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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Puma High | LSE:PMH | London | Ordinary Share | GB00B53Y1331 | 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% | 37.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMPMH
Puma High Income VCT plc
Final results for the period ended 31 March 2014
HIGHLIGHTS
-- Fund now fully invested in a diverse range of high quality businesses and
projects.
-- 28p per share of dividends paid since inception, 7p during the period,
equivalent to a 10% per annum tax-free running yield on net investment.
-- Gain in NAV (adding back dividends) of 0.98p per share during the period.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the Company's fourth Annual Report which is for
the year ended 31 March 2014.
Results
As envisaged in the Company's prospectus, the Company has for the fourth
calendar year in succession paid a dividend of 7p per ordinary share,
equivalent to a 10% tax-free running yield on shareholder's net
investment. The fully diluted net asset value per share ("NAV") at 31
March 2014 was 66.24p (equivalent to 94.24p after adding back the 28p of
dividends paid to date) resulting in a gain in NAV (after adding back
dividends) of 0.98p per share during the year.
Investments
Since the start of the year, the Company had just over GBP8.5 million
invested, representing 95% 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 6.1% on the
basis of current deployments and investment performance. Details of the
Company's portfolio of investments can be found 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
We are pleased to report that the Company's net assets are now fully
deployed in a diverse range of high quality businesses and projects.
The lack of availability of bank credit has enabled the Company to
assemble a portfolio of investments on attractive terms. Whilst there
may be some further changes in the composition of the portfolio, the
Board expects to concentrate in the future on the monitoring of our
existing investments and considering the options for exits.
Ray Pierce
Chairman
30 July 2014
INVESTMENT MANAGER'S REPORT
Introduction
The Company has now deployed a substantial proportion of its funds in
both qualifying and non-qualifying investments, having met its minimum
qualifying investment percentage of 70 per cent during the previous
period. We believe our portfolio is well positioned to deliver
attractive returns to shareholders within its expected remaining time
horizon.
Qualifying investments
The Company's GBP1.4 million investment alongside other Puma VCTs into
Saville Services Limited, a contracting company, is performing well.
Saville Services is currently deploying the funds by providing
contracting services on two projects: the construction of a private
detached housing development in the countryside outside Aberdeen, under
contract to Churchill Homes Limited, a longstanding Aberdeenshire
developer, and the development of up to 20 apartments for supported
living for psychiatric and learning disabled service users in Grimsby,
North East Lincolnshire.
Our investment of GBP860,000 in Mirfield Contracting Limited, a
contracting services company providing project management services to a
GBP3.8 million development of town houses in Mirfield (near Wakefield)
West Yorkshire, is progressing well. The three-phase development itself
is almost complete and the developer, who is approved for the
Government-backed Help to Buy Scheme, confirms that interest in the
houses remains strong.
The Company's investment of GBP920,000 (as part of GBP3.1 million across
the Puma VCTs) into Brewhouse and Kitchen Limited is performing well.
Brewhouse and Kitchen is managed by two highly experienced pub sector
professionals and our funding is facilitating the acquisition of
freehold pubs and the roll-out of the brand. The investment is largely
in the form of senior debt, secured with a first charge over the
business and each site acquired. Funds can be utilised to a maximum 65%
loan-to-value ratio, and are expected to produce an attractive return to
the Company. During the year, Brewhouse and Kitchen opened its first pub,
the White Swan in Portsmouth, which has been trading well. Shortly
after the year end, it opened its second pub in Dorchester after a
substantial renovation.
As previously reported, the Company invested GBP880,000 into each of two
contracting companies, Frederica Trading Limited and Glenmoor Trading
Limited, committing GBP1.76 million in total. As members of a limited
liability partnership with other contracting companies, Frederica
Trading and Glenmoor Trading have recently successfully completed a
contract in connection with five pre-let supported living developments
for psychiatric and learning disabled people who are housed and given
support by local authorities and other social care organisations. We
are pleased to confirm that, since the year end, these companies have
recently been awarded new contracts in connection with another two
developments. We expect these investments to deliver attractive returns
in the medium term.
In March 2012, the Company invested GBP700,000 (as part of a GBP1.4
million Puma VCT financing) into SIP Communications Plc ("SIPCOM").
SIPCOM provides hosted IP telephony and unified communications products
and services and is a leading hosting provider for users of Microsoft
Lync - a new business version of Skype with many enhanced features
allowing IP telephony, video calls, instant messaging, and online
meetings and integrating with Microsoft Outlook and Office. As
explained in the Company's 2013 Investment Manager's Report, SIPCOM
experienced a default by a major customer in 2012 and to be prudent the
Company made a fair value provision against an element of our
investment. Subsequent to this, the Company have agreed a restructuring
of the investment which should lead to a recovery exceeding this
provision. In addition to interest of GBP99,000 received to date, the
Company has also recovered principal of GBP225,000 (of which GBP70,000
was recovered since the year end) and the Company expect to receive a
further settlement in the next two months.
We previously reported that Huntly Trading Limited and Isaacs Trading
Limited, two contracting companies in which the Company had invested a
total of GBP1.4 million, had joined a limited liability partnership
which entered into a contracting contract with FreshStart Living to
provide project management and contracting services in connection with a
project known as Trafford Press in Manchester. We understand that this
project is no longer proceeding. Both companies' funds have since been
re-allocated to several contracts to provide contracting services in
connection with the construction of nine new houses and 12 new flats at
a project known as The Albany, in Barnes, south west London and two
projects in the greater Manchester area to construct supported living
apartments. Work has commenced on all three projects and is currently
progressing to time and to budget.
Non-qualifying investments
As previously reported, we have adopted a strategy for the
non-qualifying portfolio of moving away from quoted investments and
instead investing in secured non-qualifying loans offering a good yield
with hopefully limited downside risk. The Company has two such
non-qualifying loans which were originally for a total of GBP2.11
million.
The Company's GBP1.25 million loan (as part of a GBP4 million financing
with other Puma VCTs) to Puma Brandenburg Finance Limited, a subsidiary
of Puma Brandenburg Holdings Limited, continues to perform. The loan is
secured on a portfolio of flats in the middle class area of central
Berlin, Germany and, in accordance with the terms of the loan,
GBP187,000 has been repaid to date. Since the loan was made, the
property market in this area of Berlin has been very strong, further
enhancing the excellent security we have for this loan.
As previously reported, the Company has provided a loan of GBP860,000 to
provide, together with other Puma VCTs, an innovative GBP4 million
revolving credit facility to Organic Waste Management Trading Limited
through another jointly held affiliate of the VCTs Buckhorn Lending
Limited. The facility provides working capital for the purchase of used
cooking oil for conversion into bio-diesel for sale to obligated
off-take parties. The facility is structured to mitigate risks by being
capable of drawn only once approved back-to-back purchase and sale
contracts have been entered into with approved counterparties. The
facility bears interest at a substantial rate for utilised funds and a
lower rate for non-utilised fund, and has been performing very well over
the year.
Investment Strategy
We remain focused on generating strong returns for the Company from both
the qualifying and non-qualifying portfolios whilst balancing these
returns with maintaining an appropriate risk exposure. In accordance
with the HMRC VCT rules the Company had three years to invest 70 per
cent of the portfolio (on an HMRC basis) into qualifying investments.
Having now achieved this 70% qualifying status, we are now primarily
focusing on the monitoring of our existing investments and considering
the options for exits.
Shore Capital Limited
30 July 2014
Investment Portfolio Summary
As at 31 March 2014
Valuation as a % of Net
Valuation Cost Loss Assets
GBP'000 GBP'000 GBP'000
As at 31 March 2014
Qualifying Investment -
Unquoted
Brewhouse & Kitchen
Limited 920 920 - 10%
Saville Services Limited 1,400 1,400 - 15%
SIP Communications PLC 335 545 (210) 4%
Mirfield Contracting
Limited 860 860 - 9%
Huntly Trading Limited 700 700 - 8%
Isaacs Trading Limited 700 700 - 8%
Frederica Trading
Limited 880 880 - 10%
Glenmoor Trading Limited 880 880 - 10%
Total Qualifying
Investments 6,675 6,885 (210) 74%
Non-Qualifying
Investments
Buckhorn Lending Limited 860 860 - 9%
Puma Brandenburg Finance
Limited 1,063 1,063 - 12%
Total Non-Qualifying
investments 1,923 1,923 - 21%
Total Investments 8,598 8,808 (210) 95%
Balance of Portfolio 458 458 5%
Net Assets 9,056 9,266 (210) 100%
Of the investments held at 31 March 2014, 88 per cent are incorporated
in England and Wales and 12 per cent incorporated in Guernsey.
Percentages have been calculated on the valuation of the assets at the
reporting date.
Income Statement
For the year ended 31 March 2014
Period from 1 January
Year ended 31 March 2014 2012 to 31 March 2013
Note Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gain on investments 8 (c) - - - - 49 49
Income 2 495 - 495 481 - 481
495 - 495 481 49 530
Investment management fees 3 (50) (150) (200) (58) (174) (232)
Other expenses 4 (161) - (161) (252) - (252)
(211) (150) (361) (310) (174) (484)
Return on ordinary activities before taxation 284 (150) 134 171 (125) 46
Tax on return on ordinary activities 5 - - - - - -
Return on ordinary activities after tax attributable
to equity shareholders 284 (150) 134 171 (125) 46
Basic and diluted
Return per Ordinary Share (pence) 6 2.08p (1.10p) 0.98p 1.25p (0.91p) 0.34p
The total column represents the profit and loss account and the revenue
and capital columns are supplementary information.
All revenue and capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued in
the year.
No separate Statement of Total Recognised Gains and Losses is presented
as all gains and losses are included in the Income Statement.
Balance Sheet
As at 31 March 2014
Registered No: 07036487
As at As at
Note 31 March 2014 31 March 2013
GBP'000 GBP'000
Fixed Assets
Investments 8 8,598 8,940
Current Assets
Debtors 9 356 236
Cash 273 813
629 1,049
Creditors - amounts falling due within one year 10 (170) (109)
Net Current Assets 459 940
Total Assets less Current Liabilities 9,057 9,880
Creditors - amounts falling due after more than one
year (including convertible debt) 11 (1) (1)
Net Assets 9,056 9,879
Capital and Reserves
Called up share capital 12 137 137
Capital reserve - realised (699) (549)
Capital reserve - unrealised (210) (210)
Revenue reserve 9,828 10,501
Equity Shareholders' Funds 9,056 9,879
Net Asset Value per Ordinary Share 13 66.24p 72.26p
Diluted Net Asset Value per Ordinary Share 13 66.24p 72.26p
The financial statements were approved and authorised for issue by the
Board of Directors on 30 July 2014 and were signed on their behalf by:
Raymond Pierce
Chairman
30 July 2014
Cash Flow Statement
For the year ended 31 March 2014
Period from
Year ended 1 January
31 March 2012 to 31
2014 March 2013
GBP'000 GBP'000
Return on ordinary activities before taxation 134 46
Gain on investments - (49)
Increase in debtors (120) (219)
Increase/(decrease) in creditors 61 (11)
Net cash outflow from operating activities 75 (233)
Capital expenditure and financial investment
Purchase of investments - (9,400)
Proceeds from sale of investments and loan note
repayments 342 8,117
Net cash inflow/(outflow) from capital expenditure
and financial investment 342 (1,283)
Equity dividend paid (957) (1,914)
Decrease in cash in the year (540) (3,430)
Reconciliation of net cash flow to movement in net
funds
Decrease in cash in the year (540) (3,430)
Net funds at start of year 813 4,243
Net funds at end of year 273 813
Reconciliation of Movements in Shareholders' Funds
For the year ended 31 March 2014
Called up Share Capital Capital
share Premium reserve - reserve - Revenue
capital account realised unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at
1 January
2012 137 - (584) (50) 12,244 11,747
Return after
taxation
attributable
to equity
shareholders - - 85 (210) 171 46
Transfer - - (50) 50 - -
Dividend paid - - - - (1,914) (1,914)
Balance as at
31 March
2013 137 - (549) (210) 10,501 9,879
Return after
taxation
attributable
to equity
shareholders - - (150) - 284 134
Dividend paid - - - - (957) (957)
Balance as at
31 March
2014 137 - (699) (210) 9,828 9,056
Distributable reserves comprise: Capital reserve-realised, Capital
reserve-unrealised and the Revenue reserve. At the year end
distributable reserves totalled GBP8,919,000 (2013: GBP9,742,000).
The Capital reserve-realised shows gains/losses that have been realised
in the year due to the sale of investments, and related costs. The
Capital reserve-unrealised shows the gains/losses on investments still
held by the company not yet realised by an asset sale.
1. Accounting Policies
Basis of Accounting
Puma High Income VCT plc ("the Company") was incorporated and is
domiciled in England & Wales. 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 UK
Generally Accepted Accounting Practice ("UK GAAP") and the Statement of
Recommended Practice, 'Financial Statements of Investment Trust
Companies and Venture Capital Trusts' ("SORP") revised in 2009.
Income Statement
In order to better reflect the activities of a Venture Capital Trust and
in accordance with guidance issued by the Association of Investment
Companies ("AIC"), supplementary information which analyses the Income
Statement between items of a revenue and capital nature has been
presented alongside the Income Statement. The net return of GBP134,000
as per the Income Statement on page 26 is the measure that the Directors
believe is appropriate in assessing the Company's compliance with
certain requirements set out in s274 of the Income Tax Act 2007.
Investments
All investments have been designated as fair value through profit or
loss, and are initially measured at cost which is the best estimate of
fair value. A financial asset is designated in this category if acquired
to be both managed and its performance is evaluated on a fair value
basis with a view to selling after a period of time in accordance with a
documented risk management or investment strategy. All investments held
by the Company have been managed in accordance with the investment
policy set out on page 12. Thereafter the investments are measured at
subsequent reporting dates at fair value. Listed investments and
investments traded on AIM are stated at bid price at the reporting date.
Hedge funds are valued at their respective quoted Net Asset Values per
share at the reporting date. Unlisted investments are stated at
Directors' valuation with reference to the International Private Equity
and Venture Capital Valuation Guidelines ("IPEVC") and in accordance
with FRS26 "Financial Instruments: Measurement":
-- 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 redeemable equity interests and 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 investments are taken to unrealised capital reserves.
It is not the Company's policy to exercise control over investee
companies. Therefore the results of the companies are not incorporated
into the revenue account except to the extent of any income accrued.
Cash at bank and in hand
Cash at bank and in hand comprises of cash on hand and demand deposits.
Equity instruments
Equity instruments are classified according to the substance of the
contractual arrangements entered into. An equity instrument is any
contract that evidences a residual interest in the assets of the Company
after deducting all of its liabilities. Equity instruments issued by the
Company are recorded at proceeds received net of issue costs.
1. Accounting Policies (continued)
Income
Dividends receivable on listed equity shares are brought into account on
the ex-dividend date. Dividends receivable on unlisted 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 negotiated 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
amounts realised over GBP1 per Ordinary Share returned to Ordinary
shareholders. This incentive will only be exercisable once the holders
of Ordinary Shares have received distributions of GBP1 per share. The
performance fee is accounted for as an equity-settled share-based
payment.
FRS 20 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 in the year 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 which
are 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 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 years. Deferred tax is measured on a non-discounted basis at
the tax rates that are expected to apply in the years 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 and foreign exchange
transactions, transaction costs, the capital element of the 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 foreign exchange transactions and
the capital element of the performance fee are also taken through the
Income Statement and recognised in the Capital Reserve - Unrealised. The
performance fee to be effected through share-based payment is taken to
the Other Reserve and the total revenue gain or loss on the Income
Statement is taken to the Revenue Reserve.
Foreign exchange
The functional and presentational currency of the Company is Sterling.
Transactions denominated in foreign currencies are translated into
Sterling at the rates ruling at the dates that they occurred. Assets
and liabilities denominated in a foreign currency are translated at the
appropriate foreign exchange rate ruling at the balance sheet date.
Translation differences are recorded as unrealised foreign exchange
losses or gains and taken to the Income Statement.
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.
Change in reporting date
The Company has changed its reporting date to 31 March during the
comparative period and so the comparative results are for a 15 month
period ended 31 March 2013.
2. Income
Period from 1 January 2012
Year ended 31 March 2014 to 31 March 2013
GBP'000 GBP'000
Income from investments
Income from investments 490 439
Arrangement fees - 16
490 455
Other income
Bank deposit income 5 26
495 481
3. Investment Management Fees
Period from 1 January 2012
Year ended 31 March 2014 to 31 March 2013
GBP'000 GBP'000
Shore Capital Limited 200 232
Shore Capital Limited (Shore Capital) was 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 annual
costs this year were 3.5% of the year end Net Asset Value (2013: 3.5%).
4. Other expenses
Period from
Year ended 1 January
31 March 2012 to 31
2014 March 2013
GBP'000 GBP'000
Administration - Shore Capital Fund Administration
Services Limited 30 46
Directors' Remuneration 63 80
Social security costs 1 7
Auditor's remuneration for statutory audit 21 17
Insurance 5 2
Legal and professional fees 5 (13)
FSA, LSE and registrar fees 7 28
Trail commission 25 52
Other expenses 4 33
161 252
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.
The total fees paid or payable (excluding VAT and employers NIC) in
respect of individual Directors for the year are detailed in the
Directors' Remuneration Report commencing on page 17. The Company had
no employees (other than Directors) during the year. The average number
of non-executive Directors during the year was four (2013: four).
The Auditor's remuneration of GBP17,500 (2013: GBP14,000) has been
grossed up in the table above to be inclusive of VAT.
5. Tax on Ordinary Activities
Period
from 1
January
Year ended 2012 to
31 March 31 March
2014 2013
GBP'000 GBP'000
UK corporation tax charged to revenue reserve - -
UK corporation tax charged to capital reserve - -
UK corporation tax charge for the year - -
Factors affecting tax charge for the year
Return on ordinary activities before taxation 134 46
Tax charge calculated on return on ordinary activities
before taxation at the applicable rate of 20% 27 9
Non taxable capital income - 25
Utilisation of tax losses brought forward (27) (44)
Non deductible expenses - 10
- -
The income statement shows the tax charge allocated to revenue and
capital. Capital returns are not taxable as VCTs are exempt from tax on
realised capital gains subject to continuing compliance with the VCT
regulations.
Excess management expenses of GBP116,000 (2013: GBP250,000) are
available to be carried forward and set off against future taxable
income. 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 per Ordinary Share
Year ended 31 March 2014
Revenue Capital Total
Return/(loss) for the year
(GBP'000) 284 (150) 134
Weighted average number of
shares 13,671,872 13,671,872 13,671,872
Return/(loss) per share 2.08p (1.10)p 0.98p
Period from 1 January 2012 to 31 March 2013
Revenue Capital Total
Return/(loss) for the period
(GBP'000) 171 (125) 46
Weighted average number of
shares 13,671,872 13,671,872 13,671,872
Return/(loss) per share 1.25p (0.91)p 0.34p
The total return/(loss) per ordinary share is the sum of the revenue
return and capital return.
7. Dividends
The Directors do not propose a final dividend in relation to the year
ended 31 March 2014 (period ended 31 March 2013: nil). An interim
dividend of 7p per Ordinary Share was paid on 21 February 2014 (2013: 7p
per Ordinary Share paid on both 27 February 2012 and 19 February 2013).
The dividend payment totalled GBP957,000 (2013: GBP1,914,000).
8. Investments
Historic cost Market value Historic cost Market value
as at 31 March as at 31 March as at 31 March as at 31 March
(a) Summary 2014 2014 2013 2013
GBP'000 GBP'000 GBP'000 GBP'000
Qualifying
venture
capital
investments 6,885 6,675 7,040 6,830
Non qualifying
investments 1,923 1,923 2,110 2,110
8,808 8,598 9,150 8,940
(b) Movements in Qualifying venture Non qualifying
investments capital investments investments Total
GBP'000 GBP'000 GBP'000
Opening value 6,830 2,110 8,940
Repayment of loans and
loan notes (155) (187) (342)
Valuation at 31 March
2014 6,675 1,923 8,598
Book cost at 31 March
2014 7,040 2,110 9,150
Net unrealised losses
at 31 March 2014 (210) - (210)
Valuation at 31 March
2014 6,830 2,110 8,940
(c) Gains on investments
The gains on investments for the year shown in the Income Statement on
page 26 is analysed as follows:
Period from 1 January
Year ended 31 March 2014 2012 to 31 March 2013
GBP'000 GBP'000
Realised gains on
disposal - 259
Net unrealised losses in
respect of investments
held - (210)
- 49
8. Investments - continued
(d) Quoted and unquoted Market value as at 31 Market value as at 31
investments March 2014 March 2013
GBP'000 GBP'000
Quoted investments - -
Unquoted investments 8,598 8,940
8,598 8,940
(e) Significant interests
As at 31 March 2014, the Company held more than 20% of the equity of the
following undertakings. These holdings are included within the unquoted
investments disclosed above and are held as part of the Company's
investment portfolio.
Percentage of equity held directly
in Investee Company
Fair value Fair value
of of
Company's Company's
Puma Puma Investment Investment
VCT VII VCT 8 Puma VCT 31 March 31 March
Company plc plc 9 plc 2014 2013
GBP'000 GBP'000
Mirfield
Contracting
Limited 50% - - - 860 860
Frederica
Trading
Limited 47% 47% - - 880 880
Glenmoor
Trading
Limited 47% 47% - - 880 880
Huntly
Trading
Limited 47% 47% - - 700 700
Isaacs
Trading
Limited 47.5% - 47.5% - 700 700
Saville
Services
Limited 16% 23% 15% 5% 1,400 1,400
Buckhorn
Lending
Limited 25% 25% 25% 25% 860 860
6,280 6,280
Shore Capital Limited is the investment manager of the Company, Puma VCT
VII plc and Puma VCT 8 plc and a subsidiary of Shore Capital Limited is
the investment manager of Puma VCT 9 plc.
The Company is able to exercise significant influence over all of the
above-named investee companies.
These investments have not been accounted for as associates or joint
ventures since FRS 9: Associates and Joint Ventures and the SORP require
that Investment Companies treat all investments held as part of their
investment portfolio in the same way, even those over which the Company
has significant influence.
Further details of these investments are disclosed in the Investment
Portfolio Summary on pages 6 to 10 of the Annual Report.
9. Debtors
As at 31 March 2014 As at 31 March 2013
GBP'000 GBP'000
Prepayments and accrued income 356 236
10. Creditors - amounts falling due within one year
As at 31 March 2014 As at 31 March 2013
GBP'000 GBP'000
Accruals and deferred income 170 109
11. Creditors - amounts falling due after more than
one year (including convertible debt)
As at 31 March 2014 As at 31 March 2013
GBP'000 GBP'000
Loan notes 1 1
On 11 November 2009, the Company issued Loan Notes in the amount of
GBP1,000 to a nominee on behalf of the Investment Manager and members of
the investment management team. The Loan Notes accrue interest of 5 per
cent per annum.
The Loan Notes entitle the Investment Manager and member of the
investment management team to a performance related incentive of 20 per
cent of the aggregate amounts realised by the Company in excess of GBP1
per Ordinary Share, and 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 31 March 2014 As at 31 March 2013
GBP'000 GBP'000
13,671,872 ordinary shares of 1p
each 137 137
13. Net Asset Value per Ordinary Share
As at As at
31 March 2014 31 March 2013
Net assets 9,056,000 9,879,000
Shares in issue 13,671,872 13,671,872
Dilutive effect of performance fee - -
13,671,872 13,671,872
Net asset value per share
Basic 66.24p 72.26p
Diluted 66.24p 72.26p
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. The Company held the following
categories of financial instruments.
As at 31 March 2014 As at 31 March 2013
GBP'000 GBP'000
Assets at fair value through profit
or loss
Investments managed through Shore
Capital Limited 8,598 8,940
Loans and receivables
Cash at bank and in hand 273 813
Interest, dividends and other
receivables 356 236
Other financial liabilities
Financial liabilities measured at
amortised cost (171) (110)
9,056 9,879
14. Financial Instruments (continued)
Management of risk
The main risk the Company faces from its financial instruments is 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 amounts of financial assets best
represents the maximum credit risk exposure at the balance sheet date.
The Company's financial assets maximum exposure to credit risk is as
follows:
As at 31 March 2014 As at 31 March 2013
GBP'000 GBP'000
Investments in loans and loan notes 5,488 5,830
Cash at bank and in hand 273 813
Interest, dividends and other
receivables 356 236
6,117 6,879
The majority of the cash held by the Company at the year end is split
between a U.K. bank and a BBB rated South African bank. 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.
Credit risk associated with interest, dividends and other receivables
are predominantly covered by the investment management procedures.
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
management 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
throughout the period 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 12. 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.
100 per cent of the Company's investments at 31 March 2014 are unquoted
investments (2013: 100% unquoted).
14. Financial Instruments (continued)
Liquidity risk
Details of the Company's unquoted investments are provided in the
Investment Portfolio summary on page 5. By their nature, unquoted
investments may not be readily realisable, the Board regularly consider
exit strategies for these investments. As at the year end, the Company
had no borrowings other than loan notes amounting to GBP1,000 (2013:
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. 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.
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.
At the year end and throughout the year, the Company's only liability
subject to interest rate risk were the Loan Notes of GBP1,000 at 5.0 per
cent (see note 11).
Interest rate risk profile of financial assets
The following analysis sets out the interest rate risk of the Company's
financial assets.
As at 31 March Average Period until
2014 Rate status interest rate maturity Total
GBP'000
Cash at bank -
RBS Floating 0.2% - 130
Cash at bank -
Investec Fixed 0.8% 32 day notice 128
Cash at bank -
Lloyds Fixed 0.2% - 15
Loans and loan
notes Floating 14.1% 76 months 4,425
Loans and loan
notes Fixed 5.00% 12 months 1,063
Balance of Non-interest
assets bearing - 3,466
9,227
As at 31 March Average Period until
2013 Rate status interest rate maturity Total
GBP'000
Cash at bank -
RBS Floating 0.9% - 670
Cash at bank -
Investec Fixed 0.9% 32 day notice 128
Cash at bank -
Lloyds Fixed 0.9% - 15
Loans and loan
notes Floating 5.4% 86 months 4,580
Loans and loan
notes Fixed 5.00% 24 months 1,250
Balance of Non-interest
assets bearing - 3,346
9,989
14. Financial Instruments (continued)
Fair value hierarchy
Fair values have been measured at the end of the reporting period as
follows:-
As at 31
March Level 1 Level 2 Level 3
2014 'Quoted prices' 'Observable inputs' 'Unobservable inputs' Total
At fair
value
through
profit
and loss
(GBP'000) - - 8,598 8,598
As at 31
March Level 1 Level 2 Level 3
2013 'Quoted prices' 'Observable inputs' 'Unobservable inputs' Total
At fair
value
through
profit
and loss
(GBP'000) - - 8,940 8,940
Financial assets 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 - Unadjusted quoted prices in active markets for identical assets
('quoted prices');
-- Level 2 - Inputs (other than quoted prices in active markets for
identical assets) that are directly or indirectly observable for the
asset ('observable inputs'); or
-- Level 3 - Inputs that are not based on observable market data
('unobservable inputs').
The Level 3 investments have been valued in line with the Company's
accounting policies and IPEVC guidelines. Further details are provided
in the significant investments section on pages 6 to 10 of the annual
report.
Reconciliation of fair value for level 3 financial instruments held at
the year end:
Unquoted shares Loan notes Total
GBP'000 GBP'000 GBP'000
Movements in the income statement:
Balance as at 1 January 2012 - - -
Unrealised losses in the income
statement (210) - (210)
Purchases at cost 3,320 5,830 9,150
Balance as at 31 March 2013 3,110 5,830 8,940
Repayments of loans and loan notes - (342) (342)
Balance as at 31 March 2014 3,110 5,488 8,598
15. Capital management
The Company's objectives when managing capital are to safeguard the
Company's ability to continue as a going concern and to 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 is and 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, return capital to
shareholders, issue new shares, or sell assets if so required 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 the liabilities is not directly related to
managing the return to shareholders. There has been no change in this
approach from the previous period.
16. Contingencies, Guarantees and Financial Commitments
There were no commitments, contingencies or guarantees of the Company at
the year end (2013: nil).
17. Controlling Party
In the opinion of the Directors there is no immediate or ultimate
controlling party.
Enquiries
Shore Capital 020 7408 4090
Graham Shore
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 High Income VCT PLC via Globenewswire
HUG#1845232
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