Half-Yearly Report

Octopus Future Generations VCT plc

Half-Yearly Report

Octopus Future Generations VCT plc (‘Future Generations VCT’ or the ‘Company’) is backing businesses that aim to address some of society’s biggest challenges, providing an opportunity for investors to share in the growth of ambitious, purpose‑driven companies.

The Company is managed by Octopus AIF Management Limited (the ‘Manager’), who has delegated investment management to Octopus Investments Limited (‘Octopus’ or ‘Portfolio Manager’) via its investment team Octopus Ventures.

The Company today announces the half-yearly report for the six months to 30 June 2025.

Chair’s statement

Key financials

• Total net assets: £52.6 million
• Net Asset Value (NAV) per share: 88.4p
• Dividend declared: 5.6p
  
  

I am pleased to present the unaudited half-yearly report and accounts for the Company for the six months to 30 June 2025. 

The Net Asset Value (NAV) per share at 30 June 2025 was 88.4p, which represents a net decrease of 0.4p per share (-0.5%) from 31 December 2024. We are now in the fourth year of investing, and while many of our companies remain at an early stage, the portfolio continues to develop in line with our long-term strategy. The recently declared special dividend payment allows shareholders to benefit from our first company realisation. 

In the six months, the Company invested £4.5m into five new and follow-on opportunities. The cash balance of £20.8 million as at 30 June 2025 represents 39.5% of net assets at that date.

Fundraise

On 3 February 2025, to further support the Company’s growth, the Board launched an initial offer to raise up to £5 million. The offer closed for new applications on 1 April 2025 having successfully raised this amount. We would like to take this opportunity to welcome all new shareholders to the Company and thank all shareholders for their continued support. 

As investors will be aware, the intention is to invest in businesses which meet one of three key themes, which we believe demonstrate good investment prospects, as well as having the potential to transform the world we live in for the better. These three themes are further summarised in the full report.

Dividend

We are pleased that on 22 August 2025, the Company announced that it would pay its first dividend, marking an important milestone in its progress. A special dividend of 5.6p will be paid on 24 September 2025, as a result of the proceeds received from the successful disposal of Cobee which occurred in September 2024, the Company’s first full exit. This first realisation, together with other companies achieving important commercial milestones, provides some encouraging signs that the portfolio is beginning to deliver on its long-term potential.

Following approval of the Dividend Reinvestment Scheme (DRIS) at the Annual General Meeting (AGM) in June, 7% of shareholders have decided to take advantage of the offer and will receive their dividend in Future Generations VCT shares. This is an excellent option for those of you who prefer the capital value of your investment to potentially grow to achieve your investment objectives. 

VCT Qualification

We are pleased to report that in June 2025, the Company met the requirement for 80% of the Company’s funds to be invested in VCT-qualifying holdings by 30 June 2025. The remainder will continue to be invested in permitted non-VCT qualifying investments or cash.

Principal Risks and Uncertainties

The Board continues to review the risk environment in which the Company operates on a regular basis. There have been no significant changes to the key risks which were described on pages 37 to 39 of the Annual Report for the year ended 31 December 2024. The Board does not anticipate any significant changes to these risks.

Portfolio Manager and team

In September 2024, Octopus Titan VCT plc, a fund which the Company has co-invested alongside to date, announced a review of strategy, due to the ongoing performance issues it has faced. The review has now concluded, and the Shareholder Circular has been distributed summarising the findings and go-forward strategy. As part of the conclusion of the strategic review, Octopus has committed to invest in additional team resourcing. The Board and Octopus have agreed that further senior level resource will help to broaden and deepen the level of experience across the team and increase the focus on driving returns and realisations from the existing portfolio. As detailed in the annual report, Simon King, Lead Fund Manager for Octopus Future Generations VCT, has left to pursue a new opportunity and we will make an announcement regarding his successor in due course.

Outlook

The modest decline in NAV over the six-month reporting period was delivered against a highly volatile and dynamic macroeconomic backdrop. Both economic and geopolitical developments continue to weigh heavily on growth prospects and the fundraising environment for early-stage businesses. Furthermore, the marked decline in the US Dollar, to which certain portfolio companies are exposed, has created a small additional headwind for the Company’s performance. 

I would like to conclude by thanking both my Board colleagues and the Octopus team on behalf of all shareholders for their hard work. The Board’s long-term view of early-stage venture capital remains positive, and I am looking forward to seeing what the remainder of the year brings for the Company.

Helen Sinclair

Chair

22 September 2025

Portfolio Manager’s review

At Octopus, our focus is on managing your investments and providing investors with clear and transparent communication. Our annual and half-yearly updates are designed to keep you informed about the progress of your investment.



Focus on Future Generations VCT’s performance

Below is a breakdown of the 37 investments held as at 30 June 2025, showing the proportion and value of the portfolio in each investment theme:

Proportion by number of portfolio companies in each theme

Revitalising healthcare: 19

Empowering people: 11

Building a sustainable planet: 7

Value of the portfolio in each theme

Revitalising healthcare: £15.3m

Empowering people: £10.2m

Building a sustainable planet: £5.9m

Overview of investments

The Company completed five investments in the six months to 30 June 2025 (comprising a total of £4.5 million) and one further investment after the reporting date totalling £0.3 million. More information on some of these businesses can be found below:

A selection of our completed investments

Revitalising healthcare

Ufonia

The company combines AI and clinical evidence to automate routine clinical conversations. Its technology makes care more convenient, reliable and consistent for patients, increases hospitals’ capacity, and allows clinical professionals to spend more time meeting patients’ needs. Dora, its medically regulated autonomous clinical assistant, can call any number of patients and have a natural voice conversation covering a wide range of common clinical consultations.

Empowering people

Slamcore

The company has developed spatial intelligence technology for machinery. It creates embedded software that uses data from multiple sensors to help products intelligently understand and navigate the complex and dynamic worlds around them. It works across a range of products, from forklifts to autonomous robots.

Building a sustainable planet

Phlux

The company is developing new infrared sensor technology that is transforming the performance of laser range finders, LiDAR systems, and fibreoptic telecommunications test equipment (OTDRs). Its technology can offer up to 50% more range, up to 12x higher resolution and up to 40% lower system cost.

Top ten investments

Here, we set out the cost and valuation of the top ten holdings, which account for over 61% of the value of the portfolio.

Portfolio engagement

As part of our strategy, we require portfolio companies to put in place a Diversity and Inclusion policy (D&I) and an Anti-Harassment policy. We also engage with each company to help them understand their greenhouse gas (GHG) emissions and support them to take action to minimise them. You can see how we are progressing with these goals below, as at the date of this report:

D&I policy status

Policy in place: 100%

Engaged in monitoring 2024 GHG emissions¹

Signed up: 11%

Introduced: 58%

In progress: 31%

¹As of 30 June 2025, only full year 2024 carbon emissions data was available.



Focus on Performance

The NAV of 88.4p per share at 30 June 2025 represents a decrease of 0.4p per share versus a NAV of 88.8p per share as at 31 December 2024. This decrease over the six-month period has been largely driven by the downward valuation movements across 13 companies which saw a collective decrease in value of £3.1 million. The businesses which contributed most significantly to this were Infinitopes, CellVoyant and VyperCore. Both Infinitopes and CellVoyant have struggled to raise further follow-on rounds, so their valuations have declined to reflect the risk of them being unsuccessful in securing funding. Unfortunately, VyperCore’s board appointed administrators in the reporting period as it was unable to secure further funding having not achieved its commercial milestones set at the time of the Company’s initial investment. 

Conversely, 13 companies delivered a collective increase in value of £3.2 million. These valuation increases reflect businesses which have successfully concluded further funding rounds, grown revenues or met certain important milestones. Notable strong performers in the portfolio include RemoFirst, Ufonia and Manual. These top contributors demonstrate that there are opportunities available for companies to scale even during periods of heightened headwinds in the economy. 

Octopus Ventures believes that some of the companies which have seen decreased valuations in the six-month period have the potential to overcome the issues they face and get their growth plans back on track. Octopus Ventures will continue to work closely with these companies to help them realise their ambitions. In some cases, if a company is achieving its performance milestones, the support offered could include further funding, to ensure a business has the capital it needs to execute on its strategy. At this early stage of the Company’s life cycle, it is to be anticipated that failures will likely precede valuation growth, which takes longer as the portfolio companies must achieve their agreed milestones and mature. 

In the six months to 30 June 2025, the Company received deferred proceeds from the sale of Cobee (to Pluxee in 2024).

The gain on Future Generations VCT’s uninvested cash reserves was £0.5 million in the six-months to 30 June 2025 (31 December 2024: gain of £1.4 million), driven by returns on money market funds. The Board’s objective for these investments is to generate sufficient returns through the cycle to cover costs, at limited risk to capital.

VCT-qualifying status

Shoosmiths LLP provides both the Board and Octopus with advice concerning ongoing compliance with HMRC rules and regulations concerning VCTs and has advised that Future Generations VCT continues to be compliant with the conditions set by HMRC for maintaining approval as a VCT. 

As at 30 June 2025, 100% of the portfolio (as measured by HMRC rules) was invested in VCT-qualifying investments, above the 80% current VCT-qualifying threshold. This threshold is continually monitored both internally by the Manager and by external advisers and proactive measures are taken to optimise it. 

Outlook

The modest decline in NAV over the six months follows a period of progress seen in the latter half of 2024. While short-term fluctuations are expected in early-stage investing, we continue to see encouraging signs of development across the portfolio. The team have continued to deploy funds, investing £4.5 million, which includes follow-on investments into the portfolio companies which we believe are exciting opportunities for the Company and are showing potential. 

This performance is set against an extremely volatile market backdrop which is looking likely to continue. We will continue to support our companies through our in-house People and Talent team and our panel of expert consultants, helping them to navigate growth challenges and build strong foundations. We know that building talented teams drives innovation, enhances productivity and contributes to a positive work culture, all of which lead to a company’s overall success. It will also be a focus of the team to take advantage of any exit opportunities as they arise and look to drive liquidity events where possible, with the aim of regularly returning capital to the Company to deliver sustainable growth and deliver on its objectives.

We are excited to have the opportunity to continue to scale the Company, support its ambition to make the world a better place for future generations, and hope to deliver attractive returns to shareholders.

Directors’ responsibilities statement

The Directors confirm that to the best of their knowledge:

• the half-yearly financial statements have been prepared in accordance with ‘Financial Reporting Standard 104: Interim Financial Reporting’ issued by the Financial Reporting Council;
  
  
  
  
• the half-yearly financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
  
  
  
  
• the half-yearly report includes a fair review of the information required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules, being:
  
  
  
  
  • we have disclosed an indication of the important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements;
    
    
  • we have disclosed a description of the principal risks and uncertainties for the remaining six months of the period; and
  • we have disclosed a description of related party transactions that have taken place in the first six months of the current financial year, that may have materially affected the financial position or performance of the Company during that period and any changes in the related party transactions described in the last annual report that could do so.
    
    
    
    

By order of the Board

Helen Sinclair

Chair

22 September 2025

Income statement

• The ‘Total’ column of this statement is the profit and loss account of Future Generations VCT; the supplementary revenue return and capital return columns have been prepared under guidance published by the Association of Investment Companies.
• All revenue and capital items in the above statement derive from continuing operations.
• Future Generations VCT has only one class of business and derives its income from investments made in shares and securities, and from bank and money market funds. Future Generations VCT has no other comprehensive income for the period.
  
  

The accompanying notes form an integral part of the financial statements.

Balance sheet

1. Cash received from investors but not yet allotted.

The accompanying notes form an integral part of the financial statements.

The statements were approved by the Directors and authorised for issue on 22 September 2025 and are signed on their behalf by:

Helen Sinclair

Chair

Company Number: 13750143

Statement of changes in equity

1. Reserves are available for distribution.



 The accompanying notes form an integral part of the financial statements.

1. Reserves are available for distribution.

The accompanying notes form an integral part of the financial statements.

1. Reserves are available for distribution.

The accompanying notes form an integral part of the financial statements.



  

Cash flow statement

The accompanying notes form an integral part of the financial statements. 

Condensed notes to the financial statements

1. Basis of preparation

The unaudited results which cover the six months to 30 June 2025 have been prepared in accordance with the Financial Reporting Council’s (FRC) Financial Reporting Standard 104 Interim Financial Reporting (January 2022) and the Statement of Recommended Practice (SORP) for Investment Companies re-issued by the Association of Investment Companies in July 2022.

The Directors consider it appropriate to adopt the going concern basis of accounting. The Directors have not identified any material uncertainties to the Company’s ability to continue to adopt the going concern basis over a period of at least twelve months from the date of approval of the financial statements. In reaching this conclusion, the Directors have taken into account the potential impact on the economy including inflation and the recession.

The principal accounting policies have remained unchanged from those set out in the Company’s 2024 Annual Report and Accounts.

2. Publication of non-statutory accounts

The unaudited financial report for the six months ended 30 June 2025 does not constitute Statutory Accounts within the meaning of s.415 of the Companies Act 2006 and has not been delivered to the Registrar of Companies. The comparative figures for the period ended 31 December 2024 have been extracted from the audited financial statements for that period, which have been delivered to the Registrar of Companies. The independent auditor’s report on those financial statements, in accordance with Chapter 3, Part 16 of the Companies Act 2006, was unqualified. This financial report has not been reviewed by the Company’s auditor.

3. Earnings per share

The loss per share is based on 56,631,830 Ordinary shares (30 June 2024: 50,107,452, 31 December 2024: 51,727,417) being the weighted average number of shares in issue during the period. There are no potentially dilutive capital instruments in issue and so no diluted returns per share figures are relevant. The basic and diluted earnings per share are therefore identical.

4. Net asset value per share

5. Allotments

During the six months to 30 June 2025, 5,567,019 shares were issued at a weighted average price of 91.6p per share (30 June 2024: 5,022,333 shares at a weighted average price of 95.2p per share, 31 December 2024: 5,802,767 shares at a weighted average price of 94.4p per share).

6. Transactions with the Manager and Portfolio Manager

Future Generations VCT is classified as a full-scope Alternative Investment Fund (AIF) under the Alternative Investment Fund Management Directive (AIFMD). Future Generations VCT has appointed Octopus AIF Management Limited to provide the services of an Alternative Investment Fund Manager (AIFM) of a full scope AIF. In accordance with its power to do so under AIFMD, Octopus AIF Management Limited has delegated portfolio management to Octopus Investments Limited, whilst retaining the obligations of a risk manager.

Future Generations VCT paid Octopus AIF Management Limited £500,000 in the period as a management fee (30 June 2024: £950,000, 31 December 2024: £1,380,000). The annual management charge (AMC) is based on 2% of Future Generations VCT’s NAV. The AMC is payable quarterly in advance and calculated using the latest published NAV of Future Generations VCT and the number of shares in issue at each quarter end. Once the quarter has ended, an adjustment will be made if the NAV at the end of the current quarter is calculated and which differs from the NAV as at the end of the previous quarter.

Octopus also provides Non-Investment Services to Future Generations VCT, payable quarterly in advance. The fee is 0.3% of Future Generations VCT’s NAV, calculated at quarterly intervals. The Non-Investment Services Agreement (NISA) fee is calculated using the latest published NAV of Future Generations VCT and the number of shares in issue at each quarter end. As with the AMC, an adjustment will be made once the quarter has ended if the NAV at the end of the current quarter is calculated and which differs from the NAV as at the end of the previous quarter. During the period £75,000 was paid to Octopus for Non-Investment Services (30 June 2024: £143,000, 31 December 2024: £213,000).

In addition, Octopus is entitled to performance-related incentive fees, subject to Future Generations VCT’s total return at year end exceeding the total return at the previous year end when an incentive fee was paid or 97p if the first incentive fee has not yet been paid (the ‘Excess’), equal to 20% of the Excess. No performance fee will be paid prior to the financial period ending 30 June 2025, dividends (paid or declared) being equal to or greater than 10p per Ordinary share and the total return exceeding 120p.

The cap relating to Future Generations VCT’s total expense ratio, that is the regular, recurring costs of Future Generations VCT expressed as a percentage of its NAV, above which Octopus have agreed to pay, is 3.0%, and is calculated in accordance with the AIC Guidelines.

7. Related party transactions

Several members of the Octopus investment team hold non-executive directorships as part of their monitoring roles in Future Generations VCT’s portfolio companies, but they have no controlling interests in those companies.

No dividends have been paid to the Directors of Future Generations VCT in this period (2023:£nil).

8. Voting rights and equity management

The following table shows the percentage voting rights held by Future Generations VCT in each of the top ten investments, on a fully diluted basis.

                                                        

9. Post balance sheet events

The following events occurred between the balance sheet date and the signing of this financial report:

• One follow-on investment completed totalling £0.3 million.
• A special dividend of 5.6p per share was declared on 22 August 2025 and it is to be paid on 24 September 2025.

10. Half-Yearly Report

The unaudited half-yearly report for the six months ended 30 June 2025 will shortly be available to view at

A copy of the half-yearly report will be submitted to the National Storage Mechanism and will shortly be available for inspection at:

For further information please contact:

Rachel Peat  

Octopus Company Secretarial Services Limited

Tel: +44 (0)80 0316 2067

LEI: 213800AL71Z7N2O58N66