TIDMPU12
RNS Number : 9743X
Puma VCT 12 PLC
30 November 2017
Puma VCT 12 plc
Interim Report
For the period ended 31 August 2017
Officers and Professional Advisers
Directors Auditor
Raymond Pierce (Chairman) RSM UK Audit LLP
Jim Brydie (resigned on Chartered Accountants
01.11.2017) 25 Farringdon Street
David Brock (appointed on London EC4A 4AB
01.11.2017)
Graham Shore
Secretary
Eliot Kaye Sponsors and Solicitors
Howard Kennedy
Registered Number No 1 London Bridge
09758309 London SE1 9BG
Registered Office Bankers
Bond Street House Metro Bank plc
14 Clifford Street One Southampton Row
London W1S 4JU London
WC1B 5HA
Investment Manager VCT Tax Advisor
Puma Investment Management PricewaterhouseCoopers
Limited LLP
Bond Street House 1 Embankment Place
14 Clifford Street London WC2N 6RH
London W1S 4JU
Registrar Custodian
SLC Registrars Howard Kennedy
42-50 Hersham Road No 1 London Bridge
Walton-on-Thames London SE1 9BG
Surrey
KT12 1RZ
Administrator
PI Administration Services
Limited
Bond Street House
14 Clifford Street
London W1S 4JU
Chairman's Statement
Highlights
-- 95% of fund invested in a diverse range of high quality businesses and projects
-- Qualifying investments now represent just under 60% of the
fund, following investments made in eight SMEs since the period
end
-- NAV per share up 0.24p in the half year at 95.62p
Introduction
I am pleased to present the interim report for Puma VCT 12 plc
(the 'Company') for the period to 31 August 2017. As at the date of
reporting, 95% of funds raised have been invested in a diverse
range of high quality businesses and projects. Since the period
end, the Company has completed eight qualifying investments into
small and medium sized businesses ("SMEs"), representing just under
60% of the fund. Our portfolio is well positioned to deliver
attractive returns to shareholders within its expected time
horizon.
Net Asset Value ('NAV')
The NAV per share at the period end was 95.62p, including a
profit for the period of GBP74,000 which represents a return of
0.24p per ordinary share during the period. The Company's total net
assets at the period end were just over GBP29.5 million.
Investments
Qualifying Investments
Growing Fingers - Children's Nursery
As reported in the Company's previous annual report, the Company
had made a GBP294,000 qualifying investment (as part of a GBP2.8
million investment alongside other Puma VCTs) in Growing Fingers
Limited, and a further GBP126,000 was invested during the period.
The investment is funding the construction and launch of a new
purpose-built 108 place nursery school in Wendover,
Buckinghamshire, an affluent commuter town with direct links to
London. Growing Fingers is a new venture headed by a management
team with many years' operational experience in nurseries and
healthcare facilities. The Company benefits from first charge
security over the Wendover site and the Growing Fingers
business.
The Company has completed eight new qualifying investments since
the period end, details of which are as follows.
Signal Building Services - Construction projects
In September 2017, the Company invested GBP200,000 (as part of a
total investment round of GBP2 million) into Signal Building
Services Limited, a recently established business specialising in
delivering turnkey solutions to construction projects. The
management team have over 40 years' of combined experience in the
construction sector and we understand that they are in advanced
negotiations to commence their first project.
Knott End - Pubs with Microbreweries
The Company invested GBP2.4 million (as part of a GBP4.8 million
qualifying investment alongside another Puma VCT) in Knott End
Limited which has entered into a franchise agreement with Brewhouse
& Kitchen Limited to roll out a portfolio of pubs offering
on-site craft micro-brewing activities and good quality food. The
management team at Knott End have already identified several
possible locations for their first unit and expect to open their
first pub early next year.
Sweat Union - Budget Gyms
In November 2017, the Company invested GBP3.35 million (as part
of a total investment round of GBP3.75 million) into Sweat Union
Limited, an innovative fitness business in the budget gym space.
The high calibre management team includes Frank Reed, a co-founder
of Virgin Active, as CEO and has already opened five gyms under the
Sweat! brand. Sweat! is pitched at a slight price premium to budget
rivals, has dedicated spinning and aerobics studios and recently
unveiled a partnership with Debenhams to launch in-store gyms. The
Company's investment will facilitate the roll-out of the brand
across the United Kingdom.
Sunlight Education Nucleus - Special Educational Needs
Schools
In November 2017, the Company made a GBP2.35 million qualifying
investment (as part of a GBP4.7 million investment alongside other
Puma VCTs) in Sunlight Education Nucleus Limited, a company seeking
to develop, own and operate a series of special education needs
schools across the United Kingdom.
Pure Cremation - Crematorium and Direct Cremations
In November 2017, the Company invested GBP3 million in Pure
Cremation Holdings Limited (as part of a GBP5 million qualifying
investment alongside another Puma VCT). Pure Cremation is a leading
provider of so-called direct cremations, meeting the needs of a
growing number of people in the United Kingdom who want a
respectful direct cremation arranged without any funeral, leaving
them free to say farewell how, where and when is right for them.
The Pure Cremation team have many years' experience in the funeral
services sector and have secured an option over a site near Andover
on which they will seek to develop a new crematorium and central
facility.
Children's Nurseries
We are pleased to have completed qualifying investments in three
children's day nursery businesses, backing experienced management
teams, details of which are as follows.
Applebarn Nurseries
In October 2017, the Company invested GBP1.1 million in
Applebarn Nurseries Limited (as part of a GBP2.2 million qualifying
investment alongside another Puma VCT) which is developing and will
operate a new 120 place children's day nursery in Altrincham, South
Manchester. The management team behind Applebarn include Stewart
Pickering (the founder of Kidsunlimited which he built up to 50
nurseries before a successful exit) and experienced developer and
contractor, the McGoff Group. The nursery is expected to open in
the third quarter of 2018.
Kid and Play
The Company made a GBP1.7 million qualifying investment in Kid
and Play Limited, alongside funds invested by another Puma VCT
totalling GBP3.4 million, in October 2017. Kid and Play is seeking
to develop, own and operate a new children's day nursery and has
identified a first site in Bromley, South London.
South West Cliffe
In October 2017, the Company invested GBP2.1 million (as part of
a GBP4.2 million qualifying investment alongside another Puma VCT)
in South West Cliffe Limited, supporting an experienced management
team to roll out a portfolio of purpose built day nurseries.
Non-Qualifying Investments
As previously reported, the Company had initially invested just
under GBP22 million in a series of lending businesses offering an
appropriate risk adjusted return in the short to medium term. It
was intended that these positions would be liquidated in due course
as the Company makes qualifying investments. Details of the loans
that these lending businesses have made, many of which were repaid
in full during the period to facilitate the qualifying investments
referred to above, are set out below.
Portfolio of freehold ground rent interests
In June 2016, a GBP2.3 million loan was advanced and secured
against a portfolio of freehold assets and the associated ground
rents, as part of a package from other vehicles managed and advised
by the Investment Manager totalling GBP4.3 million. We are pleased
to report that, during the period, the loan was repaid in full
giving a good rate of return.
Construction of Airport Hotel, Edinburgh
During the period, a GBP1.6 million loan (as part of an overall
facility of GBP13.5 million) was agreed with Ability Hotels
(Edinburgh) Limited to fund the development of a new 175-room
Hampton by Hilton hotel at Edinburgh Airport. The hotel is
scheduled to open in the summer of 2019 at which time it will be
the newest and nearest hotel to the airport terminal building. The
Ability Group is an experienced developer and operator of hotels
and the loan is secured with a first charge over the site.
Following the period end, Ability obtained planning permission to
increase the number of rooms to 240 and the overall facility is
anticipated to increase accordingly to GBP17.75 million.
Rovex Business Park, Birmingham
In July 2016, a loan of GBP1.5 million, together with loans from
other vehicles managed and advised by your Investment Manager
totalling GBP2.5 million, was advanced to Pall Mall Investments
2016 Limited. The loan was used to acquire Rovex Business Park, an
industrial business park in Birmingham. We are pleased to report
that, shortly following the period end, the loan was repaid in full
giving a good rate of return.
Pharmacy, Notting Hill
A loan of GBP1.03 million was advanced to Zinbake Limited to
facilitate the acquisition of the assets of a pharmacy business
located on Portobello Road in Notting Hill, London. The borrower is
an experienced operator and has carried out an extensive
refurbishment program at the new unit which has a good mix of NHS
and over-the-counter income. The loan is secured with a first
charge on the new pharmacy business and a first charge over the
borrower's existing pharmacy located in south west London, both of
which are trading well.
Citrus Group
As previously reported, a series of loans totalling GBP1 million
were advanced to various entities within the Citrus Group. These
loans, together with loans from other vehicles managed and advised
by the Investment Manager, form part of a series of revolving
credit facilities to provide working capital to the Citrus PX
business. Citrus PX operates a property part exchange service
facilitating the rapid purchase of properties for developers and
homeowners. The facility provides a series of loans to Citrus PX,
with the benefit of a first charge over a geographically
diversified portfolio of residential properties on conservative
terms.
Ironbridge Group
We previously reported that a GBP800,000 million facility (as
part of a total facility of GBP5 million) had been advanced to an
entity within the Ironbridge Group, providing the senior 70% slice
of "stretched senior" bridging loans on non-owner-occupied
properties in London and the South East with Ironbridge funding the
subordinated 30% slice. Ironbridge operate a bridge lending
business and have successfully deployed over GBP50m of customer
loans to date. Loans are being advanced from 6 to 24 months with
the senior slice at a conservative loan-to-value ratio.
Mixed Residential Commercial Development, Tower Bridge
A GBP1.8 million loan (together with loans from other vehicles
managed and advised by the Investment Manager totalling GBP4.3
million) was advanced to Empire TBR Limited to fund the
construction of a mixed residential and commercial development near
Tower Bridge, London. The location is well suited to the target
market, with good transport links and local amenities, and the
developer has successfully completed several similar redevelopments
in central London. Unfortunately, the project has made little
progress since the loan was advanced and may well not proceed to
development. However, the loan is secured with a first charge over
the site and the security covers the loan exposure.
Mixed Residential Commercial Development, Bloomsbury
As previously reported, a GBP3.9 million loan (as part of a
total facility of GBP17.97 million, increased from GBP17.5 million)
was advanced to Cudworth Limited to fund the construction of a
mixed residential and commercial development in Bloomsbury, London,
close to the British Museum and 600m from King's Cross station. The
development includes 11 apartments, 2 houses and 11,800 square feet
of B1 commercial space. The loan is secured with a first charge
over the site.
Care Home for the Elderly, Chester
A GBP608,000 loan (as part of an overall facility of GBP7.4
million) was advanced to New Care (Chester) Limited to fund the
development and initial trading of a 77-bed purpose-built care home
in Chester. The New Care Group is an experienced developer and
operator of care homes. The New Care Group is an experienced
developer and operator of care homes. The loan is secured with a
first charge over the site and is expected to generate an
attractive return. We understand that the development is
progressing well and the care home is scheduled to open in the
first quarter of 2018.
Liquidity Management
To further manage liquidity, the Company holds GBP1.2 million in
a floating rate note issued by Royal Bank of Canada and GBP1.2
million in a floating rate note issued by Commonwealth Bank of
Australia. It is intended that these positions will be liquidated
in due course as the Company makes further qualifying
investments.
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. PwC will
continue to assist the Investment Manager in monitoring rule
compliance.
Principal risks and uncertainties
Although the economy in the UK continues to grow, there are some
signs of a slowdown associated with high personal debt levels and
low growth in real wages. 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.
Patient Capital Review
We are pleased that, in its response to the Financing Growth in
Innovative Firms Consultation published with the Autumn Budget on
22 November 2017 ("the Patient Capital Review"), the Government has
recognised the continuing importance of VCTs in providing much
needed investment in SMEs. We note that proposed changes arising
out of the Patient Capital Review include increasing VCTs' minimum
qualifying investment percentage threshold from 70% to 80% with
effect from 6 April 2019. As reported above, the Company has made
good progress in making qualifying investments and we therefore
believe that it is on track to meet this target.
Board changes
The Company announced on 1 November 2017 that Jim Brydie had
resigned as a director with immediate effect. I would like to take
this opportunity to thank Jim for his valuable contribution to the
Company since its launch and wish him well for the future. We also
announced that David Brock was appointed as director of the Company
from the same date. David was previously a director of the first
four Puma VCTs and, most recently, a director of Puma VCT 8 plc
which has, to date, paid out 70p per share in dividends to
shareholders. He was, until July 1997, a main board director of MFI
Furniture Group plc and Managing Director of MFI International
Limited having been involved at a senior level in both MFI's
management buy-out and its subsequent flotation. He started his
career at Marks and Spencer Group PLC. David is currently Chairman
of Episys Limited, Elderstreet VCT plc and a non- executive
director of Hargreave Hale AIM VCT 1 plc. He has had interests in
venture capital both as a private investor and as an adviser to
various funds
Outlook
We are pleased that a substantial 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. There are many suitable
companies which are well-managed, in good market positions and
which need our investment. We therefore believe the Company is
strongly positioned to continue to assemble a portfolio to deliver
attractive returns to shareholders.
Ray Pierce
Chairman
30 November 2017
Income Statement (unaudited)
For the period ended 31 August 2017
Period ended
Period ended Period ended 28 February
31 August 2017 31 August 2016 2017
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
Gains on
investments - 7 7 - 4 4 - 26 26
Income 487 - 487 93 - 93 477 - 477
487 7 494 93 4 97 477 26 503
-------- -------- -------- -------- -------- -------- -------- -------- --------
Investment
management
fees 4 (74) (222) (296) (71) (213) (284) (144) (432) (576)
Other expenses (124) - (124) (157) - (157) (297) - (297)
(198) (222) (420) (228) (213) (441) (441) (432) (873)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Return/(loss)
on ordinary
activities
before
taxation 289 (215) 74 (135) (209) (344) 36 (406) (370)
Tax on
return
on ordinary
activities - - - - - - (7) 7 -
Return/(loss)
on ordinary
activities
after tax
attributable
to equity
shareholders 289 (215) 74 (135) (209) (344) 29 (399) (370)
======== ======== ======== ======== ======== ======== ======== ======== ========
Basic and
diluted
Return/(loss)
per Ordinary
Share (pence) 2 0.93p (0.70p) 0.24p (0.44p) (0.68p) (1.11p) 0.14p (1.98p) (1.84p)
======== ======== ======== ======== ======== ======== ======== ======== ========
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 2017
As at As at As at
31 August 31 August 28 February
Note 2017 2016 2017
GBP'000 GBP'000 GBP'000
Fixed Assets
Investments 6 25,793 24,826 27,129
----------- ----------- -------------
Current Assets
Prepayments 942 83 458
Cash 2,985 4,731 2,060
----------- ----------- -------------
3,927 4,814 2,518
Creditors - amounts
falling due within one
year (164) (132) (165)
Net Current Assets 3,763 4,682 2,353
----------- ----------- -------------
Net Assets 29,556 29,508 29,482
=========== =========== =============
Capital and Reserves
Called up share capital 19 19 19
Share premium account 29,833 29,833 29,833
Capital reserve - realised (620) (213) (425)
Capital reserve - unrealised 6 4 26
Revenue reserve 318 (135) 29
Equity Shareholders'
Funds 29,556 29,508 29,482
=========== =========== =============
Net Asset Value per
Ordinary Share 3 95.62p 95.47p 95.38p
=========== =========== =============
Diluted Net Asset Value
per Ordinary Share 3 95.62p 95.47p 95.38p
=========== =========== =============
Cash Flow Statement (unaudited)
For the period ended 31 August 2017
Period Period Period
ended ended ended
31 August 31 August 28 February
2017 2016 2017
GBP'000 GBP'000 GBP'000
Operating activities
Loss on ordinary activities
after tax 74 (344) (370)
Gains on investments (7) (4) (26)
Increase in debtors (484) (83) (458)
Increase in creditors (1) 132 165
Net cash used in operating
activities (418) (299) (689)
----------- ----------- -------------
Cash flow from investing
activities
Purchase of investments 1,343 (24,822) (27,103)
Net cash used in investing
activities 1,343 (24,822) (27,103)
----------- ----------- -------------
Cash flow from financing
activities
Proceeds received from
issue of ordinary share
capital - 30,909 30,909
Expenses paid for issue
of share capital - (1,057) (1,057)
Proceeds received from
issue of redeemable preference
shares - 13 13
Redemption of redeemable
preference shares - (13) (13)
Net cash generated from
financing activities - 29,852 29,852
----------- ----------- -------------
Increase in cash 925 4,731 2,060
Net cash at start of
the period 2,060 - -
Net funds at the period
end 2,985 4,731 2,060
=========== =========== =============
Reconciliation of Movements in Shareholders' Funds
(unaudited)
For the period ended 31 August 2017
Called
up Share Capital Capital
share premium reserve reserve Revenue
capital account - realised - unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Shares issued
in the period 19 30,890 - - - 30,909
Expense of share
issue - (1,057) - - - (1,057)
Total recognised
(losses)/gains
for the period - - (213) 4 (135) (344)
Balance as at
31 August 2016 19 29,833 (213) 4 (135) 29,508
Total recognised
(losses)/gains
for the period - - (212) 22 164 (26)
Balance as at
28 February
2017 19 29,833 (425) 26 29 29,482
Total recognised
(losses)/gains
for the period - - (195) (20) 289 74
Balance as at
31 August 2017 19 29,833 (620) 6 318 29,556
========= ========= ============ ============== ========= ========
Notes to the Interim Report
For the period ended 31 August 2017
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 profit per share of 0.24p is based on the loss for the
period of GBP74,000 and the weighted average number of shares in
issue as at 31 August 2017 of 30,909,188 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
31 August 31 August 28 February
2017 2016 2017
Net assets 29,556,000 29,508,000 29,482,000
Shares in issue 30,909,188 30,909,188 30,909,188
Net asset value per
share
Basic 95.62p 95.47p 95.38p
Diluted 95.62p 95.47p 95.38p
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. The financial information for the period ended 31 August 2017
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 2017
6. Investment portfolio summary
Valuation
as a %
of Net
Valuation Cost Gain/(loss) Assets
As at 31 August
2017 GBP'000 GBP'000 GBP'000
Qualifying Investment
- Unquoted
Growing Fingers
Limited 420 420 - 1%
Total Qualifying
Investments (1) 420 420 - 1%
---------- -------- ------------ ----------
Non-Qualifying
Investments
Piccadilly Lending
Limited 2,400 2,400 - 8%
Bayswater Lending
Limited 1,900 1,900 - 6%
Victoria Lending
Limited 3,800 3,800 - 13%
Tottenham Lending
Limited 3,800 3,800 - 13%
Sloane Lending
Limited 3,800 3,800 - 13%
Marble Lending
Limited 3,800 3,800 - 13%
Valencia Lending
Limited 2,441 2,441 - 8%
Total Non-Qualifying
investments 21,941 21,941 - 74%
---------- -------- ------------ ----------
Liquidity Management
Investments
Royal Bank of Canada
Bond (2) 2,213 2,213 - 7%
Commonwealth Bank
of Australia Bond
(2) 1,219 1,213 6 4%
Total Liquidity
Management Investments 3,432 3,426 6 11%
---------- -------- ------------ ----------
Total Investments 25,793 25,787 6 86%
Balance of Portfolio 3,763 3,763 14%
Net Assets 29,556 29,550 6 100%
---------- -------- ------------ ----------
(1) As discussed in the Chairman's statement, a substantial
number of qualifying investments were made following the period
end, such that just under 60% of the portfolio on the HMRC basis is
now qualifying.
(2) Quoted investment listed on the London Stock Exchange
Of the investments held at 31 August 2017, all are incorporated
in England and Wales with the exception of the liquidity management
holdings.
Copies of this Interim Statement will be made available on the
website:
http://www.pumainvestments.co.uk/pages/view/investors-information-vcts
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EANFEDDNXFEF
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