Interim Results
September 26 2006 - 1:13PM
UK Regulatory
RNS Number:5081J
PUMA VCT II plc
26 September 2006
Interim Results for the Six Months ended 30 June 2006
Chairman's Statement
Highlights
* Undiluted net asset value per share of 110.24p, a 5.0% increase from
year-end.
* Fully diluted net asset value of 108.19p, an increase of 4.0%.
* Strong performance of alternative asset investments during the period.
* Deal flow of larger qualifying investments in pipeline.
Introduction
During the six months to 30 June 2006, the Company's net asset value grew by
5.0%, in excess of targets. This was accomplished from investments in
qualifying companies selected as being on the whole lower risk whilst making
alternative asset investments intended to provide an absolute return with low
volatility. Although the rate of new qualifying investments in the first half
of this year was lower than expected, the flow of potential new deals is
currently strong and we expect a significant upturn in activity before the
year-end.
Net asset value
2006 has begun well with the Company's net asset value up 5.0% to 110.24p. The
diluted net asset value is up 4.0% to 108.19p after accruing for potential
performance fees. The increase is largely due to the Investment Manager's focus
on maximising the returns of its hedge fund portfolio and other non-qualifying
listed investments.
The total return for the six month period to 30 June 2006 was 4.18p, comprising
a revenue return of 0.20p and a capital return of 3.98p.
Dividends
Your Board is not proposing a dividend for the period. When the portfolio is
more fully established the Directors intend to distribute a large element of the
available income and, if appropriate, realised capital gains.
Qualifying investments
During the six months a total of #196,000 was invested in the following
companies:
* Clarity Commerce Solutions Plc (#98,000) is an AIM quoted
provider of software and IT support services based in Basingstoke.
* Interactive World Plc (#70,000) is an AIM quoted distributor of digital
media content to customers of major UK mobile network operators and users
of leading UK internet search engines based in Barking.
* Debts.co.uk Plc (#28,000) is an AIM quoted personal debt consolidator
based in Chesterfield.
The Investment Managers have been selective about investing into qualifying
companies on AIM because they believed that new issues available to VCTs in the
first five months of this year were generally over-valued and in many cases by
poor quality companies. Since then, the small cap market has retrenched
bringing valuations down to a more reasonable level. This should provide a
better environment from which to invest in qualifying companies.
The qualifying portfolio now consists of six investments and represents
approximately 17% invested to 30 June 2006. With some larger qualifying
investments to be made in the near-term, your Board is confident the requirement
for at least 70% to be invested in qualifying companies after three years will
be met within the timescale.
Non-qualifying investments
The Investment Manager's non-qualifying portfolio has performed strongly in the
six months to 30 June 2006 producing the bulk of the Company's total return in
this period. The Investment Manager continues to seek out hedge funds which
meet the goal of absolute return and to construct a portfolio with a low
correlation of underlying funds and a consequent low volatility at the portfolio
level. As the funding of qualifying investments increases, the hedge fund
portfolio will be progressively liquidated to meet this need.
Outlook
The Company's Investment Manager, Shore Capital, currently has a strong deal
flow of interesting qualifying opportunities in private equity deals. The
recent turbulence in equity markets has brought valuations down to a more
realistic level which should provide interesting opportunities.
I look forward to reporting the progress of the Company with the next Annual
Report for the year ended 31 December 2006. In the meantime, shareholders should
note that the Company publishes its net asset value per share each month over
the London Stock Exchange's electronic system.
Sir Aubrey Brocklebank Bt
Chairman
26 September 2006
Income Statement (unaudited)
For the six months ended 30 June 2006
1 January 2006 to 10 December 2004 to 10 December 2004 to
30 June 2006 30 June 2005 30 December 2005
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Gains on investments - 479 479 - 25 25 - 620 620
Income 89 - 89 34 - 34 145 - 145
89 479 568 34 25 59 145 620 765
Investment
management fees 4 24 73 97 7 20 27 29 87 116
Performance fees 4 82 86 - - - 5 78 83
Other expenses 38 - 38 15 - 15 67 - 67
66 155 221 22 20 42 101 165 266
Return on ordinary
activities before
taxation 23 324 347 12 5 17 44 455 499
Tax on return on
ordinary activities
capital (6) 6 - - - - (13) 13 -
Return on ordinary
activities after tax
attributable to
equity shareholders 17 330 347 12 5 17 31 468 499
Return per Ordinary
Share (pence) 2 0.20p 3.98p 4.18p 0.14p 0.06p 0.20p 0.41p 6.26p 6.67p
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 2006
As at As at As at
30 June 2006 30 June 2005 31 December 2005
Note #'000 #'000 #'000
Fixed Assets
Investments 6 7,918 3,584 6,490
Current Assets
Trades in advance - - 339
Debtors 65 2 14
Cash 1,256 4,755 1,965
1,321 4,757 2,318
Creditors - amounts falling due
within one year (89) (190) (92)
Net Current Assets 1,232 4,567 2,226
Total Assets less Current
Liabilities 9,150 8,151 8,716
Creditors - amounts falling due
after more than one year
(including convertible debt) (1) (1) (1)
Net Assets 9,149 8,150 8,715
Capital and Reserves
Called up share capital 83 83 83
Share premium account - 8,050 -
Capital reserve - realised 65 (17) (213)
Capital reserve - unrealised 733 22 681
Other reserve 170 - 83
Revenue reserve 8,098 12 8,081
Equity Shareholders' Funds 9,149 8,150 8,715
Net Asset Value per Ordinary Share 3 110.24p 98.20p 105.01p
Diluted Net Asset Value per
Ordinary Share 3 108.19p 98.20p 104.01p
Cash Flow Statement (unaudited)
For the six months ended 30 June 2006
1 January 2006 to 10 December 2004 to 10 December 2004 to
30 June 2006 30 June 2005 31 December 2005
#'000 #'000 #'000
Operating activities
Return on ordinary activities before taxation 23 12 44
Investment management fee charged to capital (73) (20) (87)
Performance fee to be effected through
share-based payment 4 - 5
Foreign exchange (loss)/gain on cash (17) 2 1
Increase in debtors (51) (2) (14)
Decrease in creditors (10) 190 76
Net cash (outflow)/inflow from operating
activities (124) 182 25
Capital expenditure and financial investment
Purchase of investments (2,733) (3,637) (6,262)
Proceeds from sale of investments 1,580 122 561
Decrease/(increase) in trades in advance 339 - (339)
Net realised gain/(loss) on forward foreign
exchange contracts 229 (46) (154)
Net cash outflow from capital expenditure and
financial investment (585) (3,561) (6,194)
Financing
Proceeds received from issue of ordinary share
capital - 8,299 8,299
Expenses paid for issue of share capital - (166) (166)
Proceeds received from issue of redeemable
preference shares - - 50
Redemption of redeemable preference shares - - (50)
Proceeds received from convertible loan notes - 1 1
Net cash inflow from financing - 8,134 8,134
(Decrease)/increase in cash (709) 4,755 1,965
Reconciliation of net cash flow to movement in
net funds
(Decrease)/increase in cash for the period (709) 4,755 1,965
Net cash at start of the period 1,965 - -
Net funds at the period end 1,256 4,755 1,965
Reconciliation of Movements in Shareholders' Funds (unaudited)
For the six months ended 30 June 2006
Six months ended 30 June 2006
Called up Share Capital Capital
share premium reserve- reserve- Other Revenue
capital account realised unrealised reserve reserve Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Balance at 31 December 2005 83 - (213) 681 83 8,081 8,715
Combined net return on
ordinary activities after
taxation - - 278 52 87 17 434
Balance at 30 June 2006 83 - 65 733 170 8,098 9,149
Period from 10 December 2004 to 30 June 2005
Share issues in the period 83 8,216 - - - - 8,299
Expenses of share issues - (166) - - - - (166)
Combined net return on
ordinary activities after
taxation - - (17) 22 - 12 17
Balance at 30 June 2005 83 8,050 (17) 22 - 12 8,150
Period from 10 December 2004 to 31 December 2005
Share issues in the period 83 8,216 - - - - 8,299
Expenses of share issues - (166) - - - - (166)
Combined net return on
ordinary activities after
taxation - - (213) 681 83 31 582
Capital reconstruction - (8,050) - - - 8,050 -
Balance at 31 December 2005 83 - (213) 681 83 8,081 8,715
Notes to the Interim Report
For the six months ended 30 June 2006
1. 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" ("
SORP") December 2005. Although this SORP principally applies to Investment
Trusts, many of the characteristics of Investment Trusts are shared by VCTs
therefore the Company will continue to follow the SORP until investment company
status is revoked.
The Company is required to comply with a number of new UK Financial Reporting
Standards (FRS), which now represent UK Generally Accepted Accounting Practice
(UK GAAP), in presenting its financial statements for the year ending 31
December 2006. These Standards have been introduced as part of the process of
aligning UK accounting principles with International Accounting Standards. The
unaudited interim financial statements for the six months ended 30 June 2006
have been prepared in compliance with the new Standards. There is no change
with respect to the accounting policies from those used in preparing the annual
financial statements for the year ended 31 December 2005.
2. Return per Ordinary Share
The total return per share of 4.18p (30 June 2005 - 0.20p) is based on the
profit for the period of #347,000 (30 June 2005 - #17,000) and the weighted
average number of shares in issue as at 30 June 2006 of 8,299,300 (30 June 2005
- 8,299,300).
3. Net asset value per share
Period Net Asset Value per
share
Net assets Shares in issue Basic Diluted
30 June 2006 #9,149,000 8,299,300 110.24p 108.19p
31 December 2005 #8,715,000 8,299,300 105.01p 104.01p
30 June 2005 #8,150,000 8,299,300 98.20p 98.20p
4. Management fees
The Company pays the Investment Manager an annual management fee of 2% (plus
VAT) 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 six months ended 30 June 2006
and the period ended 30 June 2005 has not been audited and does not comprise
full financial statements within the meaning of Section 240 of the Companies Act
1985. The financial information for the period ended 31 December 2005 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 six months ended 30 June 2006
6. Investment portfolio summary
Cost Valuation Valuation as a
As at 30 June 2006 #'000 #'000 % of Net Assets
Qualifying investments - unquoted
Cadbury House Hotel & Country Club plc - equity 49 67 1%
Cadbury House Hotel & Country Club plc - debt 440 655 7%
Qualifying investments - quoted
Clarity Commerce Solutions plc 98 89 1%
Debts.co.uk plc 28 29 1%
Interactive World plc 70 78 1%
Patsystems plc 214 235 3%
@UK plc 285 380 3%
Total qualifying investments 1,184 1,533 17%
Non-qualifying investments
Hedge fund portfolio - unquoted 1,048 1,148 13%
Hedge fund portfolio - quoted 3,430 3,754 41%
Other quoted investments 883 1,033 11%
Fixed interest security 451 450 5%
Total non-qualifying investments 5,812 6,385 70%
Total investments 6,996 7,918 87%
Balance of portfolio 1,231 1,231 13%
Net Assets 8,227 9,149 100%
This information is provided by RNS
The company news service from the London Stock Exchange
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