TIDMPU13
RNS Number : 7212D
Puma VCT 13 PLC
30 June 2021
HIGHLIGHTS
-- Strong portfolio performance leading to 25% increase in Net Asset Value per share
-- Realisation of the Company's holding in Pure Cremation
Limited at a 3.9x return in June 2021, after the year end
-- Further fundraising offer of GBP10m completed, fully subscribed
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the third report and financial
statements for Puma VCT 13 plc ('the Company') for the year to 28
February 2021.
Overview
The Company's Net Asset Value ("NAV") per share at the end of
the year stood at 125.77p, a 25.44p and 25.4% uplift from the same
point in the previous year. This gain has arisen from a strong
performance across a broad range of the Company's qualifying
investments, which is particularly encouraging given the prevailing
market conditions. Five of the Company's qualifying holdings were
written up in value, with one held at cost. Three of the Company's
qualifying holdings were marked down in value and there was a small
loss on the Company's non-qualifying holdings of listed securities;
since then the losses on the listed securities have been recovered.
These movements, together with running costs, accounted for the
overall NAV movement. The Company's profit for the year was GBP4.4m
(2020: GBP1.7m).
Fundraising
During the year, the company undertook a further fundraising.
The Company raised GBP3.1m during the year, with a further GBP7.0m
raised after the period end meaning that the new offer has been
fully subscribed. This gives the Company material additional
deployable funds and will help spread fixed costs over a wider
shareholder base. This leaves the Company in a good position to
continue to develop a robust portfolio. The Company intends to
re-open for another fundraising in the second half of the year.
Life of the Fund Extended, now Evergreen
The Company did not have a fixed life but had initially
envisaged a shareholders' vote on its own continuation after 8 to
10 years. As disclosed in the half-yearly report, following
approval by shareholders for the change, the Company will no longer
put a resolution to shareholders to vote on the Company's
continuance and is now an 'evergreen' VCT.
At the same shareholder's meeting, the performance incentive
structure for the Investment Manager has been revised, with a
higher hurdle. The performance incentive structure has been revised
from 20% of all amounts above 105p per share, payable once
shareholders have received distributions above 105p per share to a
20% fee payable in relation to each accounting period, subject to
performance value per share exceeding the High Water Mark (being
the higher of 110p and the highest Performance Value per Share at
the end of any previous accounting period). By increasing the
hurdle at which a fee becomes payable from 105p to 110p, we believe
this further incentivises the Manager to achieve strong performance
for the benefit of shareholders.
Investment Activity and Portfolio
We are pleased to report that 2020-21 has been an active year
for the Company with four qualifying investments made in this
period, alongside other Puma-managed funds. These investments were:
GBP1.85m into Tictrac, an app-based health and wellness solution
for employers and insurance companies; GBP0.5m into the product
design and technology business, Ostmodern; a follow-on investment
of GBP0.03m into Le Col, an ecommerce business selling premium
cycling apparel; and a follow-on investment of GBP0.13m into Dymag,
a manufacturer of specialist car and motorbike wheels. This brings
the overall number of qualifying investments to nine.
The two new investments were completed during periods of extreme
uncertainty arising from the Covid-19 pandemic, including an
investment in March 2020, at the outset of the crisis. As such, the
investments were made at what already looks to be highly
advantageous pricing compared with today's market conditions.
Within the portfolio, Le Col and Pure Cremation continued to
perform very strongly and Le Col was written up accordingly. After
the period end the Company sold its position in Pure Cremation to
realise a 3.9x return on total funds invested. Your board expects a
substantial portion of the proceeds of this realisation to be paid
out as a dividend, towards the end of 2021.
Tictrac, the Company's health and wellness app investment, has
also been written up in value, despite having been held for less
than one year, aided by the highly favourable deal structure the
Investment Manager secured. The sector has gained significant
traction during the past year as individuals and employers
increasingly incorporate health and wellbeing into their daily
routines. In addition, there has also been a focus on providing
staff welfare solutions via scalable digital technology, such as
that offered by Tictrac.
The Company's holdings in Influencer, an influencer marketing
business, and MyKindaFuture (MKF), a Human Resources technology
business, have both generated positive valuation movements as the
positions were adjusted from being held at cost to being held at
market value. In both cases the Company benefits from a defensive
investment structure which has helped secure value.
Three of the Company's qualifying holdings were written down in
value. Two of these, Hot Copper (formerly Knott End Pub Company)
and Open House, are pub businesses and have therefore been impacted
by the Covid-19 pandemic and the ensuing policy responses.
Following the end of the year under review, both businesses
reopened and have traded well. The businesses are robustly
capitalised and have strong, seasoned management teams who remain
optimistic about their long-term prospects. The third business to
be written down in value was UK car and motorbike wheel
manufacturer Dymag. Dymag's sales are to an extent seasonal, and
various lockdowns in the UK and US have limited the opportunities
for racing and driving during the key spring and summer seasons,
which has impacted sales. Nevertheless, Dymag's revenues grew by
14.5% over the period compared to the prior year and, post period
end, enjoyed a record month of sales in March 2021 and the quarter
ending June 2021 is forecast to be a record quarter for sales.
Net Asset Value ("NAV")
The NAV per share at the year end was 125.77p (2020: 100.33p).
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.
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.
Outlook
With new funds now available for deployment the Company has the
opportunity to be proactive as the economy and society recover,
investing in businesses that have proven their robustness through
the last year and are well positioned to grow in the new climate.
Notwithstanding the considerable uncertainty arising from the
Covid-19 pandemic and the unprecedented policy measures put in
place to contain it, we do look to the future with confidence. The
UK benefits from an active and dynamic sector of small and medium
enterprises and as this Company's own portfolio shows, whilst there
will be losers from the pandemic and its aftermath, there will also
be winners.
The Manager has a strong reputation as a provider of capital to
well-managed, later-stage businesses and at the time of writing we
are encouraged by the flow of prospective qualifying investments
which are under consideration. The investment team are currently in
execution phase with two further potential investments and are
confident that we will continue to make good progress in executing
our investment strategy and, of course, in meeting our ongoing
qualifying holding tests as a VCT.
David Buchler
Chairman
30 June 2021
INVESTMENT MANAGER'S REPORT
Introduction
The year was of course dominated by the Covid-19 pandemic, which
has dramatically accelerated a number of pre-existing trends in
many areas of life. Examples range from remote working, to
ecommerce growth, to the application of scalable digital solutions
to health, education and staff management.
Some major macroeconomic trends have also been accelerated. As
the UK entered the pandemic at the beginning of 2020, the core
outlook was of a high debt, low interest rate, low inflation model.
In such an environment, innovative, fast growing companies tend to
attract high values as it is easier to buy growth than to create it
organically. This is exacerbated by large, cash-rich incumbents
being reluctant to retain high levels of liquid assets as the yield
on cash is unacceptably low. Overall, such an environment is
supportive of small company investing, as it is stimulative of
exits at good valuations.
Now, as the country begins to emerge from the Covid dislocation,
it is evident that the economy has been thrust forwards on that
trajectory by several years. National debt levels are very much
higher while interest rates remain very low. In fact, we risk being
in a position where governments and Central Banks (now more
entwined than they have been for probably 30 years) cannot afford
to raise interest rates. That raises material concerns about
inflation, consideration of which we formally upweighted in our
investment analysis this February.
Further, this has not been a 'conventional' recession. Whilst
there has been considerable uncertainly throughout, including an
intensely difficult planning period at the onset of the crisis, the
scale of Government support, particularly via the Furlough scheme,
but also through the various guaranteed loan schemes, has been
unprecedented. The majority of that support still needs to be
unwound, and in our view, it would be unwise to assume that we are
now in an early cycle recovery phase like any other.
The Company is early in its life and so has a high proportion of
investable cash. This allows it to react to changes quickly and
meaningfully, unburdened by a high proportion of assets in an
illiquid legacy portfolio. The Company is also of a size where
performance in a particular portfolio holding can have a material
impact on overall valuation.
The Investment Manager to the Company, Puma has a highly
involved and hands-on approach to portfolio management. This keeps
us close to the management teams that the Company has backed and
allows us to help them deal with challenges that arise. This,
coupled with a focus on genuine multi-sector diversity, has served
the Company well over the extraordinary last twelve months and we
are confident that it will continue to do so.
Investments
Qualifying Investments
Pure Cremation - Crematorium and Direct Cremations
Pure Cremation is a leading provider of direct cremations in the
UK, meeting the needs of a growing number of people 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 extremely strongly
throughout the period and has expanded operations to cover mainland
Scotland where Pure Cremation has now taken office space. Similarly
in Andover, where its main site, headquarters and crematoria are
based, it took on substantial additional office space for its
expanding customer services function.
Now profitable, the business has been using its growing free
cash flow to carefully expand into adjacent end of life services
and sectors. It recruited a legal team in Birmingham to help with
its new will writing offer, which has initially been presented to
existing pre-paid plan holders. Additional staff have also been
taken on to support the business's existing trade networks and to
drive at-need business in local markets. These efforts have been
supported by the expansion of the group's marketing capacity, with
new marketing channels added, including a digital focus to extend
reach to new markets.
The position was realised in June 2021 for GBP5.04m, generating
a gain of GBP3.74m on the original GBP1.30m invested.
2021 2020
Total investment by all funds
managed by Puma Investment
Management Limited GBP7.35m GBP7.35m
--------- ---------
VCT 13 investment participation GBP1.30m GBP1.30m
--------- ---------
VCT 13 Equity Valuation GBP4.45m GBP2.59m
--------- ---------
Multiple of Investment Cost 3.43x 2.00x
--------- ---------
Dymag Group - High performance wheel manufacturer
Dymag is a British designer and manufacturer of high-performance
car and motorbike wheels, with a specific focus on carbon fibre
wheels. The business continues to grow its presence, both in the
aftermarket through relationships with several leading US
distributors, and through project work with several leading
performance 'original equipment manufacturers' (OEM). Dymag's
wheels have been featured on several notable supercar and hypercar
projects, and in October 2020, Dymag's hybrid forged alloy and
carbon fibre wheels were used on the SSC Tuatara when it
successfully set a new world speed record for a production car. The
Tuatara reached a top speed of 331.15mph on a closed road in
Nevada, USA.
The Company's investments have supported an ongoing process of
driving efficiencies in Dymag's production processes to lower unit
cost, including relocation to a new factory in Chippenham which was
open and fully operational by mid-February 2021. Investment has
also been used to develop a more sophisticated sales and marketing
function.
Dymag managed to continue production throughout lockdown but
suffered from complications around staffing and supply chain. Order
volumes were also impacted as driving and racing activities were
curtailed and trade fairs were cancelled. However, Dymag
proactively focused on deepening its distributor relationships and
working through engineering projects with long lead times.
2021 2020
Total investment by all funds
managed by Puma Investment
Management Limited GBP5.65m GBP4.80m
--------- ---------
VCT 13 investment participation GBP1.44m GBP1.31m
--------- ---------
VCT 13 Equity Valuation GBP0.99m GBP1.31m
--------- ---------
Multiple of Investment Cost 0.69x 1.00x
--------- ---------
Hot Copper - Pubs with Microbreweries
Brewhouse & Kitchen is the largest brewpub brand in the UK,
distinctive for brewing their own unique craft beers onsite and
running a participatory experience with beer tasting and brewing
masterclasses. The Company invested into Knott End Pub Company in
2017, as a franchisee to the Brewhouse & Kitchen brand to
provide growth capital for the further build-out of the overall
Brewhouse & Kitchen branded estate.
In December 2020 Knott End was merged with two other Brewhouse
& Kitchen franchise companies which other Puma managed funds
had previously invested into. This resulted in the Company now
holding shares in Hot Copper Pub Company Limited, and therefore
having exposure to a larger, more diverse, mostly freehold estate
Hot Copper benefits from a solid financial position, and sufficient
free cash to exploit acquisition opportunities which may arise from
the current challenging climate.
Naturally, this has been a difficult time for pub businesses due
to the extreme restrictions on trade which have characterised much
of the period. Although there have been some very encouraging
trading figures from the pubs when they have been able to open, Hot
Copper has had to focus primarily on managing cash.
Over the course of the period, Brewhouse & Kitchen invested
into their "B&K On Tap" app, which allows them to digitise the
customer journey, accommodating order-from-table and pay-from-table
functionality. This new digital solution will not only allow them
to gain better labour efficiencies and reduce wage bills but will
also facilitate the company in better understanding their
customer-base.
Post period end, as the hospitality sector reopened in April,
trade for Hot Copper has begun well, with several units posting
gains on 2019 trading levels despite operating with significant
restrictions still in place. This trade benefits from ongoing
government support, including rates relief, flexi-furlough and the
reduction of VAT on food sales from 20% to 5%, now extended to
September 2021.
Also in April, post period end, Brewhouse & Kitchen won
'Best Pub Employer' at the 2021 Publican Awards and was shortlisted
as 'Best Managed Pub Company'. The reputational benefits of these
awards will help Hot Copper as a franchisee.
2021 2020
Total investment by all funds
managed by Puma Investment
Management Limited GBP20.2m GBP20.2m
--------- ---------
VCT 13 investment participation GBP0.85m GBP0.85m
--------- ---------
VCT 13 Equity Valuation GBP0.46m GBP0.59m
--------- ---------
Multiple of Investment Cost 0.55x 0.70x
--------- ---------
Open House - London based food and beverage offer
Open House owns and operates two popular dining and drinking
venues in London - The Lighterman in King's Cross and Percy &
Founders in Fitzrovia. The Group will be opening its third unit, an
anchor building in the new TV Centre development in London's White
City, in Autumn 2021. Open House was launched in 2015 by the team
behind Cubitt House, a group of highly successful gastropubs in
central London which were later sold to a private equity group.
Since closing for the first lockdown, the Group has managed its
cash well and negotiated successfully to receive considerable
support from landlords. This has eased pressure whilst units have
had to remain closed throughout the various lockdowns over the
period.
During the late summer 2020 when hospitality was temporarily
allowed to reopen, The Lighterman traded well and generated a
positive contribution for the company. While this unit also had to
close for lockdowns over winter, post period end it opened again in
April (after the financial period being reported upon) with very
strong trade. The unit had several advantages for operating in the
current restricted environment, including its high footfall
location, generous outdoor space and familiarity with table
service.
As Fitzrovia is a more office-centric London location, the Group
decided that its unit there, Percy & Founders should reopen
when government guidance encourages offices to open fully, and when
a higher footfall would be expected at this site.
2021 2020
Total investment by all funds
managed by Puma Investment
Management Limited GBP5.00m GBP5.00m
--------- ---------
VCT 13 investment participation GBP1.80m GBP1.80m
--------- ---------
VCT 13 Equity Valuation GBP1.96m GBP2.28m
--------- ---------
Multiple of Investment Cost 1.09x 1.26x
--------- ---------
MyKindaCrowd Limited - Human Resources Technology
MyKindaFuture (MKF) is an award-winning Human Resources
technology company specialising in helping underrepresented talent
to gain employment. Through its Connectr 2.0 platform, MKF provides
large corporates with a comprehensive digital engagement tool to
increase attraction and retention rates amongst potential graduate
hires and apprentices. MKF partners with organisations such as
Deloitte, Cisco, the NHS, Thalys and National Grid to help recruit
young people from a wider range of social backgrounds than
typically delivered by traditional channels.
The Connectr 2.0 platform also incorporates one-to-one digital
mentoring, which is a new feature that is rapidly gaining
commercial traction. It is particularly well suited to the
distanced working practices that are likely to be significantly
more widespread post Covid, as it offers large employers a digital
and scalable solution for career development and mentoring, even in
a remote working world.
Trading through the period remained strong, with particularly
rapid growth in recurring digital revenues. In February 2021, just
prior to the period end, the company launched a pilot program with
the Department for Work and Pensions which trialled the Connectr
2.0 platform in Job Centre Plus locations across London and the
South-East, ahead of a possible nationwide roll-out. This places
Connectr 2.0 at the centre of networks of potential employees, each
of whom is exposed to the platform and is a potential customer.
This trial has already led to client wins and is a hugely exciting
opportunity for the business.
2021 2020
Total investment by all funds
managed by Puma Investment
Management Limited GBP3.70m GBP2.75m
--------- ---------
VCT 13 investment participation GBP1.80m GBP1.80m
--------- ---------
VCT 13 Equity Valuation GBP2.92m GBP1.80m
--------- ---------
Multiple of Investment Cost 1.62x 1.00x
--------- ---------
Influencer Limited - Technology
Influencer is a data -driven social media, influencer and
digital marketing agency. Launched in 2017, Influencer's
proprietary technology is market leading in simplifying the
influencer marketing process for both brands and creators. The
business has worked with brands such as Pantene, Barclays, Walkers
and Starbucks for their influencer campaigns and regularly works
with some of the world's leading advertising agencies.
Over the period, Influencer was named an official Facebook and
Instagram Marketing Partner. Not only does this establish
Influencer as a leader in the influencer marketing space, but also
means the business will be able to distribute content directly
through the Facebook and Instagram networks and their wider digital
portfolios. Also during the period, the business made significant
developments across the big six agency groups , making a number of
as-yet confidential technology partnerships across the key networks
.
Historically, Influencer has been very strong in both the travel
and hospitality sectors, and therefore faced significant client
retrenchment during the lockdowns and other Covid-19 pandemic
responses. The business focussed on managing cash and driving into
new sectors through reinvigorated sales efforts. Despite a slow
start to 2021 , towards the end of the period the business has
enjoyed some significant client wins and is moving forward with
renewed momentum .
2021 2020
Total investment by all funds
managed by Puma Investment
Management Limited GBP3.00m GBP3.00m
--------- ---------
VCT 13 investment participation GBP1.80m GBP1.80m
--------- ---------
VCT 13 Equity Valuation GBP2.04m GBP1.80m
--------- ---------
Multiple of Investment Cost 1.13x 1.00x
--------- ---------
Le Col Holdings Limited - Sports Apparel
Le Col is a premium cycling apparel brand founded by former
professional cyclist, Yanto Barker. Based in the UK and exporting
to 50 countries, Le Col owns its own factory in Italy, giving
control of its manufacturing and supply chain.
Having grown strongly for several years since initial investment
by the Puma Funds, Le Col entered the Covid-19 crisis with a strong
platform. Like all businesses, Le Col faced great uncertainty in
the initial stages of the crisis but experienced a boom in sales
following lockdown due to an increased focus on exercise and
particular emphasis on cycling. Online sales performed
exceptionally strongly over the period, driven by a number of
successful marketing initiatives throughout the year.
These included a multi-sport Strava challenge which received
more than 500,000 sign-ups, partnerships with Wahoo (an indoor
cycling kit brand), Zwift rides (an online cycling training
programme) and ongoing sponsorship of Team Bahrain McLaren, a
leading Grand Tour team. In particular, the sponsorship of Team
Bahrain McLaren has been successful in attracting a number of new
customers to the brand.
As evidence of Le Col's continued success, in October 2020 the
business won the 'Best Leisure, Fitness & Outdoors eCommerce'
award at the eCommerce Awards 2020. Moving forwards, it plans to
make supply chain improvements to cope with increased demand,
including moving to larger premises in Italy where a significant
portion of Le Col's stock is manufactured.
2021 2020
Total investment by all funds
managed by Puma Investment
Management Limited GBP4.85m GBP3.80m
--------- ---------
VCT 13 investment participation GBP1.03m GBP1.00m
--------- ---------
VCT 13 Equity Valuation GBP3.44m GBP1.40m
--------- ---------
Multiple of Investment Cost 3 .35x 1 .40x
--------- ---------
TicTrac Limited - Health Engagement Platform
TicTrac is a personalised health and wellness platform that
provides exclusive content to its users, as well as taking
information from their wearable fitness trackers to give targeted
feedback and action plans. TicTrac has gathered powerful evidence
that use of its platform reduces sedentary behaviour amongst large
workforces, with associated positive outcomes for engagement and
wellbeing.
TicTrac's main customers are large insurance companies, such as
Aviva, Allianz and Prudential, Generali Employee Benefits and Bupa
Hong Kong. During 2020, TicTrac also launched a software as a
service (SaaS) offer, selling direct to corporates, again for the
provision of the TicTrac platform to staff as an employee
benefit.
The Covid-19 pandemic accelerated an already prevalent focus on
health and wellness, highlighting the need for flexible, scalable
digital solutions. These trends are very positive for TicTrac.
Whilst corporate spending was scrutinised in most areas during
2020, TicTrac's multi-year contracts with large insurers provided a
buffer from this scrutiny and afforded the business with good
levels of revenue visibility. Coupled with the investment from Puma
funds (and co-investment partner Aviva Ventures) the business has
been able to remain in growth mode and continue developing the
skillsets it needs for expansion.
Post period end, the company has announced some significant
client wins, again on valuable multi-year contracts. This year the
business will continue to grow its staff base across the sales,
account management, product and technology teams, with a focus on
scaling and refining sales and marketing strategy.
2021 2020
Total investment by all funds
managed by Puma Investment
Management Limited GBP5.00m -
--------- -----
VCT 13 investment participation GBP1.85m -
--------- -----
VCT 13 Equity Valuation GBP3.22m -
--------- -----
Multiple of Investment Cost 1 .74x -
--------- -----
AWB Group Limited ('Ostmodern') - Digital Product Design and
Technology
Ostmodern has been at the forefront of innovation in digital
product development for over 10 years, creating video platforms for
some of the world's leading media, broadcast and sport brands. For
example, the company worked with Formula One (F1), creating a
world-class streaming service. They led F1's first ever
direct-to-consumer product, delivering live and on-demand race
content, including all drivers' on-board cameras, broadcast to 108
countries. Ostmodern also designed and built Arsenal's new suite of
digital products. The business has also completed other projects
for hayu, the subscription-based video streaming service and All4,
Channel 4's on-demand video streaming service.
The Company's investment will accelerate the growth of
Ostmodern's Skylark Platform. Developed in-house, the unique
platform is the company's CMS, VMS and API for content-first
businesses .
Since investment, Ostmodern has started transitioning processes
and professionalising its structure to focus on separating the
product side of the business, Skylark, from the services side of
the business. Through the Skylark platform, the business seeks to
reduce the setup costs and deployment times it can offer customers,
consequently allowing the platform to be applicable to a broader
target market.
2021 2020
Total investment by all funds
managed by Puma Investment
Management Limited GBP2.00m -
--------- -----
VCT 13 investment participation GBP0.50m -
--------- -----
VCT 13 Equity Valuation GBP0.50m -
--------- -----
Multiple of Investment Cost 1 .00x -
--------- -----
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.
This portfolio is managed by the Investment Manager's listed
equities team which during the period was run by Justin Waine. Post
Period end, Justin Waine stepped down from this role and was
replaced by Dr Stuart Rollason. Dr Rollason is a highly experienced
small and mid-cap fund manager with over 20 years in the industry.
He joined the Investment Manager from Kestrel Partners LLP, and
prior to that. managed a UK smaller company investment trust at
Bluehone and GBP230m of UK smaller company pension assets at ISIS
Asset Management. He was formerly an Extel-rated Research Analyst
in Medical Technology and Biotech at Beeson Gregory, Panmure Gordon
and Nomura, and began his career as a medical doctor practising in
the NHS, before moving into research at Oxford University.
The Company's listed equity portfolio is focussed on UK centric
stocks which are listed on the main board of the London Stock
Exchange. As previously reported, the Company's portfolio
experienced high levels of volatility and material falls in value,
in line with markets generally, as a result of the Covid pandemic.
At the period end, the portfolio had recovered almost all of the
losses that arose following the market sell off in March and April
2020. From a position at the beginning of the year where the
Company held GBP1.67 million of listed equities, by the year end
this holding had reduced to GBP1.36 million after GBP337,000 of
disposals, GBP74,000 of acquisitions and GBP54,000 of losses (some
realised, some not realised).
Currently the portfolio is standing at GBP1.53m and has
recovered all of the losses incurred in the Spring of 2020.
Puma Investment Management Limited
30 June 2021
Investment Portfolio Summary
As at 28 February 2021
Valuation
as a % of
Valuation Cost Gain/(loss) Net Assets
GBP'000 GBP'000 GBP'000
Qualifying Investment
- Unquoted
ABW Group Limited ('Ostmodern') 500 500 - 2%
Dymag Group Limited 987 1,436 (449) 4%
Hot Copper Pub Company
Limited 462 847 (385) 2%
Influencer Limited 2,037 1,800 237 9%
Le Col Holdings Limited 3,439 1,028 2,411 15%
MyKindaCrowd Limited 2,923 1,800 1,123 13%
Open House London Limited 1,961 1,800 161 9%
Pure Cremation Holdings
Limited 4,451 1,297 3,154 19%
TicTrac Limited 3,221 1,850 1,371 14%
Total Qualifying Investments 19,981 12,358 7,623 87%
---------- -------- ------------ ------------
Liquidity Management
Barclays Plc 103 116 (13) 1%
Chemring Group Plc 94 70 24 0%
Diageo Plc 91 89 2 0%
Discoverie Group Plc 106 63 43 1%
Dixons Carphone Plc 85 109 (24) 0%
Headlam Group Plc 106 121 (15) 1%
ITV Group Plc 82 82 - 0%
Legal & General Group
Plc 96 96 - 0%
Lloyds Banking Group
Plc 59 74 (15) 0%
Provident Financial
Plc 56 119 (63) 0%
Prudential Plc 107 133 (26) 1%
PZ Cussons Plc 98 94 4 1%
Royal Dutch Shell Plc 69 124 (55) 0%
Volution Group Plc 143 88 55 1%
WPP Plc 60 67 (7) 0%
Total Liquidity Management
investments 1,355 1,445 (90) 6%
---------- -------- ------------ ------------
Total Investments 21,336 13,803 7,533 93%
Balance of Portfolio 1,600 1,600 - 7%
Net Assets 22,936 15,403 7,533 100%
---------- -------- ------------ ------------
Of the qualifying investments held at 28 February 2021, all are
incorporated in England and Wales.
Income Statement
For the year ended 28 February 2021
Year ended 28 February Year ended 29 February
2021 2020
Note Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
8
Gain on investments (b) - 5,660 5,660 - 2,094 2,094
Income 2 21 - 21 118 - 118
21 5,660 5,681 118 2,094 2,212
-------- -------- -------- -------- --------
Investment management
fees 3 (86) (257) (343) (70) (209) (279)
Performance fee 3 - (717) (717) - - -
Other expenses 4 (203) (1) (204) (217) (9) (226)
(289) (975) (1,264) (287) (218) (505)
-------- -------- -------- -------- --------
Profit/(loss) before
taxation (268) 4,685 4,417 (169) 1,876 1,707
Taxation 5 - - - - - -
Profit/(loss) and
total comprehensive
income for the year (268) 4,685 4,417 (169) 1,876 1,707
======== ======== ======== ======== ======== ========
Basic and diluted
Return/(loss) per
Ordinary Share (pence) 6 (1.68p) 29.35p 27.67p (1.09p) 12.04p 10.95p
======== ======== ======== ======== ======== ========
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 28 February 2021
As at As at
28 February 29 February
Note 2021 2020
GBP'000 GBP'000
Fixed Assets
Investments 8 21,336 13,433
------------- -------------
Current Assets
Debtors 9 65 203
Cash 2,396 2,093
------------- -------------
2,461 2,296
Creditors - amounts falling
due within one year 10 (861) (95)
Net Current Assets 1,600 2,201
------------- -------------
Total Assets less Current
Liabilities 22,936 15,634
Net Assets 22,936 15,634
============= =============
Capital and Reserves
Called up share capital 12 11 10
Share premium account 17,736 14,852
Capital reserve - realised (1,695) (649)
Capital reserve - unrealised 7,533 1,802
Revenue reserve (649) (381)
Total Equity 22,936 15,634
============= =============
Net Asset Value per Ordinary
Share 13 125.77p 100.33p
============= =============
The financial statements on pages 39 to 55 were approved and
authorised for issue by the Board of Directors on 30 June 2021 and
were signed on their behalf by:
David Buchler
Chairman
Statement of Cash Flows
For the year ended 28 February 2021
Year ended Year ended
28 February 29 February
2021 2020
GBP'000 GBP'000
Reconciliation of profit after tax
to net cash (used in)/ generated from
operating activities
Profit after tax 4,417 1,707
Gain on investments (5,660) (2,094)
Decrease in debtors 138 820
Increase/(decrease) in creditors 766 (35)
Net cash (used in)/generated from
operating activities (339) 398
------------- ---------------
Cash flow from investing activities
Purchase of investments (2,580) (5,897)
Proceeds from disposal of investments 337 2,430
Net cash used for investing activities (2,243) (3,467)
------------- -------------
Cash flow from financing activities
Proceeds received from issue of ordinary
share capital 3,091 1,826
Expense paid for issue of share capital (206) (46)
Net cash generated from financing
activities 2,885 1,780
------------- ---------------
Net increase/(decrease) in cash and
cash equivalents 303 (1,289)
Cash and cash equivalents at the beginning
of the year 2,093 3,382
Cash and cash equivalents at the end
of the year 2,396 2,093
============= ===============
Statement of Changes in Equity
For the year ended 28 February 2021
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
2019 12 14,852 (173) (550) (212) 13,929
Shares 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
Shares issued in the
year 1 3,090 - - - 3,091
Expenses of share
issues - (206) - - - (206)
Reserves movement - - (2) 2 - -
Total comprehensive
income for the year - - (1,044) 5,729 (268) 4,417
Balance as at 28 February
2021 11 17,736 (1,695) 7,533 (649) 22,936
========== ========= ============ ============== ========= ========
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 (2020: 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 .
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 19.
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.
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
As approved at the General Meeting in the year, performance fee
arrangements for Puma Investments and members of the investment
management team have been amended. The performance incentive fee
payable in relation to each accounting period (as determined from
the audited annual accounts for that period) is now subject to the
Performance Value per share being at least 110p at the end of the
relevant period. Performance Value per Share is calculated as the
total of the net asset value, the performance incentive fees
previously paid or accrued by the Company for all previous
accounting periods and the cumulative amount of dividends paid by
the Company before the relevant accounting reference date, with the
aggregate amount of these divided by the number of Ordinary Shares
in issue in the Company on the relevant date (excluding the
Performance Incentive Shares).
The amount of the performance incentive fee will be equal to 20%
of the amount by which the Performance Value per Share at the end
of an accounting period exceeds the High Water Mark (being the
higher of 110p and the highest Performance Value per Share at the
end of any previous accounting period), multiplied by the number of
relevant Ordinary Shares in issue at the end of the relevant period
(excluding any Performance Incentive Shares). That amount will be
allocated, at the discretion of the Investment Manager, between the
Investment Manager itself and the Management Team.
At each balance sheet date, the Company accrues for any
performance fee payable based on the calculation set out above.
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,
especially due to the ongoing impact of COVID-19. Further details
of the unquoted investments are disclosed in the Investment
Manager's Report on pages 4 to 11 and notes 8 and 14 to the
financial statements.
2. Income
Year ended 28 February Year ended 29 February
2021 2020
GBP'000 GBP'000
Income from investments
Dividends received 21 105
21 105
Other income
Bank deposit income - 13
21 118
======================= =======================
3. Investment Management and Performance Fees
Year ended 28 February Year ended 29 February
2021 2020
GBP'000 GBP'000
Puma Investments fees 343 279
Performance fees (see
note 11) 717 -
1,060 279
======================= =======================
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 3.5% the Company's net
asset as at the end of the previous accounting period (2020: cap
was calculated at 3.5% of funds raised). Total costs this year were
3.5% of the Company's net assets as at 28 February 2020 (2020: 3.4%
of the funds raised to 29 February 2020).
In addition to the investment manager fees disclosed above,
during the year, Puma Investments Management Limited charged fees
of GBP92,746 (2020: GBPnil) as commission to share issue costs.
4. Other expenses
Year ended 28 Year ended 29
February 2021 February 2020
GBP'000 GBP'000
PI Administration Services
fees 60 49
Directors' Remuneration 61 61
Social security costs 4 4
Auditor's remuneration for
statutory audit 33 29
Transaction costs 1 9
Other expenses 45 74
204 226
=============== ===============
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 27. The Company had no
employees (other than Directors) during the year (2020: none). The
average number of non-executive Directors during the year was 3
(2020: 3).
The Auditor's remuneration of GBP27,500 (2020: GBP24,000) has
been grossed up in the table above to be inclusive of VAT.
Non-audit fees charged during the year were GBPnil (2020: GBP250
for iXBRL tagging of the year ended 28 February 2019 financial
statements).
5. Taxation
Year ended 28 February Year ended 29 February
2021 2020
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 before taxation 4,417 1,707
======================= =======================
Tax charge calculated
on profit before taxation
at the applicable rate
of 19% 839 324
Gains on investments (1,075) (398)
Tax losses carried forward 236 74
- -
======================= =======================
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 28 February 2021
Revenue Capital Total
GBP'000 GBP'000 GBP'000
Total comprehensive income
for the year (268,000) 4,685,000 4,417,000
Weighted average number of
shares in issue for the year 19,858,132 19,858,132 19,858,132
Less: weighted average number
of management incentive shares
(see note 11) (3,895,834) (3,895,834) (3,895,834)
------------ ------------ ------------
Weighted average number of
shares for purposes of return/(loss)
per share calculations 15,962,298 15,962,298 15,962,298
------------ ------------ ------------
Return/(loss) per share (1.68)p 29.35p 27.67p
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
7. Dividends
The Directors will not propose a resolution at the Annual
General Meeting to pay a final dividend (2020: nil).
8. Investments
Qualifying Non-qualifying
(a) Movements in investments investments investments Total
GBP'000 GBP'000 GBP'000
Book cost at 29 February
2020 9,852 1,779 11,631
Net unrealised at 29
February 2020 1,909 (107) 1,802
Valuation at 29 February
2020 11,761 1,672 13,433
Purchases at cost 2,506 74 2,580
Disposals:
- Proceeds - (337) (337)
- Realised net losses - (69) (69)
Net unrealised gains 5,714 15 5,729
Valuation at 28 February
2021 19,981 1,355 21,336
============= =============== =============
Book cost at 28 February
2021 12,358 1,445 13,803
Net unrealised gains
at 28 February 2021 7,623 (90) 7,533
Valuation at 28 February
2021 19,981 1,355 21,336
============= =============== =============
(b) Gains/(losses)
on investments
Year ended Year ended
28 February 29 February
2021 2020
GBP'000 GBP'000
Realised (losses)/gains on investment (69) 172
Unrealised gains/(losses)
in year 5,729 1,922
5,660 2,094
=============== =============
The Company received GBP337,000 (2020: GBP2,430,000) from
investments sold in the year. The book cost of these investments
when they were purchased was GBP407,000 (2020: GBP2,689,000). 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 28 as at 29
February February
2021 2020
GBP'000 GBP'000
Quoted investments 1,355 1,672
Unquoted investments 19,981 11,761
21,336 13,433
============= =============
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 17 of the Annual Report.
9. Debtors
As at 28 February As at 29 February
2021 2020
GBP'000 GBP'000
Other debtors 65 189
Accrued income - 14
65 203
================== ==================
Other debtors includes cash held by the company's brokers of
GBP60,000 (2020: GBP177,000).
10. Creditors - amounts falling due within one year
As at 28 February As at 29 February
2021 2020
GBP'000 GBP'000
Accruals 848 82
Redeemable preference
shares 13 13
861 95
================== ==================
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.
Following approval by shareholders, on 18 November 2020 this
agreement was amended by a deed of variation. Under the new
agreement, Puma Investments and members of the investment
management team will be entitled to a performance in relation to
each accounting period as determined from the audited annual
accounts for that period, subject to the Performance Value per
share being at least 110p at the end of the relevant period.
Performance Value per Share is calculated as the total of the net
asset value, the performance incentive fees previously paid or
accrued by the Company for all previous accounting periods and the
cumulative amount of dividends paid by the Company before the
relevant accounting reference date, with the aggregate amount of
these divided by the number of Ordinary Shares in issue in the
Company on the relevant date (excluding the Performance Incentive
Shares).
The amount of the performance incentive fee will be equal to 20%
of the amount by which the Performance Value per Share at the end
of an accounting period exceeds the High Water Mark (being the
higher of 110p and the highest Performance Value per Share at the
end of any previous accounting period), multiplied by the number of
relevant Ordinary Shares in issue at the end of the relevant period
(excluding any Performance Incentive Shares). That amount will be
allocated, at the discretion of the Investment Manager, between the
Investment Manager itself and the Management Team.
Under the previous performance incentive arrangement (set out
above) 3,895,834 Ordinary Shares are held by the Investment Manager
and members of the investment management team ("Performance
Incentive Shares"). Under the terms of the incentive arrangement,
all rights to dividends will be waived except, amounts payable
under the new performance incentive fee will, where possible, be
paid as a dividend through these Performance Incentive Shares.
A performance fee of GBP717,000 (2020: GBPnil) has been accrued
for under the terms of the new performance incentive arrangement
calculated as 20% of the increase in net assets before performance
fee (GBP23,653,000) in excess of 110p per share (excluding
performance incentive shares) (GBP20,061,000).
12. Called Up Share Capital
As at 28 As at 29 As at 28 As at 29
February February February February
2021 2020 2021 2020
Number of Number of
GBP'000 GBP'000 shares shares
Allotted, called
up and fully paid:
Ordinary shares of
0.05p each 11 10 22,132,844 19,479,172
========== ========== =========== ===========
Allotted, called
up and partly paid:
Redeemable preference
shares of GBP1 each 13 13 50,000 50,000
========== ========== =========== ===========
During the year, 2,653,672 shares were issued at an average
price of 116.5p per share (2020: no shares were issued). The
consideration received for these shares was GBP3.1 million (2020:
GBPnil).
Following the period end, a further 6,030,886 shares were issued
at an average price of 116.5p. The consideration received for these
shares was GBP7.0 million.
13. Net Asset Value per Ordinary Share
As at As at
28 February 29 February
2021 2020
Net assets GBP22,936,000 GBP15,634,000
-------------- --------------
Number of shares in issue 22,132,844 19,479,172
Less: management incentive
shares (see note 11) (3,895,834) (3,895,834)
-------------- --------------
Number of shares in issue
for purposes of Net
Asset Value per share calculation 18,237,010 15,583,338
-------------- --------------
Net asset value per share
Basic and diluted 125.77p 100.33p
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 2021:
As at 28 February As at 29 February
2021 2020
GBP'000 GBP'000
Financial assets at fair
value through profit or
loss 21,336 13,433
Financial assets that are
debt instruments measured
at amortised cost 65 203
Financial liabilities measured
at amortised cost (861) (95)
20,540 13,541
================== ==================
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 29 February
2021 2020
GBP'000 GBP'000
Cash at bank and in hand 2,396 2,093
Interest, dividends and
other receivables 65 203
2,461 2,296
================== ==================
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 19. 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.
6% (2020: 12%) of the Company's investments are quoted
investments and 94% (2020: 88%) are unquoted investments.
Liquidity risk
Details of the Company's unquoted investments are provided in
the Investment Portfolio summary on page 12. 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
0.1% at 28 February 2021 (2020: 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 28 February 2021.
Rate status Average interest Period until Total
rate maturity
GBP'000
Cash at bank - RBS Floating 0% - 2,396
Balance of assets Non-interest bearing - 21,401
23,797
========
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
GBP'000
Cash at bank - RBS Floating 0.25% - 2,093
Balance of assets Non-interest bearing - 13,636
15,729
========
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:-
2021 2020
GBP'000 GBP'000
Level 1
Investments listed on LSE 1,355 1,672
Level 3
Unquoted investments 19,981 11,761
21,336 13,433
======== ========
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 13 to 17.
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.
The Company must have an amount of capital, at least 80% (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.
15. Capital management (continued)
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 (2020: none).
17. Controlling Party
In the opinion of the Directors there is no immediate or
ultimate controlling party.
18. Post Balance Sheet Events
As detailed in note 12, since the year end 6,030,886 ordinary
shares have been issued for cash consideration of GBP7.0
million.
On 15 June 2021, the VCT realised its position in Pure Cremation
Holdings Limited for total proceeds of GBP5.04m.
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 2021, but has been extracted from the statutory
financial statements for the year ended 28 February 2021 which were
approved by the Board of Directors on 30 June 2021 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 29 February 2020 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 2021 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.
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END
FR EASKEDAXFEFA
(END) Dow Jones Newswires
June 30, 2021 11:31 ET (15:31 GMT)
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