TIDMPUMX
RNS Number : 3710X
Puma VCT 10 PLC
28 August 2015
Puma VCT 10 plc
Interim Report
For the period ended 30 June 2015
Officers and Professional Advisers
Directors Auditors
David Vaughan (Chairman) Baker Tilly Audit LLP
Stephen Hazell Smith Chartered Accountants
Graham Shore 2 Bloomsbury Street
London WC1B 3ST
Secretary
Eliot Kaye Sponsors and Solicitors
Howard Kennedy
Registered Number 19 Cavendish Square
08714913 London W1A 2AW
Registered Office Bankers
Bond Street House The Royal Bank of Scotland plc
14 Clifford Street London City Office
London W1S 4JU PO Box 412
62-63 Threadneedle Street
London EC2R 8LA
Investment Manager VCT Tax Advisor
Puma Investment Management Limited PricewaterhouseCoopers LLP
Bond Street House 1 Embankment Place
14 Clifford Street London WC2N 6RH
London W1S 4JU
Registrar Custodian
SLC Registrars Pershing Securities Limited
Ashley Park House Capstan House
42-50 Hersham Road One Clove Crescent
Walton-on-Thames East India Dock
Surrey KT12 1RZ London E14 2BH
Administrator
PI Administration Services Limited
Bond Street House
14 Clifford Street
London W1S 4JU
Chairman's Statement
Highlights
-- NAV per share up 0.73p in the half year at 96.89p
-- A significant proportion of funds raised now invested in a
diverse range of high quality businesses and projects generating an
attractive return.
-- Strong pipeline of investment opportunities as the Company
completes its first year of operations.
Chairman's Statement
Introduction
During the six months to 30 June 2015 and following the period
end, the Company has been actively deploying its cash resources in
good quality investments. In doing so, it has focused on its
mandate to exploit the opportunities which are arising as a result
of continuing tight credit markets.
Net Asset Value ('NAV')
The NAV per share at the period end was 96.89p, comprising
income for the period of GBP201,000 and representing a return of
0.73p per ordinary share.
Qualifying Investments
The Company's GBP2 million qualifying investment (as part of a
GBP8 million investment alongside other entities managed and
advised by your Investment Manager) in Opes Industries Limited is
progressing well. Opes is developing a materials recycling facility
at an established landfill and aggregates business on a 76 hectare
site in Oxfordshire. The investment is secured with a first charge
over the site and the Opes business and is expected to produce an
attractive return to the Company over four years. The installation
of the materials recycling facility is nearing completion and
expects to be fully operational in Q3 2015.
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 (ROCs). The
management team have a track record delivering similar projects in
other jurisdictions and are a preferred partner of Chinook
Sciences, the Nottingham based leading technology company which has
developed the award-winning "non-incineration ultra clean synthetic
gas
technology" which will be used in the East London plant. Chinook
Sciences also holds a minority stake in the business. The
investment is secured with a first charge over the Chinook Urban
Mining business and the eight acre freehold site of the East London
plant and is expected to produce an attractive return to the
Company over three years.
In accordance with the HMRC VCT rules, the Company has three
years to invest 70 per cent of the portfolio into qualifying
investments.
Non-Qualifying Investments
As previously reported, we have adopted a strategy for the
non-qualifying portfolio of investing in secured loans (and other
similar instruments) offering a good yield with hopefully limited
downside risk.
During the period, the Company advanced a loan of GBP1.2 million
(through an affiliate Lothian Lending Limited) to Richmond Global
Properties Limited. This loan, together with loans from other
vehicles managed and advised by your Investment Manager totalling
GBP6.9 million, is being advanced to fund the development of a 112
bed purpose built care home in Hamilton, Scotland. The loan is
secured with a first charge over the site and is expected to
generate an attractive return. The construction programme has
commenced and is progressing well.
As indicated in the Company's previous annual report, the
Company advanced a series of non-qualifying loans (including
through an affiliate Valencia Lending Limited) totalling GBP2.58 to
various entities within the Citrus Group. These loans, together
with loans from other vehicles managed and advised by your
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. During the period,
GBP490,000 of principal (together with all accrued interest) was
repaid to the Company so that the Company's current exposure is
GBP2.09 million.
The Company's GBP474,000 loan (again through Valencia Lending
Limited) to Churchill Homes (Culter House) Limited continues to
perform well. Churchill Homes is a longstanding Aberdeenshire
developer and the facility provides funding towards the
construction of a private detached housing development in one of
Aberdeen's finest residential suburbs. The loan is secured with a
first charge over the site and is earning an attractive rate of
interest.
As previously reported, the Company had extended a GBP1.3
million non-qualifying loan which (through another affiliate,
Lothian Lending Limited) provides a facility, together with another
Puma VCT, of GBP2.6 million 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. The loan is secured on the
site in East Lothian and is earning an attractive rate of interest.
We are pleased to report that the construction is now complete, the
turbines are generating electricity and EBITDA is in line with
forecasts. During the period, the Company was repaid GBP125,000 and
the loan balance now stands at GBP1.175 million.
As indicated in the Company's previous annual report, the
Company advanced a GBP1.2 million loan (through an affiliate,
Palmer Lending Limited) to Saggart Silverstream Limited towards the
funding of the development of a new 65 bed high-end nursing home in
Saggart Village, County Dublin. We are pleased to report that,
after the period end and following a refinancing of the home prior
to practical completion of the development, the Company's loan was
repaid in full (with all accrued interest and early redemption
premia).
As previously reported, various entities managed and advised by
your Investment Manager provided several tranches of a GBP7.1
million bridging facility to companies within the Connolly and
Callaghan group. The Company participated in this through a GBP3.4
million non-qualifying loan (advanced through another affiliate,
Latimer Lending Limited). The Connolly and Callaghan group is a
provider of emergency overnight accommodation in Bristol with over
20 years' experience in the sector. The overall facility was
secured on a portfolio of over 20 properties and was extended on a
sub-50% loan-to-value basis. I am pleased to report that, following
the period end, the loan together with accrued interest was repaid
generating an attractive return to the Company.
During the period, the Company realised half of its GBP1 million
investment in Nextenergy Solar Fund, an investment company focusing
on operational solar photovoltaic assets located in the United
Kingdom, at a premium to the issue price. The Company retains a
position valued at the period end at GBP520,000.
VCT Qualifying Status
PricewaterhouseCoopers LLP ('PwC') provides the board and the
investment manager with advice on the ongoing compliance with Her
Majesty's Revenue & Customs ('HMRC') rules and regulations
concerning VCTs. PwC assists the Investment Manager in establishing
the status of investments as qualifying holdings and has reported
that the Company has met all HMRC's criteria to date.
Principal risks and uncertainties
Although the economy in the UK continues to improve, it remains
fragile. The consequences of this for the Company's investment
portfolio constitute the principal risk and uncertainty for the
Company in the second half of 2015.
Outlook
(MORE TO FOLLOW) Dow Jones Newswires
August 28, 2015 02:01 ET (06:01 GMT)
We are pleased that a significant proportion of the Company's
available cash is now invested in a diverse portfolio of qualifying
and non-qualifying investments, generating an attractive return.
The Investment Manager has a pipeline in legal process and many
companies which are suitable for investment. There is therefore a
strong flow of further opportunities likely to lead to suitable
investments in the second half of the year. The restrictions on
availability of bank credit continue to affect the terms on which
target companies can raise finance and this should both increase
the demand for our offering and improve the terms we can secure. We
therefore believe the Company is strongly positioned to deliver
attractive returns to shareholders in the medium to long term.
David Vaughan
Chairman
28 August 2015
Income Statement (unaudited)
For the period ended 30 June 2015
Six months ended Period ended Period ended
30 June 2015 30 June 2014 31 December 2014
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 - - - - 14 14 - (64) (64)
Income 607 - 607 78 - 78 614 - 614
607 - 607 78 14 92 614 (64) 550
-------- -------- -------- -------- -------- -------- --------
Investment
management
fees 4 (67) (201) (268) (40) (120) (160) (108) (324) (432)
Performance
fees - - - - - - - - -
Other expenses (131) - (131) (115) - (115) (276) - (276)
(198) (201) (399) (155) (120) (275) (384) (324) (708)
-------- -------- -------- -------- -------- -------- --------
Return/(loss)
on ordinary
activities
before taxation 409 (201) 208 (77) (106) (183) 230 (388) (158)
Tax on return
on ordinary
activities (7) - (7) - - - - - -
Return/(loss)
on ordinary
activities
after tax
attributable
to equity
shareholders 402 (201) 201 (77) (106) (183) 230 (388) (158)
======== ======== ======== ======== ======== ======== ======== ======== ========
Basic and
diluted
Return/(loss)
per Ordinary
Share (pence) 2 1.45p (0.73p) 0.73p (0.28p) (0.38p) (0.66p) 0.83p (1.40p) (0.57p)
======== ======== ======== ======== ======== ======== ======== ======== ========
The revenue column of this statement is the profit and loss of
the Company. All revenue and capital items in the above statement
derive from continuing operations. No operations were acquired or
discontinued in the period.
Balance Sheet (unaudited)
As at 30 June 2015
As at As at As at
30 June 30 June 31 December
Note 2015 2014 2014
GBP'000 GBP'000 GBP'000
Fixed Assets
Investments 7 15,310 5,995 13,029
--------- --------- -------------
Current Assets
Debtors 553 64 92
Cash 11,360 21,009 13,702
--------- --------- -------------
11,913 21,073 13,794
Creditors - amounts falling
due within one year (449) (520) (250)
Net Current Assets 11,464 20,553 13,544
--------- --------- -------------
Total Assets less Current Liabilities 26,774 26,548 26,573
Creditors - amounts falling
due after more than one year
(including convertible debt) - - -
Net Assets 26,774 26,548 26,573
========= ========= =============
Capital and Reserves
Called up share capital 17 17 17
Share premium account 15,624 15,624 15,624
Capital reserve - realised (599) (120) (405)
Capital reserve - unrealised 10 14 17
Other reserve - - -
Revenue reserve 11,722 11,013 11,320
Equity Shareholders' Funds 26,774 26,548 26,573
========= ========= =============
Net Asset Value per Ordinary
Share 3 96.89p 96.07p 96.16p
========= ========= =============
Diluted Net Asset Value per
Ordinary Share 3 96.89p 96.07p 96.16p
========= ========= =============
Cash Flow Statement (unaudited)
For the period ended 30 June 2015
Six months
ended Period ended Period ended
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
Operating activities
Return/(loss) on ordinary activities
before tax 208 (183) (158)
(Gains)/losses on investments - (14) 64
Decrease/(increase) in debtors (461) (64) (92)
Increase/(decrease) in creditors 192 520 250
Net cash inflow/(outflow) from
operating activities (61) 259 64
----------- ------------- -------------
Corporation tax paid - - -
----------- ------------- -------------
Capital expenditure and financial
investment
Purchase of investments (3,290) (5,981) (15,309)
Proceeds from sale of investments 1,009 - 2,216
Net cash outflow from capital
expenditure and financial investment (2,281) (5,981) (13,093)
----------- ------------- -------------
Equity dividend paid - -
----------- ------------- -------------
Financing
Proceeds received from issue
of ordinary share capital - 27,638 27,638
Expenses paid for issue of share
capital - (907) (907)
Proceeds received from issue
of redeemable preference shares - 13 13
Redemption of redeemable preference
shares - (13) (13)
Net cash outflow from financing - 26,731 26,731
----------- ------------- -------------
Decrease in cash (2,342) 21,009 13,702
Net cash at start of the period 13,702 - -
Net funds at the period end 11,360 21,009 13,702
=========== ============= =============
Reconciliation of Movements in Shareholders' Funds
(unaudited)
(MORE TO FOLLOW) Dow Jones Newswires
August 28, 2015 02:01 ET (06:01 GMT)
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