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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Puma 8 | LSE:PUM8 | London | Ordinary Share | GB00B40PR121 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 25.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
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TIDMPUM8
HIGHLIGHTS
-- Fund substantially invested in a diverse range of high quality businesses
and projects.
-- Profit of GBP310,000 before tax for the year, a post-tax gain of 1.70p
per share.
-- 20p per share of dividends paid since inception, 5p during the year,
equivalent to a 7.1% per annum tax-free running yield on net investment.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the Company's fourth Annual Report for the year
to 29 February 2016.
Results
The Company reported a profit before tax and provision against the Opes
investment of GBP458,000 for the year (2015: GBP232,000) and a post-tax
gain of 2.85p per ordinary share (calculated on the weighted average
number of shares). This profit before tax is reduced to GBP310,000 after
the GBP148,000 provision against the Company's investment in Opes
Industries resulting in a post-tax gain of 1.70p per ordinary share. The
Net Asset Value per ordinary share ("NAV") at the year end (adding back
the 20p of dividends paid to date) was 96.74p.
Dividends
As envisaged in the Company's prospectus, the Company has for the fourth
calendar year in succession paid a dividend of 5p per ordinary share,
equivalent to a 7.1% tax-free running yield on shareholder's net
investment.
Investments
At the end of the year, the Company had just under GBP9 million invested,
representing 90% of its net asset value, in a mixture of qualifying and
non-qualifying investments whilst maintaining our VCT qualifying status.
These investments are primarily in asset-backed businesses and projects
providing a gross annual return of 9.3% on the basis of current
deployments and investment performance.
The Company's portfolio of investments is generally performing well. As
reported on 4 March 2016, a major fire occurred at the materials
recycling facility operated by Opes Industries Limited, into which the
Company has invested a total of GBP1m alongside other funds managed by,
and companies advised by, the Investment Manager. Your board has agreed
that a provision of GBP148,000 should be made to the carrying value of
this investment. Further detail of this, and Company's other investments,
is set out in the Investment Manager's report below.
VCT qualifying status
PricewaterhouseCoopers LLP ("PwC") provides the board and the investment
manager with advice on the ongoing compliance with HMRC rules and
regulations concerning VCTs. PwC also assists the Investment Manager in
establishing the status of investments as qualifying holdings.
Outlook
The lack of availability of bank credit has enabled the Company to
assemble a portfolio of investments on attractive terms and we are
pleased to report that the Company's net assets are now deployed in a
diverse range of high quality businesses and projects. There may be
some further changes in the composition of the portfolio but the Board
expects to predominantly concentrate in the future on the monitoring of
our existing investments and over the next year or so realising the
portfolio to enable the liquidation of the fund after the 5(th)
anniversary as was envisaged in the prospectus.
The Board has considered the implications of the recent referendum vote
for the Company's portfolio and prospects. At this stage the impact is
uncertain. However, as far as we can judge, there is no obvious impact
on the portfolio. It may be that money market interest rates will remain
low for longer than they otherwise would have done, but low rates had
anyway been assumed in our financial planning.
Sir Aubrey Brocklebank Bt.
Chairman
30 June 2016
INVESTMENT MANAGER'S REPORT
Introduction
The Company's funds are now substantially deployed in both qualifying
and non-qualifying investments and we believe our portfolio is well
positioned to deliver attractive returns to shareholders within the
fund's expected remaining time horizon.
Qualifying Investments
The Company's GBP1.25 million qualifying investment (as part of a GBP5
million investment alongside other Puma VCTs) in Urban Mining Limited, a
member of the Chinook Urban Mining group of companies, continues to
perform well. Chinook Urban Mining is a well-funded energy-from-waste
business which is developing a flagship plant in East London to generate
electricity through the gasification of municipal solid waste and will
benefit from Renewable Obligations Certificates. The investment is
secured with a first charge over the Chinook Urban Mining business and
the eight acre site of the East London plant and is yielding an
attractive return to the Company.
As previously reported, the Company had invested GBP800,000 (as part of
a GBP2.4 million investment alongside other Puma VCTs) into Alyth
Trading Limited, a nationwide provider of contracting services to
provide working capital for its ongoing business. In February 2016, the
Company invested a further GBP800,000 (as part of a GBP2.6 million
further investment round alongside other Puma VCTs) into Alyth Trading.
During the year, Alyth Trading had been engaged on a project to provide
contracting services in connection with the construction of a new 65 bed
high-end nursing home in Saggart Village, County Dublin. We are pleased
to report that the project has completed successfully, generating
attractive returns for Alyth Trading which will benefit the Company when
its investment is repaid in due course. During the year, Alyth Trading
entered into two new contracts. In June 2015, it entered into a
contract to provide contracting services in connection with the
construction of a 112 bed purpose built care home in Hamilton, Scotland,
which we understand is going well. In February 2016, it entered into a
further contract to provide contracting services in connection with the
construction of a 68 bed purpose built care home in Egham, Windsor.
As reported on 4 March 2016, a major incident occurred at the Materials
Recycling Facility ("MRF") operated by Opes Industries Limited ("Opes"),
into which the Company has invested a total of GBP1m (as part of an
GBP8.8m investment by Puma entities). Opes owns a 73 hectare site in
north Oxfordshire with an operating landfill site for non-hazardous
materials and an aggregates/gravel quarrying business. The site has
planning permission for a MRF to process waste from commercial and
industrial sources and from construction and demolition. The MRF was
designed to separate metals and other materials for recycling, generate
solid recovered fuel and send only a small proportion of the material
accepted at the gate for landfill. As a result the MRF would mitigate
the cost of landfill tax incurred from a consignment. The Company's
investment was to provide funding for the construction and equipping of
the MRF and working capital during the build-up of the trade. The
funding was provided in the form of equity and loan stock and our
interests are covered by a first fixed and floating charge over all
Opes' assets including a charge over the land and buildings. A large
industrial building (approx. 100m x 30m) was constructed to house the
MRF which began operating during the second half of 2015. In the early
hours of Sunday 28 February 2016, a fire was discovered within the waste
reception hall of the MRF. The fire has seriously damaged at least one
third of the building and seems to have destroyed at least half of the
plant and equipment. However, until recently, the fire was still
smouldering and it is therefore currently impossible to make an informed
assessment of the full extent of the damage. No one was hurt in the
fire. It was clear that the immediate consequence of the fire was that
the plant is currently unable to operate and will require substantial
rebuilding and reequipping before it can reopen. On 9 March 2016, Puma
VCT 8 plc appointed an administrator over Opes in order to best protect
the Company's investment. The administrator has implemented various
measures to preserve the value of Opes' assets and mitigate costs. We
understand that the MRF and the Opes business is insured in respect of
plant, building and business interruption; however, due to the prolonged
smouldering of the fire, the insurers have only recently been able to
assess the damage and are currently preparing their report. In light of
the continued uncertainty regarding the situation, the Company has made
a provision of GBP148,000 against the carrying value of its investment
in Opes. The provision is believed to be a prudent position reflecting
in part the potential for various legal and professional fees likely to
be incurred in maximising the recovery of the investment.
As reported in the Company's previous interim report, Isaacs Trading
Limited, Kinloss Trading Limited and Jephcote Trading Limited (in which
the Company had invested GBP1 million, GBP254,000 and GBP1 million
respectively) have been, as members of SKPB Services LLP, engaged in a
contract with Ansgate (Barnes) Limited to provide project management and
contracting services in connection with the construction of nine new
houses and 12 new flats at a construction known as The Albany, in Barnes,
south west London. We are pleased to report that the project completed
successfully earlier this year, generating attractive returns. We
understand that the management of SKPB Services are in advance
discussions in connection with a new large contract.
The Company's investment of GBP1,185,000 (alongside other Puma VCTs)
into Saville Services Limited continues to perform well. Saville
Services has been providing contracting services over a series of
projects, including the construction of 16 apartments for supported
living for psychiatric and learning disabled service users in
Wolverhampton. We understand that this project recently completed again
generating attractive returns for Saville Services which will benefit
the Company when its investment is repaid in due course.
As reported in the Company's interim report, the Company realised its
investment in Brewhouse and Kitchen Limited during the year, receiving a
GBP1,080,930 return on its investment of GBP930,000. Our funding
facilitated the acquisition of freehold pubs and the roll-out of the
Brewhouse and Kitchen brand which now operates nine units across
locations in London, Bristol and the South East of England. We are
pleased to have facilitated the growth and development of this exciting
business and wish its team well in the future.
Non-Qualifying Investments
The Company's GBP750,000 investment in Gold Line Property Limited, a
care and dementia treatment business which has been developing new
premises in Mytchett, Surrey, has performed well. The build project
completed on time and on budget, the premises has recently passed its
Care Quality Commission final inspection and the first patients have
been accepted. As previously reported, the loan was extended for a
further 18 months and, following an internal corporate restructuring, is
now advanced (through an affiliate of the Company, Latimer Lending
Limited) to Kingsmead Care Home Limited. The loan remains secured with
a first charge on the business and the property.
We are pleased to report that the Company's GBP1.42 million loan (as
part of a GBP4 million financing with other Puma VCTs) to Puma
Brandenburg Finance Limited, a subsidiary of Puma Brandenburg Limited,
was repaid in full during the year giving a good return to the Company.
As previously reported, the Company had extended a GBP881,000 loan which
(through another affiliate, Buckhorn Lending Limited), together with
other Puma VCTs, provided a GBP4 million revolving credit facility to
Ennovor Trading 1 Limited for the purchase of used cooking oil for
conversion into bio-diesel. The facility was structured to mitigate
risks by being capable of being drawn only once back-to-back purchase
and sale contracts had been entered into with approved counterparties.
In November 2014, following a major default by one of those
counterparties, Ennovor Trading 1 Limited was placed into
administration. We had previously reported that the Company had
recovered its principal in full plus some interest from the proceeds of
the administration and we are pleased to report that, during the year,
the Company recovered a further GBP169,191 thus fully recovering all
accrued interest that was due.
Shortly following the year end, the Company advanced a GBP1 million
non-qualifying loan (as part of a GBP2.9 million financing with other
vehicles and companies managed and advised by your Investment Manager)
to Oval Estates (St Peter's) Limited. Oval Homes owns a 6 acre site in
Radstock, near Bath, which has outline planning permission for the
development of 81 new houses and the Company's loan, extended at an
appropriate loan-to-value ratio, is secured with a first charge on the
site. It is expected that, upon receipt of detailed planning permission
(expected later this year), the Company's loan will be repaid as Oval
Homes secures development finance in due course.
Investment Strategy
We are pleased now to have invested the Company's funds in both
qualifying and non-qualifying secured investments. We remain focused on
generating strong returns for the Company in both the qualifying and
non-qualifying portfolios whilst balancing these returns with
maintaining an appropriate risk exposure and ensuring compliance with
the HMRC VCT rules. We are now primarily focusing on the monitoring of
our existing investments and preparing the portfolio for realisation in
due course.
Shore Capital Limited
30 June 2016
Investment Portfolio Summary
As at 29 February 2016
Valuation as a % of
Valuation Cost Provision Net Assets
GBP'000 GBP'000 GBP'000
As at 29 February 2016
Qualifying Investments
- Unquoted
Kinloss Trading Limited 254 254 - 3%
Saville Services
Limited 1,185 1,185 - 12%
Isaacs Trading Limited 1,000 1,000 - 10%
Jephcote Trading
Limited 1,000 1,000 - 10%
Urban Mining Limited 1,250 1,250 - 13%
Opes Industries Limited 852 1,000 (148) 9%
Alyth Trading Limited 1,600 1,600 - 16%
Total Qualifying
Investments 7,141 7,289 (148) 73%
Non-Qualifying
Investments
Latimer Lending Limited 750 750 - 8%
Palmer Lending Limited 1,000 1,000 - 10%
Total Non-Qualifying
investments 1,750 1,750 - 18%
Total Investments 8,891 9,039 (148) 91%
Balance of Portfolio 948 948 - 9%
Net Assets 9,839 9,987 (148) 100%
Of the investments held at 29 February 2016, all are incorporated in
England and Wales.
Income Statement
For the year ended 29 February 2016
Year ended 29 February Period from 1 January 2014
2016 to 28 February 2015
Note Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(Loss)/Gain on
investments 8 (b) - (148) (148) - 11 11
Income 2 837 - 837 697 - 697
837 (148) 689 697 11 708
Investment
management
fees 3 (53) (159) (212) (62) (186) (248)
Other expenses 4 (167) - (167) (228) - (228)
(220) (159) (379) (290) (186) (476)
Profit on
ordinary
activities
before
taxation 617 (307) 310 407 (175) 232
Tax
(charge)/credit
on profit on
ordinary
activities 5 (123) 31 (92) - - -
Profit and total
comprehensive
income for the
year 494 (276) 218 407 (175) 232
Basic and
diluted
Return/(loss)
per Ordinary
Share (pence) 6 3.85p (2.15p) 1.70p 3.17p (1.36p) 1.81p
All items in the above statement derive from continuing operations.
There are no gains or losses other than those disclosed in the Income
Statement.
The total column of this statement is the Statement of Total
Comprehensive Income of the Company prepared in accordance with FRS 102
'The Financial Reporting Standard applicable in the UK and Republic of
Ireland'. The supplementary revenue and capital columns are prepared in
accordance with the Statement of Recommended Practice, 'Financial
Statements of Investment Trust Companies and Venture Capital Trusts'
issued in November 2014 by the Association of Investment Companies.
Balance Sheet
As at 29 February 2016
As at As at
Note 29 February 2016 28 February 2015
GBP'000 GBP'000
Fixed Assets
Investments 8 8,891 9,589
Current Assets
Debtors 9 918 339
Cash 365 466
1,283 805
Creditors - amounts falling due within one year 10 (334) (131)
Net Current Assets 949 674
Total Assets less Current Liabilities 9,840 10,263
Creditors - amounts falling due after more than one
year 11 (1) (1)
Net Assets 9,839 10,262
Capital and Reserves
Called up share capital 12 128 128
Capital reserve - realised (567) (439)
Capital reserve - unrealised (148) -
Revenue reserve 10,426 10,573
Total Equity 9,839 10,262
Net Asset Value per Ordinary Share 13 76.74p 80.04p
The financial statements on pages 26 to 42 were approved and authorised
for issue by the Board of Directors on 30 June 2016 and were signed on
their behalf by:
Graham Shore
Director
30 June 2016
Statement of Cash Flows
For the year ended 29 February 2016
Period
from 1
Year ended January
29 2014 to 28
February February
2016 2015
Reconciliation of profit after tax to net cash used
in operating activities GBP'000 GBP'000
Profit on ordinary activities after taxation 218 232
Taxation 92 -
Loss/(gain) on investments 148 (11)
Increase in debtors (579) (247)
Increase/(decrease) in creditors 111 (11)
Net cash used in operating activities (10) (37)
Cash flow from investing activities
Purchase of investments (1,800) (3,785)
Proceeds from disposal of investments 2,350 2,827
Net cash inflow/(outflow) from investing activities 550 (958)
Cash flow from financing activities
Dividend paid to shareholders (641) (1,282)
Net cash used in financing activities (641) (1,282)
Net decrease in cash and cash equivalents (101) (2,277)
Cash and cash equivalents at start of year 466 2,743
Cash and cash equivalents at the end of the year 365 466
Statement of Changes in Equity
For the year ended 29 February 2016
Called up Capital Capital
share reserve - reserve - Revenue
capital realised unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at
1 January
2014 128 (299) 35 11,448 11,312
Profit for
the period - (175) - 407 232
Realisation
of
revaluation
from prior
period - 35 (35) - -
Dividends
paid - - - (1,282) (1,282)
Balance as at
28 February
2015 128 (439) - 10,573 10,262
Profit for
the year - (128) (148) 494 218
Dividends
paid - - - (641) (641)
Balance as at
29 February
2016 128 (567) (148) 10,426 9,839
Distributable reserves comprise: Capital reserve-realised, Capital
reserve-unrealised (excluding gains on unquoted investments) and the
Revenue reserve. At the year-end distributable reserves were
GBP9,711,000 (2015: GBP10,134,000).
The Capital reserve-realised includes gains/losses that have been
realised in the year due to the sale of investments, net of related
costs. The Capital reserve-unrealised represents the investment holding
gains/losses and shows the gains/losses on investments still held by the
company not yet realised by an asset sale.
The revenue reserve represents the cumulative revenue earned less
cumulative distributions.
1. Accounting Policies
Accounting convention
Puma VCT 8 plc ("the Company") was incorporated on 7 July 2011 and is
domiciled in England and Wales. The registered office is Bond Street
House, 14 Clifford Street, London W1S 4JU. The Company is a public
limited company whose shares are listed on LSE with a premium listing.
The company's principal activities and nature of operations are
disclosed in the Report of the Directors.
The financial statements have been prepared under the historical cost
convention, modified to include the revaluation of investments held at
fair value, and in accordance with FRS 102 'The Financial Reporting
Standard applicable in the UK and Republic of Ireland' ("FRS 102") and
the Statement of Recommended Practice, 'Financial Statements of
Investment Trust Companies and Venture Capital Trusts' issued in
November 2014 by the Association of Investment Companies ("the SORP").
Monetary amounts in these financial statements are rounded to the
nearest whole GBP1,000, except where otherwise indicated.
First time adoption of FRS 102
These financial statements are the first financial statements of the
Company prepared in accordance with FRS 102. The financial statements of
the Company for the period ended 28 February 2015 were prepared in
accordance with previous UK GAAP.
Some of the FRS 102 recognition, measurement, presentation and
disclosure requirements and accounting policy choices differ from
previous UK GAAP. There are no significant changes to the accounting
policies as a result of the adoption of FRS 102 and no changes in
previously reported profit or equity.
Investments
All investments are measured at fair value. They are all held as part
of the Company's investment portfolio and are managed in accordance with
the investment policy set out on page 13.
Listed investments are stated at bid price at the reporting date.
Unquoted investments are stated at fair value by the Directors with
reference to the International Private Equity and Venture Capital
Valuation Guidelines ("IPEV") as follows:
-- Investments which have been made within the last twelve months or where
the investee company is in the early stage of development will usually be
valued at the price of recent investment except where the company's
performance against plan is significantly different from expectations on
which the investment was made in which case a different valuation
methodology will be adopted.
-- Investments in debt instruments will usually be valued by applying a
discounted cash flow methodology based on expected future returns of the
investment.
-- Alternative methods of valuation such as net asset value may be applied
in specific circumstances if considered more appropriate.
Realised surpluses or deficits on the disposal of investments are taken
to realised capital reserves, and unrealised surpluses and deficits on
the revaluation of investment are taken to unrealised capital reserves.
1. Accounting Policies (continued)
Income
Dividends receivable on listed equity shares are brought into account on
the ex-dividend date. Dividends receivable on unquoted equity shares are
brought into account when the Company's right to receive payment is
established and there is no reasonable doubt that payment will be
received. Interest receivable is recognised wholly as a revenue item on
an accruals basis.
Performance fees
Upon its inception, the Company agreed performance fees payable to the
Investment Manager, Shore Capital Limited, and members of the investment
management team at 20 per cent of the aggregate excess of the amounts
realised over GBP1 per Ordinary Share returned to Ordinary Shareholders.
This incentive will only be effective once the other holders of Ordinary
Shares have received distributions of GBP1 per share. The performance
fee is accounted for as an equity-settled share-based payment.
Section 26 of FRS 102 "Share-Based Payment" requires the recognition of
an expense in respect of share-based payments in exchange for goods or
services. Entities are required to measure the goods or services
received at their fair value, unless that fair value cannot be estimated
reliably in which case that fair value should be estimated by reference
to the fair value of the equity instruments granted.
At each balance sheet date, the Company estimates that fair value by
reference to any excess of the net asset value, adjusted for dividends
paid, over GBP1 per share in issue at the balance sheet date. Any change
in fair value is recognised in the Income Statement with a corresponding
adjustment to equity.
Expenses
All expenses (inclusive of VAT) are accounted for on an accruals basis.
Expenses are charged wholly to revenue, with the exception of:
-- expenses incidental to the acquisition or disposal of an investment
charged to capital; and
-- the investment management fee, 75 per cent of which has been charged to
capital to reflect an element which is, in the directors' opinion,
attributable to the maintenance or enhancement of the value of the
Company's investments in accordance with the Board's expected long-term
split of return; and
-- the performance fee which is allocated proportionally to revenue and
capital based on the respective contributions to the Net Asset Value.
Taxation
Corporation tax is applied to profits chargeable to corporation tax, if
any, at the applicable rate for the year. The tax effect of different
items of income/gain and expenditure/loss is allocated between capital
and revenue return on the marginal basis as recommended by the SORP.
Deferred tax is recognised in respect of all timing differences that
have originated but not reversed at the balance sheet date, where
transactions or events that result in an obligation to pay more, or
right to pay less, tax in the future have occurred at the balance sheet
date. This is subject to deferred tax assets only being recognised if it
is considered more likely than not that there will be suitable taxable
profits from which the future reversal of the underlying timing
differences can be deducted. Timing differences are differences arising
between the Company's taxable profits and its results as stated in the
financial statements which are capable of reversal in one or more
subsequent periods. Deferred tax is measured on a non-discounted basis
at the tax rates that are expected to apply in the periods in which
timing differences are expected to reverse, based on tax rates and laws
enacted or substantively enacted at the balance sheet date.
1. Accounting Policies (continued)
Reserves
Realised losses and gains on investments, transaction costs, the capital
element of the investment management fee and taxation are taken through
the Income Statement and recognised in the Capital Reserve - Realised on
the Balance sheet. Unrealised losses and gains on investments and the
capital element of the performance fee are also taken through the Income
Statement and are recognised in the Capital Reserve - Unrealised.
Debtors
Debtors include accrued income which is recognised at amortised cost,
equivalent to the fair value of the expected balance receivable.
Dividends
Final dividends payable are recognised as distributions in the financial
statements when the Company's liability to make payment has been
established. The liability is established when the dividends proposed by
the Board are approved by the Shareholders. Interim dividends are
recognised when paid.
Key accounting estimates and assumptions
The Company makes estimates and assumptions concerning the future. The
resulting accounting estimates and assumptions will, by definition,
seldom equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to the
carrying amounts of assets within the next financial year relate to the
fair value of unquoted investments. Further details of the unquoted
investments are disclosed in the Investment Manager's Report on pages 3
to 5 and notes 8 and 14 of the financial statements.
2. Income
Year ended 29 February Period from 1 January
2016 2014 to 28 February 2015
GBP'000 GBP'000
Income from investments
Loan stock interest 834 665
Bond yields - 9
834 674
Other income
Bank deposit income 3 23
837 697
3. Investment Management Fees
Year ended 29 February Period from 1 January 2014
2016 to 28 February 2015
GBP'000 GBP'000
Shore Capital Limited 212 248
212 248
Shore Capital Limited ("Shore Capital") has been appointed as the
Investment Manager of the Company for an initial period of five years,
which can be terminated by not less than twelve months' notice, given at
any time by either party, on or after the fifth anniversary. The Board
is satisfied with the performance of the Investment Manager. Under the
terms of this agreement Shore Capital will be paid an annual fee of 2
per cent of the Net Asset Value payable quarterly in arrears calculated
on the relevant quarter end NAV of the Company. These fees are capped,
the Investment Manager having agreed to reduce its fee (if necessary to
nothing) to contain total annual costs (excluding performance fee and
trail commission) to within 3.5 per cent of Net Asset Value. Total costs
this year were 3.4 per cent of Net Asset Value (2015: 3.5%).
4. Other expenses
Period from
1 January
Year ended 2014 to 28
29 February February
2016 2015
GBP'000 GBP'000
Administration - Shore Capital Fund Administration
Services Limited 37 47
Directors Remuneration 56 65
Social security costs 2 2
Auditor's remuneration for statutory audit 22 22
Insurance 1 11
Legal and professional fees 12 20
Trail commission 28 42
Other expenses 9 19
167 228
Shore Capital Fund Administration Services Limited provides
administrative services to the Company for an aggregate annual fee of
0.35 per cent of the Net Asset Value of the Fund, payable quarterly in
arrears.
Remuneration for each Director for the year is disclosed in the
Directors' Remuneration Report on page 18. The Company had no employees
(other than Directors) during the year. The average number of
non-executive Directors during the year was 3 (2015: 3). The
non-executive Directors are considered to be the Key Management
Personnel of the Company with total remuneration for the year of
GBP58,000 (2015: GBP67,000), including social security costs.
The Auditor's remuneration of GBP18,500 (2015: GBP18,000) has been
grossed up in the table above to be inclusive of VAT.
5. Tax on Ordinary Activities
Period
from 1
January
Year ended 2014 to
29 28
February February
2016 2015
GBP'000 GBP'000
UK corporation tax charged to revenue reserve 123 -
UK corporation tax credited to capital reserve (31) -
UK corporation tax charge for the year 92 -
Factors affecting tax charge for the year
Profit on ordinary activities before taxation 310 232
Tax charge calculated on profit on ordinary activities
before taxation at the applicable rate of 20% 62 46
Capital items not deductible / (taxable) 30 (2)
Utilisation of tax losses brought forward - (44)
92 -
Capital returns are not taxable as VCTs are exempt from tax on realised
capital gains subject that they comply and continue to comply with the
VCT regulations.
No provision for deferred tax has been made in the current accounting
year. No deferred tax assets have been recognised as the timing of their
recovery cannot be foreseen with any certainty Due to the Company's
status as a Venture Capital Trust and the intention to continue meeting
the conditions required to obtain approval in the foreseeable future,
the Company has not provided deferred tax on any capital gains and
losses arising on the revaluation or disposal of investments.
6. Basic and diluted return/(loss) per Ordinary Share
Year ended 29 February 2016
Revenue Capital Total
Profit/(loss) for the year
(GBP'000) 494 (276) 218
Weighted average number of
shares 12,820,841 12,820,841 12,820,841
Return/(loss) per share 3.85p (2.15)p 1.70p
Period from 1 January 2014 to 28 February 2015
Revenue Capital Total
Profit/(loss) for the
period (GBP'000) 407 (175) 232
Weighted average number of
shares 12,820,841 12,820,841 12,820,841
Return/(loss) per share 3.17p (1.36)p 1.81p
7. Dividends
The Directors do not propose a final dividend in relation to the year
ended 29 February 2016 (2015: GBPnil). An interim dividend of 5p per
ordinary share was paid from revenue reserves in respect of the year
ended 29 February 2016 totalling GBP641,000 (2015: GBP1,282,000).
8. Investments
(a) Movements in Non qualifying
investments Qualifying investments investments Total
GBP'000 GBP'000 GBP'000
Book cost and
valuation at 1 March
2015 7,419 2,170 9,589
Purchases at cost 800 1,000 1,800
Proceeds from
disposals (930) (1,420) (2,350)
Provision (148) - (148)
Valuation at 29
February 2016 7,141 1,750 8,891
Book cost at 29
February 2016 7,289 1,750 9,039
Provision at 29
February 2016 (148) - (148)
Valuation at 29
February 2016 7,141 1,750 8,891
(b) Gains and losses on investments
The gains and losses on investments for the year shown in the Income
Statement is analysed as follows:
Period from 1 January
Year ended 29 February 2014 to 28 February
2016 2015
GBP'000 GBP'000
Provision in the year (148) -
Realised gain on disposal
in the year - 11
(148) 11
(c) Quoted and unquoted investments
Market value as at 29 Market value as at 28
February 2016 February 2015
GBP'000 GBP'000
Quoted investments - -
Unquoted investments 8,891 9,589
8,891 9,589
Further details of these investments are disclosed in the Investment
Portfolio Summary on pages 6 to 11 of the Annual Report.
9. Debtors
As at 29 February 2016 As at 28 February 2015
GBP'000 GBP'000
Accrued income 918 339
10. Creditors - amounts falling due within one year
As at 29 February 2016 As at 28 February 2015
GBP'000 GBP'000
Accrued management fees and
administration costs 186 131
Corporation tax 92 -
Other Creditors 56 -
334 131
11. Creditors - amounts falling due after more than one year
As at 29 February 2016 As at 28 February 2015
GBP'000 GBP'000
Loan notes 1 1
On 26 July 2011, the Company issued Loan Notes in the amount of GBP1,000
to a nominee on behalf of Shore Capital Limited and members of the
investment management team. The Loan Notes accrue interest of 5 per cent
per annum.
The Loan Notes entitle Shore Capital and members of the investment
management team to receive a performance related incentive of 20 per
cent of the aggregate amounts realised by the Company in excess of GBP1
per Ordinary Share. The Shareholders will be entitled to the balance.
This incentive, to be effected through the issue of shares in the
Company, will only be exercised once the holders of Ordinary Shares have
received distributions of GBP1 per share (whether capital or income).
The performance incentive structure provides a strong incentive for the
Investment Manager to ensure that the Company performs well, enabling
the Board to approve distributions as high and as soon as possible.
In the event that distributions to the holders of Ordinary Shares
totalling GBP1 per share have been made, the Loan Notes will convert
into sufficient Ordinary Shares to represent 20 per cent of the enlarged
number of Ordinary Shares. The amount of the performance fee will be
calculated as 20 per cent of the excess of the net asset value (adjusted
for dividends paid) over GBP1 per issued share.
12. Called Up Share Capital
As at 29 February 2016 As at 28 February 2015
GBP'000 GBP'000
12,820,841 ordinary shares of
1p each 128 128
13. Net Asset Value per Ordinary Share
As at As at
29 February 2016 28 February 2015
Net assets 9,839,000 10,262,000
Shares in issue 12,820,841 12,820,841
Net asset value per share
Basic 76.74p 80.04p
Diluted 76.74p 80.04p
14. Financial Instruments
The Company's financial instruments comprise its investments, cash
balances, debtors and certain creditors. The fair value of all of the
Company's financial assets and liabilities is represented by the
carrying value in the Balance Sheet. Excluding cash balances, the
Company held the following categories of financial instruments at 29
February 2016:
As at 29 As at 28
February February
2016 2015
GBP'000 GBP'000
Financial assets measured at fair value through profit
or loss
Investments managed through Shore Capital Limited 8,891 9,589
Financial assets that are debt instruments measured
at amortised cost
Interest, dividends and other receivables 918 339
Financial liabilities measured at amortised cost (243) (132)
9,566 9,796
Management of risk
The main risks the Company faces from its financial instruments are
market price risk, being the risk that the value of investment holdings
will fluctuate as a result of changes in market prices caused by factors
other than interest rate or currency movements, liquidity risk, credit
risk and interest rate risk. The Board regularly reviews and agrees
policies for managing each of these risks. The Board's policies for
managing these risks are summarised below and have been applied
throughout the year.
14. Financial Instruments (continued)
Credit risk
Credit risk is the risk that the counterparty to a financial instrument
will fail to discharge an obligation or commitment that it has entered
into with the Company. The Investment Manager monitors counterparty risk
on an ongoing basis. The carrying amount of financial assets best
represents the maximum credit risk exposure at the balance sheet date.
The Company's financial assets and maximum exposure to credit risk is as
follows:
As at 29 February 2016 As at 28 February 2015
GBP'000 GBP'000
Investments in loans, loan
notes and bonds 3,937 3,871
Cash at bank and in hand 365 466
Interest, dividends and other
receivables 918 339
5,220 4,676
The cash held by the Company at the year end is split between two U.K.
banks and a BBB rated South African bank. Bankruptcy or insolvency of
any bank may cause the Company's rights with respect to the receipt of
cash held to be delayed or limited. The Board monitors the Company's
risk by reviewing regularly the financial position of the banks and
should it deteriorate significantly the Investment Manager will, on
instruction of the Board, move the cash holdings to another bank.
Credit risk associated with interest, dividends and other receivables
are predominantly covered by the investment management procedures.
Investments in loans, loan notes and bonds comprises a fundamental part
of the Company's venture capital investments, therefore credit risk in
respect of these assets is managed within the Company's main investment
procedures.
Market price risk
Market price risk arises mainly from uncertainty about future prices of
financial instruments held by the Company. It represents the potential
loss the Company might suffer through holding investments in the face of
price movements. The Investment Manager actively monitors market prices
and reports to the Board, which meets regularly in order to consider
investment strategy.
The Company's strategy on the management of market price risk is driven
by the Company's investment policy as outlined in the Strategic Report
on page 13. The management of market price risk is part of the
investment management process. The portfolio is managed with an
awareness of the effects of adverse price movements through detailed and
continuing analysis, with an objective of maximising overall returns to
shareholders.
Holdings in unquoted investments may pose higher price risk than quoted
investments. Some of that risk can be mitigated by close involvement
with the management of the investee companies along with review of their
trading results.
None of the Company's investments are quoted investments and 100% are
unquoted investments.
14. Financial Instruments (continued)
Liquidity risk
Details of the Company's unquoted investments are provided in the
Investment Portfolio summary on page 6. By their nature, unquoted
investments may not be readily realisable, the Board considers exit
strategies for these investments throughout the year for which they are
held. As at the year end, the Company had no borrowings, other than loan
notes amounting to GBP1,000 (2015: GBP1,000) (see note 11).
The Company's liquidity risk associated with investments is managed on
an ongoing basis by the Investment Manager in conjunction with the
Directors and in accordance with policies and procedures in place as
described in the Report of the Directors. The Company's overall
liquidity risks are monitored on a quarterly basis by the Board. The
Company maintains sufficient investments in cash and readily realisable
securities to pay accounts payable and accrued expenses.
Fair value interest rate risk
The benchmark that determines the interest paid or received on the
current account is the Bank of England base rate, which was 0.5 per cent
at 29 February 2016. All of the loan and loan note investments are
unquoted and hence not directly subject to market movements as a result
of interest rate movements.
Cash flow interest rate risk
The Company has exposure to interest rate movements primarily through
its cash deposits and loan notes which track either the Bank of England
base rate or LIBOR.
Interest rate risk profile of financial assets
The following analysis sets out the interest rate risk of the Company's
financial assets as at 29 February 2016.
Weighted average
Weighted average period until
Rate status interest rate maturity Total
GBP'000
Cash at bank - RBS Floating 0.15% - 158
Cash at bank -
Investec Fixed 0.40% 32 day notice 3
Cash at bank -
Lloyds Floating 0.50% - 204
Loans, loan notes
and bonds Floating 7.50% 34 months 750
Loans, loan notes
and bonds Fixed 23.09% 52 months 2,320
Balance of assets Non-interest bearing - 6,739
10,174
The following analysis sets out the interest rate risk of the Company's
financial assets as at 28 February 2015.
Weighted average
Weighted average period until
Rate status interest rate maturity Total
GBP'000
Cash at bank - RBS Floating 0.15% - 462
Cash at bank -
Investec Fixed 0.40% 32 day notice 4
Loans, loan notes
and bonds Floating 28.03% 42 months 2,451
Loans, loan notes
and bonds Fixed 5.00% 16 months 1,420
Balance of assets Non-interest bearing - 6,057
10,394
14. Financial Instruments (continued)
Foreign currency risk
The reporting currency of the Company is Sterling. The Company has not
held any non-Sterling investments during the year.
Fair value hierarchy
Financial assets and liabilities measured at fair value are disclosed
using a fair value hierarchy that reflects the significance of the
inputs used in making the fair value measurements, as follows:-
-- Level a - Fair value is measured based on quoted prices in an active
market.
-- Level b - Fair value is measured based on directly observable current
market prices or indirectly being derived from market prices.
-- Level c (i) - Fair value is measured using a valuation technique that is
based on data from an observable market.
-- Level c (ii) - Fair value is measured using a valuation technique that is
not based on data from an observable market.
Fair values have been measured at the end of the reporting year as
follows:-
As at 29 February 2016 As at 28 February 2015
GBP'000 GBP'000
Level c(ii)
Unquoted investments 8,891 9,589
8,891 9,589
The Level c (ii) investments have been valued in line with the Company's
accounting policies and IPEV guidelines. Further details of these
investments are provided in the significant investments section of the
Annual Report.
Reconciliation of fair value for level c (ii) financial instruments held
at the year-end:
Unquoted shares Loans and Total
loan notes
GBP'000 GBP'000 GBP'000
Balance as at 1 January 2014 3,069 4,766 7,835
Purchases at cost 2,649 1,136 3,785
Repayments of loans and loan notes - (2,031) (2,031)
Balance as at 28 February 2015 5,718 3,871 9,589
Purchases at cost 560 1,240 1,800
Repayments of loans and loan notes (651) (1,699) (2,350)
Transfer (525) 525 -
Provision (148) - (148)
Balance as at 29 February 2016 4,954 3,937 8,891
15. Capital management
The Company's objectives when managing capital are to safeguard the
Company's ability to continue as a going concern, so that it can provide
an adequate return to shareholders by allocating its capital to assets
commensurate with the level of risk.
By its nature, the Company has an amount of capital, at least 70% (as
measured under the tax legislation) of which must be, and remain,
invested in the relatively high risk asset class of small UK companies
within three years of that capital being subscribed.
The Company accordingly has limited scope to manage its capital
structure in the light of changes in economic conditions and the risk
characteristics of the underlying assets. Subject to this overall
constraint upon changing the capital structure, the Company may adjust
the amount of dividends paid to shareholders, issue new shares, or sell
assets to maintain a level of liquidity to remain a going concern.
The Board has the opportunity to consider levels of gearing, however
there are no current plans to do so. It regards the net assets of the
Company as the Company's capital, as the level of liabilities is small
and the management of those liabilities is not directly related to
managing the return to shareholders. There have been no changes to this
approach from prior years.
16. Contingencies, Guarantees and Financial Commitments
There were no commitments, contingencies or guarantees of the Company at
the year-end (2015: GBPnil).
17. Controlling Party
In the opinion of the Directors there is no immediate or ultimate
controlling party.
The financial information set out in this announcement does not
constitute the Company's statutory financial statements in accordance
with section 434 Companies Act 2006 for the year ended 29 February 2016,
but has been extracted from the statutory financial statements for the
year ended 29 February 2016 which were approved by the Board of
Directors on 30 June 2016 and will be delivered to the Registrar of
Companies. The Independent Auditor's Report on those financial
statements was unqualified and did not contain any emphasis of matter
nor statements under s 498(2) and (3) of the Companies Act 2006.
The statutory accounts for the year ended 28 February 2015 have been
delivered to the Registrar of Companies and received an Independent
Auditors report which was unqualified and did not contain any emphasis
of matter nor statements under s 498(2) and (3) of the Companies Act
2006.
A copy of the full annual report and financial statements for the year
ended 29 February 2016 will be printed and posted to shareholders
shortly. Copies will also be available to the public at the registered
office of the Company at Bond Street House, 14 Clifford Street, London,
W1S 4JU and will be available for download from
www.pumainvestments.co.uk.
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: PUMA VCT 8 PLC via Globenewswire
HUG#2024502
(END) Dow Jones Newswires
June 30, 2016 11:37 ET (15:37 GMT)
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