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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
-- NAV per share up 1.17p, now 97.91p (after adding back the 25p of
dividends paid to date) following profit of GBP185,000 before tax for the
year.
-- 25p per share of dividends paid since inception, equivalent to a 7.1% per
annum tax-free running yield on net investment.
-- As envisaged in the original Prospectus, resolutions will be put forward
for a winding up of the VCT in the autumn of this year.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the Company's fifth Annual Report for the year
ended 28 February 2017.
The Company was launched and began investing in Spring 2012, with a
planned life of five years. In this, its fifth year, the process of
realising the Company's qualifying investments and preparing to return
capital to investors advanced significantly.
Results
The Company reported a profit before tax of GBP185,000 for the year
(2016: GBP310,000) and a post-tax gain of 1.17p (2016: 1.70p) per
ordinary share (calculated on the weighted average number of shares).
The Net Asset Value per ordinary share ("NAV") at 28 February 2017 after
adding back the 25p of dividends paid to date was 97.91p (2016: 96.74p).
Dividend
As envisaged in the Company's prospectus, the Company has for the fifth
calendar year in succession paid a dividend of 5p per ordinary share,
equivalent to a 7.1% tax-free annual running yield on shareholders' net
investment.
Investments
At the end of the year, the Company had just over GBP8 million invested
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.
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 and has reported no issues in this regard
for the Company to date. PwC will continue to assist the Investment
Manager in monitoring rule compliance as the Company approaches the end
of its planned life.
Proposal to Wind-Up the Company
The Company has now just passed its fifth anniversary. In accordance
with the plans set out in the Company's Prospectus, the Board expects to
convene a General Meeting of the Company in the autumn of this year, at
which resolutions will be proposed to place the Company into members'
solvent liquidation. If these are passed, liquidators will be appointed
and the Company will de-list from the London Stock Exchange.
Once such resolutions have been passed by shareholders, for a maximum
period of three years, many of the VCT rules, including the 70 per cent
qualifying rule, are suspended whilst the Company retains its VCT status
of tax free distribution to UK taxpayers. The intention is to return the
balance of the capital in an orderly way, with disposals timed
appropriately to enable further substantial distributions by the end of
2017.
Sir Aubrey Brocklebank Bt
Chairman
29 June 2017
INVESTMENT MANAGER'S REPORT
Introduction
In its fifth year, the Company continues to make good progress. It is
now beginning the process of returning capital to shareholders through
the realisation of investments whilst maintaining its qualifying status.
We believe our portfolio is well positioned to deliver attractive
returns to shareholders within the Company's expected remaining time
horizon.
Investments
Qualifying Investments
The Company made a GBP1.25 million investment in Urban Mining Limited, a
member of the Chinook Urban Mining group of companies, in 2014. The
investment, which was part of a GBP5 million investment alongside other
Puma VCTs into an energy-from waste business, was made to facilitate the
development of a flagship plant in East London to generate electricity
through the gasification of municipal solid waste. The project is
seeking to benefit from favourable Contracts for Difference available to
renewable projects, but is qualifying because it was made prior to the
royal assent of the Finance Act 2014. The management team has a track
record of delivering similar projects in other jurisdictions and is a
preferred partner of Chinook Sciences, the Nottingham based technology
company which has developed the award-winning "non-incineration ultra
clean synthetic gas technology" which will be used in the East London
plant. The investment is secured with a first charge over the Chinook
Urban Mining business and the eight acre freehold site of the East
London plant and is yielding an attractive return to the Company.
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 Openwide Investments Limited in relation to the
construction of a new build 134 bedroom Ibis Budget Hotel and the
associated infrastructure adjacent to Luton Airport. We are pleased to
report that the project is nearing practical completion on time and on
budget and the hotel is expected to open in the autumn.
As previously reported, a major fire occurred in February 2016 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). As a result of the incident,
and as reported in the Company's previous annual report, the board made
a provision of GBP148,000 against the carrying value of the Company's
investment in Opes. Opes owned a 73 hectare site in north Oxfordshire
with a MRF, including a landfill site for non-hazardous materials and an
aggregates/gravel quarrying business. 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 Opes' assets.
Following the incident, the Company appointed an administrator over Opes
in order to best protect the Company's investment. We are pleased to
report that shortly after the year end, the administrator exchanged
contracts for the sale of the north Oxfordshire site; the cash
consideration is payable in stages over a 12 month period. Moreover,
discussions are continuing with Opes' insurers regarding reimbursement
of the damage to the plant and the building and of the costs of business
interruption.
The Company's investment of GBP1,185,000 (alongside other Puma VCTs)
into Saville Services Limited continues to perform well. Saville
Services has been working on a series of projects, including most
recently the construction of a 77-bed, purpose-built care home in
Chester. We understand that the development is progressing well and the
care home is scheduled to open in the first quarter of 2018.
As previously reported, the Company had invested GBP1.6 million
(alongside other Puma VCTs) into Alyth Trading Limited, a nationwide
provider of contracting services. During the year, Alyth Trading has
been working on two contracts. The first is in connection with the
construction of a 112 bed purpose built care home in Hamilton, Scotland.
We are pleased to report that the project has recently completed
successfully generating attractive returns for Alyth Trading which will
benefit the Company when its investment is repaid in due course. The
second is a contract in connection with the construction of a 68 bed
purpose built care home in Egham, Windsor. We understand that
construction is behind schedule due to issues with the main builder but
this is being addressed by the team at Alyth Trading.
Non-Qualifying Investments
We are pleased to report the repayment during the year of the GBP750,000
loan made through an affiliate, Latimer Lending Limited. The loan was to
Kingsmead Care Home Limited which owns and operates a care and dementia
treatment facility in Mytchett, Surrey, generated a good return for the
Company.
As previously reported, the Company advanced a GBP1 million loan
(through an affiliate, Palmer Lending Limited), as part of a GBP2.9
million financing with other entities managed and advised by your
Investment Manager) to Oval Estates (St Peter's) Limited. Oval owns a 6
acre site in Radstock, near Bath, which has outline planning permission
for the development of 81 new houses. The loan is secured with a first
charge on the site. Oval obtained full detailed planning permission for
the development earlier this year after a protracted process with the
local planning authority, the delays to which meant that the loan has
passed its maturity date. Now that Oval has received detailed planning
permission, it is taking steps to enable it to repay the loan. The
client has requested a redemption statement and has indicated that they
are seeking finance elsewhere to repay the facility and take the scheme
forward.
Investment Strategy
We are pleased to have invested the Company's funds in a balanced
portfolio of both qualifying and non-qualifying secured investments and
are working on improving the liquidity of the portfolio wherever
possible whilst maintaining an appropriate risk adjusted return. We
continue to focus on the monitoring of our investments and are focused
on exits. The objective remains to achieve an orderly winding up of the
Company's assets at the end of its life, subject to shareholder approval
at the forthcoming General Meeting.
Shore Capital Limited
29 June 2017
Investment Portfolio Summary
As at 28 February 2017
Valuation as a % of
Valuation Cost Gain/(loss) Net Assets
GBP'000 GBP'000 GBP'000
Qualifying Investments
Kinloss Trading
Limited 254 254 - 3%
Saville Services
Limited 1,185 1,185 - 13%
Isaacs Trading Limited 1,000 1,000 - 11%
Jephcote Trading
Limited 1,000 1,000 - 11%
Urban Mining Limited 1,250 1,250 - 13%
Opes Industries
Limited 852 1,000 (148) 9%
Alyth Trading Limited 1,600 1,600 - 17%
Total Qualifying
Investments 7,141 7,289 (148) 77%
Non-Qualifying
Investments
Latimer Lending
Limited 109 109 - 1%
Palmer Lending Limited 1,000 1,000 - 11%
Total Non-Qualifying
investments 1,109 1,109 - 12%
Total Investments 8,250 8,398 (148) 89%
Balance of Portfolio 1,098 1,098 - 11%
Net Assets 9,348 9,496 (148) 100%
Of the investments held at 28 February 2017, all are incorporated in
England and Wales.
Income Statement
For the year ended 28 February 2017
Year ended 28 February Year ended 29 February
2017 2016
Note Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loss on investments 8 (b) - - - - (148) (148)
Income 2 563 - 563 837 - 837
563 - 563 837 (148) 689
Investment management fees 3 (48) (142) (190) (53) (159) (212)
Other expenses 4 (188) - (188) (167) - (167)
(236) (142) (378) (220) (159) (379)
Profit/(loss) before taxation 327 (142) 185 617 (307) 310
Taxation 5 (63) 28 (35) (123) 31 (92)
Profit/(loss) and total comprehensive income for the
year 264 (114) 150 494 (276) 218
Basic and diluted
Return/(loss) per Ordinary Share
(pence) 6 2.06p (0.89p) 1.17p 3.85p (2.15p) 1.70p
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 and
updated in January 2017.
Balance Sheet
As at 28 February 2017
Note 2017 2016
GBP'000 GBP'000
Fixed Assets
Investments 8 8,250 8,891
Current Assets
Debtors 9 1,662 918
Cash at bank and in hand 226 365
1,888 1,283
Creditors - amounts falling due within one year 10 (789) (334)
Net Current Assets 1,099 949
Total Assets less Current Liabilities 9,349 9,840
Creditors - amounts falling due after more than one
year 11 (1) (1)
Net Assets 9,348 9,839
Capital and Reserves
Called up share capital 12 128 128
Capital reserve - realised (681) (567)
Capital reserve - unrealised (148) (148)
Revenue reserve 10,049 10,426
Total Equity 9,348 9,839
Net Asset Value per Ordinary Share 13 72.91p 76.74p
The financial statements on pages 26 to 41 were approved and authorised
for issue by the Board of Directors on 29 June 2017 and were signed on
their behalf by:
Sir Aubrey Brocklebank Bt
Chairman
29 June 2017
Statement of Cash Flows
For the year ended 28 February 2017
Year ended Year ended
28 February 29 February
2017 2016
GBP'000 GBP'000
Profit for the year 150 218
Taxation 35 92
Loss on investments - 148
Increase in debtors (744) (579)
(Decrease)/increase in creditors (132) 111
Tax paid (89) -
Net cash used in operating activities (780) (10)
Cash flow from investing activities
Purchase of investments - (1,800)
Proceeds from disposal of investments and repayment
of loans and loan notes 641 2,350
Net cash generated from investing activities 641 550
Cash flow from financing activities
Dividends paid - (641)
Net cash used in financing activities - (641)
Net decrease in cash and cash equivalents (139) (101)
Cash and cash equivalents at start of the year 365 466
Cash and cash equivalents at the end of the year 226 365
Statement of Changes in Equity
For the year ended 28 February 2017
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 March
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
Profit for
the year - (114) 264 150
Dividends
payable - - - (641) (641)
Balance as at
28 February
2017 128 (681) (148) 10,049 9,348
Distributable reserves comprise: Capital reserve-realised, Capital
reserve-unrealised (excluding gains on unquoted investments) and the
Revenue reserve. At the year-end distributable revenue reserves were
GBP10,049,000 (2016: GBP10,426,000).
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, registered and is
domiciled in England. The Company's registered number is 07696739. 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 a
description of the nature of the Company's operations are disclosed in
the Strategic Report.
The financial statements have been prepared under the historical cost
convention, modified to include investments at fair value, and in
accordance with the requirements of the Companies Act 2006, including
the provisions of the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008, 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 and updated in
January 2017 ("the SORP").
Monetary amounts in these financial statements are rounded to the
nearest whole GBP1,000, except where otherwise indicated.
Going concern
After making enquiries the Directors believe that it is appropriate to
continue to apply the going concern basis in preparing the financial
statements. This is appropriate as the Company has access to cash
reserves greater than the anticipated annual running costs of the
Company, which will enable the Company to meet its liabilities as they
fall due for payment for a period of 12 months from the date of this
report.
In accordance with the plans set out in the Company's Prospectus, the
Board expects to convene a General Meeting of the Company in the autumn
of this year, at which resolutions will be proposed to place the Company
into members' solvent liquidation. If these are passed, liquidators will
be appointed and the Company will de-list from the London Stock Exchange
The Directors have considered a period of 12 months from the date of
this report for the purposes of determining the Company's going concern
status. This period of assessment is in accordance with the guidance
issued by the Financial Reporting Council and is appropriate as the
resolutions referred to above may not be approved.
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% 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% 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 has 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.
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.
1. Accounting Policies (continued)
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 as liabilities from the ex-dividend date.
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 28 February Year ended 29 February
2017 2016
GBP'000 GBP'000
Income from investments
Loan stock interest 562 834
562 834
Other income
Bank deposit income 1 3
563 837
3. Investment Management Fees
Year ended 28 February Year ended 29 February
2017 2016
GBP'000 GBP'000
Shore Capital Limited 190 212
190 212
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%
of the Net Asset Value ("NAV") 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, trail
commission and certain non-recurring costs) to within 3.5% of average
Net Asset Value. Total costs this year were 3.5% of average Net Asset
Value (2016: 3.4%).
4. Other expenses
Year ended 28 February Year ended 29 February
2017 2016
GBP'000 GBP'000
Shore Capital Fund
Administration Services
Limited 35 37
Directors' Remuneration 56 56
Auditor's remuneration
for statutory audit 22 22
Legal and professional
fees 20 12
Trail commission 14 28
Other expenses 41 12
188 167
Shore Capital Fund Administration Services Limited provides
administrative services to the Company for an aggregate annual fee of
0.35% 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 (2016: none). The average number
of non-executive Directors during the year was 3 (2016: 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 (2016: GBP58,000), including social security costs.
The Auditor's remuneration of GBP19,000 (2016: GBP18,500) has been
grossed up in the table above to be inclusive of VAT.
5. Taxation
Year ended Year ended
28 February 29 February
2017 2016
GBP'000 GBP'000
UK corporation tax charged to revenue reserve 63 123
UK corporation tax credited to capital reserve (28) (31)
UK corporation tax charge for the year 35 92
Factors affecting tax charge for the year
Profit before taxation 185 310
Tax charge calculated on profit before taxation at
20% 37 62
Capital losses not deductible - 30
Prior year over accrual (2) -
35 92
Capital returns are not taxable as the Company is exempt from tax on
realised capital gains whilst it continues to comply with the VCT
regulations, so no corporation tax is recognised on capital gains or
losses. Due to the intention to continue to comply with the VCT
regulations, the Company has not provided for deferred tax on any
realised or unrealised capital gains and losses.
6. Basic and diluted return/(loss) per Ordinary Share
Year ended 28 February 2017
Revenue Capital Total
GBP'000 GBP'000 GBP'000
Total comprehensive income for the year 264 (114) 150
Weighted average number of shares 12,820,841 12,820,841 12,820,841
Return/(loss) per share 2.06p (0.89)p 1.17p
Year ended 29 February 2016
Revenue Capital Total
GBP'000 GBP'000 GBP'000
Total comprehensive income for the year 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
7. Dividends
The Directors do not propose a final dividend in relation to the year
ended 28 February 2017 (2016: GBPnil). An interim dividend of 5p (2016:
5p) per ordinary share was paid from revenue reserves in respect of the
year ended 28 February 2017 totalling GBP641,000 (2016: GBP641,000).
This dividend was been recognised as a liability in the financial
statements as at 28 February 2017 from the ex-dividend date of 16
February 2017. The dividend was paid on 3 March 2017.
8. Investments
(a) Movements in Non qualifying
investments Qualifying investments investments Total
GBP'000 GBP'000 GBP'000
Book cost at 1 March
2016 7,289 1,750 9,039
Net unrealised losses
at 1 March 2016 (148) - (148)
Valuation at 1 March
2016 7,141 1,750 8,891
Repayment of loans - (641) (641)
Valuation at 28
February 2017 7,141 1,109 8,250
Book cost at 28
February 2017 7,289 1,109 8,398
Net unrealised losses
at 28 February 2017 (148) - (148)
Valuation at 28
February 2017 7,141 1,109 8,250
As previously reported, a major fire occurred in February 2016 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). As a result of the incident,
and as reported in the Company's previous annual report, the board made
a provision of GBP148,000 against the carrying value of the Company's
investment in Opes. Opes owned a 73 hectare site in north Oxfordshire
with a MRF, including a landfill site for non-hazardous materials and an
aggregates/gravel quarrying business. 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 Opes' assets.
Following the incident, the Company appointed an administrator over Opes
in order to best protect the Company's investment. We are pleased to
report that shortly after the year end, the administrator exchanged
contracts for the sale of the north Oxfordshire site; the cash
consideration is payable in stages over a 12 month period. Moreover,
discussions are continuing with Opes' insurers regarding reimbursement
of the damage to the plant and the building and of the costs of business
interruption.
(b) Gains and losses on investments
The gains and losses on investments for the year shown in the Income
Statement is analysed as follows:
Year ended 28 February Year ended 29 February
2017 2016
GBP'000 GBP'000
Unrealised loss in the
year - (148)
- (148)
8. Investments (continued)
(c) Quoted and unquoted investments
Market value as at 28 Market value as at 29
February 2017 February 2016
GBP'000 GBP'000
Quoted investments - -
Unquoted investments 8,250 8,891
8,250 8,891
Further details of these investments are disclosed in the Investment
Portfolio Summary on pages 6 to 11 of the Annual Report.
9. Debtors
2017 2016
GBP'000 GBP'000
Other debtors 641 -
Prepayments and accrued income 1,021 918
1,662 918
Other debtors comprise monies paid to the registrar to enable the
interim dividend to be paid on 3 March 2017 (see note 7).
10. Creditors - amounts falling due within one year
2017 2016
GBP'000 GBP'000
Accruals and deferred income 110 186
Corporation tax 38 92
Other creditors - 56
Dividends payable (see note 7) 641 -
789 334
11. Creditors - amounts falling due after more than one year
2017 2016
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
annum.
The Loan Notes entitle Shore Capital and members of the investment
management team to receive a performance related incentive of 20% 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% of the enlarged number
of Ordinary Shares. The amount of the performance fee will be
calculated as 20% of the excess of the net asset value (adjusted for
dividends paid) over GBP1 per issued share.
12. Called Up Share Capital
2017 2016
GBP'000 GBP'000
12,820,841 ordinary shares of 1p each 128 128
13. Net Asset Value per Ordinary Share
2017 2016
Net assets GBP9,348,000 GBP9,839,000
Shares in issue 12,820,841 12,820,841
Net asset value per share
Basic 72.91p 76.74p
Diluted 72.91p 76.74p
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 28
February 2017:
2017 2016
GBP'000 GBP'000
Financial assets at fair value through profit or loss 8,250 8,891
Financial assets that are debt instruments measured
at amortised cost 1,662 918
Financial liabilities measured at amortised cost (751) (243)
9,161 9,566
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.
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:
2017 2016
GBP'000 GBP'000
Investments in loans, loan notes and bonds 3,292 3,937
Cash at bank and in hand 226 365
Other debtors 641 -
Accrued interest income 1,021 918
5,180 5,220
The cash held by the Company at the year end is split between two U.K.
banks. Bankruptcy or insolvency of either 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.
Other debtors comprised monies advanced to the registrar for payment of
the interim dividend on 3 March 2017.
Credit risk associated with accrued interest income is predominantly
covered by the investment management procedures.
14. Financial Instruments (continued)
Investments in loans and loan notes comprise 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 (2016: 100% unquoted).
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 period for which they
are held. As at the year end, the Company had no borrowings, other than
loan notes amounting to GBP1,000 (2016: 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 Strategic Report and 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 0.25% at 28
February 2017 (2016: 0.5%). 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.
14. Financial Instruments (continued)
Interest rate risk profile of financial assets
The following analysis sets out the interest rate risk of the Company's
financial assets as at 28 February 2017.
Weighted average
Weighted average period until
Rate status interest rate maturity Total
GBP'000
Cash at bank - RBS Floating 0.01% - 226
Cash at bank -
Lloyds Floating 0.25% - -
Loans, loan notes
and bonds Fixed 19.65% 23 months 2,287
Balance of assets Non-interest bearing - 7,625
10,138
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
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 1 - Fair value is measured using the unadjusted quoted price in an
active market.
-- Level 2 - Fair value is measured using inputs other quoted prices that
are observable using market data.
-- Level 3 - Fair value is measured using unobservable inputs.
The Company has early adopted the changes to FRS 102 published by the
FRC in March 2016 in relation to these disclosures.
14. Financial Instruments (continued)
Fair values have been measured at the end of the reporting year as
follows:-
2017 2016
GBP'000 GBP'000
Level 3
Unquoted investments 8,250 8,891
8,250 8,891
The Level 3 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 on pages 6 to 11.
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 (2016: none).
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 28 February 2017,
but has been extracted from the statutory financial statements for the
year ended 28 February 2017 which were approved by the Board of
Directors on 29 June 2017 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 statements under s
498(2) and (3) of the Companies Act 2006. The Independent Auditor's
Report included an emphasis of matter paragraph highlighting the
uncertainties associated with the fair value of investment in Opes
Industries Limited.
The statutory accounts for the year ended 29 February 2016 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.
Copies of the full annual report and financial statements for the year
ended 28 February 2017 will 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 Corporate Solutions on behalf
of Nasdaq 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
(END) Dow Jones Newswires
June 29, 2017 11:30 ET (15:30 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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