Puma VCT 13 PLC

Half-year Report

RNS Number : 7466U
Puma VCT 13 PLC
26 November 2019
 
 
 
 
 
 
Puma VCT 13 plc

Interim Report

 

For the period ended 31 August 2019

 

 

 

Officers and Professional Advisers

 

 

Directors

Auditor

David Buchler (Chairman)

Stephen Hazell-Smith

Graham Shore

 

RSM UK Audit LLP

Chartered Accountants

25 Farringdon Street

London EC4A 4AB

Secretary

Eliot Kaye

 

Registered Number

10376236

 

 

Sponsors and Solicitors

Howard Kennedy

No 1 London Bridge

London SE1 9BG

 

Registered Office

Bond Street House

14 Clifford Street

London W1S 4JU

 

Investment Manager

Puma Investment Management Limited

Cassini House

57 St James's Street

London

SW1A 1LD

 

Administrator

PI Administration Services Limited

Cassini House

57 St James's Street

London

SW1A 1LD

 

Registrar

SLC Registrars

Elder House

St. Georges Business Park

Brooklands Road

Weybridge

Surrey

KT13 0TS

 

Bankers

The Royal Bank of Scotland plc

London City Office

PO Box 412

62-63 Threadneedle Street

London

EC2R 8LA

 

VCT Tax Advisor

PricewaterhouseCoopers LLP

1 Embankment Place

London WC2N 6RH

 

 

Custodian

Pershing Securities Limited

1 Canada Square

London

E14 5AL

 

 

 

 

 

Chairman's Statement

 

Highlights 

 

·    Fund raising now complete

·    60% invested into qualifying portfolio positions

·    Further qualifying investment opportunities in various stages of analysis and execution

 

Introduction

 

I am pleased to present the second interim report for Puma VCT 13 plc (the "Company") for the period to 31 August 2019.

 

The Investment Manager, Puma Investments, now has just under £85 million of VCT money under management in this and other Puma VCTs as well as c. £64 million of EIS money under management.  Puma Investments is a well-established, experienced VCT manager and are demonstrating good success at investing the Company's funds in line with its mandate.

 

Since the last report and accounts the Company has made two further investments into qualifying portfolio companies, taking the Company's overall qualifying holding to 59.4% of net asset value ("NAV").  In addition to this, at the end of the period the Company held 25% of its NAV in listed equities, for the purposes of liquidity management.  These holdings are discussed in more detail below.

 

 

Results and Net Asset Value ('NAV')

 

The NAV per share at the period end was 87.73p. This figure reflects the initial funds raised less the costs of flotation adjusted for movements in the value of the liquid assets being held for liquidity management purposes and running costs of the Company.  Such movement is to be expected as the qualifying portfolio is currently being held at cost despite strong trade in some of the underlying companies.  

 

Qualifying Investments

 

The Company invested into two further qualifying investments in the period, taking its overall qualifying holdings to six positions across five sectors, accounting for c. 60% of its NAV. This activity has seen investment of 26% of the Company's NAV into qualifying holdings during the period, and the Investment Manager expects to continue this rapid pace of deployment.  As such, the Manager expects the Company to meet its qualifying requirement (to be 80% invested into qualifying holdings) considerably in advance of the required date of February 2021.

 

The first of the new qualifying investments made was into MyKindaCrowd Ltd, a digital platform working with large corporates to improve engagement of potential graduates and apprentices. The platform works with companies such as Deloitte and Cisco to help them recruit young people from a wider range of social backgrounds than their traditional channels.

 

The second qualifying investment was into Influencer Limited, a high growth, data driven, social media, influencer, and digital marketing platform. The business enables brands to connect with influencers and manage influencer marketing campaigns across one platform.  

 

The Company also holds positions in four other qualifying positions across three different sectors:

 

Pure Cremation - Crematorium and Direct Cremations

In November 2018 the Company invested £1.3 million into Pure Cremation Holdings Limited, as part of a £7.35 million investment, alongside other Puma VCTs.  Pure Cremation is a leading provider of direct cremations, meeting the needs of a growing number of people in the United Kingdom who want a respectful cremation arranged without any funeral, leaving them free to say farewell how, where and when is right for them. The business' new purpose-built site near Andover opened during the period, reducing operating costs and opening up new revenue streams.  The business is performing, delivering strong revenue growth across all of its sales channels.

 

Knott End - Pubs with Microbreweries

In December 2018 the Company invested £847,000 into Knott End Pub Company Limited, as part of a £7.3 million investment, alongside other Puma VCTs. Knott End has entered into a franchise agreement with Brewhouse & Kitchen Limited and is operating pubs in Milton Keynes and Horsham under the Brewhouse & Kitchen ("B&K") brand.  The B&K model continues to be very well respected; recent recognition includes appearing in the Sunday Times Fast Track 100 (2018 and 2019), winning Best Managed Pub Company at the British Publican Awards, and winning Multi-Site Pub Operator of the Year at the Casual Dining Awards.

 

Dymag Group - High performance wheel manufacturer

In December 2018 the Company invested £583,000 into Dymag Group Limited, as part of a £3.6 million investment, alongside other Puma funds. Dymag is a British designer and manufacturer of carbon-fibre car and motorbike wheels. These are high end, lightweight wheels for performance use. Established in 1974, Dymag is a pioneer in carbon wheel technology: it launched the first commercial carbon motorcycle wheel in 1996 and the first carbon hybrid car wheel in 2004. Funds from the investment are in part being used to relocate the business to a new production facility which is expected to materially increase capacity.   

 

Open House - London based food and beverage offer

In February 2019 the Company invested £1.8 million into Open House London Limited, as part of a £5 million investment, alongside other Puma funds. Open House owns and operates two popular dining and drinking venues in London, The Lighterman in King's Cross and Percy & Founders in Fitzrovia. Open House was launched in 2015 by the team behind Cubitt House, a group of highly successful gastropubs in central London that were later sold to a private equity group in a competitive acquisition. The Company's investment will support the business in achieving its plans for future growth though further flagship units across London with the next site on target to open in Spring 2020.

 

 

Liquidity management investments

 

To manage the Company's liquidity, £4 million has been invested in a diverse portfolio of listed equities.

 

Puma VCT 13's Listed Equities portfolio is managed by the Investment Manager's in-house Listed Equities team led by Investment Director Justin Waine. Justin is an award-winning manager (Winner of the best AIM Investment Manager 2016 and 2017 at the Growth Investor Awards) with 19 years' experience analysing UK and European small and mid-sized companies. Prior to working at Puma he was a Fund Manager of the European Forager Fund at Polar Capital Partners and also worked as a research analyst for small and mid-sized companies at Cazenove &Co.

 

In keeping with the VCT 13 mandate, the listed equity portfolio held is focussed on UK centric stocks which are listed on the main board of the London Stock Exchange. The portfolio is entirely invested in stocks with a Market Capitalization of over £100m into companies spread across 17 sectors. Circa. 40% of the portfolio as it stands is invested into stocks with a market cap greater than £4bn.

 

VCT Qualifying Status

 

PricewaterhouseCoopers LLP ("PwC") provides the Board and the Investment Manager with advice on the ongoing compliance with HMRC rules and regulations concerning VCTs and has reported no issues in this regard for the Company to date.  PwC also assists the Investment Manager in establishing the status of investments as qualifying holdings and will continue to assist the Investment Manager in monitoring rule compliance.

 

Principal Risks and Uncertainties

 

The UK economy faces its own challenges, not least those due to the ongoing political uncertainty.  This must also be seen in the context of the wider global economic environment which sees uncertainties from trade tensions, slowing Asian growth and more assertive political stances from a number of nations.  The consequences of this for the Company's investment portfolio constitute the principal risk and uncertainty for the Company in the second half of the year.

 

Outlook

 

It is pleasing to see the Company having made such good progress towards its qualifying target, with plenty of time still in hand. The qualifying portfolio is varied and contains some very strong performers which have the potential to deliver material returns. The non-qualifying portfolio is being managed with an appropriate focus on liquidity to ensure that cash can be made available for qualifying investments as they approach completion.

 

The Investment Manager continues to see a good volume of potential investment opportunities, driven by network and reputation, and so we feel confident that the Company remains well positioned to deliver attractive returns to shareholders in the medium to long term.

 

 

 

Graham Shore

Director

26 November 2019

 

 

Income Statement (unaudited)

For the period ended 31 August 2019

 

 

 

Period ended
 31 August 2019

Period ended
 31 August 2018

Period ended
 28 February 2019

 

Note

Revenue

Capital

Total

Revenue

Capital

Total

Revenue

Capital

Total

 

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Loss on investments

 

-

(43)

(43)

-

(18)

(18)

-

(550)

(550)

Income

 

58

-

58

3

-

3

45

-

45

 

 

 

 

 

 

 

 

 

 

 

 

 

58

(43)

15

3

(18)

(15)

45

(550)

(505)

 

 

 

 

 

 

 

 

 

 

 

Investment management fees

4

(35)

(104)

(139)

(20)

(59)

(79)

(49)

(147)

(196)

Other expenses

 

(134)

-

(134)

(83)

-

(83)

(200)

(26)

(226)

 

 

 

 

 

 

 

 

 

 

 

 

 

(169)

(104)

(273)

(103)

(59)

(162)

(249)

(173)

(422)

 

 

 

 

 

 

 

 

 

 

 

Return/(loss) on ordinary activities before taxation

 

(111)

(147)

(258)

(100)

(77)

(177)

(204)

(723)

(927)

Tax on return on ordinary activities

 

-

-

-

-

-

-

-

-

-

 

 

 

 

 

 

 

 

 

 

 

Return/(loss) on ordinary activities after tax attributable to equity shareholders

 

(111)

(147)

(258)

(100)

(77)

(177)

(204)

(723)

(927)

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

 

 

 

 

 

 

 

 

Return/(loss) per  Ordinary Share (pence)

2

(0.71p)

(0.95p)

(1.66p)

(0.64p)

(0.50p)

(1.14p)

(1.31p)

(4.64p)

(5.95p)

 

 

 

The total column of this statement is the profit and loss of the Company.  All revenue and capital items in the above statement derive from continuing operations.  No operations were acquired or discontinued in the period.

 

Balance Sheet (unaudited)

As at 31 August 2019

               

 

Note

As at
31 August 2019

As at
31 August 2018

As at
28 February 2019

 

 

£'000

£'000

£'000

Fixed Assets

 

 

 

 

Investments

6

11,560

1,679

7,872

 

 

 

 

 

Current Assets

 

 

 

 

Prepayments

 

3

220

2,851

Cash

 

2,236

8,045

3,382

 

 

2,239

8,265

6,233

Creditors - amounts falling due within one year

 

(128)

(18)

(176)

 

 

 

 

 

Net Current Assets

 

2,111

8,247

6,057

 

 

 

 

 

 

 

 

 

 

Net Assets

 

13,671

9,926

13,929

 

 

 

 

 

Capital and Reserves

 

 

 

 

Called up share capital

 

12

104

12

Share premium account

 

14,852

10,007

14,852

Capital reserve - realised

 

(39)

(59)

(173)

Capital reserve - unrealised

 

(831)

(18)

(550)

Revenue reserve

 

(323)

(108)

(212)

 

 

 

 

 

Equity Shareholders' Funds

 

13,671

9,926

13,929

 

 

 

 

 

 

 

 

 

 

Net Asset Value per Ordinary Share

3

87.73p

95.38p

89.38p

 

 

 

 

 

Diluted Net Asset Value per Ordinary Share

3

87.73p

95.38p

89.38p

 

Cash Flow Statement (unaudited)

For the period ended 31 August 2019

 

 

 

 

 

Period ended
 31 August 2019

Period ended
 31 August 2018

Period ended
 28 February 2019

 

£'000

£'000

£'000

 

 

 

 

Operating activities

 

 

 

Profit on ordinary activities after tax

(258)

(177)

(927)

Unrealised gains on investments

45

21

550

Decrease/(increase) in debtors

2,848

(209)

(1,011)

(Decrease)/increase in creditors

(48)

(2)

110

 

 

 

 

Net cash generated/(used) in operating activities

2,587

(367)

(1,278)

 

 

 

 

Cash flow from investing activities

 

 

 

Purchase of investments

(4,172)

(1,700)

(8,422)

Proceeds from disposal of investments

438

-

-

 

 

 

 

Net cash used in investing activities

(3,734)

(1,700)

(8,422)

 

 

 

 

Cash flow from financing activities

 

 

 

Proceeds received from issue of ordinary share capital

-

10,331

13,759

Expenses paid for issue of share capital

-

(219)

(677)

 

 

 

 

Net cash generated from financing activities

-

10,112

13,082

 

 

 

 

(Decrease)/increase in cash

(1,146)

8,045

3,382

Net cash at start of the period

3,382

-

-

 

 

 

 

Net funds at the period end

2,236

8,045

3,382

 

 

 

 

Statement of Changes in Equity (unaudited)

For the period ended 31 August 2019

 

 

 

 

Called up share capital

Share premium account

Capital reserve - realised

Capital reserve - unrealised

Revenue reserve

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

Balance as at 1 March 2018

6

-

-

-

(8)

(2)

Shares cancelled in the period

(6)

-

-

-

-

(6)

Shares issued in the period

104

10,227

-

-

-

10,331

Expense of share issue

-

(220)

-

-

-

(220)

Total comprehensive income for the period

-

-

(59)

(18)

(100)

(177)

 

 

 

 

 

 

 

Balance as at 31 August 2018

104

10,007

(59)

(18)

(108)

9,926

 

 

 

 

 

 

 

Shares issued in the period

8

5,348

-

-

-

5,356

Shares cancelled in the period

(100)

 

 

 

 

(100)

Expenses of share issues

 

(503)

 

 

 

(503)

Total comprehensive income for the period

-

-

(114)

(532)

(104)

(750)

 

 

 

 

 

 

 

Balance as at 28 February 2019

12

14,852

(173)

(550)

(212)

13,929

 

 

 

 

 

 

 

Shares cancelled in the period

-

-

-

-

-

-

Shares issued in the period

-

-

-

-

-

-

Expense of share issue

-

-

-

-

-

-

Total recognised (losses) for the period

-

-

134

(281)

(111)

(258)

 

 

 

 

 

 

 

Balance as at 31 August 2019

12

14,852

(39)

(831)

(323)

13,671

 

Notes to the Interim Report

For the period ended 31 August 2019

 

1.             Accounting Policies

 

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of fixed asset investments, and in accordance with applicable Accounting Standards and with the Statement of Recommended Practice, "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP") and in accordance with the Financial Reporting Standard 102 ("FRS102").

 

2.             Return per Ordinary Share

 

The total loss per share of 1.66p is based on the loss for the period of £258,000 and the weighted average number of shares in issue as at 31 August 2019 of 15,583,336 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
31 August 2019

As at
28 February 2019

Net assets

13,671,000

13,929,000

Shares in issue

15,583,338

15,583,338

 

 

 

Net asset value per share

 

 

Basic

87.73p

89.38p

Diluted

87.73p

89.38p

 

 

4.             Management fees

 

The Company pays the Investment Manager an annual management fee of 2% of the Company's net assets.  The fee is payable quarterly in arrears.  The annual management fee is allocated 75% to capital and 25% to revenue.

 

 

5.             Financial information provided

 

The financial information for the period ended 31 August 2019 has not been audited and does not comprise full financial statements within the meaning of Section 423 of the Companies Act 2006. The interim financial statements have been prepared on the same basis as will be used to prepare the annual financial statements.

 

 

Notes to the Interim Report continued

For the period ended 31 August 2019

 

6.             Investment portfolio summary

 

 

Valuation

Cost

Gain/(loss)

Valuation as a % of Net Assets

As at 31 August 2019

£'000

£'000

£'000

 

 

 

 

 

 

Qualifying Investments

 

 

 

 

Dymag Group Limited

583

583

-

4%

Knott End Limited

847

847

-

6%

Open House London Limited

1,800

1,800

-

13%

Pure Cremation Holdings Limited

1,297

1,297

-

9%

Influencer Limited

1,800

1,800

-

13%

Mykindacrowd Limited

1,800

1,800

-

13%

 

 

 

 

 

Total Qualifying Investments

8,127

8,127

-

58%

 

 

 

 

 

 

 

 

 

 

Liquidity Management Investments

 

 

 

 

Barclays Plc

156

206

(49)

1%

British Land Company Plc

89

105

(17)

1%

Chemring Group Plc

163

188

(26)

1%

Diageo Plc

258

201

57

2%

Discoverie Group Plc

223

207

16

2%

Dixons Carphone Plc

136

207

(70)

1%

Firstgroup Plc

291

202

89

3%

GVC Holdings Plc

137

217

(80)

1%

Headlam Group Plc

178

197

(19)

1%

ITE Group Plc

199

211

(13)

2%

ITV Plc

133

125

8

1%

Legal & General Group Plc

169

201

(32)

1%

Norcros Plc

200

201

(1)

2%

Provident Financial Plc

153

226

(73)

1%

Prudential Plc

159

203

(44)

1%

PZ Cussons Plc

181

203

(22)

1%

Royal Dutch Shell Plc

181

199

(18)

1%

Standard Chartered Plc

124

124

1

1%

Volution Group Plc

178

201

(23)

1%

WPP Plc

126

124

2

1%

 

 

 

 

 

Total Liquidity Management Investments

3,433

3,747

(314)*

26%

 

 

 

 

 

Total Investments

11,560

11,874

(314)

84%

Balance of Portfolio

2,111

2,111

 

16%

 

 

 

 

 

Net Assets

13,671

13,985

(314)

100%

 

 

 * Transaction costs on listed equities have been capitalised and form part of the gain/loss on investment, however they have been analysed as "other expenses" in the Income Statement.

 

 

 

Copies of this Interim Statement will be made available on the website: http://www.pumainvestments.co.uk/pages/view/investors-information-vcts


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