TIDMPUM9
RNS Number : 3708X
Puma VCT 9 PLC
28 August 2015
Puma VCT 9 plc
Interim Report
For the period ended 30 June 2015
Officers and Professional Advisers
Directors Auditors
Egmont Kock (Chairman) Baker Tilly Audit LLP
Terence Rhodes Chartered Accountants
Graham Shore 2 Bloomsbury Street
London WC1B 3ST
Secretary
Eliot Kaye Sponsors and Solicitors
Howard Kennedy
Registered Number 19 Cavendish Square
08238812 London W1A 2AW
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 VCT Tax Advisor
Puma Investment Management Limited PricewaterhouseCoopers LLP
Bond Street House 1 Embankment Place
14 Clifford Street London WC2N 6RH
London W1S 4JU
Registrar Custodian
SLC Registrars Pershing Securities Limited
Ashley Park House Capstan House
42-50 Hersham Road One Clove Crescent
Walton-on-Thames East India Dock
Surrey KT12 1RZ London E14 2BH
Administrator
PI Administration Services Limited
Bond Street House
14 Clifford Street
London W1S 4JU
Chairman's Statement
Highlights
-- Over 85% of funds raised invested in a diverse range of high quality businesses and projects.
-- First 6p per share dividend paid during the period,
equivalent to a 9% per annum tax-free running yield on
investment.
-- Strong pipeline of VCT qualifying investment opportunities to
ensure that the Company remains on track to meet its 3-year
target.
-- NAV p[er share of 96.81p*, up 1.4% in the period
*adding back dividends paid to date
Chairman's Statement
Introduction
The Company has now deployed a substantial proportion of its
funds in both qualifying and non-qualifying investments, and
remains on track to meet its minimum qualifying investment
percentage of 70 per cent within the requisite timeframe. Our
portfolio is well positioned to deliver attractive returns to
shareholders within its expected remaining time horizon.
Net Asset Value ('NAV')
The NAV per share at the period end was 96.81p after adding back
dividends paid to date of 6p, representing a return of 1.30p per
ordinary share for the period.
Qualifying Investments
As reported in the Company's previous annual report, Kinloss
Trading Limited and Jephcote Trading Limited (in which the Company
had invested GBP3.5 million and GBP880,000 respectively) were, as
members of SKPB Services LLP, engaged in a contract with Ansgate
(Barnes) Limited to provide project management and contracting
services in connection with the construction of nine new houses and
12 new flats at a construction known as The Albany, in Barnes,
south west London. The total cost of the project is c.GBP15 million
and the developers have already pre-sold four of the flats at
prices in line with a gross development value for the project of
c.GBP30 million. The project is expected to complete in Q1
2016.
The Company's GBP2 million qualifying investment (as part of a
GBP8 million investment alongside other entities managed and
advised by your Investment Manager) in Opes Industries Limited is
progressing well. Opes is developing a materials recycling facility
at an established landfill and aggregates business on a 76 hectare
site in Oxfordshire. The investment is secured with a first charge
over the site and the Opes business and is expected to produce an
attractive return to the Company over four years. The installation
of the materials recycling facility is nearing completion and
expects to be fully operational in Q3 2015.
Before the passing of the Finance Act 2014, the Company
completed a GBP1.875 million qualifying investment (as part of a
GBP5 million investment alongside other Puma VCTs) in Urban Mining
Limited, a member of the Chinook Urban Mining group of companies.
Chinook Urban Mining is a well-funded energy-from waste business
which is developing a flagship plant in East London to generate
electricity through the gasification of municipal solid waste and
will benefit from Renewable Obligations Certificates (ROCs). The
management team have a track record delivering similar projects in
other jurisdictions and are a preferred partner of Chinook
Sciences, the Nottingham based leading technology company which has
developed the award-winning "non-incineration ultra clean synthetic
gas technology" which will be used in the East London plant.
Chinook Sciences also holds a minority stake in the business. The
investment is secured with a first charge over the Chinook Urban
Mining business and the eight acre freehold site of the East London
plant and is expected to produce an attractive return to the
Company over three years.
As previously reported, the Company invested GBP1.6 million (as
part of a GBP2.4 million investment alongside other Puma VCTs) into
Alyth Trading Limited, a nationwide provider of contracting
services, to provide working capital for its ongoing business.
Alyth Trading has been engaged on a project to provide project
management and contracting services in connection with the
construction of a new 65 bed high-end nursing home in Saggart
Village, County Dublin. We are pleased to report that the project
has completed successfully, generating attractive returns for Alyth
Trading which will benefit the Company when its investment is
repaid in due course. During the period, Alyth Trading entered into
a new contract to provide contracting services in connection with
the construction of a 112 bed purpose built care home in Hamilton,
Scotland.
Non-Qualifying Investments
As previously reported, we have adopted a strategy for the
non-qualifying portfolio of investing in secured loans (and other
similar instruments) offering a good yield with hopefully limited
downside risk.
As reported in the Company's previous annual report, the Company
advanced a GBP3.5 million non-qualifying loan to Valencia Lending
Limited which, together with other vehicles managed and advised by
your Investment Manager has extended a GBP5 million revolving
credit facility to Citrus PX Two Limited, part of the Citrus Group.
Citrus PX Two operates a property part exchange service
facilitating the rapid purchase of properties for developers and
homeowners. The Company's facility is providing a series of loans
to Citrus PX Two, with the benefit of a first charge over a
geographically diversified portfolio of residential properties on
conservative terms. During the period, GBP500,000 of principal
(together with all accrued interest) was repaid to the Company. The
Company's exposure to Citrus at the period end was GBP3
million.
The Company's GBP750,000 non-qualifying investment in Gold Line
Property Limited, a care and dementia treatment business which is
currently developing new premises in Surrey, continues to perform
well. We are pleased to report that the build project completed on
time and on budget, the premises has recently passed its Care
Quality Commission final inspection and the first patients have
been accepted.
As previously reported, the Company had extended a GBP1.3
million non-qualifying loan which (through a subsidiary, Lothian
Lending Limited) provides a facility, together with another Puma
VCT, of GBP2.6 million to RPE FL1 Limited, a member of the
Renewable Power Exchange group. The facility provided funding
towards the construction of a 1.5MW wind farm in East Lothian,
Scotland, with the electricity once generated, used to supply those
on low incomes in the local community. The loan is secured on the
site in East Lothian and is earning an attractive rate of interest.
We are pleased to report that the construction is now complete, the
turbines are generating electricity and EBITDA is in line with
forecasts. During the period, the Company was repaid GBP125,000 and
the loan balance now stands at GBP1.175 million.
The Company's GBP1.05 million loan (through an affiliate of
itself and other VCTs) to Churchill Homes (Aberdeen) Limited
continues to perform well. Churchill Homes is a longstanding
Aberdeenshire developer and the facility provides funding towards
the construction of a private detached housing development in the
countryside outside Aberdeen.
As previously reported, various entities managed and advised by
your Investment Manager provided several tranches of a GBP7.1
million bridging facility to companies within the Connolly and
Callaghan group. The Company participated in this through an
initial GBP1.95 million non-qualifying loan (advanced through a
subsidiary, Buckhorn Lending Limited) and, subsequently, through a
GBP600,000 non-qualifying loan (advanced through another
subsidiary, Latimer Lending Limited). The Connolly and Callaghan
group is a provider of emergency overnight accommodation in Bristol
with over 20 years' experience in the sector. The overall facility
was secured on a portfolio of over 20 properties and was extended
on a sub-50% loan-to-value basis. I am pleased to report that,
following the period end, the loan together with accrued interest
was repaid generating an attractive return to the Company.
During the period, the Company realised its GBP500,000
investment in Nextenergy Solar Fund, an investment company focusing
on operational solar photovoltaic assets located in the United
Kingdom, at a premium to the issue price.
VCT Qualifying Status
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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 continues to improve, 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 2015.
Outlook
We are pleased that a significant proportion of the Company's
available cash is now invested in a diverse portfolio of qualifying
and non-qualifying investments, generating an attractive return.
The Investment Manager is in legal process with a number of further
qualifying investment opportunities and expects to make such
investments in the second half of the year. The restrictions on
availability of bank credit continue to affect the terms on which
target companies can raise finance and this should both increase
the demand for our offering and improve the terms we can secure.
The Company is therefore strongly positioned to deliver attractive
returns to shareholders in the medium to long term.
Egmont Kock
Chairman
28 August 2015
Income Statement (unaudited)
For the period ended 30 June 2015
Six months ended Six months ended Year ended
30 June 2015 30 June 2014 31 December 2014
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) - 18 18 - 23 23
Income 888 - 888 591 - 591 1,293 - 1,293
888 (1) 887 591 18 609 1,293 23 1,316
-------- -------- -------- -------- -------- -------- --------
Investment
management
fees 4 (67) (201) (268) (67) (201) (268) (135) (405) (540)
Performance
fees - - - - - - - - -
Other expenses (141) - (141) (147) - (147) (259) - (259)
(208) (201) (409) (214) (201) (415) (394) (405) (799)
-------- -------- -------- -------- -------- -------- --------
Return/(loss)
on ordinary
activities
before taxation 680 (202) 478 377 (183) 194 899 (382) 517
Tax on return
on ordinary
activities (112) - (112) - - - (8) - (8)
Return/(loss)
on ordinary
activities
after tax
attributable
to equity
shareholders 568 (202) 366 377 (183) 194 891 (382) 509
======== ======== ======== ======== ======== ======== ======== ======== ========
Basic and
diluted
Return/(loss)
per Ordinary
Share (pence) 2 2.01p (0.72p) 1.30p 1.33p (0.65p) 0.69p 3.15p (1.35p) 1.80p
======== ======== ======== ======== ======== ======== ======== ======== ========
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 2015
As at As at As at
30 June 30 June 31 December
Note 2015 2014 2014
GBP'000 GBP'000 GBP'000
Fixed Assets
Investments 7 20,756 17,136 21,918
--------- --------- -------------
Current Assets
Debtors 1,763 551 1,019
Cash 3,745 9,430 4,405
--------- --------- -------------
5,508 9,981 5,424
Creditors - amounts falling
due within one year (611) (450) (360)
Net Current Assets 4,897 9,531 5,064
--------- --------- -------------
Total Assets less Current Liabilities 25,653 26,667 26,982
Creditors - amounts falling
due after more than one year
(including convertible debt) (1) (1) (1)
Net Assets 25,652 26,666 26,981
========= ========= =============
Capital and Reserves
Called up share capital 282 282 282
Capital redemption reserve 1 1 1
Capital reserve - realised (931) (525) (730)
Capital reserve - unrealised 19 14 20
Other reserve - -
Revenue reserve 26,281 26,894 27,408
Equity Shareholders' Funds 25,652 26,666 26,981
========= ========= =============
Net Asset Value per Ordinary
Share 3 90.81p 94.40p 95.51p
========= ========= =============
Diluted Net Asset Value per
Ordinary Share 3 90.81p 94.40p 95.51p
========= ========= =============
Cash Flow Statement (unaudited)
For the period ended 30 June 2015
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
Operating activities
Return/(loss) on ordinary activities
before tax 478 194 517
(Gains)/losses on investments 1 (18) (23)
Decrease/(increase) in debtors (744) (466) (934)
Increase/(decrease) in creditors 139 230 132
Net cash inflow/(outflow) from
operating activities (126) (60) (308)
----------- ----------- -------------
Corporation tax paid - - -
----------- ----------- -------------
Capital expenditure and financial
investment
Purchase of investments - (5,000) (11,575)
Proceeds from sale of investments 1,161 214 2,012
Net cash outflow from capital
expenditure and financial investment 1,161 (4,786) (9,563)
----------- ----------- -------------
Equity dividend paid (1,695) - -
----------- ----------- -------------
Financing
Redemption of redeemable ordinary
shares - (94) (94)
Net cash outflow from financing - (94) (94)
----------- ----------- -------------
Decrease in cash (660) (4,940) (9,965)
Net cash at start of the period 4,405 14,370 14,370
Net funds at the period end 3,745 9,430 4,405
=========== =========== =============
Reconciliation of Movements in Shareholders' Funds
(unaudited)
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