Final Results
April 28 2006 - 8:01AM
UK Regulatory
RNS Number:1854C
PUMA VCT II plc
28 April 2006
For immediate release 28 April 2006
Puma VCT II plc
Preliminary Final Results for the Year Ended 31 December 2005
Highlights
* #20.4 million subscribed in Puma VCT plc and Puma VCT II plc on flotation,
which jointly invest pro rata to their respective sizes - approximately
60:40.
* NAV per share of 105.0p for Puma VCT II plc at year end (up 7.2% since
inception). NAV 109.2p at 31 March 2006.
* Three qualifying investments made in 2005, totalling #2.425 million
between the 2 VCTs.
* Three further qualifying investments of #1.63 million by the 2 VCTS
following the period end, with further transactions in negotiation.
* Strong performance of alternative asset investments during and since
the year end.
Sir Aubrey Brocklebank Bt of Puma VCT II plc said:
"The first period of trading has been a successful one. The non-qualifying
investments have performed strongly, delivering good risk adjusted returns,
whilst the qualifying investments have also shown gains. Opportunities, both
for additional investments in qualifying companies and for appreciation of our
existing portfolio, appear encouraging and we therefore view the future with
confidence."
Enquiries
Shore Capital 020 7408 4090
Chris Ring
Graham Shore
Citigate Dewe Rogerson 020 7638 9571
Sarah Gestetner
Fiona Mulcahy
Notes to Editors
Puma VCT II plc is managed by Shore Capital's successful fund management team.
The Company's investment objective is to achieve high distributions to
shareholders. It will invest in a diversified portfolio of smaller companies,
including both AIM/OFEX-traded and unquoted companies, selecting companies which
Shore Capital believes will have a relatively lower risk profile than is typical
for their size whilst having the opportunity for value appreciation. Initially,
whilst suitable VCT Qualifying Companies are being identified, the Investment
Manager invests the Company's funds in a range of investments intended to
generate a positive return, including funds of hedge funds and other products
which aim to achieve an absolute return. The VCT will continue to hold a
proportion of such products after building up the desired holdings of VCT
Qualifying Companies.
Chairman's Statement
The first period of trading for Puma VCT II plc (the Company) has been a
successful one. Although this period has largely been concerned with fund
raising I am pleased to report that at the year-end the Company's net asset
value per share ("NAV") stood at 105.01p. This is a rise of 7.01p (7.2%) since
inception before the inclusion of performance fees.
Puma VCT II plc and Puma VCT plc jointly invest in proportion to their
respective fundraisings.
Venture capital investments
Three qualifying investments (Cadbury House, Patsystems and @UK) were
successfully completed by the Company's year-end.
The Company jointly invested #1.2 million with Puma VCT plc in Cadbury House
Hotel & Country Club. Cadbury House is a major venue for weddings, conferences
and banqueting in the Bristol area with a well-established fitness centre on 14
acres of freehold grounds. Situated 10 minutes from Bristol International
Airport, it is undergoing a major refurbishment to construct a new deluxe
leisure and fitness centre, a 65 room hotel wing and to upgrade the existing
banqueting facilities. It has planning permission to increase the number of
rooms in the hotel to 65, from its original 50, which has had a significant
impact on the value of the Company's investment in Cadbury House.
We have jointly invested #525,000 with Puma VCT plc in a qualifying AiM company,
Patsystems plc, involved in the development, distribution and support of
software enabling the electronic trading of financial products on global trading
exchanges.
With Puma VCT plc, we have jointly invested #700,000 in pre-IPO financing into
@UK plc. @UK provides an e-nablement service to suppliers of a number of Local
Authorities throughout the UK, including suppliers to schools and central
council departments. Just before year-end, @UK was listed on AiM which has
resulted in the Company showing a large unrealised gain in its investment.
At 31 December 2005, the Company's qualifying portfolio had a total cost of
#987,000. Despite being its first year, the qualifying portfolio was valued at
#1,316,000 resulting in an unrealised gain of #329,000. Further details are set
out in the Investment Manager's Report.
Non-qualifying investments
The Investment Manager's aim is to generate an absolute return on non-qualifying
investments on funds not invested in qualifying companies. We are extremely
pleased with the appreciation of its non-qualifying portfolio, its value of
#5,174,000 increasing from a cost of #4,731,000 resulting in unrealised gains of
#443,000.
Results and dividend
Gross revenue for the period was #145,000 and net revenue gain after taxation
was #31,000. The Board does not propose a dividend for the period.
Annual General Meeting
The Annual General Meeting of the Company will be held at Bond Street House, 14
Clifford Street, London, W1S 4JU on 26 May 2006 at 3:00pm.
Outlook
Opportunities, both for additional investments in qualifying companies and for
appreciation of our existing portfolio, appear encouraging and we view the
future with confidence.
Sir Aubrey Brocklebank Bt
Chairman
Investment Manager's Report
Overall Performance
Following one of the most successful new VCT launches in the last tax year, the
Company has delivered very strong returns with the net asset value per share of
your Company having increased by 7.2 per cent. (6.1 per cent. net of performance
fees) in the 8-9 months since launch. This compares very favourably to the FTSE
AiM index which fell by 4 per cent. between 6 April 2005, the start of the tax
year, and the end of December 2005. This performance puts the Company well on
track to deliver the net 120 pence to investors targeted at launch, which would
be a post-tax return of 14.9 per cent. p.a. on the 60 pence net cost to
investors.
This strong performance has been achieved by a combination of gains in the
qualifying portfolio and strong delivery from the manager's innovative approach
to the non qualifying investments where the manager's Hedge Fund Strategy made a
significant contribution out-performing their benchmark indices. The hedge fund
returns have been achieved with low volatility (a normal measure of risk) in
keeping with the manager's focus on relatively lower risk opportunities. The
portfolio of hedge funds has continued to show excellent progress in 2006.
Property related investments are also performing well for the non qualifying
portfolio with investments in The Hotel Corporation and Orchid Developments
Group Limited (Orchid) both showing large gains. The investment in Orchid has
been realised since the year end at a profit of #21,000 (a 21 per cent. gain).
The performance since launch demonstrates the benefits of our strategy and
positioning.
Activity
The first 8-9 months saw three qualifying investments completed with #2.43m
invested between the Company and Puma VCT plc. Despite high levels of IPO
activity on the AiM market during the period since launch, only one of these
investments was into an AiM quoted company (Patsystems plc) with the investment
also being part of a secondary funding round rather than an IPO. This was
because we had concerns about the valuations of many of the VCT qualifying AiM
IPO's which we considered to be high. Instead we focussed on identifying private
companies which met our investment criteria including strong management, robust
growth, a degree of asset backing and a sensible valuation. Of the three
qualifying investments, two are already showing good gains.
The Company's first investment was in Cadbury House Hotel and Country Club plc
("Cadbury"), a major venue for weddings, conferences and dinner dances near
Bristol. Originally constructed as a private residence in 1790, Cadbury sits in
14 acres of freehold property, located midway between Bristol and
Weston-super-Mare. It also has a leisure and fitness facility with 1,600 members
which is to be replaced with a new leisure complex as part of a major
re-development of its 14 acre site including the construction of a hotel wing.
Cadbury has successfully applied for consent to increase the size of the hotel
within the same proposed building shell. An independent professional valuation
shows that this should add considerably to the value of the development when
complete, with a consequent increase in the value of the Company's investment.
The Company invested in @UK plc ("@UK") on a pre-IPO basis at a discount to the
IPO price. Following its successful IPO in December 2005, the investment in @UK
is showing an uplift in value. @UK is the UK's leading developer and provider
of software products which facilitate e-procurement between public sector bodies
and their suppliers. @UK's proven technology enables a more efficient process
for tendering, ordering, invoicing and purchase administration by moving these
functions to their proprietary electronic platform. @UK's system has been
selected by over 40 public sector bodies, including nearly half of the county
councils in England. Several education authorities and NHS trusts have also
employed @UK's technology. In addition, @UK was selected by central Government
to participate in 'Zanzibar', an e-marketplace to be used by Government
departments.
During August the Company invested in Patsystems ("Pats"), a provider of trading
and exchange systems to the global derivatives markets. The company was floated
at the beginning of 2000 and is now only one of a handful of companies which
dominate this industry. Pats has recently turned cash flow positive for the
first time and earnings quality is high with recurring revenues amounting to
approximately 85% of total revenues. Although the share price performance has
been muted since the investment was made, we believe that Pats is well placed to
play a key role in the expected industry consolidation and in so doing, create
further value for shareholders.
Qualifying Portfolio Valuation Policy
The unquoted investment has been valued in accordance with the guidelines issued
by the British Venture Capital Association. Holdings in companies traded on AiM
are valued on the basis of bid market prices on 30 December 2005.
Outlook
The Company has performed very well in the 8-9 months since launch and we expect
the portfolio of both qualifying and non qualifying investments to do well in
the year ahead. The deal flow for 2006 looks strong. The Company has closed
three further qualifying investments in 2006 totalling (between the 2 VCTs)
#1.63 million. Further transactions are in negotiation. We will continue to
seek to identify opportunities in the AIM/OFEX markets where we believe pricing
entry levels will result in value to shareholders being delivered over time. We
will also seek to structure investments in unquoted companies which provide both
a measure of downside protection and exposure to equity upside.
Shore Capital Limited
Investment Portfolio Summary
As at 31 December 2005
Investment Valuation Original Cost Gain/(Loss) Valuation as
#'000 #'000 #'000 % of NAV
Qualifying Investments
Cadbury House Hotel and Country Club plc* 722 488 234 8.3%
Patsystems plc 189 214 (25) 2.2%
@UK plc 405 285 120 4.7%
1,316 987 329 15.2%
Non - Qualifying Investments
Hedge funds and equity investments 5,174 4,731 443 59.3%
Total investments 6,490 5,718 772 74.5%
Cash and other net assets 2,225 2,225 25.5%
-
8,715 7,943 772 100.0%
* unquoted
Statement of Total Return
(incorporating the revenue account*) for the period ended 31 December 2005
For the period
10 December 2004 to
31 December 2005
Revenue Capital Total
#'000 #'000 #'000
Gains on investments - 620 620
Income 145 - 145
145 620 765
Investment management fees 29 87 116
Performance fees 5 78 83
Other expenses 67 - 67
101 165 266
Return on ordinary activities before taxation 44 455 499
Tax on return on ordinary activities (13) 13 -
Return on ordinary activities after tax 31 468 499
attributable to equity shareholders
Return per Ordinary Share (pence) 0.41p 6.26p 6.67p
All revenue and capital items in the above statement derive from continuing
operations.
*The revenue column of this statement is the profit and loss account of the
Company.
Revenue return per ordinary share is based on the net revenue after tax of
#31,000, in respect of 7,481,453 ordinary shares, being the weighted average
number of ordinary shares in issue during the period.
Capital return per ordinary share is based on the net capital profit after tax
of #468,000, in respect of 7,481,453 ordinary shares, being the weighted average
number of ordinary shares in issue during the period.
Balance Sheet
As at 31 December 2005
2005
#'000
Fixed Assets
Investments 6,490
Current Assets
Trades in advance 339
Debtors 14
Cash 1,965
2,318
Creditors - amounts falling due within one year (92)
Net Current Assets 2,226
Total Assets less Current Liabilities 8,716
(1)
Creditors - amounts falling due after more than one year (including
convertible debt)
Net Assets 8,715
Capital and Reserves
Called up share capital 83
Capital reserve - realised (213)
Capital reserve - unrealised 681
Other reserve 83
Revenue reserve 8,081
Equity Shareholders' Funds 8,715
Net Asset Value per Ordinary Share 105.01
Diluted Net Asset Value per Ordinary Share 104.01
Net asset value per ordinary share is based on the net assets at the period end
and on 8,299,300 ordinary shares, being the number of ordinary shares in issue
at the period end.
Diluted net asset value per ordinary share is based on the net assets at the
period end and on 8,379,354 ordinary shares, being the total number of ordinary
shares in issue, on a fully diluted basis, at the period end.
Cash Flow Statement
For the period ended 31 December 2005
For the period
10 December 2004 to
31 December 2005
#'000
Operating activities
Return on ordinary activities before taxation 44
Investment management fee charged to capital (87)
Performance fee to be effected through share-based payment 5
Foreign exchange gain on cash 1
Increase in debtors (14)
Increase in creditors 76
Net cash inflow from operating activities 25
Capital expenditure and financial investment
Purchase of investments (6,262)
Proceeds from sale of investments 561
Increase in trades in advance (339)
Net realised loss on forward foreign exchange contracts (154)
Net cash outflow from capital expenditure and financial investment (6,194)
Financing
Proceeds received from issue of ordinary share capital 8,299
Expenses paid for issue of share capital (166)
Proceeds received from issue of redeemable preference shares 50
Redemption of redeemable preference shares (50)
Proceeds received from convertible loan notes 1
Net cash inflow from financing 8,134
Increase in cash for the period 1,965
Reconciliation of net cash flow to movement in net funds
Increase in cash for the period 1,965
Net funds at start of the period -
Net funds at end of the period 1,965
Notes to the Accounts
For the period ended 31 December 2005
Reconciliation of Movements in Equity Shareholders' Funds
2005
#'000
Proceeds of share issues pursuant to the offers for subscription 8,299
Expenses of issue (166)
Total return on ordinary activities after tax 499
Performance fee to be effected through share-based payment 83
8,715
Note
The financial information set out in the announcement does not constitute the
Company's statutory accounts for the period ended 31 December 2005. The
statutory accounts for the period ended 31 December 2005 will be finalised on
the basis of the financial information presented by the directors in this
preliminary announcement and will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
A copy of the full annual report and financial statements for the period ended
31 December 2005 will be printed and posted to shareholders. Copies will also
be available to the public at the registered office of the Company at Bond
Street House, 14 Clifford Street, London W1S 4JU
This information is provided by RNS
The company news service from the London Stock Exchange
END
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