We’re publishing this updated statement because we know that our investors want to know that the companies looking after their money are themselves financially strong. Especially at times like this.
It’s clear that the coronavirus pandemic is having a significant impact on the UK economy and that in spite of significant government intervention and support, many businesses will struggle to survive. At this difficult time, we’ve focused on ensuring the wellbeing of our staff and helping our customers to navigate the challenging financial markets.
We feel a great sense of responsibility to our employees. As such we chose not to furlough any members of staff and we will not be implementing a redundancy programme for those people unable to carry out their roles from home. Instead we have redeployed these people into other businesses within the Octopus Group or encouraged them to help the wider community through our charity, Octopus Giving.
We believe that it makes sense, for the benefit of all stakeholders, for businesses to be transparent about their financial position. As such, we wanted to share the following information, which demonstrates that Octopus remains in a very strong financial position.
- We have a strong balance sheet. The net assets of the Octopus Group as at 30 April 2020 were £152m, including £106m of cash and £20m of holdings in our funds and products.
- As a fund manager we are fortunate that our business model generates a high level of recurring revenues, in the form of management fees on the funds that we run.
- We are a diversified business. Octopus invests in both quoted and unquoted assets across a range of different sectors and industries including real estate, venture capital, smaller companies, and renewable energy.
- We have modelled various scenarios for the year ahead which reflect different levels of potential inflows into our products. In all scenarios, even the most pessimistic case, our fund management business remains profitable.
- Our energy supply business (Octopus Energy) recently announced that it had taken a significant investment from Origin Energy, Australia’s largest energy supply business. Details of the transaction can be found here, but it valued the business at more than £1 billion.
- Octopus is a private business that is 75% owned by its employees. The majority of the remaining 25% is owned by people who have backed us since the start of our journey in 2000. This means we can think and make decisions for the long term, always putting our customers’ best interests first.
Our ambition when we started Octopus was to build a business that would last for generations. While we still like to think like entrepreneurs, the reality is we are now an established and sizeable business that has been going for 20 years, and we are very disciplined from a financial perspective. Octopus will never be a business which takes on lots of debt or which puts at risk the business we have built so far.
If you do have any questions, please feel to contact me directly at simon@octopusgroup.com.