Puma High Inc VCT Puma High Income Vct Plc : Interim Management Statement
November 29 2013 - 5:58AM
UK Regulatory
TIDMPMH
PUMA HIGH INCOME VCT PLC
2013 INTERIM REPORT AND ACCOUNTS
Highlights
-- 88 per cent of funds deployed in qualifying and non-qualifying
investments
-- Threshold of at least 70 per cent in qualifying investments continues to
be met
-- Return of 0.53p per ordinary share for the period
-- Good performance of the investment portfolio
Chairman's Statement
Introduction
The Company has now deployed a substantial proportion of its funds in
both qualifying and non-qualifying investments, having met its minimum
qualifying investment percentage of 70 per cent during the previous
period. We believe our portfolio is well positioned to deliver
attractive returns to shareholders within its expected remaining time
horizon.
Qualifying Investments
During the period, the Company concluded an investment of GBP1.4 million
into Saville Services Limited, a contracting company, alongside other
Puma VCTs. Saville Services is currently deploying the funds providing
contracting services on two projects: the construction of a private
detached housing development in the countryside outside Aberdeen, under
contract to Churchill Homes Limited, a longstanding Aberdeenshire
developer, and the development of up to 20 apartments for supported
living for psychiatric and learning disabled service users in Grimsby,
North East Lincolnshire.
Our investment of GBP860,000 in Mirfield Contracting Limited ("MCL") is
progressing well. MCL is a contracting services company providing
project management services to a GBP3.8 million development of town
houses in Mirfield (near Wakefield) West Yorkshire. The development
itself is progressing well with the first and second of three phases
complete and sold, and the third phase is construction. The developer
has recently been approved for the Government-backed Help to Buy Scheme
and interest in the houses remains strong.
As reported in the Company's previous annual report, the Company
invested GBP920,000 (as part of a GBP3.1 million financing with other
Puma VCTs) into Brewhouse and Kitchen Limited ("B&K"). 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 a return
to the Company of at least 7 per cent. per annum. 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. B&K's first acquisition, The White
Swan in Portsmouth, opened in March. B&K recently exchanged contracts to
acquire its second site, in Dorchester, Dorset.
The Company's investments of GBP880,000 into each of two contracting
companies, Frederica Trading Limited ("Frederica") and Glenmoor Trading
Limited ("Glenmoor") are progressing well. As previously reported,
Frederica and Glenmoor (as members of a limited liability partnership
with other contracting companies) are providing contracting services in
connection with five pre-let supported living developments for
psychiatric and learning disabled people who are housed and given
support by local authorities and other social care organisations. The
developments themselves are progressing well with two complete and the
remainder in various stages of construction. We expect these
investments to deliver attractive returns.
The Company previously invested GBP2 million into two other contracting
companies, Huntly Trading Limited ("Huntly") and Jephcote Trading
Limited ("Jephcote"). We understand that the directors of Huntly and
Jephcote are considering several opportunities to deploy their financial
resources in the short to medium term.
In March 2012, the Company invested GBP700,000 (as part of a GBP1.4
million Puma VCT financing) into SIP Communications Plc ("SIPCOM"), a
telecommunications hosting provider. . SIPCOM had a major customer
default on its contract last year and to be prudent we have made a fair
value provision against an element of our investment. We have
subsequently restructured the investment, retaining a first charge over
the company's assets and expect our recovery significantly to exceed the
value provided for.
Non-Qualifying Investments
As reported in the Company's previous annual report, we have adopted a
strategy for the non-qualifying portfolio of moving away from quoted
investments where possible and instead investing in secured
non-qualifying loans offering a good yield with hopefully limited
downside risk.
The Company's GBP1,250,000 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 given the security profile.
The Company extended a GBP881,000 loan to provide, together with other
Puma VCTs, an innovative GBP4 million revolving credit facility to
Organic Waste Management Trading Limited (now known as Ennovor 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 in 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 and has been mostly fully drawn over the period.
Results and Dividends
The Company reported a profit of GBP73,000 for the period. As set out in
the accounts for the period ended 31 March 2013, the Company declared a
dividend of 7p per ordinary share for that period which was paid on 25
February 2013, taking total dividends paid to date to 21p. 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 7p 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 93.79p after adding back
cumulative dividends paid to date of 21p.
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. As noted above, the Company has met its minimum
qualifying investment percentage of 70 per cent.
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 the Company's accounting year.
Outlook
The continued lack of availability of bank credit has enabled the
Company to assemble a portfolio of both qualifying and non-qualifying
investments on attractive terms. As a result, your Board expect to
concentrate in the future on the monitoring of our existing investments
and considering the options for exits.
Ray Pierce
Chairman
29 November 2013
Income Statement (unaudited)
For the period from 1 April 2013 to 30 September 2013
Six months ended Six months ended Period ended
30 September 2013 30 June 2012 31 March 2013
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 - - - - 124 124 - 49 49
Income 257 - 257 122 - 122 481 - 481
257 - 257 122 124 246 481 49 530
Investment management fees 4 (24) (72) (96) (31) (92) (123) (58) (174) (232)
Performance fees - - - - - - - - -
Other expenses (88) - (88) (88) - (88) (252) - (252)
(112) (72) (184) (119) (92) (211) (310) (174) (484)
Return/(loss) on ordinary activities before taxation 145 (72) 73 3 32 35 171 (125) 46
Tax on return on ordinary activities - - - - - - - - -
Return/(loss) on ordinary activities after tax attributable
to equity shareholders 145 (72) 73 3 32 35 171 (125) 46
Basic and diluted
Return/(loss) per Ordinary Share (pence) 2 1.06p (0.53p) 0.53p 0.02p 0.24p 0.26p 1.25p (0.91p) 0.34p
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 September 2013
As at As at As at
Note 30 September 2013 30 June 2012 31 March 2013
GBP'000 GBP'000 GBP'000
Fixed Assets
Investments 7 8,753 7,646 8,940
Current Assets
Debtors 353 47 236
Cash 973 3,250 813
1,326 3,297 1,049
Creditors - amounts falling due within one year (126) (117) (109)
Net Current Assets 1,200 3,180 940
Total Assets less Current Liabilities 9,953 10,826 9,880
Creditors - amounts falling due after more than one
year (including convertible debt) (1) (1) (1)
Net Assets 9,952 10,825 9,879
Capital and Reserves
Called up share capital 137 137 137
Capital reserve - realised (621) (741) (549)
Capital reserve - unrealised (210) 139 (210)
Revenue reserve 10,646 11,290 10,501
Equity Shareholders' Funds 9,952 10,825 9,879
Net Asset Value per Ordinary Share 3 72.79p 79.18p 72.26p
Diluted Net Asset Value per Ordinary Share 3 72.79p 79.18p 72.26p
Cash Flow Statement (unaudited)
For the period 1 April 2013 to 30 September 2013
Six months ended Six months ended Period ended
30 September 2013 30 June 2012 31 March 2013
GBP'000 GBP'000 GBP'000
Operating activities
Profit on ordinary activities before taxation 73 35 46
Loss on investments - (124) (49)
Increase in debtors (117) (31) (219)
Increase/(decrease) in creditors 17 (3) (11)
Net cash outflow from operating activities (27) (123) (233)
Corporation tax paid - - -
Capital expenditure and financial investment
Purchase of investments - (4,720) (9,400)
Loan amortisation 187 - -
Proceeds from sale of investments - 4,807 8,117
Net cash inflow/(outflow) from capital expenditure
and financial investment 187 87 (1,283)
Equity dividend paid - (957) (1,914)
Increase/(decrease) in cash 160 (993) (3,430)
Net cash at start of the period 813 4,243 4,243
Net funds at the period end 973 3,250 813
Reconciliation of Movements in Shareholders' Funds (unaudited)
For the period 1 April 2013 to 30 September 2013
Called up Capital Capital
share reserve - reserve - Revenue
capital realised unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1
January 2012 137 (584) (50) 12,244 11,747
Total
recognised
(losses)/gains
for the
period - (157) 189 3 35
Dividends paid - - - (957) (957)
Balance as at
30 June 2012 137 (741) 139 11,290 10,825
Total
recognised
(losses)/gains
for the
period - 242 (399) 168 11
Transfer - (50) 50 - -
Dividends paid - - - (957) (957)
Balance as at
31 March 2013 137 (549) (210) 10,501 9,879
Total
recognised
(losses)/gains
for the
period - (72) - 145 73
Dividends paid - - - - -
Balance as at
30 September
2013 137 (621) (210) 10,646 9,952
Notes to the Interim Report
For the period 1 April 2013 to 30 September 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 gain per share of 0.53p is based on the gain for the period of
GBP73,000 and the weighted average number of shares in issue as at 30
September 2013 of 13,671,870.
3. Net asset value per share
As at As at As at
30 September 2013 30 June 2012 31 March 2013
Net assets 9,952,000 10,825,000 9,879,000
Shares in issue 13,671,870 13,671,870 13,671,870
Net asset value per share
Basic 72.79p 79.18p 72.26p
Diluted 72.79p 79.18p 72.26p
Cumulative dividends paid 21.00p 14.00p 21.00p
to date
Basic (including dividends 93.79p 93.18p 93.26p
paid to date)
Diluted (including 93.79p 93.18p 93.26p
dividends paid to date)
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 2013 Annual Report and
Accounts on page 37. There were no other related party transactions
during the period ended 30 September 2013.
6. The financial information for the periods ended 30 September
2013 and 30 June 2012 have not been audited and do not comprise full
financial statements within the meaning of Section 423 of the Companies
Act 2006. The financial information for the period ended 31 March 2013
has been extracted from the company's full financial statements for the
period then ended that have been delivered to the Registrar of Companies,
and on which the report of the Auditors was unqualified. The interim
financial statements have been prepared on the same basis as the annual
financial statements.
Notes to the Interim Report (continued)
For the period 1 April 2013 to 30 September 2013
7. Investment portfolio summary
Valuation as a % of
Valuation Cost Gain/(loss) Net Assets
GBP'000 GBP'000 GBP'000
As at 30 September
2013
Qualifying Investment
- Unquoted
Frederica Trading
Limited 880 880 - 9%
Glenmoor Trading
Limited 880 880 - 9%
Huntly Trading Limited 700 700 - 7%
Isaacs Trading Limited 700 700 - 7%
Mirfield Contracting
Limited 860 860 - 9%
SIPCOM Limited 490 700 (210) 5%
Brewhouse & Kitchen 920 920 - 0.09
Saville Services
Limited 1,400 1,400 - 0.14
Total Qualifying
Investments 6,830 7,040 (210) 69%
Non-Qualifying
Investments
Puma Brandenburg
Finance Limited 1,063 1,063 - 11%
Aerternum* 860 860 - 9%
Total Non-Qualifying
investments 1,923 1,923 - 20%
Total Investments 8,753 8,963 (210) 89%
Balance of Portfolio 1,199 1,199 11%
Net Assets 9,952 10,162 (210) 100%
Copies of this Interim Statement will be posted to shareholders in due
course and made available on the website:
http://shorecap.gg/investor-relations/announcements/2013
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Puma High Income VCT PLC via Globenewswire
HUG#1746647
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