TIDMPUM9

RNS Number : 9734X

Puma VCT 9 PLC

30 November 2017

Puma VCT 9 plc

Interim Report

For the period ended 31 August 2017

Officers and Professional Advisers

 
 Directors                            Auditor 
 Egmont Kock (Chairman)               RSM UK Audit LLP 
  Terence Rhodes                       Chartered Accountants 
  Graham Shore                         25 Farringdon Street 
                                       London EC4A 4AB 
 Secretary 
  Eliot Kaye                            Sponsors and Solicitors 
                                        Howard Kennedy 
  Registered Number                     No 1 London Bridge 
  08238812                              London SE1 9BG 
 Registered Office                    Bankers 
  Bond Street House                    The Royal Bank of Scotland 
  14 Clifford Street                   plc 
  London W1S 4JU                       London City Office 
                                       PO Box 412 
                                       62-63 Threadneedle Street 
  Investment Manager                   London EC2R 8LA 
  Puma Investment Management 
  Limited                              Lloyds Bank International 
  Bond Street House                    Limited 
  14 Clifford Street                   Sarnia House 
  London W1S 4JU                       Le Truchot 
                                       St Peter Port 
                                       Guernsey, GY1 4EF 
 Registrar                            VCT Tax Advisor 
  SLC Registrars                       PricewaterhouseCoopers 
  42- 50 Hersham Road                  LLP 
  Walton-on- Thames                    1 Embankment Place 
  Surrey KT12 1RZ                      London WC2N 6RH 
 Administrator                        Custodian 
  Shore Capital Fund Administration    Howard Kennedy 
  Services Limited                     No 1 London Bridge 
  Bond Street House                    London SE1 9BG 
  14 Clifford Street 
  London W1S 4JU 
 
 

Chairman's Statement

Highlights

   --    Substantially invested in a diverse range of investments generating an attractive return 
   --    NAV per share at the period end was 98.52p (after adding back dividends paid to date) 

-- 18p per share of dividends paid since inception, equivalent to an 8.6% per annum tax-free running yield on net investment

Chairman's Statement

Introduction

As your Company enters into the final year of its expected five-year life, I am pleased to report that your funds are substantially deployed in both qualifying and non-qualifying investments. We believe our portfolio is well positioned to deliver attractive returns to shareholders within the Company's remaining time horizon.

Results and Net Asset Value ("NAV")

The NAV per share at the period end was 80.52p (98.52p after adding back dividends paid to date), an increase of 0.44p in the half year, equivalent to a GBP123,000 profit for the period.

Investments

Qualifying Investments

Gasification Plant, East London

As previously reported, in July 2014, before the passing of the Finance Act 2014, the Company completed a GBP1.875 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. Following the period end, Urban Mining Limited repaid the great majority of the Company's investment which now stands at GBP300,000. We expect the remaining investment (which remains secured with a first charge over the Chinook Urban Mining business and the eight acre site of the East London plant and continues to yield an attractive return to the Company) to be fully redeemed early in the new year.

Kinloss and Jephcote - Construction of Ibis Hotel, Luton Airport

Kinloss Trading Limited and Jephcote Trading Limited (in which the Company had invested GBP3.5 million and GBP880,000 respectively) have, as members of SKPB Services LLP ("SKPB"), been engaged in a contract with Openwide Investments Limited in relation to the construction of a new build 134 bedroom Ibis Budget Hotel and the associated infrastructure adjacent to Luton Airport. We are pleased to report that, following the period end, the project has completed successfully generating attractive returns for SKPB which will benefit the Company when its investment is repaid in due course.

Materials Recycling Facility, Oxfordshire

As previously reported, a major fire occurred in February 2016 at the Materials Recycling Facility ("MRF") operated by Opes Industries Limited ("Opes"), into which the Company has invested a total of GBP3.6m (as part of an GBP8.8m investment by Puma entities). As a result of the incident, and as reported in the Company's previous annual report, the board made a provision of GBP532,000 against the carrying value of the Company's investment in Opes.

Opes owned a 73 hectare site in north Oxfordshire with a MRF, including a landfill site for non-hazardous materials and an aggregates/gravel quarrying business. The Company's investment was to provide funding for the construction and equipping of the MRF and working capital during the build-up of the trade. The funding was provided in the form of equity and loan stock and our interests are covered by a first fixed and floating charge over Opes' assets.

Following the incident, the Company appointed an administrator over Opes in order to protect the Company's investment. During the period, the administrator made substantial progress in recovering the Company's investment, striking a deal which will generate cash consideration payable in stages over a 12 month period. Moreover, discussions are continuing with Opes' insurers regarding reimbursement of the damage to the plant and the building and of the costs of business interruption.

Saville Services - Care Home Project, Chester

The Company's investment of GBP3.4 million (alongside other Puma VCTs) into Saville Services Limited continues to perform well. Saville Services has been working on a series of projects, including most recently the construction of a 77-bed, purpose-built care home in Chester. We understand that the development is progressing well and the care home is scheduled to open in the first quarter of 2018.

Alyth Trading - Care Home Project, Hamilton and Egham

As previously reported, the Company had invested GBP3.2 million (alongside other Puma VCTs) into Alyth Trading Limited, a nationwide provider of contracting services. Alyth Trading has been working on two contracts. The first was in connection with the construction of a 112 bed purpose built care home in Hamilton, Scotland; as reported in the Company's previous annual report, that project completed successfully generating attractive returns for Alyth Trading which will benefit the Company when its investment is repaid in due course. The second is a contract in connection with the construction of a 68 bed purpose built care home in Egham, Windsor. We understand that construction is behind schedule and over budget as a result of the non-performance of the original building contractor which has been substantially resolved by the developer and the team at Alyth Trading.

Non-Qualifying Investments

Citrus Group

The Company's loan of GBP1 million (advanced through affiliate Valencia Lending Limited) to various entities within the Citrus Group continues to perform well. 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.

Mixed Residential-Commercial Development, Bloomsbury

As previously reported, a GBP1 million loan (as part of a total facility of GBP17.97 million, increased from GBP17.5 million) was advanced (through an affiliate, Latimer Lending Limited) 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.

IVF Clinic, Wickford

Loans of GBP400,000 were advanced (also through Latimer Lending Limited) to HPC (Wickford) Limited in a total loan package of GBP2.85 million together with other vehicles managed and advised by the Investment Manager. These loans are to facilitate the development and initial trading of a purpose-built IVF Fertility Clinic in Wickford, Essex. HPC (Wickford) Limited has entered into a lease with Bourn Hall Limited, one of the UK's largest independent fertility clinic groups. Construction is well progressed and is expected to reach practical completion in the first quarter of 2018.

Wind Farm, East Lothian

As previously reported, a GBP1.3 million loan (through another affiliate, Lothian Lending Limited) had been advanced as part of a GBP2.6 million facility to RPE FL1 Limited, a member of the Renewable Power Exchange group. The facility provided funding towards the construction of a 1.5MW wind farm in East Lothian, Scotland, with the electricity once generated, used to supply those on low incomes in the local community. We are pleased to report that, following the period end, the loan was repaid in full with all interest, generating an attractive return.

Liquidity Management

Following the period the end, to further manage liquidity, the Company invested GBP648,000 in a floating rate note issued by Commonwealth Bank of Australia earning 1.1%.

Dividends

As reported in the Company's annual report, the Company declared a dividend of 6p per ordinary share in March 2017. Reflecting this recent pay-out, your Board is not proposing a further dividend at this interim stage but still intends to pay out a dividend of 6p per ordinary share each year as envisaged in the Company's prospectus.

VCT Qualifying Status

PricewaterhouseCoopers LLP ("PwC") provides the board and the Investment Manager with advice on the ongoing compliance with HMRC rules and regulations concerning VCTs and has reported no issues in this regard for the Company to date. PwC also assists the Investment Manager in establishing the status of investments as qualifying holdings and will continue to assist the Investment Manager in monitoring rule compliance.

Principal risks and uncertainties

The economic environment remains uncertain and there are some signs of a slowdown associated with high personal debt levels, low growth in real wages and deferral of investment decisions. 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. This is unlikely to apply to the Company in light of its expected remaining life as detailed below. (This rule ceases to apply once a VCT has entered members' voluntary liquidation).

Life of fund

The Company was established with the intention that it would have a limited life. The Prospectus stated that after five years the Board would propose a resolution to shareholders for an orderly liquidation of the Company's assets. Your Board currently intends to propose this resolution within a year of this report.

Outlook

The Company's net assets are fully deployed in a diverse range of high quality businesses and projects which should offer the prospect of further growth in net assets per share. Whilst there may be some further changes in the composition of the portfolio to ensure that the Company continues to satisfy 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.

Egmont Kock

Chairman

30 November 2017

Income Statement (unaudited)

For the period ended 31 August 2017

 
                                   Six months                    Six months 
                                      ended                         ended                     Period ended 
                                    31 August                     31 August                    28 February 
                                       2017                          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 
 (Loss)/gain 
  on investments                 -         -         -         -        78        78         -        79        79 
 Income                        498         -       498       391         -       391       878         -       878 
 
                               498         -       498       391        78       469       878        79       957 
                          --------  --------            --------  --------            --------  --------  -------- 
 
 Investment 
  management 
  fees               4        (56)     (166)     (222)      (60)     (180)     (240)     (121)     (363)     (484) 
 Other expenses              (125)         -     (125)     (138)         -     (138)     (282)         -     (282) 
 
                             (181)     (166)     (347)     (198)     (180)     (378)     (403)     (363)     (766) 
                          --------  --------            --------  --------            --------  --------  -------- 
 
 Return/(loss) 
  on ordinary 
  activities 
  before 
  taxation                     317     (166)       151       193     (102)        91       475     (284)       191 
 Tax on 
  return 
  on ordinary 
  activities                  (63)        35      (28)      (28)        20       (8)      (95)        73      (22) 
 
 Return/(loss) 
  on ordinary 
  activities 
  after tax 
  attributable 
  to equity 
  shareholders                 254     (131)       123       165      (82)        83       380     (211)       169 
                          ========  ========  ========  ========  ========  ========  ========  ========  ======== 
 
 Basic and 
  diluted 
 Return/(loss) 
  per Ordinary 
  Share (pence)      2       0.90p   (0.46p)     0.44p     0.58p   (0.29p)     0.29p     1.35p   (0.75p)     0.60p 
                          ========  ========  ========  ========  ========  ========  ========  ========  ======== 
 

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         19,861       21,609         19,861 
                                       -----------  -----------  ------------- 
 
 Current Assets 
 Debtors                                     2,981        2,812          4,287 
 Cash                                          129          347            364 
                                       -----------  -----------  ------------- 
                                             3,110        3,159          4,651 
 Creditors - amounts 
  falling due within one 
  year                                       (224)        (535)        (1,888) 
 
 Net Current Assets                          2,886        2,624          2,763 
                                       -----------  -----------  ------------- 
 
 Total Assets less Current 
  Liabilities                               22,747       24,233         22,624 
 
 Creditors - amounts 
  falling due after more 
  than one year (including 
  convertible debt)                            (1)          (1)            (1) 
 
 Net Assets                                 22,746       24,232         22,623 
                                       ===========  ===========  ============= 
 
 Capital and Reserves 
 Called up share capital                       282          282            282 
 Capital redemption reserve                      1            1              1 
 Capital reserve - realised                (1,455)      (1,248)        (1,324) 
 Capital reserve - unrealised                (532)        (479)          (532) 
 Revenue reserve                            24,450       25,676         24,196 
 
 Equity Shareholders' 
  Funds                                     22,746       24,232         22,623 
                                       ===========  ===========  ============= 
 
 
 Net Asset Value per 
  Ordinary Share                  3         80.52p       85.78p         80.08p 
                                       ===========  ===========  ============= 
 
 Diluted Net Asset Value 
  per Ordinary Share              3         80.52p       85.78p         80.08p 
                                       ===========  ===========  ============= 
 

Cash Flow Statement (unaudited)

For the period ended 31 August 2017

 
                                  Six months   Six months         Period 
                                       ended        ended          ended 
                                   31 August    31 August    28 February 
                                        2017         2016           2017 
                                     GBP'000      GBP'000        GBP'000 
 
 Operating activities 
 Profit on ordinary activities 
  before tax                             123           83            169 
 Taxation                                 28            8             22 
 (Gains)/losses on investments             -         (78)           (79) 
 (Increase) in debtors                 1,306        (340)        (1,815) 
 Increase/(decrease) in 
  creditors                          (1,692)           39           (19) 
 Tax paid                                                          (298) 
 
 Net cash inflow/(outflow) 
  from operating activities            (235)        (288)        (2,020) 
                                 -----------  -----------  ------------- 
 
 Capital expenditure and 
  financial investment 
 Proceeds from sale of 
  investments                              -            -          1,749 
 
 Net cash outflow from 
  capital expenditure and 
  financial investment                     -            -          1,749 
                                 -----------  -----------  ------------- 
 
 
 Decrease in cash                      (235)        (288)          (271) 
 Net cash at start of 
  the period                             364          635            635 
 
 Net funds at the period 
  end                                    129          347            364 
                                 ===========  ===========  ============= 
 

Reconciliation of Movements in Shareholders' Funds (unaudited)

For the period ended 31 August 2017

 
                       Called 
                           up       Capital       Capital         Capital 
                        share    Redemption       reserve         reserve    Revenue 
                      capital       Reserve    - realised    - unrealised    reserve     Total 
                      GBP'000       GBP'000       GBP'000         GBP'000    GBP'000   GBP'000 
 
 Balance as at 
  29 February 
  2016                    282             1       (1,088)           (557)     25,511    24,149 
 Total recognised 
  (losses)/gains 
  for the period                                    (160)              78        165        83 
 
 Balance as at 
  31 August 2016          282             1       (1,248)           (479)     25,676    24,232 
 
 Total recognised 
  (losses)/gains 
  for the period            -             -          (51)            (78)        215        86 
 Realised on 
  disposal                                           (25)              25 
 Dividends paid             -             -             -               -    (1,695)   (1,695) 
 
 Balance as at 
  28 February 
  2017                    282             1       (1,324)           (532)     24,196    22,623 
 
 Total recognised 
  (losses)/gains 
  for the period            -             -         (131)               -        254       123 
 
 Balance as at 
  31 August 2017          282             1       (1,455)           (532)     24,450    22,746 
                    =========  ============  ============  ==============  =========  ======== 
 

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 return per share of 0.44p is based on the profit for the period of GBP123,000 and the weighted average number of shares in issue as at 31 August 2017 of 28,248,821.

   3.             Net asset value per share 
 
                    As at        As at          As at 
                31 August    31 August    28 February 
                     2017         2016           2017 
 Net assets    22,746,000   24,232,000     22,623,000 
 Shares in 
  issue        28,248,821   28,248,821     28,248,821 
 
 Net asset 
  value per 
  share 
 Basic             80.52p       85.78p         80.08p 
 Diluted           80.52p       85.78p         80.08p 
 
   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.             Financial information provided 

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 
                                                                                HMRC Basis 
                                                                   Valuation        as a % 
                          Valuation      Cost   Gain/(loss)    HMRC Basis(1)            of 
                            GBP'000   GBP'000       GBP'000          GBP'000    Net Assets 
 As at 31 August 
  2017 
 
 Qualifying Investment 
  - Unquoted 
 Jephcote Trading 
  Limited                       880       880             -              880            4% 
 Saville Services 
  Limited                     3,400     3,400             -            3,995           19% 
 Kinloss Trading 
  Limited                     3,500     3,500             -            3,500           17% 
 Alyth Trading 
  Limited                     3,200     3,200             -            3,200           15% 
 Urban Mining Limited         1,875     1,875             -            1,875            9% 
 Opes Industries 
  Limited                     3,068     3,600         (532)            3,600           17% 
 
 Total Qualifying 
  Investments                15,923    16,455         (532)           17,050           81% 
                         ----------  --------  ------------  ---------------  ------------ 
 
 Non-Qualifying 
  Investments 
 Valencia Lending 
  Limited                     1,000     1,000             -            1,000            5% 
 Latimer Lending 
  Limited                     1,813     1,813             -            1,813            9% 
 Lothian Lending 
  Limited                     1,125     1,125             -            1,125            5% 
 
 Total Non-Qualifying 
  investments                 3,938     3,938             -            3,938           19% 
                         ----------  --------  ------------  ---------------  ------------ 
 
 Total Investments           19,861    20,393         (532)           20,925          100% 
 Balance of Portfolio         2,885     2,885             -                -             - 
 
 Net Assets                  22,746    23,278         (532)           20,925          100% 
                         ----------  --------  ------------  ---------------  ------------ 
 

Of the investments held at 31 August 2017, all are incorporated in England and Wales.

(1) The HMRC valuation differs from FRS102, because FRS102 requires changes to reflect current market valuations whereas HMRC requires such changes when further securities of the same company are bought or sold by the VCT. It also omits the items shown as 'Balance of Portfolio'.

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 WGGWWGUPMUBU

(END) Dow Jones Newswires

November 30, 2017 04:38 ET (09:38 GMT)

Blitzen Sec.62a (LSE:PUM9)
Historical Stock Chart
From Nov 2024 to Dec 2024 Click Here for more Blitzen Sec.62a Charts.
Blitzen Sec.62a (LSE:PUM9)
Historical Stock Chart
From Dec 2023 to Dec 2024 Click Here for more Blitzen Sec.62a Charts.