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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Puma Vct 12 Plc | LSE:PU12 | London | Ordinary Share | GB00BYSJJR68 | ORD GBP0.0005 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 24.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMPU12
RNS Number : 3365J
Puma VCT 12 PLC
28 June 2017
HIGHLIGHTS
-- Fund raising of just under GBP31m completed, the largest raising by a planned exit VCT in the 2015/2016 tax year.
-- Substantial proportion of funds raised now deployed in high quality projects generating an attractive return.
-- Strong pipeline of potential deals at the Company's first anniversary.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present to you as Chairman the first annual report for Puma VCT 12 plc for the period to 28 February 2017, which was the Company's first period of investment following the completion of the fund raising last summer.
The Company launched its Prospectus in October 2015 and the offer closed in June 2016, raising just under GBP31 million, representing more than half of the entire funds raised by planned exit VCTs in the 2015/2016 tax year. The Investment Manager, Puma Investments, now has GBP121 million of VCT money under management in this and other Puma VCTs and a well-established, experienced VCT team to manage the Company's deal flow.
Investments
During the period, the Company participated in a series of investments, including first charge secured loans and subscription for investment grade liquid securities, for a total of just under GBP19 million. Details of these investments can be found in the Investment Manager's report below.
The Investment Manager has continued to review a number of suitable investment opportunities, generated by a strong pipeline, and expects, in particular, to make further qualifying investments during the coming year to ensure the Company is on course to meet its HMRC qualifying target.
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 establishing the status of potential investments as qualifying holdings in the future.
Results
The Company reported a loss of GBP370,000 for the period, a loss of 1.84p per ordinary share (calculated on the weighted average number of shares). This is a result of the running costs of the Company exceeding its income during this initial period whilst the Company assembles suitable investments. The Net Asset Value per ordinary share ("NAV") at 28 February 2017 was 95.38p. In line with the Company's dividend policy as stated in the Prospectus, no dividend was declared in respect of this first accounting period.
Outlook
We are pleased, at the Company's first anniversary, that the Investment Manager has invested a substantial proportion of funds raised. Although there is increased demand from smaller companies seeking finance, the availability of bank finance continues to be restricted. Moreover the terms on which target companies can raise finance from banks remain problematic. This continues to drive the demand for our offering and should also allow us to continue to secure favourable terms when we offer finance. There are many suitable companies which are well-managed, in good market positions, and which can offer security and need our finance. We therefore believe the Company is strongly positioned to select a portfolio which can deliver attractive returns to shareholders in the medium to long term.
Ray Pierce
Chairman
27 June 2017
INVESTMENT MANAGER'S REPORT
Introduction
As set out in the Chairman's Statement, availability of finance continues to be restricted for small and medium sized businesses (SMEs). As a consequence, the Company has been able to make a number of attractive investments, including its first qualifying investment, to smaller companies on a secured basis. We have also continued to see a strong pipeline of potential investments, particularly opportunities to make further qualifying investments to ensure the Company meets its HMRC qualifying target.
Investments
Qualifying Investments
During the period, the Company made a GBP294,000 qualifying investment (as part of a GBP2.8 million investment alongside other Puma VCTs) in Growing Fingers Limited, a further GBP126,000 was invested after the year end. The investment will fund the construction and launch of a new purpose-built 108 place nursery school in Wendover, Buckinghamshire, an affluent commuter town with direct links to London. Growing Fingers is a new company headed by a management team with many years' operational experience of nurseries and healthcare facilities. The Company benefits from first charge security over the Wendover site and the Growing Fingers business and is expected to produce an attractive return to the Company.
Non-Qualifying Investments
As previously reported, we have adopted a strategy for the non-qualifying portfolio of secured loans (and other similar instruments) offering a good yield with hopefully limited downside risk. To that end, the Company had invested just under GBP22 million in a series of lending businesses with this strategy. The lending businesses have invested just under GBP14m of this into a series of first charge secured loans and subscription for investment grade liquid securities at 28 February 2017. Details of the loans that these lending businesses have made are set out below.
During the period, GBP2.3 million was advanced (through an affiliate, Sloane Lending Limited), secured against a portfolio of freehold assets and the associated ground rents, as part of a package from other vehicles managed and advised by the Investment Manager totalling GBP4.3 million. The portfolio of ground rents consisted of 1,645 individual units in total across 17 freeholds, with all leases in excess of 90 years. The sponsor of the transaction was Grangeford Asset Management, a manager of some 7,000 individual ground rents across 130 properties in the United Kingdom valued at GBP50 million. We are pleased to report that, following the period end, the loan was repaid in full giving a good rate of return.
In July 2016, a loan of GBP1.5 million, together with loans from other vehicles managed and advised by the Investment Manager totalling GBP2.5 million, was advanced (through an affiliate, Sloane Lending Limited) to Pall Mall Investments 2016 Limited. The loan was used to acquire Rovex Business Park, an industrial business park in Birmingham. We anticipate the asset will increase in value with capital expenditure from Pall Mall Investments. This should increase rental income and, as such, provide more than adequate headroom on the serviceability of interest.
During the period, a series of loans totalling GBP1.7 million were advanced (through affiliates Valencia Lending Limited and Tottenham Lending Limited) to various entities within the Citrus Group. These loans, together with loans from other vehicles managed and advised by the Investment Manager, form part of a series of revolving credit facilities to provide working capital to the Citrus PX business. Citrus PX operates a property part exchange service facilitating the rapid purchase of properties for developers and homeowners. The facility provides a series of loans to Citrus PX, with the benefit of a first charge over a geographically diversified portfolio of residential properties on conservative terms. Following the period end, the Company's exposure was reduced to GBP1 million following repayment of GBP700,000 of principal (together with all accrued interest).
As indicated in the Company's interim report, a loan of GBP1.03 million was advanced (through an affiliate, Piccadilly Lending Limited) to Zinbake Limited to facilitate the acquisition of the assets of a pharmacy business located on Portobello Road in Notting Hill, London. The borrower is an experienced operator and has carried out an extensive refurbishment program at the new unit which has a good mix of NHS and over-the-counter income. The loan is also secured with a first charge on the new pharmacy business and a first charge over the borrower's existing pharmacy located in south west London.
During the period, a GBP800,000 facility (as part of a total facility of GBP5 million) was completed (through an affiliate, Tottenham Lending Limited) with an entity within the Ironbridge Group. The facility provides the senior 70% slice of "stretched senior" bridging loans on non-owner-occupied properties in London and the South East with Ironbridge funding the subordinated 30% slice. Ironbridge operate a bridge lending business and have successfully deployed over GBP50m of customer loans to date. Loans are being advanced from 6 to 24 months with the senior slice at a conservative loan-to-value ratio.
In September 2016, a GBP608,000 loan (as part of an overall facility of GBP7.4 million) was agreed (through an affiliate, Victoria Lending Limited) with New Care (Chester) Limited to fund the development and initial trading of a 77-bed purpose-built care home in Chester. The New Care Group is an experienced developer and operator of care homes. The loan is secured with a first charge over the site and is expected to generate an attractive return. Construction has commenced on site and is progressing well.
In November 2016, a GBP1.8 million loan ((together with loans from other vehicles managed and advised by the Investment Manager totalling GBP4.3 million) was agreed (through an affiliate, Marble Lending Limited) with Empire TBR Limited to fund the construction of a mixed residential and commercial development near Tower Bridge, London. The location is well suited to the target market, with good transport links and local amenities, and the developer has successfully completed several similar redevelopments in central London. The loan is secured with a first charge over the site and is expected to generate an attractive return.
In January 2017, a GBP3.9 million loan (as part of a total facility of GBP17.5 million) was agreed (through affiliates Victoria Lending Limited, Tottenham Lending Limited and Marble Lending Limited) with Cudworth Limited to fund the construction of a mixed residential and commercial development in Bloomsbury, London, close to the British Museum and 600m from King's Cross station. The development includes 8 flats, 2 houses and 11,800 square feet of B1 commercial space. The loan is secured with a first charge over the site.
To manage liquidity, the Company invested GBP1.6 million in a floating rate note issued by Royal Bank of Canada, GBP1.2 million in a floating rate note issued by Commonwealth Bank of Australia and GBP2 million in a short term bond issued by J Sainsbury plc, that was sold following the period end. It is intended that these other positions will be liquidated in due course as the Company makes qualifying investments.
Investment Strategy
We are pleased, at the Company's first anniversary, to have invested a substantial proportion of funds raised. Demand from smaller companies seeking finance continues whilst the availability of bank finance remains restricted. Moreover the terms on which target companies can raise finance from banks remain problematic. This continues to drive the demand for our offering and should also allow us to continue to secure favourable terms when we offer finance. There are many suitable companies which are well-managed, in good market positions, and which can offer security and need our finance. We therefore believe the Company is strongly positioned to select a portfolio which can deliver attractive returns to shareholders in the medium to long term.
The Investment Management team continues to meet with companies which are potentially suitable for investment. In accordance with our mandate we have maintained a cautious approach and are performing due diligence work on several potential investments. Over the course of the next year, the Company will seek opportunities to continue to build the qualifying portfolio. We have a strong deal-flow and are meeting many potential investee companies with several interesting opportunities to make further qualifying investments.
Puma Investment Management Limited
27 June 2017
Investment Portfolio Summary
As at 28 February 2017
Hot Features
Premium
Valuation
as a % of
Valuation Cost Gain/(loss) Net Assets
GBP'000 GBP'000 GBP'000
Qualifying Investments
Growing Fingers Limited 294 294 - 1%
Total Qualifying Investments 294 294 - 1%
---------- -------- ------------ ------------
Non-Qualifying Investments^
Piccadilly Lending Limited 2,400 2,400 - 8%
Bayswater Lending Limited 1,900 1,900 - 6%
Victoria Lending Limited 3,800 3,800 - 13%
Tottenham Lending Limited 3,800 3,800 - 13%
Sloane Lending Limited 3,800 3,800 - 13%
Marble Lending Limited 3,800 3,800 - 13%
Valencia Lending Limited 2,441 2,441 - 8%
Total Non-Qualifying
investments 21,941 21,941 - 74%
---------- -------- ------------ ------------
Liquidity Management
Royal Bank of Canada
Bond* 1,611 1,610 1 6%
J Sainsbury Plc Bond* 2,062 2,045 17 7%
Commonwealth Bank of
Australia Bond* 1,221 1,213 8 4%
Total Liquidity Management
investments 4,894 4,868 26 17%
---------- -------- ------------ ------------
Total Investments 27,129 27,103 26 92%
Balance of Portfolio 2,353 2,353 - 8%
Net Assets 29,482 29,456 26 100%
---------- -------- ------------ ------------
Of the investments held at 28 February 2017, all are incorporated in England and Wales.
^ Non-qualifying investments comprises monies advanced to affiliated lending businesses of which just under GBP14m has been invested by those affiliates as at 28 February 2017.
* Quoted investment listed on the LSE.
Income Statement
For the period ended 28 February 2017
Period from 2 September
2015 to 28 February 2017
Note Revenue Capital Total
GBP'000 GBP'000 GBP'000
Gain on investments 8 (b) - 26 26
Income 2 477 - 477
477 26 503
--------- --------- --------
Investment management
fees 3 (144) (432) (576)
Other expenses 4 (297) - (297)
(441) (432) (873)
--------- --------- --------
Profit/(loss) before
taxation 36 (406) (370)
Taxation 5 (7) 7 -
Profit/(loss) and total
comprehensive income
for the period 29 (399) (370)
========= ========= ========
Basic and diluted
Return/(loss) per Ordinary
Share (pence) 6 0.14p (1.98p) (1.84p)
========= ========= ========
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
As at
28 February
Note 2017
GBP'000
Fixed Assets
Investments 8 27,129
-------------
Current Assets
Debtors 9 458
Cash at bank and in hand 2,060
-------------
2,518
Creditors - amounts falling
due within one year 10 (165)
Net Current Assets 2,353
-------------
Net Assets 29,482
=============
Capital and Reserves
Called up share capital 12 19
Share premium account 29,833
Capital reserve - realised (425)
Capital reserve - unrealised 26
Revenue reserve 29
Total Equity 29,482
=============
Net Asset Value per Ordinary
Share 13 95.38p
=============
The financial statements on pages 25 to 40 were approved and authorised for issue by the Board of Directors on 27 June 2017 and were signed on their behalf by:
Ray Pierce
Chairman
27 June 2017
Statement of Cash Flows
For the period ended 28 February 2017
Period from
2 September
2015 to 28
February
2017
GBP'000
Loss after tax (370)
Gain on investments (26)
Increase in debtors (458)
Increase in creditors 165
Net cash used in operating activities (689)
-------------
Cash flow from investing activities
Purchase of investments (27,103)
Net cash used in investing activities (27,103)
-------------
Cash flow from financing activities
Proceeds received from issue of ordinary
share capital 30,909
Expense paid for issue of share capital (1,057)
Proceeds received from issue of redeemable
preference shares 13
Redemption of redeemable preference
shares (13)
Net cash generated from financing
activities 29,852
-------------
Net increase in cash and cash equivalents 2,060
Cash and cash equivalents at the beginning
of the period -
Cash and cash equivalents at the end
of the period 2,060
=============
Statement of Changes in Equity
For the period ended 28 February 2017
Called Share Capital Capital
up share premium reserve reserve Revenue
capital account - realised - unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Shares issues in the
period 19 30,890 - - - 30,909
Expenses of share
issues - (1,057) - - - (1,057)
Total comprehensive
income for the period - - (425) 26 29 (370)
Balance as at 28 February
2017 19 29,833 (425) 26 29 29,482
========== ========= ============ ============== ========= ========
Distributable reserves comprise: Capital reserve-realised, Capital reserve-unrealised (excluding gains on unquoted investments) and the Revenue reserve. At the period end, distributable revenue reserves were GBP29,000.
The Capital reserve-realised includes gains/losses that have been realised in the period 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.
Share premium represents premium on shares issued less issue costs.
The revenue reserve represents the cumulative revenue earned less cumulative distributions.
1. Accounting Policies
Accounting convention
Puma VCT 12 plc ("the Company") was incorporated on 2 September 2015 and is registered and domiciled in England and Wales. The Company's registered number is 09758309. 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 (including early-adoption of the 2015 changes) and 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 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.
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 12.
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, Puma Investment Management 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 incentive has been satisfied through the issue of 7,727,297 Ordinary Shares (as set out in Note 11 of the financial statements) to the Investment Manager and members of the investment management team being 20% of the total issued Ordinary Share capital of 38,636,487. Under the terms of the incentive arrangement, all rights to dividends will be waived until the GBP1 per Ordinary Share performance target has been met. 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 period. 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.
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.
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 period 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
Period from 2 September
2015 to 28 February
2017
GBP'000
Income from investments
Loan stock interest 387
Bond yields 81
468
Other income
Bank deposit income 9
477
========================
3. Investment Management Fees
Period from 2 September
2015 to 28 February
2017
GBP'000
Puma Investments fees 576
576
========================
Puma Investment Management Limited ("Puma Investments") 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 Puma Investments will be paid an annual fee of 2% 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% of funds raised. Total costs this period were 2.9% of the funds raised.
In addition to the investment manager fees disclosed above, during the period two payments were made to Puma Investment Management Limited, totalling GBP1,056,000, in relation to share issue costs. The fees were to cover the costs of launching the funds.
4. Other expenses
Period from 2 September
2015 to 28 February
2017
GBP'000
PI Administration Services
Limited 101
LSE admission fee 54
Directors' Remuneration 58
Social security costs 2
Auditor's remuneration
for statutory audit 23
Legal and professional
fees 26
Other expenses 33
297
========================
PI 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 period is disclosed in the Directors' Remuneration Report on page 17. The Company had no employees (other than Directors) during the period. The average number of non-executive Directors during the period was 3. The non-executive Directors are considered to be the Key Management Personnel of the Company with total remuneration for the period of GBP60,000 including social security costs.
The Auditor's remuneration of GBP19,500 has been grossed up in the table above to be inclusive of VAT.
5. Taxation
Period from 2 September 2015
to 28 February 2017
GBP'000
UK corporation tax charged
to revenue reserve 7
UK corporation tax credited
to capital reserve (7)
UK corporation tax charge
for the period -
=============================
Factors affecting tax charge for the period
Loss before taxation (370)
=============================
Tax charge calculated
on loss before taxation
at 20% (74)
Tax on capital items not
taxable (5)
Tax losses carried forward 79
-
=============================
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 or deferred tax is recognised on capital gains or losses.
No provision for deferred tax has been made in the current accounting period. 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
Period from 1 September 2015 to
28 February 2017
Revenue Capital Total
GBP'000 GBP'000 GBP'000
Total comprehensive
income for the period 29 (399) (370)
Weighted average number
of shares in issue for
the period 27,854,587 27,854,587 27,854,587
Less: management incentive
shares (see note 11) (7,727,297) (7,727,297) (7,727,297)
Weighted average number
of shares for purposes
of return/(loss) per
share calculations 20,127,290 20,127,290 20,127,290
============ ============ ============
Return/(loss) per share 0.14p (1.98)p (1.84)p
7. Dividends
The Directors do not propose a final dividend in relation to the period ended 28 February 2017.
8. Investments
Qualifying Non qualifying
(a) Movements in investments investments investments Total
GBP'000 GBP'000 GBP'000
Purchases at cost 294 26,809 27,103
Net unrealised - 26 26
Valuation at 28 February
2017 294 26,835 27,129
============= =============== ========
Book cost at 28 February
2017 294 26,809 27,103
Net unrealised gains
at 28 February 2017 - 26 26
Valuation at 28 February
2017 294 26,835 27,129
============= =============== ========
(b) Gains and losses on investments
The gains and losses on investments for the period shown in the Income Statement is analysed as follows:
Period from
2 September
2015 to 28
February
2017
GBP'000
Unrealised gains in
period 26
26
=============
(c) Quoted and unquoted investments
Market value
as at 28
February
2017
GBP'000
Quoted investments 4,894
Unquoted investments 22,235
27,129
=============
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 28 February
2017
GBP'000
Other debtors 8
Prepayments and accrued
income 450
458
==================
10. Creditors - amounts falling due within one year
As at 28 February
2017
GBP'000
Accruals 165
165
==================
11. Management Performance Incentive Arrangement
On 3 September 2015, the Company entered into an Agreement with the Investment Manager and members of the investment management team (together "the Management Team") such that the Management Team will be entitled in aggregate to share in 20 per cent of the aggregate excess on any amounts realised by the Company in excess of GBP1 per Ordinary Share, the Performance Target.
This incentive is effective through the issue of ordinary shares in the Company, such that the Management Team hold 7,727,297 ordinary shares being 20% of the issued share capital of 38,636,487.
The Management Team will waive all rights to dividends until a return of GBP1 per share (whether capital or income) has been paid to the other shareholders.
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.
12. Called Up Share Capital
As at 28 February
2017
GBP'000
38,636,487 ordinary shares of 0.05p each 19
==================
On incorporation on 2 September 2015 the company issued two Ordinary shares of 0.05p each.
On 3 September 2015 50,000 Redeemable Preference shares of GBP1 each were issued for total consideration of GBP12,500 to Puma Investment Management Limited, one quarter paid up, so as to enable the Company to obtain a certificate under Section 761 of the Companies Act 2006.
Also, on 3 September 2015, the Management Team (as explained in note 11) were allotted 11,250,000 Ordinary Shares of 0.05p each for total consideration of GBP5,625.
Between 12 January 2016 and 31 May 2016 30,909,188 Ordinary shares of 0.05p each were issued at GBP1 per share pursuant to the offers for subscription to the public dated 14 October 2015.
On 23 August 2016 the 50,000 Redeemable Preference shares of GBP1 each were redeemed at a price of GBP0.25 per share out of the proceeds of the offers and upon redemption the shares were cancelled. On 13 June 2016 the Management Team transferred 3,522,703 Ordinary shares to the Company for consideration of GBP1,761 and these shares were subsequently cancelled.
As explained in note 11, the Management Team now hold 7,727,297 Ordinary shares representing 20% of the total issued share capital.
13. Net Asset Value per Ordinary Share
As at
28 February 2017
Net assets 29,482,000
------------------
Number of shares in issue 38,636,487
Less: management incentive
shares (see note 11) (7,727,297)
------------------
Number of shares in issue
for purposes of Net
Asset Value per share calculation 30,909,190
------------------
Net asset value per share
Basic 95.38p
Diluted 95.38p
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:
As at 28 February
2017
GBP'000
Financial assets at fair value through
profit or loss 27,129
Financial assets that are debt instruments
measured at amortised cost 458
Financial liabilities measured at amortised
cost (165)
27,422
==================
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 period.
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 28 February 2017
GBP'000
Investments in loans, loan
notes and bonds 26,835
Cash at bank and in hand 2,060
Interest, dividends and
other receivables 458
29,353
=======================
The cash held by the Company at the period end is held in one U.K. bank. Bankruptcy or insolvency of the 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 bank and should it deteriorate significantly the Investment Manager will, on instruction of the Board, move the cash holdings to another bank.
14. Financial Instruments (continued)
Credit risk (continued)
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 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.
18% of the Company's investments are quoted investments and 82% are unquoted investments.
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 period end, the Company had no borrowings.
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 and 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.
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. 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 Weighted
average average
interest period
Rate status rate until maturity Total
GBP'000
Cash at bank - Metro Floating 0.10% - 2,060
Loans and loan notes Floating 7.75% 52 months 3,200
Floating rate liquidity
bonds Floating 1.22% 20 months 2,832
Loans, loan notes and liquidity
bonds Fixed 7.20% 55 months 13,124
Balance of assets Non-interest bearing - 8,431
29,647
========
Foreign currency risk
The reporting currency of the Company is Sterling. The Company has not held any non-Sterling investments during the period.
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.
Fair values have been measured at the end of the reporting period as follows:-
As at 28
February
2017
GBP'000
Level 1
Investments listed on LSE 4,894
Level 3
Unquoted investments 22,235
27,129
==========
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 7 to 10.
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 must have 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.
16. Contingencies, Guarantees and Financial Commitments
There were no commitments, contingencies or guarantees of the Company at the period-end.
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 period ended 28 February 2017, but has been extracted from the statutory financial statements for the period ended 28 February 2017 which were approved by the Board of Directors on 27 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 emphasis of matter nor statements under s 498(2) and (3) of the Companies Act 2006.
These are the first period of accounts.
Copies of the full annual report and financial statements for the period 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 information is provided by RNS
The company news service from the London Stock Exchange
END
FR PGUCUQUPMGAM
(END) Dow Jones Newswires
June 28, 2017 02:00 ET (06:00 GMT)
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