Update posted on 1 May 2020:
We’ve reviewed our most recent update on Titan which continues to provide relevant and up to date information about Octopus Titan VCT. Since this update was written on the 3 April 2020, we have written to shareholders and their advisers with the following information that you may also find useful:
Octopus Titan VCT will be holding its Annual General Meeting on 26 May. Due to the current coronavirus situation, the AGM will run as a closed meeting, and as such unfortunately shareholders will be unable to attend. In light of this, we’ve provided shareholders with an email address to enable them to submit any questions for the board ahead of the meeting. The questions and answers will be published on our website, following the AGM.
Original update posted on 3 Apr 2020:
The Board of Octopus Titan VCT has agreed a new NAV
The Board of Octopus Titan VCT has continued to monitor the ongoing Coronavirus pandemic developments and, in particular, the impact of the associated economic disruption on portfolio companies.
The Board today agreed a new NAV for Octopus Titan VCT of 91p ahead of the allotment of shares that will take place today, tomorrow and next week, and the share buy back on 8 April.
This reflects valuation adjustments across the portfolio, which is carried at fair value, including those resulting from conditions arising from the Coronavirus pandemic.
The previous NAV was calculated based on the valuations at the 31 December 2019 period end, with a 25% reduction to equity value applied to the travel related companies in the portfolio to reflect the potential impact of Coronavirus at that date. For more information click here.
We have undertaken a full portfolio review
Octopus Titan VCT comprises around 80 portfolio companies spread across a range of different sectors. We have been speaking to all of them regularly, sometimes on a daily basis, to understand the immediate and potential medium-term impacts of Covid-19 on their businesses.
As you might expect from a VCT that is invested in entrepreneurial businesses selected for their long-term potential and importantly for the strength of their management teams, there are plenty of companies within our portfolio that are thriving in this environment. This is not the case for all of the companies within the portfolio, and some have seen their trades significantly changed for the worse in the current environment, in particular the companies operating in the travel sector.
The VCT is well positioned
The VCT expects to have more than £300 million of cash and cash equivalents following today’s allotment, which accounts for over 30% of the fund’s net assets. This capital is available to invest into existing portfolio companies to help them through the current period, and also to make new investments at a time when many other investors may have limited means or appetite to do so.
Many of our portfolio companies have recently raised, or are in the process of raising, significant capital which will help fund them through the uncertain period and enable them to take advantage of opportunities as they arise. For example, one of our portfolio companies, Cazoo (an online car retailer), announced the raising of £100m of funding last week.
We have been very impressed with the management teams of the portfolio companies, who have acted swiftly and decisively, without panicking. The reality is that no-one yet knows what the full impact of Covid-19 will be, so our companies are planning for an 18-24 month impact whilst remaining in position to take advantage of opportunities along the way, or an earlier recovery.