PUMA VCT 8 PLC Puma Vct 8 Plc : Interim Results
30 Agosto 2013 - 8:00AM
UK Regulatory
TIDMPUM8
For the period ended 30 June 2013
Chairman's Statement
Introduction
During the six months to 30 June 2013, the Company was active in
deploying its cash resources in both qualifying and non-qualifying
investments. In doing so, it focused on its mandate to exploit the
opportunities which are arising as a result of tight credit markets.
Qualifying Investments
As reported in the Company's previous annual report, in December 2012
the Company completed a GBP450,000 investment (as part of a GBP1.5
million financing with other Puma VCTs) into Brewhouse and Kitchen
Limited ("B&K"). I am pleased to report that during the period, the
Company invested a further GBP480,000 (as part of GBP1.6 million across
the Puma VCTs) into B&K, taking total exposure to GBP930,000. B&K is
managed by two highly experienced pub sector professionals and our
funding will facilitate the acquisition of freehold pubs and install a
micro brewery within the main area of each pub. The investment is
largely in the form of senior debt, secured with a first charge over the
business and each freehold site acquired. Funds can be utilised to a
maximum 65% loan-to-value ratio, and are expected to produce an
attractive return to the Company.
In the previous period, the Company invested GBP2 million into two
contracting companies, Isaacs Trading Limited ("Isaacs") and Jephcote
Trading Limited ("Jephcote"). Isaacs joined a limited liability
partnership with other contracting companies and entered into its first
contracting contract with FreshStart Living. The fund has committed up
to GBP476,000 (as part of a GBP3.5 million project involving other
companies backed by Puma VCTs) of project management and contracting
services in connection with the development and construction by
FreshStart Living of 116 apartments at a property called Trafford Press,
two miles south east of Manchester city centre. We understand that the
directors of Isaacs and Jephcote are considering several other
opportunities to deploy their financial resources in the short to medium
term.
On 21 August the Company invested GBP450,000 into Saville Services
Limited, another contractor which is currently undertaking a range of
projects. The Company's investment is likely to be deployed to develop
up to 20 apartments for supported living for psychiatric and learning
disabled service users in Grimsby, North East Lincolnshire.
There are currently several other suitable qualifying investments in
legal process. The Investment Manager therefore expects to make further
qualifying investments in the second half of the year to ensure the
Company is on course to meet its HMRC qualifying target.
Non-Qualifying Investments
During the period, the Company completed a GBP650,000 non-qualifying
loan (as part of a GBP1.3 million financing with other Puma VCTs for
Countywide Property Holdings Limited ("CPHL"), a business with a strong
track record of acquiring greenfield and brownfield sites for
residential and commercial development. The loan is secured on a 5.6
acre site, including a large house, in Brackley near Silverstone. The
loan was extended on a sub-50% loan to value basis and is earning an
attractive rate of interest which is being paid monthly. CPHL has
exchanged contracts with one of the UK's largest house builders to sell
the property, subject to planning permission being granted to develop up
to 50 new homes on the site.
As reported in the Company's previous annual report, the Company
extended a GBP881,000 loan to provide, together with other Puma VCTs, an
innovative GBP2.5 million revolving credit facility to Organic Waste
Management Trading Limited. The facility provides working capital for
the purchase of used cooking oil for conversion into bio-diesel. The
ultimate borrower owns a large oil refining plant near Birkenhead and is
processing cooking oil to sell to petrol and diesel retailers who are
obligated to include bio-fuels in their offerings. The facility is
structured to mitigate risks by being capable of being drawn only once
back-to-back purchase and sale contracts have been entered into with
approved counterparties. The facility bears interest at a substantial
rate for utilised funds and a lower rate for non-utilised funds. The
facility has been performing well over the period.
The Company's GBP1,420,000 non-qualifying loan (as part of a GBP4
million financing with other Puma VCTs) to Puma Brandenburg Finance
Limited, a subsidiary of Puma Brandenburg Limited, continues to perform.
The loan is secured on a portfolio of flats in the middle class area of
central Berlin, Germany. Since the loan was made, the property market
in this area of Berlin has been very strong, further enhancing the
excellent security we have for this loan. The loan attracts a fixed
interest rate at a good coupon.
The Company continues to hold GBP750,000 in a Tesco Bank 8 year bond
traded on the London Stock Exchange bearing a 5% per annum coupon. This
bond is currently trading at a premium to the issue price.
Dividends
As set out in the accounts for the period ended 31 December 2012, the
Company declared a dividend of 5p per ordinary share for that period
which was paid on 25 February 2013. Reflecting this recent payout, your
Board is not proposing a further dividend at this interim stage but
still intends to pay out a dividend of 5p per ordinary share each year
as envisaged in the Company's prospectus.
Net Asset Value ('NAV')
The NAV per share at the period end was 88.17p (93.17p after adding back
the 5p dividend paid on 25 February 2013).
VCT Qualifying Status
PricewaterhouseCoopers LLP ('PwC') provides the board and the investment
manager with advice on the ongoing compliance with Her Majesty's Revenue
& Customs ('HMRC') rules and regulations concerning VCTs. PwC assists
the Investment Manager in establishing the status of investments as
qualifying holdings and has reported that the Company has met all HMRC's
criteria to date.
Principal risks and uncertainties
Although the economy in the UK is showing signs of improvement, it
remains fragile. The consequences of this for the Company's investment
portfolio constitute the principal risk and uncertainty for the Company
in the second half of 2013.
Outlook
The Investment Manager has a strong pipeline of deals and a number of
these are in legal process. Therefore there is a strong flow of further
opportunities likely to lead to suitable investments. The restrictions
on availability of bank credit continue to affect the terms on which
target companies can raise finance. This should both increase the demand
for our offering and improve the terms we can secure. There are many
suitable companies which are well-managed, in good market positions,
which need our finance and can offer good security. We therefore believe
the Company is strongly positioned to assemble a portfolio to deliver
attractive returns to shareholders in the medium to long term.
Sir Aubrey Brocklebank
Chairman
30 August 2013
Income Statement (unaudited)
For the period ended 30 June 2013
Six months ended Period ended Period ended
30 June 2013 30 June 2012 31 December 2012
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 - (17) (17) - 39 39 - 61 61
Income 177 - 177 28 - 28 158 - 158
177 (17) 160 28 39 67 158 61 219
Investment management fees 4 (28) (84) (112) (18) (54) (72) (48) (144) (192)
Performance fees - - - - - - - - -
Other expenses (95) - (95) (36) - (36) (172) - (172)
(123) (84) (207) (54) (54) (108) (220) (144) (364)
Return/(loss) on ordinary activities before taxation 54 (101) (47) (26) (15) (41) (62) (83) (145)
Tax on return on ordinary activities - - - 5 (5) - - - -
Return/(loss) on ordinary activities after tax attributable
to equity shareholders 54 (101) (47) (21) (20) (41) (62) (83) (145)
Basic and diluted
Return/(loss) per Ordinary Share (pence) 2 0.42p (0.79p) (0.37p) (0.16p) (0.16p) (0.32p) (0.91p) (1.23p) (2.14p)
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 30 June 2013
As at As at As at
Note 30 June 2013 30 June 2012 31 December 2012
GBP'000 GBP'000 GBP'000
Fixed Assets
Investments 7 6,659 2,789 5,546
Current Assets
Debtors 116 14 67
Cash 4,576 9,363 6,498
4,692 9,377 6,565
Creditors - amounts falling due within one year (46) (69) (118)
Net Current Assets 4,646 9,308 6,447
Total Assets less Current Liabilities 11,305 12,097 11,993
Creditors - amounts falling due after more than one
year (including convertible debt) (1) (1) (1)
Net Assets 11,304 12,096 11,992
Capital and Reserves
Called up share capital 128 128 128
Share premium account 12,009 12,009 12,009
Capital reserve - realised (213) (60) (128)
Capital reserve - unrealised 28 39 45
Other reserve - - -
Revenue reserve (648) (20) (62)
Equity Shareholders' Funds 11,304 12,096 11,992
Net Asset Value per Ordinary Share 3 88.17p 94.35p 93.54p
Diluted Net Asset Value per Ordinary Share 3 88.17p 94.35p 93.54p
Cash Flow Statement (unaudited)
For the period ended 30 June 2013
Six months ended Period ended Period ended
30 June 2013 30 June 2012 31 December 2012
GBP'000 GBP'000 GBP'000
Operating activities
Loss on ordinary activities before tax (47) (41) (145)
Losses/(gains) on investments 17 (39) (61)
Increase in debtors (49) (14) (67)
(Decrease)/increase in creditors (72) 56 105
Net cash outflow from operating activities (151) (38) (168)
Corporation tax paid - - -
Capital expenditure and financial investment
Purchase of investments (1,130) (2,750) (6,501)
Proceeds from sale of investments - 1,016
Net cash outflow from capital expenditure and financial
investment (1,130) (2,750) (5,485)
Equity dividend paid (641) - -
Financing
Proceeds received from issue of ordinary share capital - 12,441 12,441
Expenses paid for issue of share capital - (304) (304)
Proceeds received from issue of redeemable preference
shares - 13 13
Proceeds received from convertible loan notes - 1 1
Net cash inflow from financing - 12,151 12,151
(Decrease)/increase in cash (1,922) 9,363 6,498
Net cash at start of the period 6,498 - -
Net funds at the period end 4,576 9,363 6,498
Reconciliation of Movements in Shareholders' Funds (unaudited)
For the period ended 30 June 2013
Capital
Called Share reserve Capital
up share premium - reserve - Revenue
capital account realised unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1
January 2012 -
Shares issued
in the period 128 12,693 - - - 12,821
Expense of
share issue - (684) - - - (684)
Total
recognised
(losses)/gains
for the
period - - (60) 39 (20) (41)
Dividends paid - - - - - -
Balance as at
30 June 2012 128 12,009 (60) 39 (20) 12,096
Total
recognised
(losses)/gains
for the
period - - (68) 6 (42) (104)
Realisation of
valuations from
prior period - - - - - -
Dividends paid - - - - - -
Balance as at
31 December
2012 128 12,009 (128) 45 (62) 11,992
Total
recognised
(losses)/gains
for the
period (85) (17) 55 (47)
Dividends paid (641) (641)
Balance as at
30 June 2013 128 12,009 (213) 28 (648) 11,304
Notes to the Interim Report
For the period ended 30 June 2013
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").
2. Return per Ordinary Share
The total loss per share of 0.37p is based on the loss for the period of
GBP47,000 and the weighted average number of shares in issue as at 30
June 2013 of 12,820,839 calculated from the date of the first receipt of
proceeds from the issue of ordinary share capital.
3. Net asset value per share
As at As at As at
30 June 2013 30 June 2012 31 December 2012
Net assets 11,304,000 12,096,000 11,992,000
Shares in issue 12,820,841 12,820,841 12,820,841
Net asset value per share
Basic 88.17p 94.35p 93.54p
Diluted 88.17p 94.35p 93.54p
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. Related Party Transactions
Related party transactions are described in the 2012 Annual Report and
Accounts on page 36. There were no other related party transactions
during the six months ended 30 June 2013.
6. The financial information for the period ended 30 June 2013
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.
7. Investment portfolio summary
Valuation as a % of
Valuation Cost Gain/(loss) Net Assets
GBP'000 GBP'000 GBP'000
As at 30 June 2013
Qualifying Investment
- Unquoted
Brewhouse & Kitchen 930 930 - 8%
Isaacs Trading Limited 1,000 1,000 - 9%
Jephcote Trading
Limited 1,000 1,000 - 9%
Total Qualifying
Investments 2,930 2,930 - 26%
Non-Qualifying
Investments
Organic Waste
Management
Limited(1) 881 881 - 8%
Tesco personal finance
bond 778 750 28 7%
Puma Brandenburg
Finance Limited 1,420 1,420 - 13%
Countrywide Property
Holdings Limited(2) 650 650 - 6%
Total Non-Qualifying
investments 3,729 3,701 28 34%
Total Investments 6,659 6,631 60%
Balance of Portfolio 4,645 4,645 40%
Net Assets 11,304 11,276 - 100%
1. Via a loan to Buckhorn Lending Limited
2. Via a loan to Latimer Lending Limited
Copies of this Interim Statement will be posted to shareholders in due
course and made available on the website:
http://www.shorecap.gg/alternative-asset-management/puma-vcts/information
This announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other
applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: PUMA VCT 8 PLC via Thomson Reuters ONE
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