Octopus AIM VCT 2 plc : Final Results

14 februari 2017

Octopus AIM VCT 2 plc

Final Results

14 February 2017

Octopus AIM VCT 2 plc, managed by Octopus Investments Limited, today announces the final results for the year ended 30 November 2016.

These results were approved by the Board of Directors on 10 February 2017.

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

Financial Summary

	30 November 2016	30 November 2015
Net assets (£'000s)	63,005	52,317
Profit/(Loss) on ordinary activities for the year after tax (£'000s)	3,184	4,047
Net asset value ("NAV")  per share	80.6p	80.6p
Ordinary Dividends per share - paid in year	4.0p	4.0p
Special Dividend per share - paid in year	-	2.0p
Final Dividend per share proposed*	2.0p	2.0p
Total Return**	5.0%	7.8%

* The proposed final dividend will, if approved by shareholders, be paid on 28 April 2017 to shareholders on the register on 24 March 2017.
**Total return is calculated as (movement in NAV + dividends paid in the period) divided by the NAV at the beginning of the period.

Chairman's Statement

Introduction
I would particularly like to welcome new shareholders who have joined the share register and I do hope that I will see some of you at the AGM on 20 April 2017.

The year to 30 November 2016 has not been quite the one we expected, with both domestic and international developments taking investors by surprise and causing some volatility. In the light of those events, the resilience of the market generally has also been surprising and, while my last annual statement was correct to comment on the potential for the derating of smaller companies while volatile market conditions persisted, it is encouraging to report that your Company has produced a positive return, helped particularly by the progress made by many of the maturing holdings in the portfolio. 

Performance
The Net Asset Value on 30 November 2016 was 80.6p per share, which is in line with the 80.6p reported last year. Adding back the 4.0p of dividends paid in the year, to adjust the year end NAV to 84.6p, gives a total return of 5.0%. In the same twelve months, the FTSE All Share Index rose by 9.8%, the FTSE SmallCap (excluding investment companies) Index by 7.9% and the FTSE AIM All Share Index by 12.8%, all on a total return basis.

Last year I commented that positive performance contributions had come from the more established companies in the portfolio, with many of the smaller and yet to be profitable companies seeing their share prices struggle. This year was similar in many ways, with positive contributions to performance from many of the more mature companies in the portfolio, supplemented by good contributions from some of the newer and smaller companies which have begun to establish themselves in their respective marketplaces. Craneware, Abcam, RWS and Quixant are examples of more mature holdings, whilst Gear4music, DP Poland and Scientific Digital Imaging are examples of the newer holdings.

What is quite clear is that the timetable for success, or even partial success, is long. For example, since our first investment, DP Poland has needed additional capital and made several alterations to its retail format before achieving its initial success, and the consequent share price increase of the last year. As ever this just goes to prove that it is the determination of the management team that is crucial to making any company a successful investment.

In the year under review AIM has raised £5.0 billion of new capital, fulfilling its purpose of providing additional growth capital for its members.

New VCT Regulations
It is a little over a year now since the latest VCT regulations began to take effect. With the publication of guidance notes by HMRC more recently the new structure of the market is starting to take effect and our Managers are acclimatising to the new environment. At this stage there has been little impact on the portfolio itself and no need to change investment policies. That is a situation that may change in the future, but any change is much more likely to be evolutionary rather than immediately dramatic. At present there are signs of a developing trend towards investing in smaller and earlier stage companies which fit the HMRC regulations. These may take a few years to contribute meaningfully to performance, not least because the companies will invariable require additional capital.

Making follow-on investments has proved difficult on occasions and is one concern for the sector as a whole, which needs to be addressed by the authorities, since the inability to support existing investments seems to invalidate much of the purpose of VCTs and to undermine the potential for growth in the UK economy.

Dividends
The Board has a policy of providing shareholders with a yield of 5%, subject to a minimum payment of 3.6p per year. In September an interim dividend of 2.0p was paid to all shareholders. The Board is recommending a final dividend in respect of the year to 30 November 2016 of 2.0p per share, making 4.0p in total. This is in line with the yield objective. Subject to the approval of shareholders at the AGM the dividend will be paid on 28 April 2017 to shareholders on the register on 24 March 2017.

Dividend Reinvestment Scheme
In common with a number of other VCTs in the industry, your Company has established a Dividend Reinvestment Scheme (DRIS) following approval at the AGM in 2014.  Some shareholders have already taken advantage of this opportunity.  For investors who do not need income, but value the additional tax relief on their reinvested dividends, this is an attractive scheme and I hope that more shareholders will find it useful.  In the course of the year 395,968 new shares have been issued under this scheme, returning £0.3 million to the Company. The dividend referred to above will be eligible for the DRIS.

Share Buybacks
During the year to 30 November 2016 your Company continued to buy back shares in the market from selling shareholders and purchased 1,888,104 ordinary shares for a total consideration of £1,401,000. We have maintained a discount of approximately 4.5% (equating to a 5.0% discount to the selling shareholder after costs), which your Board monitors and intends to retain as a policy which fairly balances the interests of both remaining and selling shareholders. Buybacks remain an essential practice for VCTs as providing a means of selling is an important part of the initial investment decision and has enabled your Company to grow. As such therefore I hope you will all support the appropriate resolution at the AGM.

Share Issues
A prospectus was issued on 21 December 2015 and the final issue of shares under that prospectus was made in October 2016, raising a total of £11.5 million after costs in the year. This brings the total proceeds from share issues, including the DRIS, to £11.8 million. The Board has announced a Top-Up offer to raise up to a further £4.3 million. This small issue allows existing investors a new chance to invest and does not need a prospectus.

Risks and Uncertainties
In accordance with the Listing Rules and the Companies Act 2006 under which your Company operates, your Board has to comment on potential risks and uncertainties, which could have a material impact on the Company's performance.  A risk arises from the requirement to maintain compliance with HMRC regulations requiring 70% of your Company's assets to be invested in qualifying holdings. Other risks include economic conditions, which impact particularly on smaller companies in which your Company invests, and this could have an adverse impact on share prices.

VCT Status
PricewaterthouseCoopers LLP provides your Board and Investment Manager with advice concern continuing compliance with HMRC regulations for VCTs. Your 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 70% qualifying investment level.  As at 30 November 2016 over 85% of the portfolio, as measured by HMRC regulations, was invested in qualifying investments.

Annual General Meeting
The Annual General Meeting will be held on 20 April 2017.  I very much hope that you will be able to come.  After the formal business, our Investment Managers will make a presentation and there will, of course, be a chance for you to ask questions. At the Annual General Meeting, a resolution will be proposed to extend the life of the Company until 2022 in order to preserve the VCT status of the Company for the benefit of both existing shareholders and new investors participating in the current share offer.

Outlook
The market extended its year end rally to reach new highs in the middle of January, helped by some upward revisions of growth statistics which have allayed some of the fears about the early effects of the Referendum result on the economy.  However, uncertainty continues to be the dominant theme, with the lack of clarity regarding the terms of our exit from the EU and a new President entering the White House both likely to impact market sentiment as the year unfolds.

The portfolio now contains 69 holdings across a range of sectors and many of them have already demonstrated their management's ability to grow their businesses successfully in difficult economic conditions.  The balance of the portfolio towards profitable companies remains, and the cash available for new investments will allow us to take advantage of any future weakness in valuations should it occur. With the VCT over 85% invested in qualifying companies for HMRC purposes your Manager can afford to be selective about new investments.

Keith Mullins
Chairman
10 February 2017

Investment Manager's Review

Introduction

In a year, in which some significant economic and political events have taken markets by surprise, the expectation that volatility would follow as a consequence has been confounded by a stronger market, particularly towards the end of the year to 30 November 2016. Although larger companies, as measured by the FTSE 100 Share Index have, on balance, performed in absolute terms a little better than smaller companies, all indices have risen. Large companies with overseas earnings had a particularly strong period of performance post the Referendum in June as Sterling fell and the oil price began to recover.  There have been some notable contributors to the portfolio, both positive and negative, but we are pleased to report a resilient NAV performance and the maintenance of the 5% yield objective.

The year to 30 November 2016 has continued to see AIM raise new capital for companies, both already quoted and new flotations, and your Company has invested steadily throughout the year as well as raising new capital for future investments. The prospectus offer closed in October 2016 and we have recently announced a 'Top-Up offer of up to £4.3 million to give existing and new shareholders a chance to invest in the current tax year. Early in the new year we expect to see a number of VCT qualfifying investment opportunities, which have chosen to postpone their fundraising from December.

The Alternative Investment Market

Despite some volatility in the first half, the FTSE AIM All-Share Index was little changed in that period.  However, in the second six months the index rose markedly, helped by a resurgence in resource and oil stocks. Share trading volumes also picked up helped by a sense of stability if not outright confidence, despite the result of the Referendum to leave the EU, and by smaller companies continuing to be seen as an attractive asset class.  In addition, September saw a reasonable results season confirming that for many smaller companies the economy remained supportive. Against that background the number of AIM companies has shrunk further, to 993 at 30 November 2016, compared to 1,049 a year earlier. However, we believe that the quality has continued to rise and see nothing fundamentally wrong with AIM just because it has fewer companies on the market. New issues in the last twelve months include such names as Joules, the clothing manufacturer and retailer, and Hotel Chocolat, the chocolatier. AIM is certainly not a second class market, but is still best described as a collection of smaller growth companies.

Those companies have continued to raise new capital throughout the year. In the twelve months to 30 November 2016 AIM raised a further £3.6 billion of new capital for existing companies and a total of £1.4 billion for new companies floating on the market. Although the level of fundraising for existing companies was lower than last year, these figures show conclusively that AIM remains open for the funding of good growth companies and continues to attract new entrants. VCTs play a significant part in that funding process and we identify below the companies we have invested in during the second half of the year.

Performance

Adding back dividends paid in the year  to show the total return, the Net Asset Value increased in the year by exactly the same amount as the dividends paid out, giving a total return of 5.0%, a progression on the 0.6% achieved in the first half. This compares with a total return for the FTSE Smallcap Index of 7.9% and for AIM of 12.8%, and the FTSE All Share Index of 9.8%. Individual months in the year under review saw share prices suffering significant bouts of volatility and the market has generally remained wary of smaller companies that have yet to make a profit although more established companies outperforming expectations have been well rewarded by rising prices.

Within the portfolio there was once again a good contribution from the more established and already profitable companies which includes many of the individual non-qualifying holdings such as RWS, Abcam, Next Fifteen and Gooch and Housego. However, the polarisation we talked about in the interim statement persisted with companies deemed to be exposed to the 'Brexit effect' such as Staffline and Vertu Motors continuing to underperform despite producing decent figures and encouraging trading statements.  In addition Tasty's exposure to rising costs caused it to re-evaluate some of its new opening pipeline and raise extra funds to reduce its debt financing, all of which caused its shares to underperform.  We do not share the market's current pessimism about these companies which have been held in the portfolio for a number of years and where the management teams have successfully grown in challenging economic conditions in the past. We believe that their share prices will recover as they deliver on their growth plans.

Elsewhere, underperformance came from the earlier stage companies in the portfolio, particularly those that had setbacks or showed themselves in need of further cash to reach profitability. Nektan, Oxford Pharmascience and Microsaic all performed very  badly in the year.  Nektan has raised money post the period end and Microsaic had a fundraising where we made a further investment to support the new management team who believe they now have a product that they can sell.  Oxford Pharmascience is trading at around the £22m value of cash in the balance sheet reflecting disappointment that it has so far failed to negotiate a licensing deal for its taste masking technology for NSAIDS. The other poor performers were TLA where the bid and move to Nasdaq that had boosted the shares in the first half of the year went away and Escher which underwent significant changes to its board.

There were several corporate developments. Breedon completed the acquisition of Hope, doubling the size of the business and giving it a much prized cement railhead into London, supporting another year of good share price performance. GB Group also made an important acquisition in scanning technology although its shares suffered a setback on the news that revenue growth would be affected by the slow roll-out of a UK Government contract.  The shares have since recovered most of their losses reflecting appreciation of the strength of the Group's growth opportunities as remote identity checking becomes more important. Ergomed raised money and acquired another pharmacovigilance business in a very earnings enhancing deal which was much better received by the market than its earlier acquisition of Haemostatix, and the shares have started to recover.  Midatech also reacted well to news of a £10m fundraising which should finanace the business to profitability. Idox, EKF and Animalcare were all positive contributors to performance after their core businesses started to show growth after a period of consolidation. In EKF's case this was after the business was pared back to its core and re-focussed under the direction of the new Chairman.

Several shares performed particularly well as the underlying businesses demonstrated that they were delivering on, or ahead of, their plans at the time that we invested.  Gear4music is now a profitable business with  a third of its revenues coming from Europe and growing at more than 50% in the current year.  DP Poland has also finally demonstrated that the Domino's model works in Poland and is now signing up sub-franchisees for new sites.  Quixant has also increased its customer base and has had several upgrades to its forecasts this year, making it the biggest positive contributor to the fund's performance this year. Craneware has also re-established its growth credentials although it has had more of a roller-coaster performance as it outperformed on the back of weak sterling before underperforming on fears over changes to the US healthcare market under Trump.

The non-qualifying element of the equity portfolio also did well in the year as our existing strategy of investing in larger more liquid, profitable companies to counterbalance new earlier stage qualifying holdings continued to pay off. We have now supplemented these with holdings in Octopus Portfolio Manager and the FP Octopus Micro Cap Growth funds to manage liquidity while cash is awaiting investment.

Portfolio Activity

Having made two new qualifying investments in the first half of the year, we added three further new qualifying holdings at a cost of £0.66m as well as one further qualifying investment of £0.34 million into Futura Medical, an existing holding, in the second half. This made a total investment of £1.96 million in qualifying investments in the year which was considerably lower than last years £4.78 million reflecting slightly lower levels of fundraising activity on AIM and the short term effects of digesting the new rules.  Of the three new qualifying investments, two were new issues.  LoopUp is a telephone and web conferencing operator with an easy to use system with more functionality than many market competitors.  It is growing rapidly, and although not profitable at the time of float, it made an interim  profit and is expected to be so for the year to December.  FreeAgent is a supplier of cloud based accounting software sold as  a service to enable small businesses to file their tax returns on line or via mobile.  It is expected to be profitable for the year to March 2019.

There were no major sales in the year although we took the opportunity to dispose of some of the smaller holdings that were not contributing to performance, mostly at a loss. The largest sale was Vianet where the market for its beer monitoring device continues to be difficult and the holdings in Lombard Medical and Altitude Group were also sold.  In all disposals raised £1.2 million in cash.

New VCT Regulations

Almost coinciding with the last year end the Summer Budget of 2015 received the Royal Assent and with guidelines published by HMRC at about the same time as the interim results in May 2016, it has been a period of assimilating the consequences of the new regulations. We do not believe that there needs to be any material change to our investment approach.  We are determined to maintain a threshold of quality and to invest where we see returns from growth. However, the emphasis of the new regulations is definitely to encourage investment into earlier stage companies and to that extent, it seems likely over a number of years, that the portfolio will see a rise in the number of smaller companies receiving our initial investment.  We would expect to invest further in those companies as they grow and would certainly seek to reduce the risk in those initial investments by not investing as much as perhaps we might have done a year or two ago, when quite possibly our investment would have been on the last occasion that a VCT could invest.

At present there has been little change to the portfolio, as we continue to hold the larger market capitalisation companies, in which we invested several years ago as qualifying companies, or which we bought in the market prior to the rule changes.

To summarise the changes, in order to qualify companies must:

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

Although there is a longer period and higher funding limit allowed for knowledge intensive companies, it seems quite likely that a new funding gap will open up for smaller companies that hit their funding limit, but which are still in a development phase.  This would particularly affect a company that has failed for whatever reason to qualify as a knowledge intensive one. It is also possible that capital intensive companies, which potentially form a key part of the new government's industrial strategy, will face a funding chasm as VCTs will not be able to follow on with further investment and the companies may be too small to attract investment from more conventional and larger institutional investors. Accessing funds from the general public may also prove difficult since crowd funding seems reliant on tax breaks, which would not apply. This financing issue is probably a long way down any government department's list of priorities, but it is to be hoped that the funding gap fails to materialise for any of our holdings. One of our major and consistent reasons for refusing to invest is the belief that a company is not raising enough capital at a particular time.  We will persist with that criterion.

 

Outlook

Markets have enjoyed a surprisingly strong finish to 2016, buoyed by better than expected economic growth figures and a sense of relief that the immediate disaster predicted by those opposing the decision to exit the European Union has not materialised.  However, political and macro-economic issues remain and newspaper headlines are still dominated by speculation about Brexit's likely depressing effect on our economy in the medium term as well as the shape of our eventual relationship with Europe and the rest of the world. These questions are unlikely to be settled quickly and it seems therefore that investors have to be prepared for continued bouts of uncertainty and volatility.  However, the majority of news from the portfolio has continued to be encouraging in the run up to the end of 2016.

The portfolio now contains 69 holdings with investments across a range of sectors including several such as Craneware, Gooch and Housego, Gear4music, Clinigen, Cello, DP Poland and GB Group that have significant international exposure. Domestic companies such as Breedon, Vertu and Staffline have already demonstrated their management's ability to grow their businesses successfully in difficult economic conditions and the latter two should see scope for share price recovery if they continue to meet market expectations.  The balance of the portfolio towards profitable companies remains, with several expected to start paying dividends in 2017.  A top-up fundraising for £4.3 million will add to the funds available for new investments and allow us to take advantage of any dip in valuations should sentiment weaken in the future. We remain selective when viewing new investment opportunities.

The AIM Team
Octopus Investments Limited
10 February 2017

Directors' Responsibility Statement

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland ("FRS 102"). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss 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 judgments 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; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business;
• 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 group's performance, business model and strategy.

The Directors are responsible for ensuring the Annual Report and the financial statements are made available on a website.  Financial statements are published on the company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions.  The maintenance and integrity of the company's website is the responsibility of the Directors.  The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Directors' responsibilities pursuant to DTR4

The Directors confirm to the best of their knowledge:

• the financial statements, prepared in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland ("FRS 102"), give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company; and
   
• the Annual Report includes a fair review of the development and performance of the business and the financial position of the Company, together with a description or the principal risks and uncertainties that it faces.

On Behalf of the Board

Keith Mullins

Chairman

10 February 2017

Income Statement

	Year to 30 November 2016			Year to 30 November 2015
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Gain on disposal of fixed asset investments	-	300	300	-	172	172
Gain on valuation of fixed asset investments	-	3,389	3,389	-	4,555	4,555
Gain on valuation of current asset investments	-	174	174	-	-	-
Investment Income	597	-	597	547	-	547
Investment management fees	(225)	(676)	(901)	(230)	(689)	(919)
Other expenses	(375)	-	(375)	(308)	-	(308)
Return on ordinary activities before tax	(3)	3,187	3,184	9	4,038	4,047
Taxation on return on ordinary activities	-	-	-	-	-	-
Return on ordinary activities after tax	(3)	3,187	3,184	9	4,038	4,047
Earnings per share - basic and diluted	0.0p	4.5p	4.5p	0.0p	6.6p	6.6p

There is no other comprehensive income for the period.

• the 'Total' column of this statement represents the statutory income statement of the Company; the supplementary revenue return and capital return columns have been prepared in accordance with the AIC Statement of Recommended Practice
• all revenue and capital items in the above statement derive from continuing operations
• the Company has only one class of business and derives its income from investments made in shares and securities and from bank and money market funds, as well as OEIC funds.

Balance Sheet

	As at 30 November 2016		As at 30 November 2015
	£'000	£'000	£'000	£'000
Fixed asset investments*		49,737		44,968
Current assets:
Investments*	10,594		5,397
Debtors	49		54
Cash at bank	2,984		2,010
	13,627		7,461
Creditors: amounts falling due within one year	(359)		(112)
Net current assets		13,268		7,349
Net assets		63,005		52,317
Called up equity share capital		8		6
Share premium		23,405		11,575
Special distributable reserve		30,513		34,841
Capital reserve realised		(10,168)		(8,373)
Capital reserve unrealised		19,388		14,406
Revenue reserve		(141)		(138)
Total equity shareholders' funds		63,005		52,317
Net asset value per share - basic and diluted		80.6p		80.6p

*Held at fair value through profit and loss

The statements were approved by the Directors and authorised for issue on 10 February 2017 and are signed on their behalf by:

Keith Mullins
Chairman
Company No: 05528235

Statement of changes in Equity

	Share Capital	Share Premium	Special distributable reserves	Capital reserve - realised	Capital reserve - unrealised	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
As at 1 December 2014	6	8,979	34,183	(10,457)	12,452	(147)	45,016
Comprehensive income for the year:
Management fee allocated as capital expenditure	-	-	-	(689)	-	-	(689)
Current year gains on disposal	-	-	-	172	-	-	172
Current period gains on fair value of investments	-	-	-	-	4,555	-	4,555
Loss on ordinary activities after tax	-	-	-	-	-	9	9
Total comprehensive income for the year	-	-	-	(517)	4,555	9	4,047
Contributions by and distributions to owners:
Repurchase and cancellation of own shares	-	-	(925)	-	-	-	(925)
Issue of shares	-	8,320	-	-	-	-	8,320
Share issue costs	-	(362)	-	-	-	-	(362)
Dividends paid	-	-	(3,779)	-	-	-	(3,779)
Total contributions by and distributions to owners		7,958	(4,704)	-	-	-	3,254
Other Movements:
Cancellation of share premium	-	(5,362)	5,362	-	-	-	-
Prior years' holding gains now realised	-	-	-	2,601	(2,601)	-	-
Total other movements	-	(5,362)	5,362	2,601	(2,601)	-	-
Balance as at 30 November 2015	6	11,575	34,841	(8,373)	14,406	(138)	52,317

	Share Capital	Share Premium	Special distributable reserves	Capital reserve - realised	Capital reserve - unrealised	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
As at 1 December 2015	6	11,575	34,841	(8,373)	14,406	(138)	52,317
Comprehensive income for the year:
Management fee allocated as capital expenditure	-	-	-	(676)	-	-	(676)
Current year gains on disposal	-	-	-	300	-	-	300
Current period gains on fair value of investments	-	-	-	-	3,563	-	3,563
Profit on ordinary activities after tax	-	-	-	-	-	(3)	(3)
Total comprehensive income for the year	-	-	-	(376)	3,563	(3)	3,184
Contributions by and distributions to owners:
Repurchase and cancellation of own shares	-	-	(1,401)	-	-	-	(1,401)
Issue of shares	2	12,367	-	-	-	-	12,369
Share issue costs	-	(537)	-	-	-	-	(537)
Dividends paid	-	-	(2,927)	-	-	-	(2,927)
Total contributions by and distributions to owners	2	11,830	(4,328)	-	-	-	7,504
Other Movements:
Prior years' holding losses now realised	-	-	-	(1,419)	1,419	-	-
Total other movements	-	-	-	(1,419)	1,419	-	-
Balance as at 30 November 2016	8	23,405	30,513	(10,168)	19,388	(141)	63,005

Cash Flow Statement

	Year to 30  November  2016 £'000	Year to 30  November  2015 £'000
Cash flows from operating activities
Return on ordinary activities before tax	3,184	4,047
Adjustments for:
Decrease in debtors	5	343
Decrease in creditors	247	5
Gain/(loss) on disposal of fixed assets	(300)	(172)
(Gain)/loss on valuation of fixed asset investments	(3,389)	(4,555)
(Gain)/loss on valuation of current asset investments	(174)	-
Cash from operations	(427)	(332)
Income taxes paid	-	-
Net cash generated from operating activities	(427)	(332)
Cash flows from investing activities
Purchase of fixed asset investments	(2,261)	(8,883)
Sale of fixed asset investments	1,181	5,387
Purchase of current asset investments	(6,000)	-
Total cash flows from investing activities	(7,080)	(3,496)
Cash flows from financing activities
Purchase of own shares	(1,401)	(925)
Issue of own shares	11,832	7,958
Dividends paid	(2,927)	(3,779)
Total cash flows from financing activities	7,504	3,254
Increase in cash and cash equivalents	(3)	(574)
Opening cash and cash equivalents	7,407	7,981
Closing cash and cash equivalents	7,404	7,407
Cash at bank	2,984	2,010
Money Market Funds	4,420	5,397
Total cash and cash equivalents	7,404	7,407

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