TIDMPU13
RNS Number : 8242D
Puma VCT 13 PLC
28 June 2019
HIGHLIGHTS
-- Top-up Offer closed early having been over-subscribed
-- Fund raising of just over GBP15.5m now completed
-- Qualifying investments completed in four SMEs during the
year, representing just under one third of the fund
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present to you as Chairman the annual report for
Puma VCT 13 plc for the year to 28 February 2019, which was the
Company's first period of investment following closing of the first
offer last summer. I am pleased to report that the fund raised just
over GBP15.5 million over the two offers.
The Company began investing in the latter half of 2018 and has
now deployed just under one third of available funds in qualifying
investments.
The Investment Manager, Puma Investments, has over GBP150
million of money under management in this, other Puma VCTs and
related EIS funds and a well-established, experienced VCT team to
manage the Company's deal flow.
Investments
During the year, the Company completed a series of qualifying
investments for a total of just over GBP4.5 million. At the end of
the year, the Company had a total of GBP7.9 million invested -
details of these investments can be found in the Investment
Manager's report on pages 3 to 4.
The Investment Manager has continued to review a number of
suitable investment opportunities, generated by a strong pipeline,
and expects, in particular, to make qualifying investments during
the coming year to ensure the Company is on course to meet its HMRC
qualifying target.
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 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.
Results
The Company reported a loss of GBP927,000 for the year, a loss
of 9.19p per ordinary share (calculated on the weighted average
number of shares). This is a result of the running costs of the
Company exceeding its income during this initial period whilst the
Company assembles suitable investments, together with the Company's
listed investments portfolio being marked to market. The Net Asset
Value per ordinary share ("NAV") at 28 February 2019 was 89.38p. In
line with the Company's dividend policy as stated in the
Prospectus, no dividend was declared in respect of this accounting
year.
Outlook
The Investment Manager has a strong pipeline of companies which
are suitable for investment. There are many suitable companies
which are well-managed, in good market positions and which need our
finance. We therefore believe the Company is well positioned to
assemble a portfolio to deliver attractive returns to shareholders
in the medium to long term.
David Buchler
Chairman
27 June 2019
INVESTMENT MANAGER'S REPORT
Introduction
As set out in the Chairman's Statement, availability of finance
continues to be restricted for small and medium sized businesses
(SMEs). As a consequence, the Company has been able to make a
number of attractive investments in smaller companies. We have also
continued to see a strong pipeline of potential investments,
particularly opportunities to make further qualifying investments
to ensure the Company meets its HMRC qualifying target.
Investments
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 so-called direct cremations,
meeting the needs of a growing number of people in the United
Kingdom who want a respectful direct cremation arranged without any
funeral, leaving them free to say farewell how, where and when is
right for them. The Pure Cremation team have many years' experience
in the funeral services sector and acquired a site near Andover to
develop a new crematorium and central facility. We are pleased to
report that the Andover facility opened earlier this year and the
business is performing well.
Knott End - Pubs with Microbreweries
In December 2018, the Company invested GBP847,000 in Knott End
Pub Company Limited (as part of a total cumulative GBP7.3 million
qualifying investment alongside other Puma VCTs). Knott End 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. During the period,
Knott End opened its first two pubs, in Milton Keynes and Horsham,
West Sussex, both of which are trading well.
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 transaction, investing
alongside the Puma Alpha EIS fund. Dymag is a British designer and
manufacturer of carbon hybrid automotive wheels. These are light
weight wheels for performance cars. Established in 1974, Dymag is a
pioneer in carbon wheel technology: it launched the first
commercial carbon motorcycle wheel in 1996 and the first carbon
hybrid car wheel in 2004. Following Dymag's successful expansion
into car wheel manufacturing, the company continues to grow its
presence in the aftermarket and original equipment manufacturer
(OEM) channels, working with strategic regional aftermarket
partners and several of the world's leading performance OEMs.
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 transaction,
investing alongside the Puma Alpha EIS fund. Open House owns and
operates popular dining and drinking venues in London, The
Lighterman and Percy & Founders. Open House was launched in
2015 by the team behind Cubitt House, a group of highly successful
gastropubs in central London that were later sold to a private
equity group in a competitive acquisition. The Company's investment
will support the business in achieving its plans for future growth
though further flagship units across London.
Liquidity Management
To manage the Company's liquidity, GBP4.9 million was allocated
to be invested in a portfolio of listed equities during the year.
At the end of February 2019 GBP3.9 million had been invested in a
variety of UK listed equities with the highest exposure being to
mid-sized companies with a market capitalisation between GBP100m
and GBP4bn. During the year the portfolio recorded an unrealised
capital loss of GBP550,000 and provided a dividend income of
GBP36,000 to the fund. The decline in the listed equities reflects
the weakness of the UK stock market, and particularly of mid-sized
UK focused companies, over the period in which the equities were
invested. This particularly negatively impacted mid-sized UK
focused companies due to concerns over Brexit.
Investment Strategy
We are pleased to have invested the Company's funds in a diverse
range of businesses and projects. We remain focused on generating
strong returns for the Company in the qualifying portfolio as well
as the equities portfolio held for liquidity management purposes,
whilst balancing these returns with maintaining an appropriate risk
exposure.
The Investment Management team continues to meet with companies
which are potentially suitable for investment. Over the course of
the next year, the Company will build the qualifying portfolio to
ensure the Company remains on course to meets its HMRC qualifying
target. We have strong deal-flow and are meeting many potential
investee companies with several interesting opportunities to make
further qualifying investments.
Puma Investment Management Limited
27 June 2019
Investment Portfolio Summary
As at 28 February 2019
Valuation
as a % of
Valuation Cost Gain/(loss) Net Assets
GBP'000 GBP'000 GBP'000
Qualifying Investments
Dymag Group Limited 583 583 - 4%
Knott End Pub Company
Limited 847 847 - 6%
Open House London Limited 1,800 1,800 - 13%
Pure Cremation Holdings
Limited 1,297 1,297 - 10%
Total Qualifying Investments 4,527 4,527 - 33%
---------- -------- ------------ ------------
Liquidity Management
Barclays Plc 188 206 (18) 1%
British Land Company
Plc 208 208 - 2%
Chemring Group Plc 137 188 (51) 1%
Diageo Plc 214 201 13 2%
Discoverie Group Plc 213 207 6 2%
Dixons Carphone Plc 169 207 (38) 1%
Firstgroup Plc 200 202 (2) 1%
GVC Holdings (UK) Limited 143 217 (74) 1%
Headlam Group Plc 180 197 (17) 1%
ITE Group Plc 188 211 (23) 1%
Legal & General Group
Plc 216 201 15 2%
McColl's Retail Group
Plc 79 197 (118) 1%
Norcros Plc 178 201 (23) 1%
Provident Financial Plc 229 226 3 2%
Prudential Plc 184 202 (18) 1%
PZ Cussons Plc 164 203 (39) 1%
Revolution Bars Limited 129 204 (75) 1%
Sports Direct International
Plc 166 216 (50) 1%
Volution Group Plc 160 201 (41) 1%
Total Liquidity Management
investments 3,345 3,895 (550) 24%
---------- -------- ------------ ------------
Total Investments 7,872 8,422 (550) 57%
Balance of Portfolio 6,057 6,057 - 43%
Net Assets 13,929 14,479 (550) 100%
---------- -------- ------------ ------------
Of the investments held at 28 February 2019, all are
incorporated in England and Wales.
Income Statement
For the year ended 28 February 2019
Year ended 28 February Period ended 28 February
2019 2018
Note Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loss on investments 8 (b) - (550) (550) - - -
Income 2 45 - 45 - - -
45 (550) (505) - - -
-------- -------- --------- -------- --------
Investment management
fees 3 (49) (147) (196) - - -
Other expenses 4 (200) (26) (226) (8) - (8)
(249) (173) (422) (8) - (8)
-------- -------- --------- -------- --------
Loss before taxation (204) (723) (927) (8) - (8)
Taxation 5 - - - - - -
Loss and total
comprehensive
income for the
year (204) (723) (927) (8) - (8)
======== ======== ======== ========= ======== ========
Basic and diluted
Loss per Ordinary
Share (pence) 6 (2.02p) (7.17p) (9.19p) n/a n/a n/a
======== ======== ======== ========= ======== ========
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 in November 2014 by the Association
of Investment Companies and updated in February 2018.
Balance Sheet
As at 28 February 2019
As at As at
28 February 28 February
Note 2019 2018
GBP'000 GBP'000
Fixed Assets
Investments 8 7,872 -
------------- -------------
Current Assets
Debtors 9 2,851 18
Cash 3,382 -
------------- -------------
6,233 18
Creditors - amounts falling
due within one year 10 (176) (20)
Net Current Assets 6,057 (2)
------------- -------------
Net Assets/(Liabilities) 13,929 (2)
============= =============
Capital and Reserves
Called up share capital 12 12 6
Share premium account 14,852 -
Capital reserve - realised (173) -
Capital reserve - unrealised (550) -
Revenue reserve (212) (8)
Total Equity 13,929 (2)
============= =============
Net Asset Value per Ordinary
Share 13 89.38p n/a
============= =============
The financial statements on pages 26 to 41 were approved and
authorised for issue by the Board of Directors on 27 June 2019 and
were signed on their behalf by:
David Buchler
Chairman
Statement of Cash Flows
For the year ended 28 February 2019
Year ended Period ended
28 February 28 February
2019 2018
GBP'000 GBP'000
Loss after tax (927) (8)
Loss on investments 550 -
Increase in debtors (1,011) -
Increase in creditors 110 8
Net cash used in operating activities (1,278) -
------------- -------------
Cash flow from investing activities
Purchase of investments (8,422) -
Net cash used in investing activities (8,422) -
------------- -------------
Cash flow from financing activities
Proceeds received from issue of
ordinary share capital 13,759 -
Expense paid for issue of share
capital (677) -
Net cash generated from financing
activities 13,082 -
------------- -------------
Net increase in cash and cash equivalents 3,382 -
Cash and cash equivalents at the
beginning of the period - -
Cash and cash equivalents at the
end of the period 3,382 -
============= =============
Statement of Changes in Equity
For the year ended 28 February 2019
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 31 August
2017 4 - - - - 4
Shares issued in the
period 2 - - - - 2
Total comprehensive
income for the period - - - - (8) (8)
---------- --------- ------------ -------------- --------- --------
Balance as at 28 February
2018 6 - - - (8) (2)
Shares issued in the
period 8 15,575 - - - 15,583
Expenses of share
issues - (723) - - - (723)
Share cancelled in
the period (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
========== ========= ============ ============== ========= ========
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 (2018: 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 Bond Street House, 14 Clifford Street, London W1S 4JU.
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 November 2014 by the Association of
Investment Companies and updated in February 2018 ("the SORP").
The comparative period is for the six month period to 28
February 2018.
Monetary amounts in these financial statements are rounded to
the nearest whole GBP1,000, except where otherwise indicated.
Investments
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 9.
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 the price of recent
investment 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.
Income
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 of 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.
Expenses
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.
Taxation
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.
Reserves
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
Debtors include other debtors and accrued income which is
recognised at amortised cost, equivalent to the fair value of the
expected balance receivable.
Creditors
Creditors are initially measured at the transaction price and
subsequently measured at amortised cost, being the transaction
price less any amounts settled.
Dividends
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.
Further details of the unquoted investments are disclosed in the
Investment Manager's Report on pages 3 to 4 and notes 8 and 14 of
the financial statements.
2. Income
Year ended 28 February Period ended 28
2019 February 2018
GBP'000 GBP'000
Income from investments
Dividends received 36 -
36 -
Other income
Bank deposit income 9 -
45 -
======================= ================
3. Investment Management Fees
Year ended 28 February Period ended 28
2019 February 2018
GBP'000 GBP'000
Puma Investments fees 196 -
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 2.8% (2018: nil) 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 (2018: GBPnil) in
relation to share issue costs. The fees were to cover the costs of
launching the VCT.
4. Other expenses
Year ended 28 February Period ended 28
2019 February 2018
GBP'000 GBP'000
PI Administration Services
fees 34 -
Directors' remuneration 58 -
Social security costs 4 -
Auditor's remuneration
for statutory audit 25 8
Transaction costs 26 -
Other expenses 79 -
226 8
======================= ================
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 16. The Company had no
employees (other than Directors) during the year (2018: none). The
average number of non-executive Directors during the year was 3
(2018: 3). The non-executive Directors are considered to be the Key
Management Personnel of the Company with total remuneration for the
year of GBP62,000 (2018: nil) including social security costs.
The Auditor's remuneration of GBP20,500 (2018: GBP6,250) has
been grossed up in the table above to be inclusive of VAT.
5. Taxation
Year ended 28 February Period ended 28
2019 February 2018
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
Loss before taxation (927) (8)
======================= ================
Tax charge calculated
on loss before taxation
at the applicable rate
of 19% (176) (2)
Tax on capital items
not taxable 105 -
Tax losses carried forward 71 2
- -
======================= ================
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 or deferred tax is
recognised on capital gains or losses.
No provision for deferred tax has been made in the current
accounting year. Due to the Company's status as a Venture Capital
Trust and the intention to continue meeting the conditions required
to obtain approval in the foreseeable future, the Company has not
provided deferred tax on any capital gains and losses arising on
the revaluation or disposal of investments. 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 28 February 2019
Revenue Capital Total
Total comprehensive income (GBP204,000) (GBP723,000) (GBP927,000)
for the year
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
------------- ------------- -------------
Loss per share (2.02p) (7.17p) (9.19p)
No return/(loss) per share is presented for 2018 due to minimal
activity in the period.
7. Dividends
The Directors will not propose a resolution at the Annual
General Meeting to pay a final dividend (2018: nil).
8. Investments
Qualifying Non-qualifying
(a) Movements in investments investments investments Total
GBP'000 GBP'000 GBP'000
Purchased at cost - - -
Net unrealised gains/(losses) - - -
Valuation at 1 March
2018 - - -
Purchases at cost 4,527 3,895 8,422
Net unrealised losses - (550) (550)
Valuation at 28 February
2019 4,527 3,345 7,872
============= =============== =============
Book cost at 28 February
2019 4,527 3,895 8,422
Net unrealised losses
at 28 February 2019 - (550) (550)
Valuation at 28 February
2019 4,527 3,345 7,872
============= =============== =============
(b) Losses on investments
Year ended Period ended
28 February 28 February
2019 2018
GBP'000 GBP'000
Realised gains on investment - -
Unrealised losses in
period (550) -
(550) -
=============== =============
(c) Quoted and unquoted
investments
Market value Market value
as at 28 as at 28
February February
2019 2018
GBP'000 GBP'000
Quoted investments 3,345 -
Unquoted investments 4,527 -
7,872 -
=============== =============
Further details of these investments (including the unrealised
loss in the year) are disclosed in the Chairman's Statement,
Investment Manager's Report, Investment Portfolio Summary and
Significant Investments on pages 1 to 7 of the Annual Report.
9. Debtors
As at 28 February As at 28 February
2019 2018
GBP'000 GBP'000
Other debtors 2,829 18
Prepayments and accrued
income 22 -
2,851 18
================== ==================
Other debtors includes cash held by the company share registrar
of GBP1,824,000 (2018: GBPnil) and cash held by the company's
brokers of GBP1,005,000 (2018: GBPnil).
10. Creditors - amounts falling due within one year
As at 28 February As at 28 February
2019 2018
GBP'000 GBP'000
Accruals 163 7
Redeemable preference
shares 13 13
176 20
================== ==================
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 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, there were 7,500,000 ordinary
shares held by the Management Team. This was reduced to 3,895,834
ordinary shares 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 28 As at 28 As at 28 As at 28
February February February February
2019 2018 2019 2018
Number Number
GBP'000 GBP'000 of shares of shares
Allotted, called up
and fully paid:
Ordinary shares of 0.05p
each 12 6 23,083,338 11,250,002
========== ========== =========== ===========
Allotted, called up
and partly paid:
Redeemable preference
shares of GBP1 each 13 13 50,000 50,000
========== ========== =========== ===========
Between 19 March and 5 April 2018, 8,849,391 Ordinary shares of
GBP0.0005 each were allotted and issued GBP1 per share for total
consideration of GBP8,849,391.
On 29 June 2018, 1,557,169 Ordinary shares of GBP0.0005 each
were allotted and issued GBP1 per share for total consideration of
GBP1,557,169.
On 10 October 2018, 1,839,123 Ordinary shares of GBP0.0005 each
were allotted and issued GBP1 per share for total consideration of
GBP1,839,123.
On 26 October 2018, 147,780 Ordinary shares of GBP0.0005 each
were allotted and issued GBP1 per share for total consideration of
GBP147,780.
On 11 December 2018, 779,917 Ordinary shares of GBP0.0005 each
were allotted and issued GBP1 per share for total consideration of
GBP779,917.
On 17 January 2019, 577,185 Ordinary shares of GBP0.0005 each
were allotted and issued GBP1 per share for total consideration of
GBP577,185.
On 22 February 2019, 1,832,771 Ordinary shares of GBP0.0005 each
were allotted and issued GBP1 per share for total consideration of
GBP1,832,771.
On 25 July 2018, 3,750,000 Ordinary shares of GBP0.0005 each
were cancelled (during the year).
On 22 March 2019, 3,604,166 Ordinary shares of GBP0.0005 each
were cancelled (post year-end).
13. Net Asset Value per Ordinary Share
As at As at
28 February 28 February
2019 2018
Net assets/(liabilities) GBP 13,929,000 GBP (2,000)
--------------- -------------
Number of shares in issue 23,083,338 11,250,002
Less: management incentive
shares (see note 11) (7,500,000) (11,250,000)
--------------- -------------
Number of shares in issue
for purposes of Net
Asset Value per share calculation 15,583,338 2
--------------- -------------
Net asset value per share
Basic 89.38p n/a
Diluted 89.38p n/a
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 28 February 2019:
As at 28 February As at 28 February
2019 2018
GBP'000 GBP'000
Financial assets at fair 7,872 -
value through profit or
loss
Financial assets that are
debt instruments measured
at amortised cost 2,838 18
Financial liabilities measured
at amortised cost (176) (20)
10,534 (2)
================== ==================
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 28 February As at 28 February
2019 2018
GBP'000 GBP'000
Cash at bank and in hand 3,382 -
Interest, dividends and
other receivables 2,838 18
6,220 18
================== ==================
The cash held by the Company at the year-end is held in two U.K.
banks. 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 is primary cash held by the share
registrar, which has been remitted to the company since year end,
and cash at 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 9. 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.
42% (2018: 0%) of the Company's investments are quoted
investments and 58% (2018: 0%) are unquoted investments.
Liquidity risk
Details of the Company's unquoted investments are provided in
the Investment Portfolio summary on page 5. 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 Report of the Directors and
the Strategic 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 28 February 2019 (2018: 0.5%).
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 28 February 2019.
Rate status Average interest Period until Total
rate maturity
GBP'000
Cash at bank - Metro Floating 0.10% - 6
Cash at bank - RBS Floating 0.25% - 3,376
Balance of assets Non-interest bearing - 10,710
14,092
========
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:-
2019 2018
GBP'000 GBP'000
Level 1
Investments listed on LSE 3,345 -
Level 3
Unquoted investments 4,527 -
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 6 to 7.
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 (2018: none).
17. Controlling Party
In the opinion of the Directors there is no immediate or
ultimate controlling party.
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
28 February 2019, but has been extracted from the statutory
financial statements for the year ended 28 February 2019 which were
approved by the Board of Directors on 27 June 2019 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 2018 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 2019 will be available to the public at
the registered office of the Company at Bond Street House, 14
Clifford Street, London, W1S 4JU 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.
END
FR EANKPAALNEEF
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