financial statements in accordance with applicable laws and regulations. They are also responsible for ensuring that the annual report and accounts include information required by the Listing Rules of the Financial Conduct Authority.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (GAAP), including Financial Reporting Standard 102 – ‘The Financial Reporting Standard Applicable in the United Kingdom and Republic of Ireland’ (FRS 102), (United Kingdom accounting standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and
- prepare a Strategic Report, a Directors’ Report and Directors’ Remuneration Report which comply with the requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions, to disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for ensuring that the annual report and accounts, taken as a whole, are fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s performance, business model and strategy.
In so far as each of the Directors is aware:
- there is no relevant audit information of which the Company’s auditor is unaware; and
- the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.
The Directors are responsible for preparing the annual report and accounts in accordance with applicable laws and regulations. Having taken advice from the Audit Committee, the Directors are of the opinion that this report as a whole provides the necessary information to assess the Company’s performance, business model and strategy and is fair, balanced and understandable.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Directors confirm that, to the best of their knowledge:
- the financial statements, prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS 102, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
- the annual report and accounts (including the Strategic Report), give a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
On behalf of the Board
Joanne Parfrey
Chair
Income statement
| Year to 28 February 2026 | Year to 28 February 2025 | |||||
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £’000 | £’000 | £'000 | £’000 | £’000 | |
| Gain on disposal of fixed asset investments | – | 713 | 713 | - | 1,059 | 1,059 |
| Loss on disposal of current asset investments | – | 150 | 150 | - | - | - |
| Gain/(loss) on valuation of fixed asset investments | – | 1,581 | 1,581 | - | (6,264) | (6,264) |
| Gain/(loss) on valuation of current asset investments | – | 828 | 828 | - | (352) | (352) |
| Investment income | 2,072 | – | 2,072 | 2,209 | - | 2,209 |
| Investment management fees | (483) | (1,449) | (1,932) | (518) | (1,561) | (2,079) |
| Other expenses | (622) | – | (622) | (652) | - | (652) |
| Profit/(loss) before tax | 967 | 1,823 | 2,790 | 1,039 | (7,118) | (6,079) |
| Tax | – | – | – | - | - | - |
| Profit/(loss) after tax | 967 | 1,823 | 2,790 | 1,039 | (7,118) | (6,079) |
| Earnings per share – basic and diluted | 0.4p | 0.8p | 1.2p | 0.5p | (3.4p) | (2.9p) |
- The ‘Total’ column of this statement represents the statutory income statement of the Company prepared in accordance with the accounting policies detailed in the Notes to the financial statements; 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 money market funds, as well as OEIC funds.
The Company has no recognised gains or losses other than the results for the period as set out above. Accordingly, a statement of comprehensive income is not required.
The accompanying notes are an integral part of the Financial Statements.
Balance sheet
| As at 28 February 2026 | As at 28 February 2025 | |||
| £’000 | £’000 | £’000 | £’000 | |
| Fixed asset investments | 62,357 | 81,535 | ||
| Current assets: | ||||
| Investments | 13,086 | 14,283 | ||
| Money market funds | 29,468 | 18,204 | ||
| Debtors | 364 | 252 | ||
| Applications cash1 | 7,047 | 4,350 | ||
| Cash at bank | 3,993 | 2,296 | ||
| 53,958 | 39,385 | |||
| Creditors: amounts falling due within one year | (8,831) | (5,537) | ||
| Net current assets | 45,127 | 33,848 | ||
| Total assets less current liabilities | 107,484 | 115,383 | ||
| Called up equity share capital | 2,295 | 2,282 | ||
| Share premium | 1,038 | 16,226 | ||
| Capital redemption reserve | 529 | 408 | ||
| Special distributable reserve | 122,435 | 118,070 | ||
| Capital reserve realised | (21,280) | (33,351) | ||
| Capital reserve unrealised | 1,833 | 12,081 | ||
| Revenue reserve | 634 | (333) | ||
| Total equity shareholders’ funds | 107,484 | 115,383 | ||
| NAV per share – basic and diluted | 46.8p | 50.6p | ||
- Cash held but not yet allotted.
The statements were approved by the Directors and authorised for issue on 16 June 2026 and are signed on their behalf by:
Joanne Parfrey
Chair
The accompanying notes are an integral part of the Financial Statements.
Statement of changes in equity
| Share capital | Share premium | Capital redemption reserve | Special distributable reserves1 | Capital reserve realised1 | Capital reserve unrealised | Revenue reserve1 | Total | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| As at 1 March 2025 | 2,282 | 16,226 | 408 | 118,070 | (33,351) | 12,081 | (333) | 115,383 |
| Comprehensive income for the year: | ||||||||
| Management fee allocated as capital expenditure | – | – | – | – | (1,449) | – | – | (1,449) |
| Current period gain on disposal | – | – | – | – | 863 | – | – | 863 |
| Current period gain on revaluation of investments | – | – | – | – | – | 2,409 | – | 2,409 |
| Profit after tax | – | – | – | – | – | – | 967 | 967 |
| Total comprehensive (loss)/profit for the year | – | – | – | – | (586) | 2,409 | 967 | 2,790 |
| Contributions by and distributions to owners: | ||||||||
| Repurchase and cancellation of own shares | (121) | – | 121 | (5,629) | – | – | – | (5,629) |
| Issue of shares | 134 | 6,657 | – | – | – | – | – | 6,791 |
| Share issue costs | – | (279) | – | – | – | – | – | (279) |
| Dividends paid | – | – | – | (11,572) | – | – | – | (11,572) |
| Total contributions by and distributions to owners | 13 | 6,378 | 121 | (17,201) | – | – | – | (10,689) |
| Other movements: | ||||||||
| Cancellation of share premium | – | (21,566) | – | 21,566 | – | – | – | – |
| Prior years’ holding gains now realised | – | – | – | – | 12,657 | (12,657) | – | – |
| Total other movements | – | (21,566) | – | 21,566 | 12,657 | (12,657) | – | – |
| Balance as at 28 February 2026 | 2,295 | 1,038 | 529 | 122,435 | (21,280) | 1,833 | 634 | 107,484 |
- Included within these reserves is an amount of £101,789,000 (2025: £84,386,000) which is considered distributable to shareholders under Companies Act rules. 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 28 February 2026, £59,878,000 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 March 2024 | 2,038 | 18,041 | 341 | 124,213 | (24,622) | 10,470 | (1,372) | 129,109 |
| Comprehensive income for the year: | ||||||||
| Management fee allocated as capital expenditure | - | - | - | - | (1,561) | - | - | (1,561) |
| Current period gain on disposal | - | - | - | - | 1,059 | - | - | 1,059 |
| Current period loss on revaluation of investments | - | - | - | - | - | (6,616) | - | (6,616) |
| Profit after tax | - | - | - | - | - | - | 1,039 | 1,039 |
| Total comprehensive (loss)/profit for the year | - | - | - | - | (502) | (6,616) | 1,039 | (6,079) |
| Contributions by and distributions to owners: | ||||||||
| Repurchase and cancellation of own shares | (67) | - | 67 | (3,687) | - | - | - | (3,687) |
| Issue of shares | 311 | 17,114 | - | - | - | - | - | 17,425 |
| Share issue costs | - | (864) | - | - | - | - | - | (864) |
| Dividends paid | - | - | - | (20,521) | - | - | - | (20,521) |
| Total contributions by and distributions to owners | 244 | 16,250 | 67 | (24,208) | - | - | - | (7,647) |
| Other movements: | ||||||||
| Cancellation of share premium | - | (18,065) | - | 18,065 | - | - | - | - |
| Prior years’ holding gains now realised | - | - | - | - | (8,228) | 8,228 | - | - |
| Total other movements | - | (18,065) | - | 18,065 | (8,228) | 8,228 | - | - |
| Balance as at 28 February 2025 | 2,282 | 16,226 | 408 | 118,070 | (33,351) | 12,081 | (333) | 115,383 |
The accompanying notes are an integral part of the financial statements.
Cash flow statement
| Year to 28 February 2026 | Year to 28 February 2025 | |
| £'000 | £'000 | |
| Cash flows from operating activities | ||
| Profit/(loss) before tax | 2,790 | (6,079) |
| Adjustments for: | ||
| (Increase)/decrease in debtors | (112) | 414 |
| Increase in creditors | 597 | 466 |
| Gain on disposal of fixed asset investments | (713) | (1,059) |
| Gain on disposal of current asset investments | (150) | – |
| (Gain)/loss on valuation of fixed asset investments | (1,581) | 6,264 |
| (Gain)/loss on valuation of current asset investments | (828) | 352 |
| Net cash generated from operating activities | 3 | 358 |
| Cash flows from investing activities | ||
| Purchase of fixed asset investments | (7,711) | (11,280) |
| Proceeds from sale of fixed asset investments | 29,183 | 4,890 |
| Purchase of current asset investments | (450) | (1,008) |
| Proceeds from sale of current asset investments | 2,625 | 270 |
| Total cash flows utilised in investing activities | (23,647) | (7,128) |
| Cash flows from financing activities | ||
| Movement in applications account | 2,697 | 4,346 |
| Purchase of own shares | (5,629) | (3,687) |
| Proceeds from share issues (net of DRIS) | 4,664 | 13,678 |
| Share issue costs | (279) | (864) |
| Dividends paid (net of DRIS) | (9,445) | (16,774) |
| Net cash flows utilised in financing activities | (7,992) | (3,301) |
| Increase/(decrease) in cash and cash equivalents | 15,658 | (10,071) |
| Opening cash and cash equivalents | 24,850 | 34,921 |
| Closing cash and cash equivalents | 40,508 | 24,850 |
| Closing cash and cash equivalents is represented by: | ||
| Cash at bank | 3,993 | 2,296 |
| Applications cash | 7,047 | 4,350 |
| Money market funds | 29,468 | 18,204 |
| Total cash and cash equivalents | 40,508 | 24,850 |
The accompanying notes are an integral part of the financial statements.
Notes to the financial statements
1. Significant accounting policies
The Company is a Public Limited Company (plc) incorporated in England and Wales and its registered office is 6th Floor, 33 Holborn, London EC1N 2HT.
The Company’s principal activity is to invest in a diverse portfolio of predominantly AIM-traded companies with the objective of providing shareholders with attractive tax-free dividends and long-term capital growth.
Basis of preparation
The financial statements have been prepared under the historical cost convention, except for the measurement at fair value of certain financial instruments, and in accordance with UK Generally Accepted Accounting Practice (GAAP), including Financial Reporting Standard 102 – The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland’ (‘FRS 102’), and with the Companies Act 2006 and the Statement of Recommended Practice (SORP) ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts (issued 2014 and updated in July 2022)’.
The significant accounting policies have remained unchanged from those set out in the Company’s 2025 annual report and accounts.
2. Income
Accounting policy
Investment income includes interest earned on money market securities is shown net of income tax withheld at source. Dividend income is shown net of any related tax credit. Dividends are allocated to revenue or capital depending on whether the dividend is of a revenue or capital nature.
Dividends receivable are recognised when the Company’s right to receive payment is established and it is probable that payment will be received. Fixed returns on debt and money market securities are recognised on a time apportionment basis so as to reflect the effective yield, provided there is no reasonable doubt that payment will be received in due course.
Disclosure
| 28 February 2026 | 28 February 2025 | |
| £’000 | £’000 | |
| Dividends receivable from fixed asset investments | 682 | 906 |
| Loan note interest receivable | 115 | 111 |
| Income receivable on money market securities | 1,275 | 1,192 |
| Total | 2,072 | 2,209 |
3. Investment management fees
| 28 February 2026 | 28 February 2025 | |||||
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Investment management fees | 483 | 1,449 | 1,932 | 518 | 1,561 | 2,079 |
Octopus provides investment management and accounting and administration services to the Company under a management agreement which may be terminated at any time thereafter by not less than 12 months’ notice given by either party. No compensation is payable in the event of terminating the agreement by either party, if the required notice period is given. The fee payable, should insufficient notice be given, will be equal to the fee that would have been paid should continuous service be provided, or the required notice period was given. The management fee is an annual charge and is set at 2% of the Company’s net assets. The Investment Manager is not entitled to any annual performance incentive scheme.
During the year Octopus charged gross management fees of £2,277,000 (2025: £2,614,000). When the various allowances detailed below are included, the net management fee for the year is £1,932,000 (2025: £2,079,000). At the year end £487,000 was payable to Octopus (2025: £503,000). Octopus received £106,000 as a result of upfront fees charged on allotments of Ordinary shares (2025: £165,000).
The Company pays ongoing adviser charges to independent financial advisers (IFAs). Ongoing adviser charges are an ongoing fee of up to 0.5% per annum of the amount invested for a maximum of nine years paid to Advisers who are on an advised and ongoing fee structure. The Company is rebated for this cost by way of a reduction in the annual management fee. For the year to 28 February 2026 the rebate received was £114,000 (2025: £131,000).
The Company also facilitates upfront fees to IFAs where an investor has invested through a financial adviser and has received upfront advice. Where an investor agrees to an upfront fee only, the Company can facilitate a payment of an initial adviser charge of up to 4.5% of the investment amount. If the investor chooses to pay their intermediary/adviser less than the maximum initial adviser charge, the remaining amount will be used for the issue and allotment of additional new shares for the investor. In these circumstances the Company does not facilitate ongoing annual payments. To ensure that the Company is not financially disadvantaged by such payment, a notional ongoing adviser charge equivalent to 0.5% per annum of the amount invested will be deemed to have been paid by the Company for a period of nine years. The Company is rebated for this cost, also by way of a reduction in the annual management fee. For the year to 28 February 2026 the rebate received was £151,000 (2025: £171,000).
The Company also receives a reduction in the management fee for the investments in other Octopus managed funds, being the Multi Cap, Micro Cap Growth and Future Generations products, to ensure the Company is not double charged on these products. This amounted to £80,000 for the year to 28 February 2026 (2025: £86,000).
The management fee has been allocated 25% to revenue and 75% to capital, in line with the Board’s expected long-term return in the form of income and capital gains respectively from the Company’s investment portfolio.
4. Other expenses
Accounting policy
All expenses are accounted for on an accruals basis and are charged wholly to revenue, apart from management fees which are charged 25% to revenue and 75% to capital.
The transaction costs incurred when purchasing or selling assets are written off to the Income Statement in the period that they occur.
Disclosure
| 28 February 2026 | 28 February 2025 | |
| £’000 | £’000 | |
| IFA charges | 114 | 131 |
| Directors’ remuneration | 110 | 108 |
| Audit fees | 51 | 49 |
| Registrar fees | 72 | 56 |
| Printing and postage | 26 | 19 |
| VCT monitoring fees | 14 | 14 |
| Directors’ and officers’ liability insurance | 34 | 49 |
| Brokers’ fees | 6 | 6 |
| Other administration expenses | 195 | 220 |
| Total | 622 | 652 |
The fees payable to the Company’s auditor above are stated net of VAT and the VAT is included within other administration expenses. No non-audit services were provided by the Company’s auditor.
The ongoing charges of the Company were 2.2% of average net assets during the year to 28 February 2026 (2025: 2.3%).
5. Tax
Accounting policy
Current tax is recognised for the amount of income tax payable in respect of the taxable profit/(loss) for the current or past reporting periods using the current UK corporation tax rate. The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue return on the ‘marginal’ basis as recommended in the SORP.
Deferred tax is recognised on an undiscounted basis in respect of all timing differences that have originated but not reversed at the balance sheet date, except as otherwise indicated.
Deferred tax assets are only recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Disclosure
The corporation tax charge for the year was £nil (2025: £nil).
| 28 February 2026 | 28 February 2025 | |
| £’000 | £’000 | |
| Profit/(loss) before tax | 2,790 | (6,079) |
| Current tax at 25% (2025: 25%) | 697 | (1,519) |
| Effects of | ||
| Non-taxable income | (489) | (525) |
| Non-taxable capital (losses)/gains | (818) | 1,389 |
| Non-deductible expenses | 12 | 9 |
| Excess management expenses on which deferred tax not recognised | 598 | 646 |
| Total tax charge | - | - |
Approved VCTs are exempt from tax on capital gains within the Company. Since the Board intends that the Company will continue to conduct its affairs so as to maintain its approval as a VCT, no deferred tax has been provided in respect of any capital gains or losses arising on the revaluation or disposal of investments.
As at 28 February 2026, there is an unrecognised deferred tax asset of £7,858,000 (2025: £7,558,000) in respect of surplus management expenses of £31,433,000 (2025: £30,232,000), based on a prospective tax rate of 25% (2025: 25%). This deferred tax asset could in future be used against taxable profits.
Provided the Company continues to maintain its current investment profile, it is unlikely that the surplus management expenses will be utilised and that the Company will obtain any benefit from this asset.
6. Dividends
A Accounting policy
Dividends payable are recognised as distributions in the financial statements when the Company’s liability to make payment has been established. This liability is established on the record date, the date on which those shareholders on the share register are entitled to the dividend.
Disclosure
| 28 February 2026 | 28 February 2025 | |
| £’000 | £’000 | |
| Dividends paid on Ordinary shares during the year | ||
| Final dividend – 2.5p paid 28 August 2025 (2025:2.5p) | 5,741 | 5,044 |
| Special dividend – nil (2025: 4.6p) | _ | 9,886 |
| Interim dividend – 2.5p paid 27 January 2026 (2025: 2.5p) | 5,831 | 5,591 |
| Total | 11,572 | 20,521 |
During the year £2,127,000 (2025: £3,747,000) of dividends were reinvested under the DRIS.
Under Section 32 of FRS 102 ‘Events After the end of the Reporting Period’, dividends payable at year end are not recognised as a liability. Details of these dividends and all other dividends declared in the year are set out below.
| 28 February 2026 | 28 February 2025 | |
| £’000 | £’000 | |
| Dividends paid and proposed in respect of the year | ||
| Interim dividend – 2.5p per share paid 27 February 2026 (2025: 1.8p per share) | 5,831 | 5,591 |
| Final dividend proposed – 2.5p per share payable 28 August 2026 (2025: 2.5p per share) | 5,736 | 5,704 |
| Special dividend – 4.6p per share paid 1 April 2026 (2025: nil) | 11,222 | – |
| Total | 22,789 | 11,295 |
The above proposed final dividend is based on the number of shares in issue at the date of this report. The actual dividend paid may differ from this number as the dividend payable will be based on the number of shares in issue on the record date and will reflect any changes in the share capital between the year end and the record date.
7. Earnings per share
| 28 February 2026 | 28 February 2025 | |||||
| Revenue | Revenue | Capital | Total | Capital | Total | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Profit/(loss) attributable to Ordinary shareholders | 967 | 1,823 | 2,790 | 1,039 | (7,118) | (6,079) |
| Earnings per ordinary share | 0.4p | 0.8p | 1.2p | 0.4p | (3.4)p | (2.9)p |
The profit/(loss) per share is based on 232,224,185 (2025: 234,289,954) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year, and the profit on ordinary activities after tax for the year of £2,790,000 (2025: loss of £6,079,000).
There are no potentially dilutive capital instruments in issue and, as such, the basic and diluted earnings per share are identical.
8. Net asset value per share
| 28 February 2026 | 28 February 2025 | |
| Net assets (£’000) | 107,484 | 115,383 |
| Shares in issue | 229,459,767 | 228,158,686 |
| NAV per share (p) | 46.8 | 50.6 |
There are no potentially dilutive capital instruments in issue and, as such, the basic and diluted NAV per share are identical.
9. Events after the end of the reporting period
The following events occurred between the balance sheet date and the signing of these financial statements:
- a full disposal of 4,136,007 shares in IDOX plc for total consideration of £2,957,245.
The following shares have been bought back since the year end:
- 3 March 2026: 1,260,373 shares at a price of 38.97p per share.
- 23 April 2026: 1,243,434 shares at a price of 39.79p per share.
- 21 May 2026: 953,604 shares at a price of 39.80p per share.
10. 2026 financial information
The figures and financial information for the year ended 28 February 2026 are extracted from the Company’s annual financial statements for the period and do not constitute statutory accounts. The Company’s annual financial statements for the year to 28 February 2026 have been audited but have not yet been delivered to the Registrar of Companies. The Auditors’ report on the 2026 annual financial statements was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain any statements under Sections 498(2) or 498(3) of the Companies Act 2006.
11. 2025 financial information
The figures and financial information for the year ended 28 February 2025 are complied from an extract of the published financial statements for the period and do not constitute statutory accounts. Those financial statements have been delivered to the Registrar of Companies and included the Auditors’ report which was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain any statements under Sections 498(2) or 498(3) of the Companies Act 2006.
12. Annual Report and financial statements
The Annual Report and financial statements will be posted to shareholders in June and will be available on the Company’s website. The Notice of Annual General Meeting is contained within the Annual Report.
13. General information
Registered in England & Wales. Company No. 03477519
LEI: 213800C5JHJUQLAFP619
14. Directors
Joanne Parfrey (Chair), Andrew Boteler, Louise Nash and David Docherty.
15. Secretary and registered office
Octopus Company Secretarial Services Limited
33 Holborn, London EC1N 2HT
