Interim / Quarterly Report • Nov 26, 2019
Interim / Quarterly Report
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National Storage Mechanism | Additional information
RNS Number : 7466U
Puma VCT 13 PLC
26 November 2019
Officers and Professional Advisers
| Directors | Auditor |
| David Buchler (Chairman) Stephen Hazell-Smith Graham Shore |
RSM UK Audit LLP Chartered Accountants 25 Farringdon Street London EC4A 4AB |
| Secretary Eliot Kaye Registered Number 10376236 |
Sponsors and Solicitors Howard Kennedy No 1 London Bridge London SE1 9BG |
| Registered Office Bond Street House 14 Clifford Street London W1S 4JU Investment Manager Puma Investment Management Limited Cassini House 57 St James's Street London SW1A 1LD Administrator PI Administration Services Limited Cassini House 57 St James's Street London SW1A 1LD Registrar SLC Registrars Elder House St. Georges Business Park Brooklands Road Weybridge Surrey KT13 0TS |
Bankers The Royal Bank of Scotland plc London City Office PO Box 412 62-63 Threadneedle Street London EC2R 8LA VCT Tax Advisor PricewaterhouseCoopers LLP 1 Embankment Place London WC2N 6RH Custodian Pershing Securities Limited 1 Canada Square London E14 5AL |
Chairman's Statement
Highlights
· Fund raising now complete
· 60% invested into qualifying portfolio positions
· Further qualifying investment opportunities in various stages of analysis and execution
Introduction
I am pleased to present the second interim report for Puma VCT 13 plc (the "Company") for the period to 31 August 2019.
The Investment Manager, Puma Investments, now has just under £85 million of VCT money under management in this and other Puma VCTs as well as c. £64 million of EIS money under management. Puma Investments is a well-established, experienced VCT manager and are demonstrating good success at investing the Company's funds in line with its mandate.
Since the last report and accounts the Company has made two further investments into qualifying portfolio companies, taking the Company's overall qualifying holding to 59.4% of net asset value ("NAV"). In addition to this, at the end of the period the Company held 25% of its NAV in listed equities, for the purposes of liquidity management. These holdings are discussed in more detail below.
Results and Net Asset Value ('NAV')
The NAV per share at the period end was 87.73p. This figure reflects the initial funds raised less the costs of flotation adjusted for movements in the value of the liquid assets being held for liquidity management purposes and running costs of the Company. Such movement is to be expected as the qualifying portfolio is currently being held at cost despite strong trade in some of the underlying companies.
Qualifying Investments
The Company invested into two further qualifying investments in the period, taking its overall qualifying holdings to six positions across five sectors, accounting for c. 60% of its NAV. This activity has seen investment of 26% of the Company's NAV into qualifying holdings during the period, and the Investment Manager expects to continue this rapid pace of deployment. As such, the Manager expects the Company to meet its qualifying requirement (to be 80% invested into qualifying holdings) considerably in advance of the required date of February 2021.
The first of the new qualifying investments made was into MyKindaCrowd Ltd, a digital platform working with large corporates to improve engagement of potential graduates and apprentices. The platform works with companies such as Deloitte and Cisco to help them recruit young people from a wider range of social backgrounds than their traditional channels.
The second qualifying investment was into Influencer Limited, a high growth, data driven, social media, influencer, and digital marketing platform. The business enables brands to connect with influencers and manage influencer marketing campaigns across one platform.
The Company also holds positions in four other qualifying positions across three different sectors:
Pure Cremation - Crematorium and Direct Cremations
In November 2018 the Company invested £1.3 million into Pure Cremation Holdings Limited, as part of a £7.35 million investment, alongside other Puma VCTs. Pure Cremation is a leading provider of direct cremations, meeting the needs of a growing number of people in the United Kingdom who want a respectful cremation arranged without any funeral, leaving them free to say farewell how, where and when is right for them. The business' new purpose-built site near Andover opened during the period, reducing operating costs and opening up new revenue streams. The business is performing, delivering strong revenue growth across all of its sales channels.
Knott End - Pubs with Microbreweries
In December 2018 the Company invested £847,000 into Knott End Pub Company Limited, as part of a £7.3 million investment, alongside other Puma VCTs. Knott End has entered into a franchise agreement with Brewhouse & Kitchen Limited and is operating pubs in Milton Keynes and Horsham under the Brewhouse & Kitchen ("B&K") brand. The B&K model continues to be very well respected; recent recognition includes appearing in the Sunday Times Fast Track 100 (2018 and 2019), winning Best Managed Pub Company at the British Publican Awards, and winning Multi-Site Pub Operator of the Year at the Casual Dining Awards.
Dymag Group - High performance wheel manufacturer
In December 2018 the Company invested £583,000 into Dymag Group Limited, as part of a £3.6 million investment, alongside other Puma funds. Dymag is a British designer and manufacturer of carbon-fibre car and motorbike wheels. These are high end, lightweight wheels for performance use. 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. Funds from the investment are in part being used to relocate the business to a new production facility which is expected to materially increase capacity.
Open House - London based food and beverage offer
In February 2019 the Company invested £1.8 million into Open House London Limited, as part of a £5 million investment, alongside other Puma funds. Open House owns and operates two popular dining and drinking venues in London, The Lighterman in King's Cross and Percy & Founders in Fitzrovia. 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 with the next site on target to open in Spring 2020.
Liquidity management investments
To manage the Company's liquidity, £4 million has been invested in a diverse portfolio of listed equities.
Puma VCT 13's Listed Equities portfolio is managed by the Investment Manager's in-house Listed Equities team led by Investment Director Justin Waine. Justin is an award-winning manager (Winner of the best AIM Investment Manager 2016 and 2017 at the Growth Investor Awards) with 19 years' experience analysing UK and European small and mid-sized companies. Prior to working at Puma he was a Fund Manager of the European Forager Fund at Polar Capital Partners and also worked as a research analyst for small and mid-sized companies at Cazenove &Co.
In keeping with the VCT 13 mandate, the listed equity portfolio held is focussed on UK centric stocks which are listed on the main board of the London Stock Exchange. The portfolio is entirely invested in stocks with a Market Capitalization of over £100m into companies spread across 17 sectors. Circa. 40% of the portfolio as it stands is invested into stocks with a market cap greater than £4bn.
VCT Qualifying Status
PricewaterhouseCoopers LLP ("PwC") provides the Board and the Investment Manager with advice on the ongoing compliance with HMRC rules and regulations concerning VCTs and has reported no issues in this regard for the Company to date. PwC also assists the Investment Manager in establishing the status of investments as qualifying holdings and will continue to assist the Investment Manager in monitoring rule compliance.
Principal Risks and Uncertainties
The UK economy faces its own challenges, not least those due to the ongoing political uncertainty. This must also be seen in the context of the wider global economic environment which sees uncertainties from trade tensions, slowing Asian growth and more assertive political stances from a number of nations. The consequences of this for the Company's investment portfolio constitute the principal risk and uncertainty for the Company in the second half of the year.
Outlook
It is pleasing to see the Company having made such good progress towards its qualifying target, with plenty of time still in hand. The qualifying portfolio is varied and contains some very strong performers which have the potential to deliver material returns. The non-qualifying portfolio is being managed with an appropriate focus on liquidity to ensure that cash can be made available for qualifying investments as they approach completion.
The Investment Manager continues to see a good volume of potential investment opportunities, driven by network and reputation, and so we feel confident that the Company remains well positioned to deliver attractive returns to shareholders in the medium to long term.
Graham Shore
Director
26 November 2019
Income Statement (unaudited)
For the period ended 31 August 2019
| Period ended 31 August 2019 |
Period ended 31 August 2018 |
Period ended 28 February 2019 |
||||||||
| Note | Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||
| Loss on investments | - | (43) | (43) | - | (18) | (18) | - | (550) | (550) | |
| Income | 58 | - | 58 | 3 | - | 3 | 45 | - | 45 | |
| 58 | (43) | 15 | 3 | (18) | (15) | 45 | (550) | (505) | ||
| Investment management fees | 4 | (35) | (104) | (139) | (20) | (59) | (79) | (49) | (147) | (196) |
| Other expenses | (134) | - | (134) | (83) | - | (83) | (200) | (26) | (226) | |
| (169) | (104) | (273) | (103) | (59) | (162) | (249) | (173) | (422) | ||
| Return/(loss) on ordinary activities before taxation | (111) | (147) | (258) | (100) | (77) | (177) | (204) | (723) | (927) | |
| Tax on return on ordinary activities | - | - | - | - | - | - | - | - | - | |
| Return/(loss) on ordinary activities after tax attributable to equity shareholders | (111) | (147) | (258) | (100) | (77) | (177) | (204) | (723) | (927) | |
| Basic and diluted | ||||||||||
| Return/(loss) per Ordinary Share (pence) | 2 | (0.71p) | (0.95p) | (1.66p) | (0.64p) | (0.50p) | (1.14p) | (1.31p) | (4.64p) | (5.95p) |
The total column of this statement is the profit and loss of the Company. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.
Balance Sheet (unaudited)
As at 31 August 2019
| Note | As at 31 August 2019 |
As at 31 August 2018 |
As at 28 February 2019 |
|
| £'000 | £'000 | £'000 | ||
| Fixed Assets | ||||
| Investments | 6 | 11,560 | 1,679 | 7,872 |
| Current Assets | ||||
| Prepayments | 3 | 220 | 2,851 | |
| Cash | 2,236 | 8,045 | 3,382 | |
| 2,239 | 8,265 | 6,233 | ||
| Creditors - amounts falling due within one year | (128) | (18) | (176) | |
| Net Current Assets | 2,111 | 8,247 | 6,057 | |
| Net Assets | 13,671 | 9,926 | 13,929 | |
| Capital and Reserves | ||||
| Called up share capital | 12 | 104 | 12 | |
| Share premium account | 14,852 | 10,007 | 14,852 | |
| Capital reserve - realised | (39) | (59) | (173) | |
| Capital reserve - unrealised | (831) | (18) | (550) | |
| Revenue reserve | (323) | (108) | (212) | |
| Equity Shareholders' Funds | 13,671 | 9,926 | 13,929 | |
| Net Asset Value per Ordinary Share | 3 | 87.73p | 95.38p | 89.38p |
| Diluted Net Asset Value per Ordinary Share | 3 | 87.73p | 95.38p | 89.38p |
Cash Flow Statement (unaudited)
For the period ended 31 August 2019
| Period ended 31 August 2019 |
Period ended 31 August 2018 |
Period ended 28 February 2019 |
|
| £'000 | £'000 | £'000 | |
| Operating activities | |||
| Profit on ordinary activities after tax | (258) | (177) | (927) |
| Unrealised gains on investments | 45 | 21 | 550 |
| Decrease/(increase) in debtors | 2,848 | (209) | (1,011) |
| (Decrease)/increase in creditors | (48) | (2) | 110 |
| Net cash generated/(used) in operating activities | 2,587 | (367) | (1,278) |
| Cash flow from investing activities | |||
| Purchase of investments | (4,172) | (1,700) | (8,422) |
| Proceeds from disposal of investments | 438 | - | - |
| Net cash used in investing activities | (3,734) | (1,700) | (8,422) |
| Cash flow from financing activities | |||
| Proceeds received from issue of ordinary share capital | - | 10,331 | 13,759 |
| Expenses paid for issue of share capital | - | (219) | (677) |
| Net cash generated from financing activities | - | 10,112 | 13,082 |
| (Decrease)/increase in cash | (1,146) | 8,045 | 3,382 |
| Net cash at start of the period | 3,382 | - | - |
| Net funds at the period end | 2,236 | 8,045 | 3,382 |
Statement of Changes in Equity (unaudited)
For the period ended 31 August 2019
| Called up share capital | Share premium account | Capital reserve - realised | Capital reserve - unrealised | Revenue reserve | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Balance as at 1 March 2018 | 6 | - | - | - | (8) | (2) |
| Shares cancelled in the period | (6) | - | - | - | - | (6) |
| Shares issued in the period | 104 | 10,227 | - | - | - | 10,331 |
| Expense of share issue | - | (220) | - | - | - | (220) |
| Total comprehensive income for the period | - | - | (59) | (18) | (100) | (177) |
| Balance as at 31 August 2018 | 104 | 10,007 | (59) | (18) | (108) | 9,926 |
| Shares issued in the period | 8 | 5,348 | - | - | - | 5,356 |
| Shares cancelled in the period | (100) | (100) | ||||
| Expenses of share issues | (503) | (503) | ||||
| Total comprehensive income for the period | - | - | (114) | (532) | (104) | (750) |
| Balance as at 28 February 2019 | 12 | 14,852 | (173) | (550) | (212) | 13,929 |
| Shares cancelled in the period | - | - | - | - | - | - |
| Shares issued in the period | - | - | - | - | - | - |
| Expense of share issue | - | - | - | - | - | - |
| Total recognised (losses) for the period | - | - | 134 | (281) | (111) | (258) |
| Balance as at 31 August 2019 | 12 | 14,852 | (39) | (831) | (323) | 13,671 |
Notes to the Interim Report
For the period ended 31 August 2019
1. Accounting Policies
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of fixed asset investments, and in accordance with applicable Accounting Standards and with the Statement of Recommended Practice, "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP") and in accordance with the Financial Reporting Standard 102 ("FRS102").
2. Return per Ordinary Share
The total loss per share of 1.66p is based on the loss for the period of £258,000 and the weighted average number of shares in issue as at 31 August 2019 of 15,583,336 calculated from the date of the first receipt of proceeds from the issue of ordinary share capital.
3. Net asset value per share
| As at 31 August 2019 |
As at 28 February 2019 |
|
| Net assets | 13,671,000 | 13,929,000 |
| Shares in issue | 15,583,338 | 15,583,338 |
| Net asset value per share | ||
| Basic | 87.73p | 89.38p |
| Diluted | 87.73p | 89.38p |
4. Management fees
The Company pays the Investment Manager an annual management fee of 2% of the Company's net assets. The fee is payable quarterly in arrears. The annual management fee is allocated 75% to capital and 25% to revenue.
5. Financial information provided
The financial information for the period ended 31 August 2019 has not been audited and does not comprise full financial statements within the meaning of Section 423 of the Companies Act 2006. The interim financial statements have been prepared on the same basis as will be used to prepare the annual financial statements.
Notes to the Interim Report continued
For the period ended 31 August 2019
6. Investment portfolio summary
| Valuation | Cost | Gain/(loss) | Valuation as a % of Net Assets | |
| As at 31 August 2019 | £'000 | £'000 | £'000 | |
| Qualifying Investments | ||||
| Dymag Group Limited | 583 | 583 | - | 4% |
| Knott End Limited | 847 | 847 | - | 6% |
| Open House London Limited | 1,800 | 1,800 | - | 13% |
| Pure Cremation Holdings Limited | 1,297 | 1,297 | - | 9% |
| Influencer Limited | 1,800 | 1,800 | - | 13% |
| Mykindacrowd Limited | 1,800 | 1,800 | - | 13% |
| Total Qualifying Investments | 8,127 | 8,127 | - | 58% |
| Liquidity Management Investments | ||||
| Barclays Plc | 156 | 206 | (49) | 1% |
| British Land Company Plc | 89 | 105 | (17) | 1% |
| Chemring Group Plc | 163 | 188 | (26) | 1% |
| Diageo Plc | 258 | 201 | 57 | 2% |
| Discoverie Group Plc | 223 | 207 | 16 | 2% |
| Dixons Carphone Plc | 136 | 207 | (70) | 1% |
| Firstgroup Plc | 291 | 202 | 89 | 3% |
| GVC Holdings Plc | 137 | 217 | (80) | 1% |
| Headlam Group Plc | 178 | 197 | (19) | 1% |
| ITE Group Plc | 199 | 211 | (13) | 2% |
| ITV Plc | 133 | 125 | 8 | 1% |
| Legal & General Group Plc | 169 | 201 | (32) | 1% |
| Norcros Plc | 200 | 201 | (1) | 2% |
| Provident Financial Plc | 153 | 226 | (73) | 1% |
| Prudential Plc | 159 | 203 | (44) | 1% |
| PZ Cussons Plc | 181 | 203 | (22) | 1% |
| Royal Dutch Shell Plc | 181 | 199 | (18) | 1% |
| Standard Chartered Plc | 124 | 124 | 1 | 1% |
| Volution Group Plc | 178 | 201 | (23) | 1% |
| WPP Plc | 126 | 124 | 2 | 1% |
| Total Liquidity Management Investments | 3,433 | 3,747 | (314)* | 26% |
| Total Investments | 11,560 | 11,874 | (314) | 84% |
| Balance of Portfolio | 2,111 | 2,111 | 16% | |
| Net Assets | 13,671 | 13,985 | (314) | 100% |
* Transaction costs on listed equities have been capitalised and form part of the gain/loss on investment, however they have been analysed as "other expenses" in the Income Statement.
Copies of this Interim Statement will be made available on the website: http://www.pumainvestments.co.uk/pages/view/investors-information-vcts
This information is provided by RNS, the 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 [email protected] or visit www.rns.com.
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