Chairman Statement
Highlights
·
Seven new portfolio companies added in the year
taking the total number of investments to 17
·
£9.3 million raised in new equity and a further
£1.6m raised post year-end
·
5p dividend paid during the year in relation to
TicTrac disposal proceeds
Introduction
I am pleased to present the report
and financial statements for Puma Alpha VCT plc ("the Company") for
the year to 29 February 2024.
Overview
The Company's Net Asset Value
("NAV") per share at the end of the year stood at 108.35p (2023:
130.53p) a decrease of 22.2p, 17.2p after the 5p dividend paid
during the year, and 17.0% from the same time in the previous
year.
The Company's loss for the year was
£4.1m (2023: loss £0.4m).
Further to statements made by the
Company in the prospectus published back in December 2023, Puma
Alpha VCT is proposing to launch a dividend reinvestment scheme
("DRIS") under which shareholders will be able to reinvest any cash
dividends received into further shares. Details of the
proposed DRIS and the terms and conditions of the DRIS are set out
at the end of the notice of Annual General Meeting.
Fundraising
We are happy to report that at the
year end the Company had raised £9.3m, and since the year end a
further £1.6m has been raised. This gives the Company additional
deployable funds to continue building a robust portfolio and will
help spread fixed costs over a wider shareholder
base.
Investment activity and
portfolio
2023-24 has been a very active year
for the Company with seven new qualifying investments having been
made in the period, alongside other Puma managed funds. These
investments were: £0.1m into Bikmo, a specialist cycle and
e-mobility insurer; £0.2m into Iris an advanced audio technology
company; £0.7m into Lucky Saint, the UK's number 1 dedicated
alcohol-free beer brand; £0.5m into Pockit, a digital account
provider; £0.4m into Thingtrax, a SaaS-based manufacturing
performance platform; £1.0m into Transreport, a fast-growing
accessibility technology company and £0.2m into TravelLocal, global
travel marketplace.
In addition, follow-on investments
were made: £0.1m into Ostmodern; £0.3m into Dymag; £0.3m into
Connectr; £0.9m into CameraMatics and £0.7m into Ron Dorff. This
brings the overall number of qualifying investments to
17.
Within the portfolio, the Company's
holdings in Deazy, HR Duo, Le Col and MUSO have generated positive
valuation movements. Six of the Company's qualifying holdings were
marked down in value.
Muso saw a modest increase of £0.3m
in the year. Growth picked up in 2024 following a slowdown in 2023
as a result of the actors and writers' strikes. 2024 has seen new
client wins and a strong pipeline.
Dymag has seen a decrease of £1.7m
in the year as the after-market for car wheels slowed and car
manufacturers became more cautious despite ongoing investment in
product and sales capacity. Puma is working closely with management
recognising the challenges it faces.
Ostmodern has had a decrease of
£0.8m in the year after challenging trading conditions in a soft
macro environment. Puma has worked closely with management on its
strategy and sales process as management look to reignite revenue
growth on the agency side, to help drive profitability.
Connectr was written down by £0.7m
in the year due to a challenging trading environment where many
employers are cutting back on recruitment and associated spend on
software impacting new business growth and
renewal rates alike. Puma has supported the Company through a
restructure which has had a positive impact on cashflow and
profitability.
At the year-end, the Company has
over £5.4m ready to deploy. The Investment Manager continues to see
several hundred investment opportunities a year, and your Board is
optimistic that the rapid deployment the Company has enjoyed
to-date will continue.
NAV
The Company's NAV stood at 108.35p
(2023: 130.53p) at the year end of 29 February 2024. This
impairment is largely driven by decreases in investment valuations
in the year, the payment of Alpha's first dividend, coupled with
management fees and other expenses incurred in the year.
VCT qualifying status
Shoosmiths LLP 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. Shoosmiths and
other specialist advisors will continue to assist the Investment
Manager in establishing the status of potential investments as
qualifying holdings. Shoosmiths will continue to monitor rule
compliance and maintaining the qualifying status of the Company's
holdings in the future.
Outlook
The global economic picture is mixed
and has yet to return to a period of sustained stability. The wars
in Ukraine and the Middle East are undermining sentiment and
growing geopolitical tensions are creating an environment of
considerable uncertainty. Whilst headline inflation is easing in
some countries, including the UK where it is close to the Bank of
England's 2 per cent target, the economic shock of a higher base
level of prices has some way to run.
Interest rates seem to be at or near
their peak in the US and Europe and the focus is increasingly on
when central banks will start cutting rates. With the recent
positive news about UK inflation expectation is building that the
Bank of England will start to cut interest rates this coming
summer. However, these reductions are likely to be small and it is
doubtful whether we will see material rate cuts in the near future
or the very low interest rates seen before the pandemic. This,
alongside prolonged economic stagnation and little sign of an
upturn in investment, poses a real risk to growth. A lack of
investment in capital and skills is also leading to low
productivity. Whilst there is increasing policy emphasis on the
need to respond to this and encourage investment and innovation in
the private sector, question marks remain over the degree to which
this can be sustained in the face of record government debt levels,
not to mention the fast-approaching general election. All of this
points to uncertainty prevailing for the time
being.
Nevertheless, challenging conditions
always present opportunities for agile businesses focused on
resilient sectors. This VCT is in a position to adapt quickly to
changes in the economic environment when developing its portfolio.
Notwithstanding ongoing uncertainty, the UK continues to benefit
from an active and well-established SME market in which the Manager
has a strong reputation as a provider of capital. This applies
especially to well-managed, later-stage SMEs where bank lending,
despite some policy support, continues to remain challenging for
even the best of these businesses. This, alongside the
institutional support the Manager is able to offer, continues to
make for a compelling equity offer from the Company. The ongoing
uncertainty places added emphasis on the Company's ability to focus
efforts on sectors that are well placed to navigate the current
headwinds. We are confident that we have the team to do this and
assemble a portfolio capable of delivering attractive returns to
shareholders.
Egmont Kock
Chairman
14 June 2024
Investment Manager's
Report
The period has clearly been one of
significant strain for smaller companies in the UK, as indeed it
has been for companies of all stages of growth plus households and
consumers. The challenges facing those building a business are
substantial from inflation to geopolitical conflict, supply shock,
labour shortages, strikes, energy price spikes, the list could go
on.
Given these challenges and potential
roadblocks, it's easy to overlook just how much things have
improved over the past 12-18 months. Inflation was still stubbornly
in double figures a little over a year ago1, but is now
forecast to drop below 2% in the coming months (before rising again
slightly)2, meaning interest rates are potentially
expected to fall during the summer months. On the back of this, the
long-running CFO survey conducted by Deloitte reported in April
that sentiment among UK CFOs had risen for the third consecutive
quarter to a point well above its long-term average. Consumer
confidence has also improved, the latest GFK Consumer Confidence
Barometer has illustrated that consumer optimism when it comes to
their personal finances has improved significantly over the past
year.
Yet, despite these promising trends,
many companies are experiencing stretched balance sheets with the
majority of cost management options already exhausted. This
is especially true in sectors that have been most exposed to supply
chain, labour or demand shocks. Companies in these sectors have
been weakened, and any further shocks to the economy could be
difficult to absorb.
We have seen this pattern reflected
in the trading data of our well diversified portfolio of investee
companies. 2023 was extremely challenging, with particular weakness
in Q3 and a soft end to the year, 2024 has opened with considerably
more momentum. Encouragingly, we are starting to see steady
like-for-like growth across a number of sectors.
We consider potential investment
opportunities against a broader valuation landscape, and from the
above we can see that the period covered in these accounts was a
challenging time to be selling companies, but an advantageous time
to be investing in them. As such, we are excited to have added 7
additional investee companies in the period, increasing the size of
the portfolio by 54%. This is particularly pleasing as
overall VCT investment activity during 2023 was significantly down,
by approximately 30% according to the AIC.
New additions to the portfolio
include Bikmo, a specialist cycle and e-mobility insurer which
protects over 75,000 riders in the UK, Lucky Saint, the UK's number
one dedicated alcohol-free beer brand and Iris, a cutting-edge
audio technology company with a mission to enable the world to
listen well.
Naturally given the economic
environment, it has been appropriate to reduce the carrying values
of some of the positions in the portfolio. New investments made in
the period have been held at cost (as is the norm under the IPEV
guidelines covering VCTs). This masks the strong momentum that many
of our new investments exhibited when we made our original
investment, but the growth from this cohort should be visible in
the future.
We remain very active in our
approach and engagement with the companies in our portfolio. We
continue to host networking events and workshops through our Senior
Managers Club, directed at CEOs, CFOs and other heads of department
to enable them to share ideas and insight with each other. For
example, the most recent event focused on cyber security and
efficiently scaling tech teams.
This, together with the support and
oversight we provide the companies in our portfolio, means our
proposition continues to prove compelling in attracting high
quality companies.
[1] Source:
Consumer price inflation from the Office for National
Statistics
2 Bank of
England, March 2024
Qualifying investments
In this section, we look at the
following investments within our portfolio in more
detail.
Bikmo
Bikmo is a specialist cycle and
e-mobility insurer which protects over 75,000 riders in the UK,
Ireland, Germany and Austria. Capitalising on growth in the cycle
market, Bikmo offers a range of insurance products to protect every
type of cyclist - from road cyclists and triathletes to daily
commuters.
The business is B-Corp certified, it
is focusing on expanding into other European markets and supporting
multinational partners, including British Cycling, Cyclescheme and
Brompton.
CameraMatics
CameraMatics is an award-winning
solution for Fleet Risk Management. Continuing its mission to
create safer roads for all, it released one of the most advanced
AI-powered collision avoidance system on the market. The system
promises radically to improve driver reaction times and blind spot
visibility by using deep learning algorithms, continually scanning
for pedestrians, hidden road users and cyclists.
The company has attended several
trade shows across America and the UK to bring its offerings to new
audiences, with a continued focus on US expansion. It has invested
heavily into its sales and marketing team to aid this and recently
announced a new collaboration with Bosch Logistics Operating
System. This partnership will align CameraMatics with Bosch's
mission to unite all stakeholders in the logistics and
transportation industry.
IRIS
IRIS is an audio specialist which
has developed an AI-powered software which removes distracting
background noise from calls, integrating seamlessly with existing
platforms. IRIS achieved a top 20 placing in the Startups 100 Index
2024.
Le Col
Recently named best performance
cycling brand by GQ Magazine, Le Col is continuing its expansion
into the US and is now available online at DICK'S Sporting Goods
(which has over 800 stores nationwide). In addition, Le Col has
partnered with US fabrics manufacturer Polartec to launch a new
plant-based performance fabric, 'Power Shield', which is made with
50% fewer emissions than similar fabrics.
Lucky Saint
Lucky Saint is the UK's number one
dedicated alcohol-free beer brand across grocery and on-trade. The
investment from Puma funds will support the brand's next phase of
growth both in the UK and globally.
The B-Corp certified company, voted
'Marketing Society Brand of the Year 2023', has recently expanded
its offering by launching the Superior Hazy IPA, which joins the
award-winning Alcohol-Free Superior Unfiltered Lager as its first
new beer since launch in 2018. It is stocked in over 7,000 pubs,
bars and restaurants and sold in major supermarkets including
Waitrose, Sainsbury's, Tesco and Marks & Spencer.
Pockit
Pockit is a digital account provider
offering pre-paid spending cards and current accounts. The fintech
company has focused on growing the senior team and has appointed a
new COO. The next phase of Pockit's growth strategy aims to expand
its customer base and introduce new services.
Ron Dorff
Ron Dorff, the premium athleisure
brand, has grown sales by 42% in the two years to December 2023 and
is present across more than 50 countries including the US, the UK,
Germany and France. It launched a crowdfunding campaign, which
raised over the target, giving the Ron Dorff community an
opportunity to be part of its growth. The funds will be used to
sustain global online growth, in particular in the US, building
brand awareness on and offline. It is due to open a flagship store
in Paris towards the end of 2024.
Thingtrax
Thingtrax is an IoT enabled software
provider using AI and machine learning to optimise performance in
manufacturing facilities.
Its latest offering, Retail Pack
Label Validation powered by AI, enables manufacturers early
detection of label discrepancies. The pairing of camera vision with
AI examines each label for specific text, dates, imagery, and
positioning, with an instant alert when a label fails to meet
product specifications, allowing mistakes to be addressed
efficiently.
Transreport
Transreport's flagship technology,
the Passenger Assistance app, supports anyone who needs assistance
whilst travelling, facilitating quicker and easier use of public
transport.
Since its launch in May 2021, the
Passenger Assistance technology, nominated for an Apple Design
Award in the Inclusivity Category, has been downloaded over 100,000
times, facilitating millions of passenger journeys to date.
Transreport has initially focussed on UK rail, where it works with
every UK rail operating company.
TravelLocal
TravelLocal is a leading online
platform for tailor-made holidays that connects clients directly
with local experts in their destinations. Since the business was
founded in 2016, TravelLocal has helped more than 70,000 customers
from 100 countries globally create the perfect trip. TravelLocal is
growing rapidly, many travellers demand genuinely authentic, more
sustainable holidays and prioritise spending on experiences, with
annual bookings over USD 50m and growing over 100% year on
year.
The new funding will support the
company's international growth and has already added Australia to
its growing roster of over 90 international destinations. In
addition, the company looks to invest in its managed marketplace
platform and further brand marketing.
Liquidity management investments
An active approach is taken to
manage any cash held, prior to investing in VCT qualifying
companies.
The rules for VCTs limit the income
which can be received from bank deposits, making them an
unattractive way of holding funds waiting to be invested. As a
result, during a period where funds remain not yet deployed in
qualifying investments in smaller companies, to earn a return on
these funds a VCT needs to hold investments rather than cash
deposits.
Rising interest rates have made
investing in fixed-income securities more attractive. The Company
has therefore implemented a liquidity management strategy focused
on short term bonds held through collective investment
schemes.
Puma
Investment Management Limited
14 June 2024
Investment portfolio summary
As
at 29 February 2024
Of the investments held at 29
February 2024, all are incorporated in England and Wales, except
for MySafeDrive Limited and HR Duo Limited who are incorporated in
Ireland.
|
Valuation
|
Cost
|
Gain/(loss)
|
Valuation as a % of Net
Assets
|
Multiple
|
|
£'000
|
£'000
|
£'000
|
|
|
Qualifying Investments
|
|
|
|
|
|
ABW Group Limited
('Ostmodern')
|
263
|
1,008
|
(745)
|
1%
|
0.26x
|
Bikmo Limited
|
115
|
115
|
-
|
0%
|
1.00x
|
Deazy Limited
|
1,085
|
1,000
|
85
|
4%
|
1.08x
|
Dymag Group Limited
|
288
|
1,957
|
(1,669)
|
1%
|
0.15x
|
Everpress Limited
|
2,986
|
2,100
|
886
|
11%
|
1.42x
|
Forde Resolution Company Limited ('HR
Duo')
|
456
|
347
|
109
|
2%
|
1.32x
|
Iris Audio Technologies
Limited
|
223
|
223
|
-
|
1%
|
1.00x
|
Le Col Holdings Limited
|
2,803
|
2,599
|
204
|
10%
|
1.08x
|
Muso Limited
|
821
|
500
|
321
|
3%
|
1.64x
|
MyKindaCrowd Limited
('Connectr')
|
1,164
|
1,949
|
(785)
|
4%
|
0.60x
|
MySafeDrive Limited
('CameraMatics')
|
6,008
|
2,514
|
3,494
|
22%
|
2.39x
|
Not Another Beer Co Limited ('Lucky
Saint')
|
711
|
711
|
-
|
3%
|
1.00x
|
NQOCD Consulting Limited ('Ron
Dorff')
|
3,128
|
2,545
|
583
|
11%
|
1.23x
|
Pockit Limited
|
530
|
530
|
-
|
2%
|
1.00x
|
Thingtrax Limited
|
422
|
422
|
-
|
2%
|
1.00x
|
Transreport Limited
|
1,017
|
1,017
|
-
|
4%
|
1.00x
|
TravelLocal Limited
|
234
|
234
|
-
|
1%
|
1.00x
|
|
|
|
|
|
|
Total Qualifying Investments
|
22,254
|
19,771
|
2,483
|
80%
|
1.13x
|
|
|
|
|
|
|
Total Investments
|
22,254
|
19,771
|
2,483
|
80%
|
|
Balance of Portfolio
|
5,412
|
5,412
|
-
|
20%
|
|
|
|
|
|
|
|
Net
Assets
|
27,666
|
25,183
|
2,483
|
100%
|
|
Strategic Report
The Directors present their
Strategic Report of the Company for the year ended 29 February
2024. The purpose of the report is to inform members of the Company
and help them assess how the Directors have performed their duty to
promote the success of the Company.
Principal activities and status
The Company was incorporated on 11
April 2019. The principal activity of the Company is the making of
investments in qualifying and non-qualifying holdings of shares or
securities. The Company is an investment company within the meaning
of Section 833 of the Companies Act 2006. The Company has been
granted approval by the Inland Revenue under Section 274 of the
Income Tax Act 2007 as a Venture Capital Trust. The Directors have
managed, and continue to manage, the Company's affairs in such a
manner as to comply with Section 274 of the Income Tax Act 2007.
The Company's ordinary shares of 0.01p each were listed on the
Official List of the UK Listing Authority on 5 June
2020.
Business model and strategy
The Company operates as a VCT to
enable its shareholders to benefit from tax reliefs available. The
Directors aim to maximise tax free distributions to shareholders by
way of dividends paid out of income received from investments and
capital gains received following successful realisations. The
Company's strategy is set out in the Investment Policy set out
below.
Investment policy
Puma Alpha VCT plc seeks to achieve
its overall investment objective (of proactively managing the
assets of the fund with an emphasis on realising gains in the
medium term) to maximise distributions from capital gains and
income generated from the Company's assets. It intends to do so
whilst maintaining its qualifying status as a VCT, by pursuing the
following Investment Policy:
The Company may invest in a mix of
qualifying and non-qualifying assets. The qualifying investments
may be quoted on AIM or a similar market or be unquoted companies.
The Company may invest in a diversified portfolio of growth
orientated qualifying companies which seek to raise new capital on
flotation or by way of a secondary issue. The Company will target
investments in unquoted companies with a strong and experienced
management team, a proposition that is commercially validated
through sales volume, a clear and comprehensive plan for growth,
and operating in a well-defined market niche with proven market
fit. The Company had to have in excess of 80% of its assets
invested in qualifying investments as defined for VCT purposes by
29 February 2024.
The portfolio of non-qualifying
investments will be managed with the intention of ensuring the
Company has sufficient liquidity to invest in qualifying
investments as and when opportunities arise. Subject to the Board
and Investment Manager's view from time to time of desirable asset
allocation, it may comprise quoted ordinary shares or securities on
a regulated market, collective investment schemes (including
UCITs), shares or units in an alternative investment fund, and cash
on short-term deposit.
A full text of the Company's
investment policy can be found within the Company's prospectus
at
www.pumainvestments.co.uk.
Principal risks and uncertainties
The Board have carried out a robust
assessment of the Company's emerging and principal risks, including
those that might threaten the Company's business model, future
performance, solvency or liquidity and reputation. The Board
receives regular reports from the Investment Manager and uses this
information along with their own knowledge and experience to
identify any emerging risks, so that appropriate procedures can be
put in place to manage or mitigate such risks.
The principal risks facing the
Company relate to its investment activities, specifically market
price risk, as well as interest rate risk, credit risk and
liquidity risk. An explanation of these risks and how they are
managed is contained in note 15 to the financial statements.
Additional risks faced by the Company are as follows:
Market Conditions
There is a risk that geo-political
and economic events, can have an impact on the prospects of certain
of the Company's investments. The Investment Manager mitigates the
risk by maintaining close contact with all investee companies as
well as by maintaining a diverse portfolio. Further details of the
investments are set out in the Investment Manager's
Report.
Investment Risk
Inappropriate stock selection
leading to underperformance in absolute and relative terms is a
risk which the Investment Manager and the Board mitigate by
reviewing performance throughout the year and formally at Board
meetings. There is also a regular review by the Board of the
investment mandate and long-term investment strategy and monitoring
of whether the Company should change its investment
strategy.
Regulatory Risk
The Company operates in a complex
regulatory environment and faces several related risks. A breach of
s274 of the Income Tax Act 2007 could result in the Company being
subject to capital gains on the sale of investments. A breach of
the VCT Regulations could result in the loss of VCT status and
consequent loss of tax relief currently available to shareholders.
Serious breach of other regulations, such as the UKLA Listing Rules
and the Companies Act 2006 could lead to suspension from the Stock
Exchange. The Board receives quarterly reports to monitor
compliance with regulations and engages external independent
advisers to undertake an independent VCT status monitoring
role.
In addition, to the principal risks
explained above, the principal uncertainty that may affect the
Company relate to material changes to the VCT regulations. The
Board will continue to monitor this and take appropriate action if
required.
Risk management
The Company's investment policy
allows for a large proportion of the Company's assets to be held in
unquoted investments. These investments are not publicly traded so
there is not a liquid market for them. Therefore, these investments
may be difficult to realise.
The Company manages its investment
risk within the restrictions of maintaining its qualifying VCT
status by using the following methods:
·
the active monitoring of its investments by the
Investment Manager and the Board;
·
seeking Board representation associated with each
investment, if possible;
·
seeking to hold larger investment stakes by
co-investing with other companies managed by the Investment
Manager, so as to gain more influence over the
investment;
·
ensuring a spread of investments is
achieved.
Business review and future developments
The Company's business review and
future developments are set out in the Chairman's Statement, the
Investment Manager's Report and Investment Portfolio
Summary.
Key
performance indicators
At each board meeting, the Directors
consider a number of performance measures to assess the Company's
success in meeting its objectives. The Board believes the Company's
key performance indicators are movement in Net Asset Value per
ordinary share and Total Return per ordinary share. The Board
considers that the Company has no non-financial key performance
indicators. In addition, the Board considers the Company's
compliance with the Venture Capital Trust Regulations to ensure
that it will maintain its VCT status. An analysis of the Company's
key performance indicators and the performance of the Company's
portfolio and specific investments is included in the Chairman's
Statement, the Investment Manager's Report and the Investment
Portfolio Summary.
Viability statement
The Directors have conducted a
robust assessment of the principal risks facing the Company
including those that would threaten its business model, future
performance, solvency or liquidity. This is summarised above. The
Directors have assessed the prospects of the Company for the
three-year period from the balance sheet date. This is a period for
which developments are considered to be reasonably
foreseeable.
This review included consideration
of compliance with VCT regulations, the Company's current financial
position and expected cash flows for the period and the current
economic outlook.
Based on this review, the Directors
have concluded that there is a reasonable expectation that the
Company has adequate cash resources to enable it to continue in
operation and meet its liabilities as they fall due over the
three-year period to 28 February 2027.
Section 172 statement - Duty to promote the success of the
company
Section 172 of the Companies Act
requires directors of a company to act in the way they consider, in
good faith, would be most likely to promote the success of the
company for the benefit of its members as a whole, and in doing so
have regard (amongst other matters) to:
a) the likely
consequences of any decision in the long term,
b) the
interests of the Company's employees,
c) the need to
foster the Company's business relationships with suppliers,
customers and others,
d) the impact
of the Company's operations on the community and the
environment,
e) the
desirability of the Company maintaining a reputation for high
standards of business conduct, and
f) the need to
act fairly between members of the Company.
This section of the Strategic Report
also sets out the disclosures required in respect of how the
Company engages with suppliers, customers and others in a business
relationship with the Company.
The Company does not have any
employees and delegates day to day operations to service providers.
The Board's principal concern is to focus on the needs and
priorities of its shareholders as well as considering the wider
community including the company's service providers and its
investee companies (as disclosed in the Investment Manager's
Report). The Board consider that the Company does not have
customers, only shareholders, and its suppliers are the service
providers.
The Annual Report sets out how the
Board promotes the success of the company for the benefit of its
shareholders. The Board is focused on high standards of business
conduct and recognises the need to act fairly between
shareholders.
The Board engages with the
investment manager at every board meeting to ensure that there is a
close and constructive working relationship and a good
understanding of the investee companies. The Company also engages
regularly with its other service providers. The Board ensures that
the interests of current and potential stakeholders, and the impact
of the Company's investments on the wider community and the
environment are considered when decisions are made.
Statement of Directors' responsibilities
The Directors are responsible for
preparing the Strategic Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors
to prepare financial statements for each financial year. Under that
law, the Directors have elected to prepare the financial statements
in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 102
"The Financial Reporting Standard applicable in the UK and Republic
of Ireland", and applicable law). Under company law, the Directors
must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that period.
In preparing those financial statements, the Directors are required
to:
a) select
suitable accounting policies and then apply them
consistently;
b) make
judgements and accounting estimates that are reasonable and
prudent;
c) state
whether applicable UK Accounting Standards (comprising FRS 102 "The
Financial Reporting Standard applicable in the UK and Republic of
Ireland", and applicable law). have been followed, subject to any
material departures disclosed and explained in the financial
statements;
d) prepare the
financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in
business.
The Directors are responsible for
keeping adequate accounting records that are sufficient to show and
explain the Company's transactions and disclose with reasonable
accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the
assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other
irregularities.
Directors' statement pursuant to the disclosure and
transparency rules
Each of the Directors, whose names
and functions are listed in the Directors' Biographies, confirms
that, to the best of each person's knowledge:
a) the
financial statements, prepared in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting
Standards, comprising FRS 102 "The Financial Reporting Standard
applicable in the UK and Republic of Ireland", and applicable law),
give a true and fair view of the assets, liabilities, financial
position and profit/(loss) of the Company; and
b) the
Chairman's Statement, Investment Manager's Report and the Strategic
Report in the Annual Report include a fair review of the
development and performance of the business and the position of the
Company together with a description of the principal risks and
uncertainties that it faces.
Directors' statement regarding Annual Report and
Accounts
The Directors consider that the
Annual Report and Accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company's position and performance,
business model and strategy.
Electronic publication
The Directors are responsible for
the maintenance and integrity of the corporate and financial
information included on the Company's website. The financial
statements are published on
www.pumainvestments.co.uk, a website
maintained by the Investment Manager.
Legislation in the United Kingdom
regulating the preparation and dissemination of the financial
statements may differ from legislation in other
jurisdictions.
On behalf of the Board.
Egmont Kock
Chairman
14 June 2024
Income Statement
For
the year ended 29 February 2024
|
|
Year ended 29 February
2024
|
Year ended 28 February
2023
|
|
Note
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
(Loss)/gain on fixed asset
investments
|
8
(b)
|
-
|
(3,458)
|
(3,458)
|
-
|
316
|
316
|
Gain on current asset
investments
|
|
-
|
75
|
75
|
-
|
-
|
-
|
Income
|
2
|
192
|
-
|
192
|
35
|
-
|
35
|
|
|
192
|
(3,383)
|
(3,191)
|
35
|
316
|
351
|
|
|
|
|
|
|
|
|
Investment management fees
|
3
|
(140)
|
(419)
|
(559)
|
(111)
|
(332)
|
(443)
|
Performance fee
|
3
|
-
|
-
|
-
|
-
|
-
|
-
|
Other expenses
|
4
|
(378)
|
-
|
(378)
|
(294)
|
-
|
(294)
|
|
|
(518)
|
(419)
|
(937)
|
(405)
|
(332)
|
(737)
|
|
|
|
|
|
|
|
|
Loss
before tax
|
|
(326)
|
(3,802)
|
(4,128)
|
(370)
|
(16)
|
(386)
|
Tax
|
5
|
-
|
-
|
-
|
-
|
-
|
-
|
Loss
after tax
|
|
(326)
|
(3,802)
|
(4,128)
|
(370)
|
(16)
|
(386)
|
Basic and diluted loss per Ordinary
Share (pence)
|
6
|
(1.44p)
|
(16.82p)
|
(18.26p)
|
(2.17p)
|
(0.09p)
|
(2.26p)
|
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 by the Association of Investment
Companies.
There were no items of other
comprehensive income during the year.
Balance Sheet
As
at 29 February 2024
|
Note
|
As at
29 February 2024
|
As at
28 February 2023
|
|
|
£'000
|
£'000
|
Fixed assets
|
|
|
|
Investments
|
8
|
22,254
|
20,180
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
Cash
|
|
1,817
|
3,911
|
Applications
cash1
|
|
826
|
425
|
Investments
|
10
|
3,534
|
-
|
Debtors
|
9
|
282
|
185
|
|
|
6,459
|
4,521
|
|
|
|
|
Current liabilities
|
11
|
(1,047)
|
(606)
|
|
|
|
|
Net
current assets
|
|
5,412
|
3,915
|
|
|
|
|
Net
assets
|
|
27,666
|
24,095
|
|
|
|
|
Capital and reserves
|
|
|
|
Called up share capital
|
13
|
255
|
185
|
Share premium account
|
|
10,816
|
1,938
|
Capital reserve - realised
|
|
(1,032)
|
(612)
|
Capital reserve -
unrealised
|
|
2,559
|
5,941
|
Revenue reserve
|
|
(1,234)
|
16,643
|
Special distributable
reserve
|
|
16,302
|
-
|
Total equity
|
|
27,666
|
24,095
|
|
|
|
|
Net
Asset Value per Ordinary Share
|
14
|
108.35p
|
130.53p
|
1 Funds raised from
investors since Alpha VCT opened for new investment which have not
been allotted as at year end.
The financial statements were
approved and authorised for issue by the Board of Directors on 14
June 2024 and were signed on their behalf by:
Egmont Kock
Chairman
Statement of Cash Flows
For
the year ended 29 February 2024
|
Note
|
Year ended 29 February
2024
|
Year ended 28 February
2023
|
|
|
£'000
|
£'000
|
Reconciliation of loss after tax
|
|
|
|
Loss before tax
|
|
(4,128)
|
(386)
|
Loss/(gain) on fixed asset
investments
|
|
3,458
|
(316)
|
Gain on current asset
investments
|
|
(75)
|
-
|
Increase in debtors
|
|
(97)
|
(61)
|
Increase/(decrease) in
creditors
|
|
40
|
(473)
|
Outflow from operating activities
|
|
(802)
|
(1,236)
|
|
|
|
|
Cash
flow from investing activities
|
|
|
|
Purchase of fixed asset
investments
|
|
(5,532)
|
(5,268)
|
Purchase of current asset
investments
|
|
(3,459)
|
-
|
Proceeds from disposal of
investments
|
|
-
|
1,157
|
Outflow from investing activities
|
|
(8,991)
|
(4,111)
|
|
|
|
|
Cash
flow from financing activities
|
|
|
|
Proceeds received from issue of
ordinary share capital
|
|
9,252
|
7,476
|
Expense paid for issue of share
capital
|
|
(304)
|
(198)
|
Movement in applications
account
|
|
401
|
425
|
Dividends paid
|
|
(1,249)
|
-
|
Inflow from financing activities
|
|
8,100
|
7,703
|
|
|
|
|
Net
(decrease)/increase in cash and cash equivalents
|
|
(1,693)
|
2,356
|
|
|
|
|
Cash and cash equivalents at the
beginning of the year
|
|
4,336
|
1,980
|
Cash
and cash equivalents at the end of the year
|
|
2,643
|
4,336
|
|
|
|
|
Cash
and cash equivalents comprise
|
|
|
|
Cash at bank
|
|
1,817
|
3,911
|
Applications cash
|
19
|
826
|
425
|
Cash
and cash equivalents at the end of the year
|
|
2,643
|
4,336
|
Statement of Changes in Equity
For the year ended 29 February
2024
|
Called up share
capital
|
Share premium
account
|
Capital reserve -
realised
|
Capital reserve -
unrealised
|
Revenue
reserve
|
Special distributable
reserve
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
Balance as at 1 March 2022
|
126
|
12,271
|
(836)
|
6,182
|
(540)
|
-
|
17,203
|
|
|
|
|
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
(Loss)/profit after tax
|
-
|
-
|
(327)
|
310
|
(369)
|
-
|
(386)
|
Total comprehensive income for the year
|
-
|
-
|
(327)
|
310
|
(369)
|
-
|
(386)
|
|
|
|
|
|
|
|
|
Transactions with owners, recognised directly in
equity
|
|
|
|
|
|
|
|
Issue of shares
|
59
|
7,417
|
-
|
-
|
-
|
-
|
7,476
|
Share issue cost
|
-
|
(198)
|
-
|
-
|
-
|
-
|
(198)
|
Cancellation of share
premium
|
-
|
(17,552)
|
-
|
-
|
17,552
|
-
|
-
|
Total transactions with owners, recognised directly in
equity
|
59
|
(10,333)
|
-
|
-
|
17,552
|
-
|
7,278
|
|
|
|
|
|
|
|
|
Other movements
|
|
|
|
|
|
|
|
Prior year fixed asset gains now
realised
|
-
|
-
|
551
|
(551)
|
-
|
-
|
-
|
Total other movements
|
-
|
-
|
551
|
(551)
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
Balance as at 28 February 2023
|
185
|
1,938
|
(612)
|
5,941
|
16,643
|
-
|
24,095
|
|
|
|
|
|
|
|
|
Comprehensive income for the year
|
|
|
|
|
|
|
|
Loss after tax
|
-
|
-
|
(420)
|
(3,382)
|
(326)
|
-
|
(4,128)
|
Total comprehensive income for the year
|
-
|
-
|
(420)
|
(3,382)
|
(326)
|
-
|
(4,128)
|
|
|
|
|
|
|
|
|
Transactions with owners, recognised directly in
equity
|
|
|
|
|
|
|
|
Issue of shares
|
70
|
9,182
|
-
|
-
|
-
|
-
|
9,252
|
Share issue cost
|
-
|
(304)
|
-
|
-
|
-
|
-
|
(304)
|
Dividends paid
|
-
|
-
|
-
|
-
|
-
|
(1,249)
|
(1,249)
|
Total transactions with owners, recognised directly in
equity
|
70
|
8,878
|
-
|
-
|
-
|
(1,249)
|
7,699
|
|
|
|
|
|
|
|
|
Other movements
|
|
|
|
|
|
|
|
Re-classification to Special
distributable reserve
|
-
|
-
|
-
|
-
|
(17,551)
|
17,551
|
-
|
Total other movements
|
-
|
-
|
-
|
-
|
(17,551)
|
17,551
|
-
|
|
|
|
|
|
|
|
|
Balance as at 29 February 2024
|
255
|
10,816
|
(1,032)
|
2,559
|
(1,234)
|
16,302
|
27,666
|
The capital reserve - realised will
include gains/losses that have been realised 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 account represents
premium on shares issued less issue costs.
The revenue reserve represents the
cumulative revenue earned less cumulative
expenses.
The special distributable reserve
represents reserves available for dividends and repurchases of
shares subject to additional VCT restrictions surrounding retention
of the share capital and share premium account.
1. Accounting policies
Accounting convention
Puma Alpha VCT plc ("the Company")
was incorporated in England on 11 April 2019 and is registered and
domiciled in England and Wales. The Company's registered number is
11939975. The registered office is Cassini House, 57 St James's
Street, London SW1A 1LD. The Company is a public limited company
(limited by shares) 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 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
October 2019 by the Association of Investment Companies ("the
SORP").
Monetary amounts in these financial
statements are rounded to the nearest whole £1,000, except where
otherwise indicated. The functional and presentational
currency of the Company is sterling.
Going concern
The Directors have considered a
period of 12 months from the date of this report for the purposes
of determining the Company's going concern status which has been
assessed in accordance with the guidance issued by the Financial
Reporting Council. The Directors have a reasonable expectation that
the Company has adequate resources to continue in operational
existence for the foreseeable future and believe that it is
appropriate to continue to apply the going concern basis in
preparing the financial statements. This is appropriate as the
Company's listed shares are held for liquidity purposes and will be
sold as and when required to ensure the Company has adequate cash
reserves to meet the Company's running
costs.
Cash and cash equivalents
Cash, for the purposes of the cash
flow statement, comprises cash at bank. Cash equivalents are
current asset investments which are disposable without curtailing
or disrupting the business and are either readily convertible into
known amounts of cash at or close to their carrying values.
Interest earned on cash balances is recorded as income.
Investments
All investments are measured at fair
value through profit or loss. They are all held as part of the
Company's investment portfolio and are managed in accordance with
the investment policy.
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 either the price of recent
investment or cost as the closest approximation to fair value,
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.
·
For investments that have been held for longer
than twelve months, methods of valuation such as earnings or
revenue-based multiples or net asset value may be used to arrive at
the fair value.
·
Investments in debt instruments are held at
amortised cost and accrue interest at the rate agreed within the
Investment Agreement. Interest is shown separately within
debtors.
·
Realised gains and losses on the disposal of
investments are first recognised in the profit and loss and
subsequently taken to realised capital reserves.
·
Unrealised gains and losses on the revaluation of
investments are first recognised in the profit and loss and
subsequently taken to unrealised capital reserves.
·
In preparation of the valuations of assets, the
Directors are required to make judgements and estimates that are
reasonable and incorporate their knowledge of the performance of
the portfolio companies. A key judgement made in applying the above
accounting policy relates to impairment of the investments.
Valuations are based upon financial information received from the
underlying investee companies. Together with the extensive
knowledge and expertise of the team who work closely with the
investee companies, a fair value is reached using appropriate
valuation techniques consistent with the IPEV guidelines. Any
deviations in expectations of performance of the underlying
companies are captured within the information received and as such,
reflected in the fair value.
·
Impairment of debt instruments is considered when
arriving at the valuations for equity shareholders. Loan notes are
deducted from the overall enterprise value before distributing in
line with the appropriate waterfall arrangements between equity
shareholders. If the enterprise value is greater than the debt
instrument, the loan note is not considered to be
impaired.
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
Performance fees are payable to the
Investment Manager, Puma Investment Management Limited, and members
of the investment management team at 20% of the amount by which the
Performance Value per Share at the end of an accounting period
exceeds the High Water Mark (being the higher of 120p and the
highest Performance Value per Share at the end of any previous
accounting period) and multiplied by the number of Shares in issue
at the end of the relevant period.
At each balance sheet date, the
Company accrues for any performance fee payable based on the
calculation set out above.
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 and performance fees 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 charged to
capital.
Tax
Corporation tax is applied to
profits chargeable to corporation tax, if any, at the applicable
rate for the year. The tax effect of different items of income/gain
and expenditure/loss is allocated between capital and revenue
return on the marginal basis as recommended by the
SORP.
Deferred tax is recognised in
respect of all timing differences that have originated but not
reversed at the balance sheet date, where transactions or events
that result in an obligation to pay more, or right to pay less, tax
in the future have occurred at the balance sheet date. This is
subject to deferred tax assets only being recognised if it is
considered more likely than not that there will be suitable taxable
profits from which the future reversal of the underlying timing
differences can be deducted. Timing differences are differences
arising between the Company's taxable profits and its results as
stated in the financial statements which are capable of reversal in
one or more subsequent periods. Deferred tax is measured on a
non-discounted basis at the tax rates that are expected to apply in
the periods in which timing differences are expected to reverse,
based on tax rates and laws enacted or substantively enacted at the
balance sheet date.
Reserves
Realised losses and gains on
investments, transaction costs, the capital element of the
investment management fee, performance 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 are also taken through the Income Statement and are
recognised in the capital reserve - unrealised. The special
distributable reserve includes cancelled share premium and
represents reserves available for dividends and repurchases of
shares subject to additional VCT restrictions surrounding retention
of the share capital and share premium account.
Debtors
Debtors include other debtors and
accrued income. These are initially recorded at the transaction
price and subsequently measured at amortised cost, being the
transaction price less any amounts settled.
Creditors
Creditors are initially measured at
the transaction price and subsequently measured at amortised cost,
being the transaction price less any amounts
settled.
Dividends
Dividends payable are recognised as
distributions in the financial statements when the VCT's liability
to make the payment has been established. This liability is
established on the record date, the date on which those
shareholders on the share register are entitled to the
dividend.
Key
accounting estimates and assumptions
The Company makes estimates and
assumptions concerning the future. The resulting accounting
estimates and assumptions will, by definition, seldom equal the
related actual results. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying
amounts of assets within the next financial year relate to the fair
value of unquoted investments. Unquoted investments are stated at
fair value at each measurement date in accordance with the
appropriate valuation techniques consistent with the IPEV
guidelines outlined in the Investments section in note 1 to the
financial statements. Valuations are based upon financial
information received from the underlying investee companies,
together with the extensive knowledge and expertise of the team who
work closely with the investee companies. Any deviations in
expectations of performance of the underlying companies are
captured within the information received and as such, reflected in
the fair value.
Further details of the unquoted
investments are disclosed in the Investment Manager's Report and
notes 8 and 15 to the financial statements.
2.
Income
|
Year ended 29 February
2024
|
Year ended 28 February
2023
|
|
£'000
|
£'000
|
Income from investments
|
|
|
Qualifying interest income
|
112
|
35
|
Qualifying dividend income
|
62
|
-
|
Non-qualifying interest
income
|
18
|
-
|
|
192
|
35
|
3. Investment management
fee
|
Year ended 29 February
2024
|
Year ended 28 February
2023
|
|
£'000
|
£'000
|
Investment management fee
|
559
|
443
|
|
559
|
443
|
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 no less than
twelve months' notice, given at any time by either party, on or
after the fifth anniversary. Puma Investments has been appointed as
the Investment Manager for four years. 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 commenced on 16
January 2020 (the date of the first share allotment). 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 Net Asset
Value. Total costs this year were 3.4% of the Net Asset Value
(2023: 3.1%).
In addition to the investment
manager fees disclosed above, during the year ended 29 February
2024, Puma Investments Management Limited charged fees totalling
£63,930 (2023: £66,060) in relation to share issue
costs.
4. Other expenses
|
Year ended 29 February
2024
|
Year ended 28 February
2023
|
|
£'000
|
£'000
|
Administration - Puma
Investments
|
98
|
77
|
Directors' remuneration
|
60
|
60
|
Social security costs
|
6
|
5
|
Auditor's remuneration for statutory
audit
|
64
|
61
|
Insurance
|
9
|
9
|
Legal and professional
fees
|
32
|
6
|
Other expenses
|
109
|
76
|
|
378
|
294
|
Puma Investments Management Limited
('Puma Investments') 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.
The Company has no employees other
than non-executive Directors (2023: none). The average number of
non-executive Directors during the year was 3 (2023:
3).
Auditor's fees of £59,400 (2023:
£52,800) have been grossed up in the table above to be inclusive of
VAT. No non-audit services were provided by the Company's auditor
in the year (2023: £nil).
Other expenses are made up of
several smaller items, the largest of these being fees paid for
registrar services.
5. Taxation
|
Year ended 29 February
2024
|
Year ended 28 February
2023
|
|
£'000
|
£'000
|
UK
corporation tax charge for the period
|
-
|
-
|
|
|
|
Factors affecting tax charge for the period
|
|
|
Loss before taxation
|
(4,128)
|
(386)
|
|
|
|
Tax charge calculated on loss before
taxation at the applicable rate of 25%/19%
|
(1,032)
|
(73)
|
Losses/(gains) on
investments
|
846
|
(60)
|
Tax losses carried forward
|
186
|
133
|
|
-
|
-
|
The corporation tax rate for the
current year is 25% (2023: 19%).
Capital returns are not taxable as
the Company is exempt from tax on realised capital gains whilst it
continues to comply with the VCT regulations, so no corporation tax
is recognised on capital gains or losses.
Due to the intention to continue to
comply with the VCT regulations, the Company has not provided for
deferred tax on any realised or unrealised capital gains and
losses. No deferred tax asset has been recognised in respect of the
tax losses carried forward due to the uncertainty as to
recovery.
6. Basic and diluted profit/(loss) per Ordinary
Share
Year ended 29 February 2024
|
Revenue
|
Capital
|
Total
|
|
£'000
|
£'000
|
£'000
|
Loss for the year
|
(326)
|
(3,802)
|
(4,128)
|
|
|
|
|
Weighted average number of
shares
|
22,607,660
|
22,607,660
|
22,607,660
|
|
|
|
|
Loss per share
|
(1.44p)
|
(16.82p)
|
(18.26p)
|
|
|
|
|
|
|
|
|
|
Year ended 28 February
2023
|
|
Revenue
|
Capital
|
Total
|
|
£'000
|
£'000
|
£'000
|
Loss for the year
|
(370)
|
(16)
|
(386)
|
|
|
|
|
Weighted average number of
shares
|
17,073,079
|
17,073,079
|
17,073,079
|
|
|
|
|
Loss per share
|
(2.17p)
|
(0.09p)
|
(2.26p)
|
This calculation is carried out in
accordance with IAS 33.
7. Dividends
During the year, a dividend of 5p
per Ordinary Share was paid from the Special Distributable Reserve
in relation to the TicTrac disposal proceeds received in the year
ended 28 February 2023. The dividend was paid on 10 November 2023
totalling £1.3 million.
8. Investments
(a)
Movements in investments
|
|
Qualifying
investments
|
Total
|
|
|
£'000
|
£'000
|
Book cost at 1 March 2023
|
|
14,239
|
14,239
|
Net unrealised gains at 1 March
2023
|
|
5,941
|
5,941
|
Valuation at 1 March 2023
|
|
20,180
|
20,180
|
|
|
|
|
Purchases at cost
|
|
5,532
|
5,532
|
Net unrealised loss
|
|
(3,458)
|
(3,458)
|
Valuation at 29 February 2024
|
|
22,254
|
22,254
|
|
|
|
|
Book cost at 29 February
2024
|
|
19,771
|
19,771
|
Unrealised gains at 29 February
2024
|
|
2,483
|
2,483
|
Valuation at 29 February 2024
|
|
22,254
|
22,254
|
|
|
|
|
(b)
Gains/(losses) on investments
|
|
|
|
|
Year ended 29 February
2024
|
Year ended 28 February
2023
|
|
|
£'000
|
£'000
|
|
|
|
|
Realised gains in the year
|
|
-
|
6
|
Unrealised (loss)/gains in
year
|
|
(3,458)
|
310
|
|
|
(3,458)
|
316
|
The Company's investments are
revalued each year, so until they are sold any unrealised gains or
losses are included in the fair value of the
investments.
All the Company's qualifying
investments as at 29 February 2024 and 28 February 2023 were
unquoted.
Further details of these investments
(including the unrealised gain in the year) are disclosed in the
Chairman's Statement, Investment Manager's Report and Investment
Portfolio Summary.
9. Debtors
|
As at 29 February
2024
|
As at 28 February
2023
|
|
£'000
|
£'000
|
|
|
|
Other debtors
|
5
|
(5)
|
Prepayments
|
163
|
150
|
Accrued income
|
114
|
40
|
|
282
|
185
|
Contained within prepayments are PR
fees totalling £116,000 made up of a number of small items. In
2023, the balance was largely attributable to admission fees to the
London Stock Exchange of £99,000.
10.
Current asset
investments
|
As at 29 February
2024
|
As at 28 February
2023
|
|
£'000
|
£'000
|
|
|
|
Current asset investments
|
3,534
|
-
|
|
3,534
|
-
|
Current asset investments comprise
short term bonds held through collective investment schemes and are
readily convertible into cash at the option of Puma Alpha
VCT.
11.
Creditors - amounts falling due
within one year
|
As at 29 February
2024
|
As at 28 February
2023
|
|
£'000
|
£'000
|
Accruals
|
221
|
181
|
Applications cash (see note 19)
|
826
|
425
|
|
1,047
|
606
|
Included within accruals is nil
(2023: £nil) in relation to performance fees
payable.
Applications cash is cash received
from investors to Puma Alpha VCT but not yet allotted.
12.
Management performance incentive
arrangement
On 5 July 2019, the Company entered
into an Agreement with the Investment Manager such that they will
be entitled to a Performance Incentive Fee ("PIF") payable in
relation to each accounting period, subject to the Performance
Value per Share being at least 120p at the end of the relevant
period. The amount of the PIF will be equal to 20% of the amount by
which the Performance Value per Share at the end of an accounting
period exceeds the High Water Mark (being the higher of 120p and
the highest Performance Value per Share at the end of any previous
accounting period) and multiplied by the number of Shares in issue
at the end of the relevant period.
Following shareholder approval at
the 2023 AGM, the methodology for calculating the PIF was amended
to make it fairer to shareholders by removing the impact of changes
to the share capital of the Company. The amount of the PIF
continues to be calculated in the manner described
above.
13.
Called up share
capital
|
As at 29 February
2024
|
As at
28 February 2023
|
As at 29 February
2024
|
As at 28 February
2023
|
|
|
|
£'000
|
£'000
|
|
|
|
|
|
Allotted, called up and fully
paid:
|
|
|
|
Ordinary shares of £0.01
each
|
25,534,137
|
18,460,066
|
255
|
185
|
Allotted, called up and partly
paid:
|
|
|
|
Redeemable preference shares of £1
each
|
-
|
-
|
-
|
-
|
|
|
|
|
|
During the year, 7,074,071 shares
were issued at an average price of 130.8p per share (2023:
5,855,244 shares were issued at a price of 130.4p per share). The
consideration received for these shares was £9.3 million (2023:
£7.6 million).
14.
Net Asset Value per Ordinary
Share
|
As at
29 February 2024
|
As at
28 February 2023
|
Net assets
|
27,666,338
|
24,095,381
|
|
|
|
Number of shares in issue for
purposes of Net
|
|
Asset Value per share
calculation
|
25,534,137
|
18,460,066
|
|
|
|
Net Asset Value per share
|
108.35p
|
130.53p
|
15.
Financial
instruments
The Company's financial instruments
comprise its investments, cash balances, debtors and certain
creditors. The fair value of all 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:
|
As at 29 February
2024
|
As at 28 February
2023
|
|
£'000
|
£'000
|
|
|
|
Financial assets at fair value
through profit or loss
|
23,509
|
19,731
|
Financial assets measured at
amortised cost
|
2,561
|
634
|
Financial liabilities measured at
amortised cost
|
(221)
|
(181)
|
|
25,849
|
20,184
|
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 Company's maximum exposure to credit risk is as
follows:
|
As at 29 February
2024
|
As at 28 February
2023
|
|
|
|
Investments in loan notes
|
2,279
|
449
|
Cash at bank and in hand
|
1,817
|
3,911
|
Applications cash (see note 11 and
19)
|
826
|
425
|
Current asset investments
|
3,534
|
-
|
Other receivables
|
282
|
185
|
|
8,738
|
4,970
|
Investments in loans and loan notes
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.
The cash held by the Company at the
year-end is held in RBS and the applications cash is held at
NatWest. Bankruptcy or insolvency of the banks 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.
Credit risk relating to current
asset investments is mitigated by investing in a portfolio of
investment instruments of high credit quality.
Credit risk associated with other
receivables are predominantly covered by the 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 and reports to the Board, which meets regularly in order to
consider investment strategy.
The Company's views on the economic
environment which also impacts market price risk are discussed in
the Investment Manager's Report. 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. 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% (2023: 100%) of the Company's
investments are unquoted investments held at fair value. 85% of the
portfolio (69% of net assets) is valued using the application of
earnings/revenue-based multiples. An increase in the multiple used
by 20% would increase the net asset value by 9.6% (£30.3m).
Conversely, a decrease in the multiple used by 20% would decrease
the net asset value by 9.2% (£25.1m). The 20% sensitivity used
provides the most meaningful impact of average multiple changes
across the portfolio.
The sensitivity analysis is based on
the year-end position of the investments and so may not be
reflective of the year as a whole.
Liquidity risk
Details of the Company's unquoted
investments are provided in the Investment Portfolio summary. By
their nature, unquoted investments may not be readily realisable
and the Board considers exit strategies for these investments
throughout the period for which they are held. As at the year end,
the Company had no borrowings.
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 Directors' Report and the Strategic Report. The Company's
overall liquidity risks are monitored on a quarterly basis by the
Board. The Company maintains access to sufficient cash
resources 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 5.25% at 29 February 2024 (2023:
4.0%).
Cash flow interest rate risk
The Company has exposure to interest
rate movements primarily through its cash deposits which track the
Bank of England base rate.
Interest rate risk profile of financial
assets
The following analysis sets out the
interest rate risk of the Company's financial assets as at 29
February 2024.
|
Rate status
|
Average interest
rate
|
Period until
maturity
|
Total
|
|
|
|
|
£'000
|
Cash at bank - RBS
|
Floating
|
0.00%
|
-
|
180
|
Cash at bank - RBS
|
Floating
|
1.70%
|
-
|
1637
|
Applications cash - NatWest (see note
11 and 19)
|
Floating
|
0.00%
|
-
|
826
|
Loan notes
|
Fixed
|
9.20%
|
52
months
|
2,279
|
Balance of assets
|
Non-interest bearing
|
-
|
23,791
|
|
|
|
|
28,713
|
The following analysis sets out the
interest rate risk of the Company's financial assets as at 28
February 2023.
|
Rate status
|
Average interest
rate
|
Period until
maturity
|
Total
|
|
|
|
|
£'000
|
Cash at bank - RBS
|
Floating
|
0.00%
|
-
|
3,911
|
Applications cash - NatWest (see note
11 and 19)
|
Floating
|
0.00%
|
-
|
425
|
Loans and loan notes
|
Fixed
|
10.00%
|
38
months
|
449
|
Balance of assets
|
Non-interest bearing
|
-
|
19,916
|
|
|
|
|
24,701
|
Foreign currency risk
The Company's functional and
presentation currency is Sterling. The Company has not held any
non-Sterling investments during the year.
Fair value hierarchy
Financial assets and liabilities
measured at fair value are disclosed using a fair value hierarchy
that reflects the significance of the inputs used in making the
fair value measurements, as follows:-
·
Level 1 - Fair value is measured using the
unadjusted quoted price in an active market for identical
assets.
·
Level 2 - Fair value is measured using inputs
other than quoted prices that are observable using market
data.
·
Level 3 - Fair value is measured using
unobservable inputs.
Fair values have been measured at
the end of the reporting period as follows:-
|
As at 29
February
2024
|
As at 28 February
2023
|
|
|
|
Level 1
|
|
|
Current asset investments
|
3,534
|
-
|
|
|
|
Level 3
|
|
|
Unquoted investments
|
22,254
|
20,180
|
|
25,788
|
20,180
|
The Level 1 investments have been
valued using the current quoted price.
The Level 3 investments have been
valued in line with the Company's accounting policies and IPEV
guidelines. This comprises of both loan and equity instruments,
which are considered to be one instrument due to them being bound
together when assessing the portfolio's returns to the
shareholders.
16. 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.
The Company must have an amount of
capital, at least 80% (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.
17.
Contingencies, guarantees and
financial commitments
There were no commitments,
contingencies or guarantees of the Company at the year-end (2023:
none).
18.
Related party
disclosures
The Company has delegated the
investment management of the portfolio to Puma Investment
Management Limited. Further details of the transactions with these
entities are disclosed in note 3 of the financial
statements.
19.
Re-presentation of comparative
figures
The comparative figures for the year ended 28
February 2023 have been re-presented with an additional line item
for 'Applications cash' included within current assets and current
liabilities. Applications cash relates to funds received from
investors but have not yet been allotted as at the year end. The
net impact of this re-presentation on the NAV is nil and is purely
a balance sheet gross up adjustment.
20.
Post Balance Sheet events
Post year-end, a further 1,419,795
ordinary shares have been issued for cash consideration of
£1.6m.
On 2 May 2024 a portfolio company,
Ron Dorff, raised third-party funding through a Crowdfunding
investment round, which valued the company at €27m. The investment
opportunity was made available to Ron Dorff customers as part of
the launch of Ron Dorff's new loyalty programme, Le Club Ron Dorff.
Incoming third-party investors did not benefit from EIS relief. For
the VCT, this results in a NAV uplift of £0.9m at June 2024. The
valuation at February 2024 was £3.1m.
In May 2024, the Directors chose to
write the value of the VCTs holdings in its portfolio company Dymag
to nil. The valuation at February 2024 was £0.2m, meaning a net
decrease to the NAV of £0.2m at June 2024. This decision was taken
on the back of the unexpected cancellation of a large OEM project
which Dymag had expected to win, and continued weakness in the
aftermarket.
On 22 May 2024 a portfolio company,
Iris, completed a £3.5m investment round with a new external US
investor. Puma Funds also participated in the round with Puma
Alpha VCT investing an additional £41k. This round valued the
company at £35m which values the VCT's initial investment at 2x the
invested sum. This has resulted in a £0.2m NAV uplift at June 2024.
At February 2024 Iris was held at cost of £0.2m.
The financial information set out in this announcement does
not constitute the Company's statutory financial statements in
accordance with section 434 Companies Act 2006 for the year ended
29 February 2024 but has been extracted from the statutory
financial statements for the year ended 29 February 2024 which were
approved by the Board of Directors on 14 June 2024 and will be
delivered to the Registrar of Companies. The Independent Auditor's
Report on those financial statements was unqualified and did not
contain any emphasis of matter nor statements under s 498(2) and
(3) of the Companies Act 2006.
The statutory accounts for the year ended 28 February 2023
have been delivered to the Registrar of Companies and received an
Independent Auditors report which was unqualified and did not
contain any emphasis of matter nor statements under s 498(2) and
(3) of the Companies Act 2006.
Copies of the full annual report and financial statements for
the year ended 29 February 2024 will be available to the public at
the registered office of the Company at Cassini House, 57 St
James's Street, London, SW1A 1LD and is available for download from
https://www.pumainvestments.co.uk/products/venture-capital-trusts/puma-alpha-vct.