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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Puma Vct 10 Plc | LSE:PUMX | London | Ordinary Share | GB00BFG3QX28 | 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% | 39.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMPUMX
RNS Number : 0797J
Puma VCT 10 PLC
30 November 2018
Puma VCT 10 plc
Interim Report
For the period ended 31 August 2018
Officers and Professional Advisers
Directors Auditor David Vaughan (Chairman) RSM UK Audit LLP Peter L R Hewitt Chartered Accountants Graham Shore 25 Farringdon Street London EC4A 4AB Secretary Eliot Kaye Sponsors and Solicitors Howard Kennedy Registered Number No 1 London Bridge 08714913 London SE1 9BG Registered Office Bankers Bond Street House The Royal Bank of Scotland plc 14 Clifford Street London City Office London W1S 4JU PO Box 412 62-63 Threadneedle Street London EC2R 8LA Investment Manager Puma Investment Management Limited Bond Street House 14 Clifford Street London W1S 4JU Registrar VCT Tax Advisor SLC Registrars PricewaterhouseCoopers LLP 42- 50 Hersham Road 1 Embankment Place Walton-on-Thames London WC2N 6RH Surrey KT12 1RZ Administrator Custodian PI Administration Services Limited Pershing Securities Limited Bond Street House 1 Canada Square 14 Clifford Street London London W1S 4JU E14 5AL
Chairman's Statement
Highlights
-- Fund substantially invested in a diverse range of high quality businesses and projects.
-- 18p per share of dividends paid since inception, equivalent to a 8.6% per annum tax-free running yield on net investment.
-- NAV of 97.20p at the half year to (adding back dividends paid to date).
Chairman's Statement
Introduction
As your Company enters into the final year of its expected five-year life, I am pleased to report that your funds are substantially deployed in both qualifying and non-qualifying investments. It continues to meet its minimum qualifying investment percentage of 70 per cent and remains on track to meet the new minimum qualifying investment percentage of 80 per cent by the end of the current tax year. We believe our portfolio is well positioned to deliver returns in line with expectations to shareholders within the Company's remaining time horizon.
Investments
Qualifying Investments
Having met its minimum qualifying investment percentage and in light of its remaining planned life, the Company has not made any new qualifying investments during the period. We report as follows on its current portfolio of qualifying investments:
Growing Fingers - Children's Nursery
As previously reported, the Company has invested GBP1.4 million (as part of a GBP2.8 million investment alongside other Puma VCTs) in Growing Fingers Limited. The investment is funding 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 venture headed by a management team with many years' operational experience in nurseries and healthcare facilities. The Company benefits from the first charge security over the Wendover site and the Growing Fingers business.
Welcome Health - Chain of Pharmacies
The Company had previously invested GBP2.5 million (as part of a GBP5 million investment alongside other Puma VCTs) in Welcome Health Limited. Welcome Health owns and operates a series of mature pharmacies across the North East of England. The entrepreneur behind Welcome Health has experience in this region and is focused on providing pharmaceutical services to a currently underserviced and relatively deprived market.
Mini Rainbows - Children's Nursery
As reported in the Company's previous annual report, Mini Rainbows Limited (in which the Company invested GBP2.5 million as part of a GBP5 million investment alongside other Puma VCTs) acquired a mature children's day nursery in Murrayfield, an affluent part of Edinburgh. We are pleased to report that the Edinburgh nursery is performing well. During the period, Mini Rainbows acquired a second nursery in Shawlands, Glasgow, founded in 1991 and with capacity for up to 65 children. The Mini Rainbows' experienced management team are in various stages of discussions to acquire further nurseries in the coming months.
Warm Hearth - Pubs with Microbreweries
In late 2015, the Company invested GBP2.5 million (as part of a GBP5 million investment alongside other Puma VCTs) in Warm Hearth Limited, a pub business seeking to capitalise on the strong growth trends within the craft beer sub-market. As previously reported, Warm Hearth entered into a franchise agreement with Brewhouse & Kitchen Limited ("B&K"), a strong and fast-growing national branded operator, offering craft micro-brewing activities within each of its pub units as a point of focus. Warm Hearth currently owns and operates two substantial freehold pub assets in Chester and Wilmslow. Performance of these units has been below our expectations. Management are focused on improving performance at both pubs, as well as looking at planning options on both sites which have the prospect of delivering value.
Saville Services - Construction projects
The Company's investment of GBP2.1 million (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 are pleased to report that the care home project completed successfully during the year and is now generating attractive returns for Saville Services which will benefit the Company when its investment is repaid in due course. The team at Saville Services are currently working on the construction of a 9 unit supported living scheme in Bishop Auckland.
Materials Recycling Facility, Oxfordshire
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 invested a total of GBP3.45m (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 GBP510,000 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 protect the Company's investment. The administrator has made substantial progress in recovering the Company's investment: the site was sold and a settlement was reached with Opes' insurers. As a result, a large part of the original capital invested has been recovered. The directors have now reversed GBP188,000 of the original GBP510,000 impairment to reflect the current position. The administrator continues to pursue several other avenues to recover the balance of the Company's investment.
Sunlight Education Nucleus - Special Educational Needs Schools
In November 2017, the Company made a GBP1 million qualifying investment (as part of a GBP4.7 million investment alongside other Puma VCTs) in Sunlight Education Nucleus Limited, a company seeking to develop, own and operate a series of special education needs schools across the United Kingdom. The team at Sunlight are progressing with plans for their first school in the West Midlands.
Non-Qualifying Investments
Citrus Group
As previously reported, a series of loans had been advanced to various entities within the Citrus Group, which at the start of the period stood at GBP1 million (through an affiliate, Victoria Lending Limited). These loans, together with loans from other vehicles managed and advised by your Investment Manager, formed 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. We are pleased to report that, during the period, the loans were repaid in full giving a good rate of return.
Mixed Residential-Commercial Development, Bloomsbury
During the year, a GBP1.2 million loan (as part of a total facility of GBP17.97 million, increased from GBP17.5 million) was advanced (through an affiliate, Lothian Lending Limited) to 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 11 apartments, 2 houses and 11,800 square feet of B1 commercial space. The loan is secured with a first charge over the site and the development is progressing well.
Construction of Airport Hotel, Edinburgh
The GBP1.6 million loan advanced to Ability Hotels (Edinburgh) Limited (as part of an overall facility of GBP16 million, through affiliate Latimer Lending Limited) to fund the development of a new 240-room Hampton by Hilton hotel at Edinburgh Airport continues to perform. The hotel is now expected to open before the end of the year, well ahead of schedule, at which time it will be the newest and nearest hotel to the airport terminal building. The Ability Group is an experienced developer and operator of hotels and the loan is secured with a first charge over the site.
Housing Development Project, Aberdeen
As previously reported, a GBP474,000 loan (as part of a GBP2.9 million facility from other vehicles managed and advised by your Investment Manager) had been extended (through an affiliate, Valencia Lending Limited) to Churchill Homes (Culter House) Limited. Churchill Homes is a longstanding Aberdeenshire developer and the facility provided funding towards the construction of a private detached housing development in one of Aberdeen's finest residential suburbs. We are pleased to report that, during the period, the loan was repaid in full giving a good rate of return.
Care Home for the Elderly, Egham
As previously reported, a loan of GBP575,000 had been advanced (through an affiliate, Meadow Lending Limited) to Windsar Care (UK) LLP to fund the development and initial trading of a 68-bed purpose-built care home in Egham, Windsor. This loan, together with loans from other vehicles managed and advised by the Investment Manager totalling GBP7.2 million, are secured with a first charge over the site. As previously reported, construction has been behind schedule and over budget as a result of the non-performance of the original building contractor. We are pleased to report that, following a substantial injection of further equity by the developer and careful management by the construction manager, Alyth Trading, a new contractor has been appointed and the scheme is now on track to reach practical completion by January 2019. We understand that the borrowers are seeking to re-finance the scheme to enable them to repay us on completion of the construction project.
Care Home for the Elderly, Formby
The GBP800,000 loan to New Care (Sefton) Limited in connection with the development and initial trading of a 75-bed purpose-built care home in Formby, Merseyside, continues to perform in line with expectations. The New Care Group is an experienced developer and operator of care homes. The loan is part of an overall facility of GBP7.6 million, through an affiliate, Lavender Lending Limited, and is secured with a first charge over the site.
Apartment Development Project, Worthing
As previously reported, a loan of GBP500,000 was advanced (through an affiliate, Valencia Lending Limited) to Columbia House Development Limited. This loan, together with loans from other vehicles managed and advised by the Investment Manager totalling GBP5 million, facilitated the acquisition of an office block in Worthing, for which the borrower is seeking planning permission for a conversion into 144 flats. The loan is secured with a first charge over the property at an appropriate loan to current value (the site already has planning permission for a 102 flat scheme). The enhanced planning consent is taking the borrower longer than anticipated to obtain; accordingly, and in light of the borrower otherwise servicing the loans, the loans were recently extended to January 2019.
Supported Living, Wigan
During the period, loans of GBP2.1 million were advanced (through affiliates, Valencia Lending Limited and Lothian Lending Limited) to Enabling Homes Investments Ltd, an experienced developer of supported living homes. The loans are to fund the development of a 22-apartment supported scheme in Wigan and are secured with a first charge over the site. Construction is progressing well and practical completion is targeted for Q2 2019. Enabling Homes Investments Ltd has agreed terms to sell the scheme immediately following practical completion which should generate sufficient proceeds to repay the loans.
To further manage liquidity, the Company had exposure to a GBP199,000 bond issued by Commonwealth Bank of Australia and earning 1.1%, which matured in October 2018.
Results and Net Asset Value ('NAV')
The NAV per share at the period end was 79.20p, 97.20p after adding back dividends paid to date. The Company made a small loss of GBP96,000 in the period (representing a 0.34p per share post-tax loss). This arose partly as a result of reduced income from remunerative non-qualifying investments which as repaid were replaced with less income-focused qualifying investments. It also reflected a change in the Company's revenue recognition policy whereby income expected from dividends from investee companies is now only recognised on remittance to the VCT.
Dividends
As reported in the Company's annual report, the Company declared a dividend of 6p per ordinary share in February 2018. Reflecting this recent pay-out, your Board is not proposing a further dividend at this interim stage but still intends to pay out a dividend of 6p per ordinary share each year as envisaged in the Company's prospectus.
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 also assists the Investment Manager in establishing the status of investments as qualifying holdings and will continue to assist the Investment Manager in monitoring rule compliance.
Principal risks and uncertainties
Although the economy in the UK continues to improve, it remains fragile, especially in light of the ongoing Brexit negotiations. The consequences of this for the Company's investment portfolio constitute the principal risk and uncertainty for the Company in the second half of the year.
Life of fund
The Company was established with the intention that it would have a limited life. The Prospectus stated that after five years the Board would propose a resolution to shareholders for an orderly liquidation of the Company's assets. Your Board currently intends to propose this resolution within a year of this report.
Outlook
The Company's net assets are substantially deployed in a diverse range of high quality businesses and projects which should offer the prospect of further growth in net assets per share. Whilst there may be some further changes in the composition of the portfolio to ensure that the Company continues to satisfy its HMRC qualifying targets, the Board expects to concentrate in the future primarily on the monitoring of our existing investments and considering the options for exits.
David Vaughan
Chairman
30 November 2018
Income Statement (unaudited)
For the period ended 31 August 2018
Six months ended Period ended Year ended 31 August 2018 31 August 2017 28 February 2018 Note Revenue Capital Total Revenue Capital Total Revenue Capital Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 (Loss)/gain on investments - (1) (1) - (51) (51) - 190 190 Income 228 - 228 487 - 487 644 - 644 228 (1) 227 487 (51) 436 644 190 834 -------- -------- -------- -------- -------- -------- -------- Investment management fees 4 (55) (165) (220) (59) (175) (234) (117) (351) (468) Other expenses (118) - (118) (122) - (122) (263) - (263) (173) (165) (338) (181) (175) (356) (380) (351) (731) -------- -------- -------- -------- -------- -------- -------- Profit/(loss) on ordinary activities before taxation 55 (166) (111) 306 (226) 81 264 (161) 103 Tax on profit on ordinary activities (8) 24 16 (61) 47 (14) (50) 66 16 Profit/(loss) and total comprehensive income for the year 47 (142) (95) 245 (179) 67 214 (95) 119 ======== ======== ======== ======== ======== ======== ======== ======== ======== Basic and diluted Return/(loss) per Ordinary Share (pence) 2 0.17p (0.51p) (0.34p) 0.88p (0.64p) 0.24p 0.77p (0.34p) 0.43p ======== ======== ======== ======== ======== ======== ======== ======== ========
The revenue column of this statement is the profit and loss of the Company. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.
Balance Sheet (unaudited)
As at 31 August 2018
As at As at As at 31 August 31 August 28 February Note 2018 2017 2018 GBP'000 GBP'000 GBP'000 Fixed Assets Investments 6 19,729 22,360 20,313 ----------- ----------- ------------- Current Assets Debtors 1,879 1,463 1,725 Cash 392 99 90 ----------- ----------- ------------- 2,271 1,562 1,815 Creditors - amounts falling due within one year (115) (338) (149) Net Current Assets 2,156 1,224 1,666 ----------- ----------- ------------- Total Assets less Current Liabilities 21,885 23,584 21,979 Net Assets 21,885 23,584 21,979 =========== =========== ============= Capital and Reserves Called up share capital 17 17 17 Share premium account 15,624 15,624 15,624 Capital reserve - realised (1,307) (1,061) (1,166) Capital reserve - unrealised (322) (510) (321) Revenue reserve 7,873 9,514 7,825 Equity Shareholders' Funds 21,885 23,584 21,979 =========== =========== ============= Net Asset Value per Ordinary Share 3 79.20p 85.35p 79.54p =========== =========== ============= Diluted Net Asset Value per Ordinary Share 3 79.20p 85.35p 79.54p =========== =========== =============
Cash Flow Statement (unaudited)
For the period ended 31 August 2018
Six months ended Period ended Year ended 31 August 31 August 28 February 2018 2017 2018 GBP'000 GBP'000 GBP'000 (Loss)/profit after tax (95) 67 119 Taxation (16) 14 (16) Loss/(gains) on investments 1 50 (190) Increase in debtors (154) (376) (576) Increase/(decrease) in creditors (17) 121 (4) Tax paid - - (95) Net cash (used in)/generated from operating activities (281) (124) (762) ----------- ------------- ------------- Cash flow from investing activities Purchase of investments - (420) (2,067) Proceeds from sale of investments 583 400 4,334 Net cash generated from/(used in) investing activities 583 (20) 2,267 ----------- ------------- ------------- Cash flow from financing activities Dividends paid - - (1,658) Net cash used in financing activities - - (1,658) ----------- ------------- ------------- Net increase/(decrease) in cash and cash equivalents 302 (144) (153) Cash and cash equivalents at the beginning of the period 90 243 243 Cash and cash equivalents at the end of the period 392 99 90 =========== ============= =============
Reconciliation of Movements in Shareholders' Funds (unaudited)
For the period ended 31 August 2018
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 Balance as at 1 March 2017 17 15,624 (933) (459) 9,268 23,517 Realised gain from prior period 51 (51) - Total recognised (losses)/gains for the period - - (179) - 246 67 Balance as at 31 August 2017 17 15,624 (1,061) (510) 9,514 23,584 Realised gain in the period - - (1) 1 - - Total recognised (losses)/gains for the period - - (104) 188 (32) 52 Dividends paid - - - - (1,657) (1,657) Balance as at 28 February 2018 17 15,624 (1,166) (321) 7,825 21,979 Total recognised (losses)/gains for the period - - (141) (1) 47 (95) Balance as at 31 August 2018 17 15,624 (1,307) (322) 7,873 21,885 ========== ========= ============ ============== ========= ========
Notes to the Interim Report
For the period ended 31 August 2018
1. Accounting Policies
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of fixed asset investments, and in accordance with applicable Accounting Standards and with the Statement of Recommended Practice, "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP") and in accordance with the Financial Reporting Standard 102 ("FRS102").
2. Return per Ordinary Share
The total loss per share of 0.34p is based on the loss for the period of GBP95,000 and the weighted average number of shares in issue as at 31 August 2018 of 27,633,222.
3. Net asset value per share As at As at As at 31 August 31 August 28 February 2018 2017 2018 Net assets 21,885,000 23,584,000 21,979,000 Shares in issue 27,633,222 27,633,222 27,633,222 Net asset value per share Basic 79.20p 85.35p 79.54p Diluted 79.20p 85.35p 79.54p 4. Management fees
The Company pays the Investment Manager an annual management fee of 2% of the Company's net assets. The fee is payable quarterly in arrears. The annual management fee is allocated 75% to capital and 25% to revenue.
5. Financial information provided
The financial information for the period ended 31 August 2018 has not been audited and does not comprise full financial statements within the meaning of Section 423 of the Companies Act 2006. The interim financial statements have been prepared on the same basis as will be used to prepare the annual financial statements.
Notes to the Interim Report continued
For the period ended 31 August 2018
6. Investment portfolio summary Valuation Valuation HMRC basis Valuation Cost Gain/(loss) HMRC basis as a % of GBP'000 GBP'000 GBP'000 GBP'000 Net Assets As at 31 August 2018 Qualifying Investment - Unquoted Opes Industries Limited 2,628 2,950 (322) 2,950 14% Warm Hearth Limited 2,500 2,500 - 2,500 12% Mini Rainbows Limited 2,500 2,500 - 2,500 12% Welcome Health Limited 2,500 2,500 - 2,500 12% Saville Services Limited 2,139 2,139 - 3,739 16% Growing Fingers Limited 1,400 1,400 - 1,400 6% Sunlight Education Nucleus Limited 1,000 1,000 - 1,000 5% Total Qualifying Investments(1) 14,667 14,989 (322) 16,589 77% ---------- -------- ------------ ------------ ------------ Non-Qualifying Investments Valencia Lending Limited 901 901 - 901 4%
Lothian Lending Limited 1,266 1,266 - 1,266 6% Latimer Lending Limited 822 822 - 822 4% Lavender Lending Limited 800 800 - 800 4% Victoria Lending Limited 500 500 - 500 2% Meadow Lending Limited 575 575 - 575 2% Total Non-Qualifying Investments 4,864 4,864 - 4,864 22% ---------- -------- ------------ ------------ ------------ Liquidity Management Commonwealth Bank of Australia bond 198 199 (1) 199 1% Total Liquidity Management Investments 198 199 (1) 199 1% ---------- -------- ------------ ------------ ------------ Total Investments(1) 19,729 20,052 (323) 21,652 100% Balance of Portfolio 2,156 2,156 - - 0% Net Assets 21,885 22,208 (323) 21,652 100% ---------- -------- ------------ ------------ ------------
Of the investments held at 31 August 2018, all are incorporated in England and Wales with the exception of the liquidity management holdings.
(1) The HMRC valuation differs from FRS102, because FRS102 requires changes to reflect current market valuations whereas HMRC requires such changes when further securities of the same company are bought or sold by the VCT. It also omits the items shown as 'Balance of Portfolio'.
Copies of this Interim Statement will be made available on the website:
http://www.pumainvestments.co.uk/pages/view/investors-information-vcts
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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November 30, 2018 06:50 ET (11:50 GMT)
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