Half-Yearly Results

Octopus Apollo VCT delivers modest growth, strong liquidity, and full VCT compliance in H1 2026.

What the company is saying

Octopus Apollo VCT plc reports unaudited half-yearly results for the six months to 31 July 2026, emphasizing portfolio resilience and continued investment activity despite a challenging macroeconomic environment. The company highlights a net asset value of £573.3 million, a total return per share of 1.0% for the period, and a five-year total return of 26.5%. Management frames the narrative around disciplined investment in established B2B technology and AI businesses, underpinned by high recurring revenues and robust customer retention. The board stresses the benefits of expanded VCT investment limits, which have enabled investments in larger businesses and greater support for existing portfolio companies. Chair Murray Steele communicates confidence in the strategy and confirms an interim dividend of 1.2p per share, payable 23 December 2026. The announcement is factual and measured, with no promotional language and clear explanations for valuation movements, attributing gains to operational progress and losses to market volatility and company-specific factors.

What the data suggests

Net assets increased to £573,339,000 at 31 July 2026, up from £522,983,000 at HY 2025 and £541,059,000 at FY 2026. Profit after tax for the period was £5,951,000, a decrease from £8,854,000 in HY 2025 and £12,401,000 in FY 2026. NAV per share stands at 48.3p, with cumulative dividends paid since launch totaling 93.9p per share. Total value per share rose to 142.2p, a 0.5p increase since January 2026, and total return per share for the half-year was 1.0%. The company paid dividends of 1.3p per share (2.6% yield) and declared an interim dividend of 1.2p per share. Over five years, total return reached 26.5%, and more than £127.9 million has been distributed as tax-free dividends. Cash and cash equivalents were £100.6 million (17.5% of net assets), with £62.7 million of cash resources utilized in the half-year, including £23.9 million in new and follow-on investments, £15.9 million in share buybacks (34,158,939 shares), and £12.1 million in dividends. Portfolio valuation increased by £12.4 million, with 26 companies seeing gains (£30.5 million) and 21 experiencing reductions (£18.1 million). Investments included £3.7 million in Gradient Labs and £11.2 million in Hurree. No new disposals occurred, but £0.7 million of deferred proceeds were received. The portfolio is 100% VCT-qualifying, exceeding the 80% requirement. The data shows modest growth, high liquidity, and disciplined capital deployment.

Analysis

The announcement is a factual, data-rich half-yearly results release, with nearly all claims supported by realised, audited or unaudited figures for the period ended 31 July 2026. Key profitability metrics (profit after tax), asset values, dividend payments, and investment activity are all disclosed with precise numbers. The only forward-looking statements are routine (e.g., risk outlook, intent to continue active portfolio management, and a declared dividend with a set payment date), and these are standard for such releases. There is no promotional or exaggerated language; the tone is measured and descriptive. Capital outlays (investments, buybacks) are matched by immediate or recent activity, not by long-dated, uncertain returns. The gap between narrative and evidence is negligible, with no inflated claims or unsupported projections.

Risk flags

• ●Profit after tax declined to £5,951,000 from £8,854,000 in HY 2025 and £12,401,000 in FY 2026, indicating pressure on earnings despite asset growth. This may reflect market volatility or operational headwinds within the portfolio.
• ●Valuation reductions across 21 portfolio companies totaled £18.1 million, showing that a significant portion of the portfolio is exposed to company-specific or sectoral risks, particularly in the B2B technology and software segments.
• ●The exit environment remains challenging, with no disposals completed in the period and only £0.7 million in deferred proceeds received. Limited realisations could constrain liquidity or delay capital recycling if market conditions persist.
• ●Dividend sustainability depends on continued portfolio performance and market stability. While the company maintains a 5% target yield and paid 1.3p per share in the period, future distributions are at the board's discretion and not guaranteed.
• ●Expanded VCT investment limits allow for larger investments but may increase exposure to individual company risks or reduce portfolio diversification if not carefully managed.

Bottom line

Octopus Apollo VCT plc delivered steady asset and per-share value growth in the first half of 2026, with net assets rising to £573.3 million and a modest 1.0% total return per share. The company maintains a strong liquidity position, with £100.6 million in cash and full compliance with VCT qualifying investment rules. While profit after tax declined year-on-year, portfolio valuation gains and continued investment activity support the long-term strategy. The board's decision to declare an interim dividend and the recent £89.6 million fundraise reinforce confidence in ongoing capital deployment. Risks include earnings pressure, valuation volatility in the technology sector, and a difficult exit environment, but the portfolio remains diversified and fully VCT-qualifying. Investors should focus on future portfolio realisations, the impact of recent investments, and the company's ability to sustain dividends amid market uncertainty. The key takeaway is that Apollo is delivering incremental growth and maintaining flexibility, but faces sector and market risks that warrant close monitoring.

Announcement summary

(LSE:OAP3) Octopus Apollo VCT plc announced its unaudited half-yearly results for the six months ended 31 July 2026. Net assets at 31 July 2026 were £573,339,000, compared to £522,983,000 at HY 2025 and £541,059,000 at FY 2026. Profit after tax for the period was £5,951,000, down from £8,854,000 in HY 2025 and £12,401,000 in FY 2026. Net asset value (NAV) per share was 48.3p, with cumulative dividends paid since launch totaling 93.9p per share. Total value per share was 142.2p, up from 141.3p at HY 2025 and 141.7p at FY 2026. Dividends paid in the period were 1.3p per share, with a dividend yield of 2.6%. The Board declared an interim dividend of 1.2p per share for the period ended 31 July 2026, payable on 23 December 2026 to shareholders on the register at 4 December 2026. Total return per share for the six months was 1.0%. Apollo’s latest fundraise raised £89.6 million. Over the five years ended 31 July 2026, total return was 26.5%. During the six months, £62.7 million of cash resources were utilised, including £23.9 million in new and follow-on investments, £12.1 million in dividends (net of DRIS), £5.4 million in management fees, £15.9 million in share buybacks, £3.2 million in performance fees, and £2.2 million in other running costs. Cash and cash equivalents at 31 July 2026 were £100.6 million, representing 17.5% of net assets. During the period, 6,888,278 shares were issued under the Dividend Reinvestment Scheme (DRIS), equating to a reinvested amount of £3.3 million. The Company bought back 34,158,939 shares for a total consideration of £15.9 million. As at 31 July 2026, 100% of the portfolio, as measured by HMRC rules, was invested in VCT qualifying investments, exceeding the 80% qualifying investment level requirement. Over the last five years, more than £127.9 million has been distributed to shareholders as tax-free dividends. In the six months to 31 July 2026, there were valuation increases across 26 portfolio companies totaling £30.5 million, while 21 companies experienced valuation reductions totaling £18.1 million, resulting in a net portfolio valuation increase of £12.4 million. Apollo invested £23.9 million in new and follow-on investments during the period, including £3.7 million in Gradient Labs and £11.2 million in Hurree. No disposals occurred during the period, but £0.7 million of deferred proceeds were received from previous investments. Dividends paid to shareholders in the six months ended 31 July 2026 totaled £15,425,000. Disposal proceeds for the same period were £678,000. The Board continues to review the risk environment and does not anticipate significant changes to key risks for the remainder of the financial year. Murray Steele is Chair of the Company. Shoosmiths LLP advises the Board and Portfolio Manager on VCT compliance. The Company is managed by Octopus AIF Management Limited, with investment management delegated to Octopus Investments Limited (Octopus Ventures).

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