TIDMPUM8
Puma VCT 8 plc
Interim Report
For the period ended 30 June 2014
Chairman's Statement
Highlights
-- NAV per share up 0.71p in the half year at 83.94p (93.94p after adding
back dividends paid to date)
-- Currently over 90% of the assets invested in portfolio of investments
generating an attractive return
-- 62% in qualifying investments, expected to exceed the 70% threshold
shortly
Introduction
During the six months to 30 June 2014, the Company continued to pursue
opportunities to deploy its cash resources in both qualifying and
non-qualifying investments. In doing so, it focused on its mandate to
exploit the opportunities which are arising as a result of tight credit
markets.
Net Asset Value ('NAV')
The NAV per share at the period end was 83.94p (93.94p after adding back
dividends paid to date), an increase of 0.71p in the half year,
equivalent to a GBP91,000 profit for the period.
Dividends
As set out in the accounts for the period ended 31 December 2013, the
Company declared a dividend of 5p per ordinary share for that period
which was paid on 21 February 2014. Reflecting this recent pay-out,
your Board is not proposing a further dividend at this interim stage,
but intends to pay out a dividend of 5p per ordinary share in respect of
each of this full year and subsequent years as envisaged in the
Company's prospectus.
Investments
I am pleased to report that the Company has completed a further two VCT
qualifying investments. Over 90% of the Company's assets are now
invested in a diverse portfolio of qualifying and non-qualifying
investments, generating an attractive return.
Qualifying Investments
The Company is required to have at least 70% of its assets in VCT
qualifying investments by the end of this full accounting period (28
February 2015). With approximately 62% of the Company's assets in VCT
qualifying investments at the date of this interim report and deals to
complete in legal process, the Company is well on course to meet its
HMRC qualifying targets.
The Company's GBP930,000 investment in Brewhouse and Kitchen Limited
continues to perform well. Brewhouse and Kitchen is managed by two
highly experienced pub sector professionals and our funding will
facilitate the acquisition of freehold pubs and the roll-out of the
brand. The investment is largely in the form of senior debt, secured
with a first charge over the business and each site acquired. Funds can
be utilised to a maximum 65% loan-to-value ratio on freeholds, and are
expected to produce an attractive return to the Company. Having opened
its first pub, the White Swan in Portsmouth, last year, Brewhouse and
Kitchen opened its second pub, the Station Master's House in Dorchester,
in April after a substantial renovation. Both have been trading well,
and, since the period end, Brewhouse and Kitchen have taken leases on a
further three units in London and Bristol.
As previously reported, Isaacs Trading Limited, Kinloss Trading Limited
and Jephcote Trading Limited (in which the Company had invested GBP1
million, GBP254,000 and GBP1 million respectively) were, as members of
SKPB Services LLP, engaged in a contract with Ansgate (Barnes) Limited
to provide project management and contracting services in connection
with the construction of nine new houses and 12 new flats at a
construction known as The Albany, in Barnes, south west London. We
understand that the project is progressing well with a view to
completion by the third quarter of next year. SKPB Services LLP has also
recently entered into a contract with HB Villages Tranche 2 Limited to
provide project management and contracting services in connection with
the construction of 12 units as accommodation and supported housing for
psychiatric and learning disabled service users, and their care-workers,
in Timperley, Greater Manchester.
As previously reported, in July 2013 the Company invested GBP450,000
(alongside other Puma VCTs) into Saville Services Limited, a company
providing contracting services over a series of projects including the
construction of up to 20 apartments for supported living for psychiatric
and learning disabled service users in Grimsby, North East Lincolnshire.
I am pleased to report that Saville Services recently completed this
project and its directors are actively pursuing opportunities to
continue to deploy the capital and profits arising from the Grimsby
project in similar projects in the near future.
Since the period end, the Company has made two new VCT qualifying
investments.
Before the passing of the Finance Act 2014, the Company completed a
GBP1.25 million qualifying investment (as part of a GBP5 million
investment alongside other Puma VCTs) in Urban Mining Limited, a member
of the Chinook Urban Mining group of companies. Chinook Urban Mining is
a well-funded energy-from-waste business which is developing a flagship
plant in East London to generate electricity through the gasification of
municipal solid waste and will benefit from Renewable Obligations
Certificates. The management team have a track record delivering
similar projects in other jurisdictions and are a preferred partner of
Chinook Sciences, the Nottingham based leading technology company which
has developed the award-winning "non-incineration ultra clean synthetic
gas technology" which will be used in the East London plant. Chinook
Sciences also holds a minority stake in the business. The investment is
secured with a first charge over the Chinook Urban Mining business and
the eight acre site of the East London plant and is expected to produce
an attractive return to the Company over three years.
Earlier this month, the Company made a GBP1 million qualifying
investment (as part of a GBP8 million investment alongside other
entities managed and advised by your Investment Manager) in Opes
Industries Limited. Opes is developing a materials recycling facility at
an established landfill and aggregates business on a 76 hectare site in
Oxfordshire. The investment is secured with a first charge over the
site and the Opes business and is expected to produce an attractive
return to the Company over four years.
Non-Qualifying Investments
The Company's GBP881,000 non-qualifying loan to Ennovor Trading 1
Limited (formerly known as Organic Waste Management Trading Limited)
continues to perform well. The loan (through an affiliate of the
Company and other Puma VCTs) extended an innovative GBP4 million
revolving credit facility to Ennovor Trading which provides working
capital for the purchase of used cooking oil for conversion into
bio-diesel for sale to obligated off-take parties. The facility is
structured to mitigate risks by being capable of draw only once approved
back-to-back purchase and sale contracts have been entered into with
approved counterparties.
As previously reported, the Company invested GBP750,000 (as part of a
total investment by Puma VCTs of GBP2.16 million) in Gold Line Property
Limited, a care and dementia treatment business which is currently
developing new premises in Surrey. The management team have a long track
record in operating similar treatment centres across the UK. The
project is progressing well and the team expect the new facility to open
in early 2015.
Together with other vehicles managed and advised by your Investment
Manager, the Company made a GBP500,000 non-qualifying loan, as part of
GBP5 million revolving credit facility to Citrus PX Two Limited, part of
the Citrus Group, through an affiliate, Valencia Lending Limited.
Citrus PX Two operates a property part exchange service facilitating the
rapid purchase of properties for developers and homeowners. The
Company's facility is providing a series of loans to Citrus PX Two, with
the benefit of a first charge over a geographically diversified
portfolio of residential properties on conservative terms.
The Company's GBP1,420,000 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.
As previously reported, the Company had extended a GBP650,000
non-qualifying loan (as part of a GBP1.3 million financing with other
Puma VCTs for Countywide Property Holdings Limited, a business with a
strong track record of acquiring greenfield and brownfield sites for
residential and commercial development. The loan was secured on a 5.6
acre site, including a large house, in Brackley near Silverstone. I am
pleased to report that this loan has recently been repaid in full
following the sale of the site to one of the UK's largest house builders
after planning permission was granted. During the period, the Company
also realised its GBP785,000 holding in a Tesco Bank 5% 8 year bond at a
premium to the issue price.
We are pleased that our strategy for the non-qualifying portfolio of
moving away from quoted investments and instead investing in secured
non-qualifying loans offering a good yield with hopefully limited
downside risk is working well for the Company as the Countywide Property
Holdings demonstrates.
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.
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 2014.
Outlook
The Company has made good progress during the period, and thereafter. We
are pleased to report that the Company's net assets are now fully
deployed in a diverse range of high quality businesses and projects.
The lack of availability of bank credit has enabled the Company to
assemble a portfolio of investments on attractive terms. We have further
investments in the pipeline which will bring the VCT's portfolio over
the 70% threshold of qualifying investment. After this there will be
some further changes in the composition of the portfolio to ensure that
the Company satisfies its HMRC qualifying targets, the Board expects to
concentrate in the future primarily on the monitoring of our existing
investments and considering the options for exits.
Sir Aubrey Brocklebank
Chairman
29 August 2014
Income Statement (unaudited)
For the period ended 30 June 2014
Six months ended Six months ended Year ended
30 June 2014 30 June 2013 31 December 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 - 11 11 - (17) (17) - (10) (10)
Income 298 - 298 177 - 177 402 - 402
298 11 309 177 (17) 160 402 (10) 392
Investment management fees 4 (27) (81) (108) (28) (84) (112) (57) (171) (228)
Performance fees - - - - - - - - -
Other expenses (110) - (110) (95) - (95) (203) - (203)
(137) (81) (218) (123) (84) (207) (260) (171) (431)
Return/(loss) on ordinary activities before taxation 161 (70) 91 54 (101) (47) 142 (181) (39)
Tax on return on ordinary activities - - - - - - - - -
Return/(loss) on ordinary activities after tax attributable
to equity shareholders 161 (70) 91 54 (101) (47) 142 (181) (39)
Basic and diluted
Return/(loss) per Ordinary Share (pence) 2 1.26p (0.55p) 0.71p 0.42p (0.79p) (0.37p) 1.11p (1.41p) (0.30p)
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 2014
As at As at As at
Note 30 June 2014 30 June 2013 31 December 2013
GBP'000 GBP'000 GBP'000
Fixed Assets
Investments 7 7,835 6,659 8,620
Current Assets
Debtors 279 116 92
Cash 2,807 4,576 2,743
3,086 4,692 2,835
Creditors - amounts falling due within one year (158) (46) (142)
Net Current Assets 2,928 4,646 2,693
Total Assets less Current Liabilities 10,763 11,305 11,313
Creditors - amounts falling due after more than one
year (including convertible debt) (1) (1) (1)
Net Assets 10,762 11,304 11,312
Capital and Reserves
Called up share capital 128 128 128
Share premium account - 12,009 -
Capital reserve - realised (334) (213) (299)
Capital reserve - unrealised - 28 35
Other reserve - - -
Revenue reserve 10,968 (648) 11,448
Equity Shareholders' Funds 10,762 11,304 11,312
Net Asset Value per Ordinary Share 3 83.94p 88.17p 88.23p
Diluted Net Asset Value per Ordinary Share 3 83.94p 88.17p 88.23p
Cash Flow Statement (unaudited)
For the period ended 30 June 2014
Six months ended Six months ended Year ended
30 June 2014 30 June 2013 31 December 2013
GBP'000 GBP'000 GBP'000
Operating activities
Return/(loss) on ordinary activities before tax 91 (47) (39)
(Gains)/losses on investments (24) 17 10
Decrease/(increase) in debtors (187) (49) (25)
Increase/(decrease) in creditors 16 (72) 37
Net cash inflow/(outflow) from operating activities (104) (151) (17)
Corporation tax paid - - -
Capital expenditure and financial investment
Purchase of investments - (1,130) (3,084)
Proceeds from sale of investments 809 -
Net realised loss on forward foreign exchange contracts - - -
Transaction costs - - -
Net cash outflow from capital expenditure and financial
investment 809 (1,130) (3,084)
Equity dividend paid (641) (641) (641)
Financing
Proceeds received from issue of ordinary share capital - - -
Expenses paid for issue of share capital - - -
Redemption of redeemable preference shares - - (13)
Proceeds received from convertible loan notes - - -
Net cash outflow from financing - - (13)
Decrease in cash 64 (1,922) (3,755)
Net cash at start of the period 2,743 6,498 6,498
Net funds at the period end 2,807 4,576 2,743
Reconciliation of Movements in Shareholders' Funds (unaudited)
For the period ended 30 June 2014
Capital
Called Share reserve Capital
up share premium - reserve - Revenue
capital account realised unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1
January 2013 128 12,009 (128) 45 (62) 11,992
Total
recognised
(losses)/gains
for the
period - - (85) (17) 55 (47)
Dividends paid - - - - (641) (641)
Balance as at
30 June 2013 128 12,009 (213) 28 (648) 11,304
Capital
reconstruction - (12,009) - - 12,009 -
Total
recognised
(losses)/gains
for the
period - - (86) 7 87 8
Balance as at
31 December
2013 128 - (299) 35 11,448 11,312
Total
recognised
(losses)/gains
for the
period - - (35) (35) 161 91
Dividends paid - - - - (641) (641)
Balance as at
30 June 2014 128 - (334) - 10,968 10,762
Notes to the Interim Report
For the period ended 30 June 2014
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 return per share of 0.71p is based on the profit for the
period of GBP91,000 and the weighted average number of shares in issue
as at 30 June 2014 of 12,820,841.
3. Net asset value per share
As at As at As at
30 June 2014 30 June 2013 31 December 2013
Net assets 10,762,000 11,304,000 11,312,000
Shares in issue 12,820,841 12,820,841 12,820,841
Net asset value per share
Basic 83.94p 88.17p 88.23p
Diluted 83.94p 88.17p 88.23p
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 38. There were no other related party transactions
during the six months ended 30 June 2014.
6. The financial information for the period ended 30 June
2014 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 30 June 2014
7. Investment portfolio summary
Valuation as a % of
Valuation Cost Gain/(loss) Net Assets
GBP'000 GBP'000 GBP'000
As at 30 June 2014
Qualifying Investment
- Unquoted
Brewhouse & Kitchen
Limited 930 930 - 9%
Isaacs Trading Limited 1,000 1,000 - 9%
Jephcote Trading
Limited 1,000 1,000 - 9%
Kinloss Trading
Limited 254 254 - 2%
Saville Services
Limited 450 450 - 4%
Total Qualifying
Investments 3,634 3,634 - 33%
Non-Qualifying
Investments
Buckhorn Lending
Limited 881 881 - 8%
Puma Brandenburg
Finance Limited 1,420 1,420 - 13%
Latimer Lending
Limited 650 650 - 6%
Gold Line Property
Limited 750 750 - 7%
Valencia Lending
Limited 500 500 - 5%
Total Non-Qualifying
investments 4,201 4,201 - 39%
Total Investments 7,835 7,835 72%
Balance of Portfolio 2,927 2,927 28%
Net Assets 10,762 10,762 - 100%
Copies of this Interim Statement will be posted to shareholders in due
course and made available on the website:
http://www.shorecap.gg/alternative-asset-management/puma-vcts/information
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 VCT 8 PLC via Globenewswire
HUG#1852014
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