RNS Number : 2915R

Puma VCT 13 PLC

29 June 2020


   --    Fund well invested with a diverse qualifying portfolio 
   --    71% invested into qualifying portfolio positions at year end, rising to 84% after year end 
   --    Volatility in the non-qualifying holdings but income yield remains robust 



I am pleased to present the second report and financial statement for Puma VCT 13 plc (the "Company") for the year to 29 February 2020.

The Investment Manager has delivered rapid and purposeful investment and the Company now holds seven qualifying investments in six different sectors. I am also pleased to report that the company returned a profit for the year of GBP1,707,000 (2019: GBP927,000 loss), representing 10.95 pence (2019: 9.19p loss) per ordinary share.

Post year end, the Company experienced volatility in the values of its non-qualifying holdings in listed equities. These values fell significantly before substantially recovering and remain volatile.


Since the last report and accounts the Company has made three further investments into qualifying portfolio companies, and one follow on investment into automotive manufacturing business Dymag. Post year end the Company made a fourth new investment into a qualifying company and a small follow-on into cycling apparel business Le Col. Together these investments took the Company's overall qualifying holdings to 84% of Net Asset Value. As the Board concluded that the pandemic was a non-adjusting post balance sheet event, the impact of COVID-19 is not reflected in the fair value of the Company's investments as at 29 February 2020. We understand that this treatment is being adopted by other funds with similar year-ends.

Net Asset Value ("NAV")

The NAV per share at the year end was 100.33p (2019: 89.38p). This figure reflects the initial funds raised less the costs of issue adjusted for movements in the value of the listed equities and running costs of the Company, plus audited adjustments in the carrying value of the qualifying positions. Four of the positions have been adjusted in value with three being written up and one being written slightly down, for a cumulative gain of GBP1,909,000 (2019: GBPnil). GBP1,292,000 of this gain is driven by the Company's holding in Pure Cremation Limited which has seen sustained strong trade over the period, as detailed in the Investment Manager's Report.

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 and other specialist advisors will continue to assist the Investment Manager in establishing the status of potential investments as qualifying holdings, monitoring rule compliance and maintaining the qualifying status of the Company's holdings in the future.


The Covid-19 pandemic and the unprecedented policy measures put in place to contain it have led to significant uncertainty. However, we look to the future with confidence. The Investment Manager has worked closely with the fund's portfolio companies over the crisis and continues to support them through this.

The Company's strategy of assembling a diverse portfolio has proven useful during this period, and we believe that will continue, as the COVID-19 crisis impacts different sectors - and different consumer groups - in different ways.

David Buchler


26 June 2020



Since the Company's year end, the global economy and financial markets have been impacted significantly by the COVID-19 pandemic. These are unprecedented times which have disrupted personal and working life for almost everyone. Since the emergence of the pandemic in the UK, we have been actively working with portfolio companies to protect Shareholder value whilst, at the same time, complying with Government guidelines. Our existing monitoring cycle involves very close contact with portfolio companies. However, we have significantly increased our level of interaction with portfolio companies and changed our portfolio review meeting from monthly to weekly, as we carefully assess each company's cash management and outlook.

During this time, we have worked closely with advisers to support our portfolio companies. This has involved providing companies with in-depth information on available support packages and hosting calls with advisers to deliver guidance on key topics such as employment law, available funding and scenario cash planning. Our aim was to ensure management teams could concentrate on running their businesses rather than scrutinising Government support schemes. Where appropriate, portfolio companies have made use of Government-led support, including the Coronavirus Job Retention Scheme and the Coronavirus Business Interruption Loan Scheme (CBILS).

As the situation has evolved, we have continued to work closely with portfolio companies to help them with strategies to conserve cash during this period of contraction and, if required, outline emergency funding options. Retaining a long-term view, the team has also worked with portfolio companies to position them to capitalise on the opportunities for growth that may arise. We have placed particular emphasis on helping them manage costs as aggressively as possible, making appropriate use of government support schemes and assessing opportunities to reopen efficiently with a focus on agile trading, adapted to new consumer and business behaviours.


Qualifying Investments

Pure Cremation - Crematorium and Direct Cremations

In November 2018, the Company invested GBP1.3 million in Pure Cremation Holdings Limited (as part of a total cumulative GBP7.35 million qualifying investment alongside other Puma VCTs). Pure Cremation is a leading provider of direct cremations, meeting the needs of a growing number of people in the United Kingdom who want a respectful cremation arranged without any funeral, leaving them free to say farewell how, where and when is right for them. The business has continued to perform strongly during the year with strong revenue growth across all of its sales channels. Reflecting the business's move into profitability and continued growth, the Directors have decided to write up the value of the holding, generating an unrealised gain of GBP1,292,000.

Knott End Pub Company - Pubs with Microbreweries

As previously noted, in December 2018 the Company invested GBP847,000 (as part of a GBP7.3 million qualifying investment alongside another Puma VCT) in Knott End Pub Company 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. Knott End owns and operates two pub assets in Horsham and Milton Keynes. The pub in Milton Keynes had experienced some disappointing trading but was showing good year on year growth towards the end of the year. In light of these trading challenges, the Directors have decided to write down the value of the holding, generating an unrealised loss of GBP254,000.

Post year-end, the business had to close both units due the COVID-19 pandemic. It is taking advantage of Government support and working on plans to allow the pubs to open as soon as possible when permitted following lockdown easing.

Dymag Group - High performance wheel manufacturer

In December 2018 the Company invested GBP583,000 into Dymag Group Limited, as part of a GBP3.6 million investment, alongside other Puma funds. Dymag is a British designer and manufacturer of carbon-fibre car and motorbike wheels. These are high end, lightweight wheels for performance use. In January 2020 the Company made a GBP725,000 follow-on investment into Dymag to continue supporting its work of refining production process and lowering unit cost.

The global market for carbon wheels was developing strongly before the impact of Covid-19, with several automotive companies announcing medium-size production runs of carbon wheels on high-profile vehicles. The Renault Megane RS Trophy R, which features a carbon wheel option, is just one example of the increasing appeal of the technology and adoption at lower price points. The Directors have decided to hold the position at cost.

Post year-end, the Dymag has experienced reduction and delay in revenue levels since the outbreak of Covid-19. Decisions were made to cut or defer operating costs, and to make full use of available Government initiatives. Extensions of payments due to several major suppliers and Government have been agreed. We are pleased that some sources of revenue remain strong, such as online motorbike wheel sales and wheel turner projects, generating short-term cashflow.

Open House - London based food and beverage offer

In February 2019 the Company invested GBP1.8 million into Open House London Limited, as part of a GBP5 million investment, alongside other Puma funds. Open House owns and operates two popular dining and drinking venues in London, The Lighterman in King's Cross and Percy & Founders in Fitzrovia, and will be opening a further unit in White City, West London. The company's performances have been very strong with continued growth and significant EBITDA generation from The Lighterman in particular. On this basis, the Directors have decided to write up the value of the holding, generating an unrealised gain of GBP475,000.

Post year-end, the business had to close both units as part of the policy response to the COVID-19 pandemic. It is taking advantage of Government support including the opportunity to conserve cash by furloughing staff. The business is working constructively with its landlords to support the reopening of its sites. Trade was strong at both sites in the lead-up to the closure of the units on 16(th) March, and the business has since then reacted quickly and efficiently. It is well capitalised and will consider opportunity for expansion if suitable high-profile sites become available post lockdown.

MyKindaCrowd Limited - Human Resources Technology

In August 2019, the Company invested GBP1.8 million into MyKindaCrowd Limited, as part of a GBP2.75 million investment alongside other Puma funds. MyKindaCrowd, trading under the name MyKindaFuture, is a digital platform working with large corporates to improve engagement of potential graduates and apprentices. The platform works with companies such as Deloitte and Cisco to help them recruit young people from a wider range of social backgrounds than their traditional channels through its refreshed digital platform, 'Connectr 2.0'. The Company has added significant new wins to its pipeline of clients.

Post year-end, in May 2020, the business took on its first international client, and has more recently partnered with Grant Thornton to offer a digital solution to corporates allowing them to communicate with employees whilst on furlough.

Influencer Limited - Technology

In August 2019, the Company invested GBP1.8 million in Influencer Limited, as part of a GBP3 million investment alongside other Puma funds. Influencer is a high-growth, data driven social media, influencer and digital marketing platform. The business enables brands to connect with influencers and manage influencer marketing campaigns across one platform. Since investment, Influencer has performed well and revenue has continued to grow. The business won 'Influencer Marketing Company of the Year 2019' and is focussed on building its international reputation as a leading influencer marketing platform. It operates within a lucrative environment, with influencer marketing projected to become a $15 billion industry by 2022.

Post year-end, Influencer has continued working with both new and existing clients throughout the Covid-19 period, helping creators work with brands to produce content on their social media channels. Alongside this, they have built a robust pipeline of campaign work for the coming months.

Le Col Holdings Limited - Sports Apparel

In October 2019, the Company invested GBP1 million in Le Col Holdings, as part of a GBP4.85 million investment, GBP2.5 million of which came as a second tranche. Le Col is a premium cycling apparel brand founded by former professional cyclist, Yanto Barker. The brand's mission is to bring professional level kit to the amateur market, whilst still acknowledging technical sportswear's increasingly fashion led desirability. Revenues have continued to grow strongly during the period of investment especially within E-commerce, the largest sales channel. Sponsorship of the Team Bahrain McLaren (which is helping to bring the brand to the world stage), and partnerships with both Bradley Wiggins and the online community, Strava, will drive sales activation and increase overall brand awareness. Notably, Le Col is the second largest branded 'club' outside of Strava's own. In light of these successes, the Directors have decided to write up the value of the holding, generating an unrealised gain of GBP396,000.

Post year-end, during the Covid lockdown, the business has continued to perform very strongly, aided by the focus on cycling as a permitted form of exercise. The company recently hired a Head of Digital from Asics to support the continued growth of the e-commerce channel.

Post year end the Company made a further investment as follows:

Tictrac Limited - Health Engagement Platform

In March 2020, post period end, the Company invested GBP1.85 million in Tictrac Limited as part of a GBP5 million investment. Tictrac is a personalised health and wellness platform. Tictrac collates day-to-day data from consumers through 'wearable' fitness trackers, to give people targeted information to help improve their health. The Company collaborates with experts and world-renowned centres of expertise in health, behavioural change and data science and its customers include some of the world's biggest healthcare providers and insurers, including Aviva, Allianz and Prudential.

Since investment, Tictrac continues to work with its existing client-base and insurers to roll out the platform to their customers and end users. With the renewed emphasis on the need for employers to engage with the health and wellbeing of their employees during lockdown, Tictrac chose to make its platform available on a free trial basis to UK employers who want to support their workforce during the crisis. Tictrac has successfully built a strong pipeline of new clients as a result of this.

Liquidity management investments

To manage the Company's liquidity, a portion of the Company's funds are invested in a diverse portfolio of listed equities.

The Company's listed equities portfolio is managed by the Investment Manager's in-house Listed Equities team led by Investment Director Justin Waine. Justin is an award-winning manager (Winner of the best AIM Investment Manager 2016 and 2017 at the Growth Investor Awards) with 20 years' experience analysing UK and European small and mid-sized companies. Prior to working at Puma he was a Fund Manager of the European Forager Fund at Polar Capital Partners and also worked as a research analyst for small and mid-sized companies at Cazenove &Co.

In keeping with the VCT 13 mandate, the listed equity portfolio is focussed on UK centric stocks which are listed on the main board of the London Stock Exchange. Over the year a substantial portion of the Company's listed equities portfolio was sold in order to realise funds for qualifying investment. From a position at the beginning of the year where the Company held GBP3.35 million of listed equities, by the year end this holding had reduced to GBP1.67 million including GBP2.4 million of disposals, GBP0.57 million of acquisitions and GBP159,000 of gains (some realised, some not realised).

Post year end and in line with markets generally, the Company's portfolio experienced high levels of volatility and material falls in value. At date of writing the portfolio had recovered from its low point, but further market volatility should be expected.

Investment Strategy

We are pleased to have invested the Company's funds in a diverse range of businesses. We remain focused on generating strong returns for the Company, whilst balancing these returns with maintaining an appropriate risk exposure. Notwithstanding the recent performance of the listed equities portfolio, we remain confident that our portfolio is well-positioned to deliver positive returns to shareholders within the Fund's expected time horizon

Puma Investment Management Limited

26 June 2020

Investment Portfolio Summary

As at 29 February 2020

                                                                       as a % of 
                                 Valuation      Cost   Gain/(loss)    Net Assets 
                                   GBP'000   GBP'000       GBP'000 
 Qualifying Investments 
 Dymag Group Limited                 1,308     1,308             -            8% 
 Knott End Pub Company 
  Limited                              593       847         (254)            4% 
 Open House London Limited           2,275     1,800           475           15% 
 Pure Cremation Holdings 
  Limited                            2,589     1,297         1,292           17% 
 Influencer Limited                  1,800     1,800             -           12% 
 Le Col Holdings Limited             1,396     1,000           396            9% 
 MyKindaCrowd Limited                1,800     1,800             -           12% 
 Total Qualifying Investments       11,761     9,852         1,909           77% 
                                ----------  --------  ------------  ------------ 
 Liquidity Management 
 Barclays Plc                           96       116          (20)            1% 
 Chemring Group Plc                    123       105            18            1% 
 Diageo Plc                            120       119             1            1% 
 Discoverie Group Plc                  165       127            38            1% 
 Dixons Carphone Plc                    82       109          (27)            0% 
 Firstgroup Plc                         75        58            17            0% 
 Headlam Group Plc                     132       121            11            1% 
 Hyve Group Plc                        130       128             2            1% 
 ITV Plc                                88        82             6            0% 
 Legal & General Group 
  Plc                                   96        97           (1)            1% 
 Provident Financial 
  Plc                                   80       119          (39)            0% 
 Prudential Plc                         96       133          (37)            1% 
 PZ Cussons Plc                         83       108          (25)            0% 
 Royal Dutch Shell Plc                  83       124          (41)            0% 
 Standard Chartered Plc                 56        62           (6)            0% 
 Volution Group Plc                    114       104            10            1% 
 WPP Plc                                53        67          (14)            0% 
 Total Liquidity Management 
  investments                        1,672     1,779         (107)            9% 
                                ----------  --------  ------------  ------------ 
 Total Investments                  13,433    11,631         1,802           86% 
 Balance of Portfolio                2,201     2,201             -           14% 
 Net Assets                         15,634    13,832         1,802          100% 
                                ----------  --------  ------------  ------------ 

Of the investments held at 29 February 2020, all are incorporated in England and Wales.

Income Statement

For the year ended 29 February 2020

                                        Year ended 29 February        Year ended 28 February 
                                                  2020                          2019 
                               Note   Revenue   Capital     Total   Revenue   Capital     Total 
                                      GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
 Gain/(loss) on investments     (b)         -     2,094     2,094         -     (550)     (550) 
 Income                         2         118         -       118        45         -        45 
                                          118     2,094     2,212        45     (550)     (505) 
                                     --------  --------            --------  --------  -------- 
 Investment management 
  fees                          3        (70)     (209)     (279)      (49)     (147)     (196) 
 Other expenses                 4       (217)       (9)     (226)     (200)      (26)     (226) 
                                        (287)     (218)     (505)     (249)     (173)     (422) 
                                     --------  --------            --------  --------  -------- 
 Profit/(loss) before 
  taxation                              (169)     1,876     1,707     (204)     (723)     (927) 
 Taxation                       5           -         -         -         -         -         - 
 Profit/(loss) and 
  total comprehensive 
  income for the year                   (169)     1,876     1,707     (204)     (723)     (927) 
                                     ========  ========  ========  ========  ========  ======== 
 Basic and diluted 
 Return/(loss) per 
  Ordinary Share (pence)        6     (1.09p)    12.04p    10.95p   (2.02p)   (7.17p)   (9.19p) 
                                     ========  ========  ========  ========  ========  ======== 

All items in the above statement derive from continuing operations.

There are no gains or losses other than those disclosed in the Income Statement.

The total column of this statement is the Statement of Total Comprehensive Income of the Company prepared in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. The supplementary revenue and capital columns are prepared in accordance with the Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued by the Association of Investment Companies.

Balance Sheet

As at 29 February 2020

                                               As at          As at 
                                         29 February    28 February 
                                 Note           2020           2019 
                                             GBP'000        GBP'000 
 Fixed Assets 
 Investments                      8           13,433          7,872 
                                       -------------  ------------- 
 Current Assets 
 Debtors                          9              203          2,851 
 Cash                                          2,093          3,382 
                                       -------------  ------------- 
                                               2,296          6,233 
 Creditors - amounts falling 
  due within one year             10            (95)          (176) 
 Net Current Assets                            2,201          6,057 
                                       -------------  ------------- 
 Net Assets                                   15,634         13,929 
                                       =============  ============= 
 Capital and Reserves 
 Called up share capital          12              10             12 
 Share premium account                        14,852         14,852 
 Capital reserve - realised                    (649)          (173) 
 Capital reserve - unrealised                  1,802          (550) 
 Revenue reserve                               (381)          (212) 
 Total Equity                                 15,634         13,929 
                                       =============  ============= 
 Net Asset Value per Ordinary 
  Share                           13         100.33p         89.38p 
                                       =============  ============= 

The financial statements on pages 32 to 48 were approved and authorised for issue by the Board of Directors on 26 June 2020 and were signed on their behalf by:

David Buchler


Statement of Cash Flows

For the year ended 29 February 2020

                                               Year ended     Year ended 
                                              29 February    28 February 
                                                     2020           2019 
                                                  GBP'000        GBP'000 
 Profit/(loss) after tax                            1,707          (927) 
 (Gain)/loss on investments                       (2,094)            550 
 Decrease/(Increase) in debtors                       820        (1,011) 
 (Decrease)/Increase in creditors                    (35)            110 
 Net cash generated from/(used for) 
  operating activities                                398        (1,278) 
                                            -------------  ------------- 
 Cash flow from investing activities 
 Purchase of investments                          (5,897)        (8,422) 
 Proceeds from disposal of investments              2,430              - 
 Net cash used for investing activities           (3,467)        (8,422) 
                                            -------------  ------------- 
 Cash flow from financing activities 
 Proceeds received from issue of ordinary 
  share capital                                     1,826         13,759 
 Expense paid for issue of share capital             (46)          (677) 
 Net cash generated from financing 
  activities                                        1,780         13,082 
                                            -------------  ------------- 
 Net (decrease)/increase in cash and 
  cash equivalents                                (1,289)          3,382 
 Cash and cash equivalents at the 
  beginning of the year                             3,382              - 
 Cash and cash equivalents at the 
  end of the year                                   2,093          3,382 
                                            =============  ============= 

Statement of Changes in Equity

For the year ended 29 February 2020

                                 Called      Share       Capital         Capital 
                               up share    premium       reserve         reserve    Revenue 
                                capital    account    - realised    - unrealised    reserve     Total 
                                GBP'000    GBP'000       GBP'000         GBP'000    GBP'000   GBP'000 
 Balance as at 28 February 
  2018                                6          -             -               -        (8)       (2) 
 Shares issued in the 
  year                                8     15,575             -               -          -    15,583 
 Expenses of share 
  issues                              -      (723)             -               -          -     (723) 
 Shares cancelled in 
  the year                          (2)          -             -               -          -       (2) 
 Total comprehensive 
  income for the year                 -          -         (173)           (550)      (204)     (927) 
                             ----------  ---------  ------------  --------------  ---------  -------- 
 Balance as at 28 February 
  2019                               12     14,852         (173)           (550)      (212)    13,929 
 Share cancelled in 
  the year                          (2)          -             -               -          -       (2) 
 Reserves movement                    -          -         (430)             430          -         - 
 Total comprehensive 
  income for the year                 -          -          (46)           1,922      (169)     1,707 
 Balance as at 29 February 
  2020                               10     14,852         (649)           1,802      (381)    15,634 
                             ==========  =========  ============  ==============  =========  ======== 

Distributable reserves comprise: Capital reserve-realised, Capital reserve-unrealised (excluding gains on unquoted investments) and the Revenue reserve. At the year end, distributable revenue reserves were nil (2019: nil).

The Capital reserve-realised includes gains/losses that have been realised in the year due to the sale of investments, net of related costs. The Capital reserve-unrealised represents the investment holding gains/losses and shows the gains/losses on investments still held by the Company not yet realised by an asset sale.

Share premium represents premium on shares issued less issue costs.

The revenue reserve represents the cumulative revenue earned less cumulative distributions.

   1.       Accounting Policies 

Accounting convention

Puma VCT 13 plc ("the Company") was incorporated in England on 15 September 2016 and is registered and domiciled in England and Wales. The Company's registered number is 10376236. The registered office is Cassini House, 57 St James's Street, London SW1A 1LD . The Company is a public limited company (limited by shares) whose shares are listed on LSE with a premium listing. The Company's principal activities and a description of the nature of the Company's operations are disclosed in the Strategic Report.

The financial statements have been prepared under the historical cost convention, modified to include investments at fair value, and in accordance with the requirements of the Companies Act 2006, including the provisions of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 and with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' ("FRS 102") and the Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in October 2019 by the Association of Investment Companies ("the SORP").

Monetary amounts in these financial statements are rounded to the nearest whole GBP1,000, except where otherwise indicated.

Going concern

The Directors have considered a period of 12 months from the date of this report for the purposes of determining the Company's going concern status which has been assessed in accordance with the guidance issued by the Financial Reporting Council. After making enquiries, including consideration of the impact of COVID-19 on the Company's current financial position and expected cash flows for the period of the review, the Directors believe that it is appropriate to continue to apply the going concern basis in preparing the financial statements. This is appropriate as the Company's listed shares are held for liquidity purposes and will be sold as and when required to ensure the Company has adequate cash reserves to meet the Company's running costs .


All investments are measured at fair value. They are all held as part of the Company's investment portfolio and are managed in accordance with the investment policy set out on page 14.

Listed investments are stated at bid price at the reporting date.

Unquoted investments are stated at fair value by the Directors with reference to the International Private Equity and Venture Capital Valuation Guidelines ("IPEV") as follows:

-- Investments which have been made within the last twelve months or where the investee company is in the early stage of development will usually be valued at either the price of recent investment or cost except where the company's performance against plan is significantly different from expectations on which the investment was made, in which case a different valuation methodology will be adopted.

-- Investments in debt instruments will usually be valued by applying a discounted cash flow methodology based on expected future returns of the investment.

-- Alternative methods of valuation such as multiples or net asset value may be applied in specific circumstances if considered more appropriate.

Realised surpluses or deficits on the disposal of investments are taken to realised capital reserves, and unrealised surpluses and deficits on the revaluation of investments are taken to unrealised capital reserves.


Dividends receivable on listed equity shares are brought into account on the ex-dividend date. Dividends receivable on unquoted equity shares are brought into account when the Company's right to receive payment is established and there is no reasonable doubt that payment will be received. Interest receivable is recognised wholly as a revenue item on an accruals basis.

Performance fees

Upon its inception, the Company agreed performance fees payable to the Investment Manager, Puma Investment Management Limited, and members of the investment management team at 20% of the aggregate excess of the amounts realised over GBP1.05 per Ordinary Share returned to Ordinary Shareholders. This incentive will only be effective once the other holders of Ordinary Shares have received distributions of GBP1.05 per share.

The performance incentive has been satisfied through the issue of 3,895,834 Ordinary Shares (as set out in note 11 to the financial statements) to the Investment Manager and members of the investment management team being 20% of the total issued Ordinary Share capital of 19,479,172 (after share cancellation on 22 March 2019 explained in note 11 of the financial statements). Under the terms of the incentive arrangement, all rights to dividends will be waived until the GBP1.05 per Ordinary Share performance target has been met. The performance fee is accounted for as an equity-settled share-based payment.

Section 26 of FRS 102 "Share-Based Payment" requires the recognition of an expense in respect of share-based payments in exchange for goods or services. Entities are required to measure the goods or services received at their fair value, unless that fair value cannot be estimated reliably in which case that fair value should be estimated by reference to the fair value of the equity instruments granted.

At each balance sheet date, the Company estimates that fair value by reference to any excess of the net asset value, adjusted for dividends paid, over GBP1.05 per share in issue at the balance sheet date. Any change in fair value is recognised in the Income Statement with a corresponding adjustment to equity.


All expenses (inclusive of VAT) are accounted for on an accruals basis. Expenses are charged wholly to revenue, with the exception of:

   --      expenses incidental to the acquisition or disposal of an investment charged to capital; and 

-- the investment management fee, 75% of which has been charged to capital to reflect an element which is, in the directors' opinion, attributable to the maintenance or enhancement of the value of the Company's investments in accordance with the Board's expected long-term split of return; and

-- the performance fee which is allocated proportionally to revenue and capital based on the respective contributions to the Net Asset Value.


Corporation tax is applied to profits chargeable to corporation tax, if any, at the applicable rate for the year. The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue return on the marginal basis as recommended by the SORP.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more, or right to pay less, tax in the future have occurred at the balance sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the financial statements which are capable of reversal in one or more subsequent periods. Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.


Realised losses and gains on investments, transaction costs, the capital element of the investment management fee and taxation are taken through the Income Statement and recognised in the Capital Reserve - Realised on the Balance sheet. Unrealised losses and gains on investments and the capital element of the performance fee are also taken through the Income Statement and are recognised in the Capital Reserve - Unrealised.


Debtors include other debtors and accrued income which is recognised at amortised cost, equivalent to the fair value of the expected balance receivable.


Creditors are initially measured at the transaction price and subsequently measured at amortised cost, being the transaction price less any amounts settled.


Final dividends payable are recognised as distributions in the financial statements when the Company's liability to make payment has been established. The liability is established when the dividends proposed by the Board are approved by the Shareholders. Interim dividends are recognised when paid.

Key accounting estimates and assumptions

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets within the next financial year relate to the fair value of unquoted investments, especially due to the impact of COVID-19, which is a non-adjusting post balance sheet event as disclosed in note 18. Further details of the unquoted investments are disclosed in the Investment Manager's Report on pages 3 to 7 and notes 8 and 14 to the financial statements.

   2.       Income 
                            Year ended 29 February   Year ended 28 February 
                                              2020                     2019 
                                           GBP'000                  GBP'000 
 Income from investments 
 Dividends received                            105                       36 
                                               105                       36 
 Other income 
 Bank deposit income                            13                        9 
                                               118                       45 
                           =======================  ======================= 
   3.      Investment Management Fees 
                          Year ended 29 February   Year ended 28 February 
                                            2020                     2019 
                                         GBP'000                  GBP'000 
 Puma Investments fees                       279                      196 
                                             279                      196 
                         =======================  ======================= 

Puma Investment Management Limited ("Puma Investments") has been appointed as the Investment Manager of the Company for an initial period of five years, which can be terminated by not less than twelve months' notice, given at any time by either party, on or after the fifth anniversary. The Board is satisfied with the performance of the Investment Manager. Under the terms of this agreement Puma Investments will be paid an annual fee of 2% of the Net Asset Value payable quarterly in arrears calculated on the relevant quarter end NAV of the Company. These fees commenced on 19 March 2018 (the date of the first share allotment). These fees are capped, the Investment Manager having agreed to reduce its fee (if necessary to nothing) to contain total annual costs (excluding performance fee and trail commission) to within 3.5% of funds raised. Total costs this year were 3.4% (2019: 2.8%) of the funds raised. Graham Shore, a director, holds a Directorship of the parent of the Investment Manager.

In addition to the investment manager fees disclosed above, during the year ended 28 February 2019, Puma Investments Management Limited charged fees totalling GBP467,500 in relation to share issue costs. The fees were to cover the costs of launching the VCT.

   4.       Other expenses 
                               Year ended 29 February   Year ended 28 February 
                                                 2020                     2019 
                                              GBP'000                  GBP'000 
 PI Administration Services 
  fees                                             49                       34 
 Directors' Remuneration                           61                       58 
 Social security costs                              4                        4 
 Auditor's remuneration 
  for statutory audit                              29                       25 
 Transaction costs                                  9                       26 
 Other expenses                                    74                       79 
                                                  226                      226 
                              =======================  ======================= 

PI Administration Services Limited provides administrative services to the Company for an aggregate annual fee of 0.35% of the Net Asset Value of the Fund, payable quarterly in arrears.

Remuneration for each Director for the year is disclosed in the Directors' Remuneration Report on page 21. The Company had no employees (other than Directors) during the year (2019: none). The average number of non-executive Directors during the year was 3 (2019: 3). The non-executive Directors are considered to be the Key Management Personnel of the Company with total remuneration for the year of GBP65,000 (2019: GBP62,000) including social security costs.

The Auditor's remuneration of GBP24,000 (2019: GBP20,500) has been grossed up in the table above to be inclusive of VAT. Non-audit fees charged during the year were GBP250 (2019: nil) for iXBRL tagging of the 2019 (2019: 2018) financial statements.

   5.      Taxation 
                                  Year ended 29 February   Year ended 28 February 
                                                    2020                     2019 
                                                 GBP'000                  GBP'000 
 UK corporation tax charged 
  to revenue reserve                                   -                        - 
 UK corporation tax charged 
  to capital reserve                                   -                        - 
 UK corporation tax charge 
  for the year                                         -                        - 
                                 =======================  ======================= 
 Factors affecting tax charge for the year 
 Profit/(loss) before taxation                     1,707                    (927) 
                                 =======================  ======================= 
 Tax charge calculated 
  on profit/(loss) on before 
  taxation at the applicable 
  rate of 19%                                        324                    (176) 
 Gain/(loss) on investments                        (398)                      105 
 Tax losses carried forward                           74                       71 
                                                       -                        - 
                                 =======================  ======================= 

Capital returns are not taxable as the Company is exempt from tax on realised capital gains whilst it continues to comply with the VCT regulations, so no corporation tax is recognised on capital gains or losses. Due to the intention to continue to comply with the VCT regulations, the Company has not provided for deferred tax on any realised or unrealised capital gains and losses. No deferred tax asset has been recognised in respect of the tax losses carried forward due to the uncertainty as to recovery.

   6.      Basic and diluted return/(loss) per Ordinary Share 
                                                Year ended 29 February 2020 
                                              Revenue       Capital         Total 
                                              GBP'000       GBP'000       GBP'000 
 Total comprehensive income 
  for the year                              (169,000)     1,876,000     1,707,000 
 Weighted average number of 
  shares in issue for the year             19,686,535    19,686,535    19,686,535 
 Less: weighted average number 
  of management incentive shares 
  (see note 11)                           (4,103,197)   (4,103,197)   (4,103,197) 
                                         ------------  ------------  ------------ 
 Weighted average number of 
  shares for purposes of return/(loss) 
  per share calculations                   15,583,338    15,583,338    15,583,338 
                                         ------------  ------------  ------------ 
 Return/(loss) per share                      (1.09)p        12.04p        10.95p 
                                                Year ended 28 February 2019 
                                              Revenue       Capital         Total 
                                              GBP'000       GBP'000       GBP'000 
 Total comprehensive income 
  for the year                              (204,000)     (723,000)     (927,000) 
 Weighted average number of 
  shares in issue for the year             19,086,640    19,086,640    19,086,640 
 Less: weighted average number 
  of management incentive shares 
  (see note 11)                           (9,000,000)   (9,000,000)   (9,000,000) 
                                         ------------  ------------  ------------ 
 Weighted average number of 
  shares for purposes of return/(loss) 
  per share calculations                   10,086,640    10,086,640    10,086,640 
                                         ------------  ------------  ------------ 
 Return/(loss) per share                      (2.02)p       (7.17)p       (9.19)p 
   7.      Dividends 

The Directors will not propose a resolution at the Annual General Meeting to pay a final dividend (2019: nil).

   8.      Investments 
                                      Qualifying  Non-qualifying 
(a) Movements in investments         investments     investments         Total 
                                         GBP'000         GBP'000       GBP'000 
Purchased at cost                          4,527           3,895         8,422 
Unrealised losses                              -           (550)         (550) 
Valuation at 1 March 2019                  4,527           3,345         7,872 
Purchases at cost                          5,325             572         5,897 
Disposals of investments: 
- Proceeds                                     -         (2,430)       (2,430) 
Realised gains                                 -             172           172 
Unrealised gains                           1,909              13         1,922 
Valuation at 29 February 
 2020                                     11,761           1,672        13,433 
                                    ============  ==============  ============ 
Book cost at 29 February 
 2020                                      9,852           1,779        11,631 
Unrealised gains/(losses) 
 at 29 February 2020                       1,909           (107)         1,802 
Valuation at 29 February 
 2020                                     11,761           1,672        13,433 
                                    ============  ==============  ============ 
(b) Gains/(losses) on investments 
                                                      Year ended    Year ended 
                                                     29 February   28 February 
                                                            2020          2019 
Realised gains on investment                                 172             - 
Unrealised gains/(losses) in year                          1,922         (550) 
                                                           2,094         (550) 
                                                  ==============  ============ 

The Company received GBP2,430,000 (2019 GBPnil) from investments sold in the year. The book cost of these investments when they were purchased was GBP2,689,000 (2019 GBPnil). The Company's investments are revalued each year, so until they are sold any unrealised gains or losses are included in the fair value of the investments.

(c) Quoted and unquoted investments 
                                             Market value        Market value 
                                        as at 29 February   as at 28 February 
                                                     2020                2019 
                                                  GBP'000             GBP'000 
Quoted investments                                  1,672               3,345 
Unquoted investments                               11,761               4,527 
                                                   13,433               7,872 
                                       ==================  ================== 

Further details of these investments (including the unrealised gains in the year) are disclosed in the Chairman's Statement, Investment Manager's Report, Investment Portfolio Summary and Significant Investments on pages 1 to 12 of the Annual Report.

   9.      Debtors 
                            As at 29 February   As at 28 February 
                                         2020                2019 
                                      GBP'000             GBP'000 
 Other debtors                            189               2,829 
 Prepayments and accrued 
  income                                   14                  22 
                                          203               2,851 
                           ==================  ================== 

Other debtors includes cash held by the company share registrar of GBPnil (2019: GBP1,824,000) and cash held by the company's brokers of GBP177,000 (2019: GBP1,005,000).

   10.    Creditors - amounts falling due within one year 
                          As at 29 February   As at 28 February 
                                       2020                2019 
                                    GBP'000             GBP'000 
 Accruals                                82                 163 
 Redeemable preference 
  shares                                 13                  13 
                                         95                 176 
                         ==================  ================== 

Redeemable preference shares were issued for total consideration GBP12,500 to Puma Investment Management Limited, being one quarter paid up, so as to enable the Company to obtain a certificate under s.761 of the Companies Act 2006.

Each of the redeemable preference shares carries the right to a fixed, cumulative, preferential dividend of 0.1% per annum (exclusive of any imputed tax credit available to shareholders) on the nominal amount thereof but confers no right to vote except as otherwise agreed by the holders of a majority of the Shares. On a winding-up, the redeemable preference shares confer the right to be paid the nominal amount paid on such shares. The redeemable preference shares are redeemable at par at any time by the Company and by the holder. Each redeemable preference share which is redeemed, shall, thereafter be cancelled without further resolution or consent.

   11.    Management Performance Incentive Arrangement 

On 8 December 2016, the Company entered into an Agreement with the Investment Manager and members of the investment management team (together "the Management Team") such that the Management Team will be entitled in aggregate to share in 20 per cent of the aggregate excess on any amounts realised by the Company in excess of GBP1.05 per Ordinary Share, the Performance Target. This agreement was amended by a deed of variation on 28 June 2018 to extend the terms to cover the extended fundraising period.

This incentive is effective through the issue of ordinary shares in the Company, such that the Management Team hold 3,895,834 ordinary shares being 20% of the issued share capital of 19,479,172. As at 28 February 2019, the Management Team held 7,500,000 Ordinary Shares, which were reduced on 22 March 2019 by the cancellation of 3,604,166 ordinary shares in accordance with the Terms of the Agreement.

The Management Team will waive all rights to dividends until a return of GBP1.05 per share (whether capital or income) has been paid to the other shareholders.

The performance incentive structure provides a strong incentive for the Investment Manager to ensure that the Company performs well, enabling the Board to approve distributions as high and as soon as possible.

   12.    Called Up Share Capital 
                            As at 29    As at 28     As at 29     As at 28 
                            February    February     February     February 
                                2020        2019         2020         2019 
                                                    Number of    Number of 
                             GBP'000     GBP'000       shares       shares 
 Allotted, called 
  up and fully paid: 
  Ordinary shares of 
  0.05p each                      10          12   19,479,172   23,083,338 
                          ==========  ==========  ===========  =========== 
 Allotted, called 
  up and partly paid: 
  Redeemable preference 
  shares of GBP1 each             13          13       50,000       50,000 
                          ==========  ==========  ===========  =========== 

As disclosed in note 11, on 22 March 2019, 3,604,166 ordinary shares were cancelled.

   13.    Net Asset Value per Ordinary Share 
                                                              As at              As at 
                                                   29 February 2020   28 February 2019 
Net assets                                               15,634,000         13,929,000 
                                                  -----------------  ----------------- 
Number of shares in issue                                19,479,172         23,083,338 
Less: management incentive shares (see note 11)         (3,895,834)        (7,500,000) 
                                                  -----------------  ----------------- 
Number of shares in issue for purposes of Net 
Asset Value per share calculation                        15,583,338         15,583,338 
                                                  -----------------  ----------------- 
Net asset value per share 
Basic and diluted                                           100.33p             89.38p 
   14.    Financial Instruments 

The Company's financial instruments comprise its investments, cash balances, debtors and certain creditors. The fair value of all of the Company's financial assets and liabilities is represented by the carrying value in the Balance Sheet. Excluding cash balances, the Company held the following categories of financial instruments at 29 February 2020:

                                   As at 29 February   As at 28 February 
                                                2020                2019 
                                             GBP'000             GBP'000 
 Financial assets at fair 
  value through profit or 
  loss                                        13,433               7,872 
 Financial assets that are 
  debt instruments measured 
  at amortised cost                              203               2,851 
 Financial liabilities measured 
  at amortised cost                             (95)               (176) 
                                              13,541              10,547 
                                  ==================  ================== 

Management of risk

The main risks the Company faces from its financial instruments are market price risk, being the risk that the value of investment holdings will fluctuate as a result of changes in market prices caused by factors other than interest rate or currency movements, liquidity risk, credit risk and interest rate risk. The Board regularly reviews and agrees policies for managing each of these risks. The Board's policies for managing these risks are summarised below and have been applied throughout the year.

Credit risk

Credit risk is the risk that the counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Investment Manager monitors counterparty risk on an ongoing basis. The Company's maximum exposure to credit risk is as follows:

                             As at 29 February   As at 28 February 
                                          2020                2019 
                                       GBP'000             GBP'000 
 Cash at bank and in hand                2,093               3,382 
 Interest, dividends and 
  other receivables                        203               2,851 
                                         2,296               6,233 
                            ==================  ================== 

The cash held by the Company at the year-end is held in one U.K. bank. Bankruptcy or insolvency of the bank may cause the Company's rights with respect to the receipt of cash held to be delayed or limited. The Board monitors the Company's risk by reviewing regularly the financial position of the bank and should it deteriorate significantly the Investment Manager will, on instruction of the Board, move the cash holdings to another bank.

Credit risk associated with interest, dividends and other receivables are predominantly covered by the investment management procedures. Other receivables as at 29 February 2020 was mainly cash held by the company's brokers, that is subject to reviews consistent with the banks noted above.

Market price risk

Market price risk arises mainly from uncertainty about future prices of financial instruments held by the Company. It represents the potential loss the Company might suffer through holding investments in the face of price movements. The Investment Manager actively monitors market prices and reports to the Board, which meets regularly in order to consider investment strategy.

The Company's strategy on the management of market price risk is driven by the Company's investment policy as outlined in the Strategic Report on page 14. The management of market price risk is part of the investment management process. The portfolio is managed with an awareness of the effects of adverse price movements through detailed and continuing analysis, with an objective of maximising overall returns to shareholders.

Holdings in unquoted investments may pose higher price risk than quoted investments. Some of that risk can be mitigated by close involvement with the management of the investee companies along with review of their trading results.

12% (2019: 42%) of the Company's investments are quoted investments and 88% (2019: 58%) are unquoted investments.

Liquidity risk

Details of the Company's unquoted investments are provided in the Investment Portfolio summary on page 8. By their nature, unquoted investments may not be readily realisable and the Board considers exit strategies for these investments throughout the period for which they are held. As at the year end, the Company had no borrowings.

The Company's liquidity risk associated with investments is managed on an ongoing basis by the Investment Manager in conjunction with the Directors and in accordance with policies and procedures in place as described in the Strategic Report and the Directors' Report. The Company's overall liquidity risks are monitored on a quarterly basis by the Board. The Company maintains access to sufficient cash resources to pay accounts payable and accrued expenses.

Fair value interest rate risk

The benchmark that determines the interest paid or received on the current account is the Bank of England base rate, which was 0.75% at 29 February 2020 (2019: 0.75%).

Cash flow interest rate risk

The Company has exposure to interest rate movements primarily through its cash deposits which track either the Bank of England base rate or LIBOR.

Interest rate risk profile of financial assets

The following analysis sets out the interest rate risk of the Company's financial assets as at 29 February 2020.

                        Rate status   Average interest   Period until     Total 
                                                  rate       maturity 
 Cash at bank - RBS        Floating              0.25%              -     2,093 
 Balance of assets          Non-interest bearing                    -    13,636 

The following analysis sets out the interest rate risk of the Company's financial assets as at 28 February 2019.

                          Rate status   Average interest   Period until     Total 
                                                    rate       maturity 
 Cash at bank - Metro        Floating              0.10%              -         6 
 Cash at bank - RBS          Floating              0.25%              -     3,376 
 Balance of assets            Non-interest bearing                    -    10,723 

Foreign currency risk

The reporting currency of the Company is Sterling. The Company has not held any non-Sterling investments during the year.

Fair value hierarchy

Financial assets and liabilities measured at fair value are disclosed using a fair value hierarchy that reflects the significance of the inputs used in making the fair value measurements, as follows:-

-- Level 1 - Fair value is measured using the unadjusted quoted price in an active market for identical assets.

-- Level 2 - Fair value is measured using inputs other than quoted prices that are observable using market data.

   --      Level 3 - Fair value is measured using unobservable inputs. 

Fair values have been measured at the end of the reporting year as follows:-

                                 2020      2019 
                              GBP'000   GBP'000 
 Level 1 
 Investments listed on LSE      1,672     3,345 
 Level 3 
 Unquoted investments          11,761     4,527 
                               13,433     7,872 
                             ========  ======== 

The Level 3 investments have been valued in line with the Company's accounting policies and IPEV guidelines. Further details of these investments are provided in the Significant Investments section of the Annual Report on pages 9 to 12.

   15.    Capital management 

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern, so that it can provide an adequate return to shareholders by allocating its capital to assets commensurate with the level of risk.

By its nature, the Company must have an amount of capital, at least 70% (as measured under the tax legislation) of which must be, and remain, invested in the relatively high risk asset class of small UK companies within three years of that capital being subscribed. For accounting periods commencing after 5 April 2019 this increases to 80%.

The Company accordingly has limited scope to manage its capital structure in the light of changes in economic conditions and the risk characteristics of the underlying assets. Subject to this overall constraint upon changing the capital structure, the Company may adjust the amount of dividends paid to shareholders, issue new shares, or sell assets to maintain a level of liquidity to remain a going concern.

The Board has the opportunity to consider levels of gearing, however there are no current plans to do so. It regards the net assets of the Company as the Company's capital, as the level of liabilities is small, and the management of those liabilities is not directly related to managing the return to shareholders.

   16.    Contingencies, Guarantees and Financial Commitments 

There were no commitments, contingencies or guarantees of the Company at the year-end (2019: none).

   17.    Controlling Party 

In the opinion of the Directors there is no immediate or ultimate controlling party.

   18.    Post Balance Sheet Events 

On 11 March 2020, the World Health Organisation declared COVID-19 a global pandemic and on 23 March 2020, the UK Government imposed a lockdown on the whole population. The Directors consider that COVID-19 is a non-adjusting post balance sheet event. The pandemic will significantly impact the UK economy and may materiality impact the prospects of a number of the Company's investments and cause a material reduction in the fair value of the Company's investments. The Directors are unable to quantify the full financial impact of COVID-19 on the fair value of its investment portfolio as a material proportion of the investments remains remain in lockdown. Further details of the investments are set out in the Investment Manager's Report on pages 3 to 7.

The financial information set out in this announcement does not constitute the Company's statutory financial statements in accordance with section 434 Companies Act 2006 for the year ended 29 February 2020, but has been extracted from the statutory financial statements for the year ended 29 February 2020 which were approved by the Board of Directors on 26 June 2020 and will be delivered to the Registrar of Companies. The Independent Auditor's Report on those financial statements was unqualified and did not contain any emphasis of matter nor statements under s 498(2) and (3) of the Companies Act 2006.

The statutory accounts for the year ended 28 February 2019 have been delivered to the Registrar of Companies and received an Independent Auditors report which was unqualified and did not contain any emphasis of matter nor statements under s 498(2) and (3) of the Companies Act 2006.

Copies of the full annual report and financial statements for the year ended 28 February 2020 will be available to the public at the registered office of the Company at Cassini House, 57 St James's Street, London, SW1A 1LD and will be available for download from www.pumainvestments.co.uk.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.



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June 29, 2020 03:00 ET (07:00 GMT)

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