TIDMPU12
RNS Number : 9821S
Puma VCT 12 PLC
19 November 2021
Highlights
-- NAV at period end of 106.79p (after adding back dividends paid to that date)
-- Profit of GBP1,849,000 recorded in the period, representing 5.98p per share
-- 21p special dividend paid shortly after period end following
successful exit from Pure Cremation.
Chairman's Statement
Introduction
As we emerge from the pandemic, it is still too early to comment
on the long-term effects on investment markets and values. Despite
this uncertain environment, we are pleased to report that the
Company was able to sell its position in Pure Cremation during the
period on attractive terms, realising a 2.1x return on total funds
invested.
There is also good progress with other companies in our
portfolio. The Investment Manager worked closely with investee
companies during the pandemic to give them support and assistance.
This has continued since as the outlook for the Company has become
more encouraging. Nonetheless, the disruption caused by lockdowns
and government restrictions of trading will inevitably impact the
timings of exits. Accordingly, and as announced earlier this year
in the Company's annual report, the Board has decided to delay
convening a General Meeting of the Company at which resolutions
would be proposed to place the Company into members' solvent
liquidation. The Board continues to keep this matter under regular
review.
Results and Net Asset Value ("NAV")
The Company recorded a profit of GBP1,849,000 in the period
(representing 5.98p per share post-tax profit). Accordingly, the
NAV per share at the period end was 97.79p (106.79p after adding
back the dividends paid to that date). Since this date, a 21p
dividend has been paid out by way of a special dividend.
Dividends
As previously reported, the Company paid a dividend of 21p per
ordinary share shortly after the period end in October, taking
cumulative dividends paid to date to 30p per ordinary share. Given
this large recent pay-out, your Board is not proposing a further
dividend at this interim stage.
Investments
Qualifying Investments
Growing Fingers Limited - Children's Nursery
Our investment has funded the construction and launch of a new
purpose-built 108-place nursery school in Wendover,
Buckinghamshire, an affluent commuter town with direct links to
London. The Company benefits from a first-charge security over the
Wendover site and the Growing Fingers business.
Despite delays to construction at the beginning of the year, the
nursery opened successfully in March and has since then traded
ahead of forecasts. Occupancy is due to increase in the New Year
with a number of new joiners, and the nursery's management team
remains confident of achieving full-year targets based on recent
enrolment and inquiry trends.
Kid and Play Limited - Children's Nursery
Kid & Play has developed a 110-place children's day nursery
in Bedford, which was originally expected to open in Spring 2020
but experienced delays to building works as a result of the
Covid-19 measures. It reached practical completion in May 2020 and
opened in August 2020. The site has traded well since opening and
has consistently been ahead of budget in terms of occupancy.
Encouragingly, the unit's occupancy is heavily weighted to babies
and 'early years' children who are likely to remain with the
nursery for three to four years.
Building works are due to start shortly at a second site in
Barnet which the business is seeking to lease. The site was
previously a satellite site for an arts college and the renovation
is expected to take approximately 3 months.
Signal Building Services Limited - Construction projects
Signal Building Services Limited is a business specialising in
delivering turnkey solutions to construction projects, led by a
management team with over 40 years' of combined experience in the
construction sector. The company is currently working on the
construction of a 41-unit residential scheme in North-West London
and a 60-bed care home in Wilmslow.
Applebarn Nurseries Limited - Children's Nursery
Applebarn Nurseries is a childcare business operating under the
brand, Back to the Garden Childcare. The team's first site, a
custom-built 120-place children's day nursery in Altrincham, South
Manchester, opened in September 2018 and continues to record stable
occupancy levels.
Underlying trends for the nursery are strong, however, as has
been the case for the wider nursery sector, the company's
performance has been impacted by the need to comply with the health
authorities' requirement to work in 'bubbles'. With the loosening
of isolation rules in August 2021, this issue is much improved.
Post period end, the Puma management team has been in discussion
with a mainstream lender about refinancing the VCT's investment in
early 2022.
Hot Copper Pub Company Limited - Pubs with Microbreweries
Brewhouse & Kitchen is the largest brewpub brand in the UK,
distinctive for brewing their own unique craft beers on-site 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
underpinned by a substantial free-cash buffer.
The Hot Copper sites traded strongly throughout the summer
months and since then have traded ahead of sales compared to two
years ago (pre-pandemic). However, this followed a period of
difficulty for pub businesses due to lockdowns and extreme
restrictions on trade. More recently the situation has much
improved, but staffing shortages - and other logistical challenges
- across the hospitality sector have impacted the Group.
Sunlight Education Nucleus Limited - Special Educational Needs
Schools
Sunlight Education Nucleus (SEN) is a provider of special
educational needs schools in the Midlands run by an expert
management team with a proven track record of sourcing, developing
and launching highly successful special needs educational
settings.
Over the period, both schools - in Stafford, West Midlands, and
Crewe, Cheshire - have remained ahead of forecasts in terms of
pupil headcount and revenues. During the period, both schools
received approval from the Department of Education to increase
their number of pupils from 50 to 100. Recruitment of staff has
increased to support this growth.
Post period end, the school in Stafford received an
'Outstanding' rating from Ofsted; an impressive achievement given
that Oftsed has recently tightened the ranking criteria.
SA Fitness Holdings Limited ('NRG') - Budget Gyms
NRG gyms are aimed at price-sensitive millennials with a keen
interest in sports and fitness. When we first invested, the
business operated sites in Gravesend and Watford; it has since
added gyms in Walsall and Lewisham, with a new site under
development in Manchester.
All sites were able to open in line with government regulations
in April 2021, and in May 2021 indoor classes and coaching for
members were able to resume. Since reopening, membership has been
ahead of pre-pandemic levels, which compares well with reported
performance of key competitors.
Post period end, work began on a new site at Stretford,
Manchester in September; this is expected to complete in
mid-December 2021, and the site to open in January 2022. This will
be the largest NRG Gym to date and act as a new flagship site.
Tictrac Limited - Health Engagement Platform
TicTrac is a personalised health and wellness platform which
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
workforces, with associated positive outcomes for engagement and
wellbeing.
TicTrac's main customers are international insurance companies,
such as Aviva, Cigna, Allianz and Prudential, Generali Employee
Benefits and Bupa Hong Kong. The pandemic accelerated a focus on
health and wellness, as well as the need for flexible, scalable
digital solutions to support this. Over the period, the company has
developed the "Community Hub" for its platform, which gives more
direct control to corporate customers, enabling them to manage more
of the platform's features themselves. This will bring major new
functionality to clients and be more efficient for TicTrac from an
account management perspective.
The company engaged a new Chief Product and Technology Officer
in the period, and, subsequent to the period end, also added a new
Head of Sales.
Non-Qualifying Investments
As previously reported, the Company had initially invested just
over GBP20 million in a series of lending businesses offering an
appropriate risk adjusted return in the short to medium term. As
intended, most of these positions have been liquidated as the
Company has made qualifying investments. Details of these lending
businesses' remaining loans are set out below.
Aparthotel, Glasgow
A pre-development bridge loan of GBP836,000 was advanced
(through an affiliate, Tottenham Lending Limited) to Citihome
Glasgow Limited against a site with planning permission for a
156-room aparthotel in central Glasgow. This loan, together with
loans from other vehicles managed and advised by the Investment
Manager totalling GBP3.3 million, is secured with a first charge
over the site and is backed by a personal guarantee from the
developer. Since the loan was advanced, the developer successfully
increased the planning permission to 204 rooms.
Care Home for the Elderly, Bristol
A loan of GBP1,512,000 was advanced to facilitate the
development of a new 80-bed care home in Bristol. The loan was made
through an affiliate, Marble Lending Limited, and was advanced
together with facilities from other vehicles managed and advised by
the Investment Manager totalling GBP13.4 million. The developer has
significant previous experience of developing and operating care
homes and the loans are secured with a first charge over the
site.
Purpose Built Student Accommodation, Brighton
A loan of GBP1,250,000 was advanced (through an affiliate,
Tottenham Lending Limited) to Alumno Student Brighton Living
(Brighton) Limited. The loan was to fund the acquisition and
development of a 71-unit purpose-built student accommodation unit
in Brighton. This loan, together with loans from other vehicles
managed and advised by the Investment Manager totalling GBP8.47
million, is secured with a first charge over the site. Brighton is
one of the university towns with a strong demand for new-build
quality student accommodation and the developer has a long track
record, having developed over 5,000 units to date. Construction is
now complete, the building is fully occupied and we understand that
the borrower is in advanced discussions to sell the property which
would result in repayment of the loan in full.
Supported Living, Atherstone
A loan of GBP594,000 was advanced (through affiliate Victoria
Lending Limited) to HBP Group Limited to facilitate the development
of 16 supported-living flats in Atherstone, Warwickshire. This
loan, together with loans from other vehicles managed and advised
by the Investment Manager totalling GBP1.7 million, is secured with
a first charge over the property. The scheme benefits from a
pre-let with a leading housing association and a rental void
agreement with a large care provider. The development is expected
to reach practical completion in the coming weeks.
Care Homes for the Elderly, the Wirral
A loan of GBP700,000 was advanced (through an affiliate,
Victoria Lending Limited) to various entities within the Athena
Healthcare group of companies. This loan is part of a package of
GBP14 million including loans from other vehicles managed and
advised by the Investment Manager. Its purpose is to finance the
build-up of residents in two newly built 80-bed care homes in the
Wirral, near Liverpool. The loan is at conservative leverage and
neither care home has had, to-date, any serious outbreaks of
Covid-19.
Care Home for the Elderly, Cambridgeshire
A loan of GBP1,311,000 was advanced to facilitate the
development of a new 70-bed care home in Brampton, Cambridgeshire.
The loan was made through an affiliate, Marble Lending Limited, and
was advanced together with facilities from other vehicles managed
and advised by the Investment Manager totalling GBP11.7 million.
The developer has significant previous experience of developing and
operating care homes and the loans are secured with a first charge
over the site.
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.
Principal risks and uncertainties
The measures taken to deal with Covid-19 have caused, and
continue to cause, major economic disruption across all sectors.
The consequences of this for the value of the Company's investment
portfolio constitute the principal risk and uncertainty for the
Company in the second half of the year.
Outlook
The Company's funds are invested in a balanced portfolio of both
qualifying and non-qualifying investments. Whilst the Covid-19
pandemic has presented a number of significant unforeseen economic
and social challenges for the UK and the global economy, management
teams in our portfolio companies and the developers who have
received loans from our affiliates have responded well. The
objective remains to achieve an orderly winding up of the Company's
assets as soon as possible.
It was envisaged in the Company's Prospectus that the Board
would convene a General Meeting of the Company following the fifth
anniversary at which resolutions would be proposed to place the
Company into members' solvent liquidation. The intention remains to
return the balance of the capital in an orderly way as soon as
possible following the fifth anniversary. However, whilst
discussions are underway regarding potential exits from portfolio
companies, it is likely that, in light of the Covid-19 outbreak, a
number of these exit processes will be delayed until there is a
greater degree of economic certainty. It is therefore likely that
the liquidation process may take place at a later date than
originally envisaged. The Board will keep this under regular
review.
Ray Pierce
Chairman
19 November 2021
Income Statement (unaudited)
For the period ended 31 August 2021
Period ended Period ended Year ended
31 August 2021 31 August 2020 28 February 2021
Note Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains on investments - 2,020 2,020 - 697 697 - 3,982 3,982
Income 259 - 259 250 - 250 677 - 677
259 2,020 2,279 250 697 947 677 3,982 4,659
-------- -------- -------- -------- -------- -------- --------
Investment
management
fees 4 (74) (221) (295) (64) (192) (256) (128) (385) (513)
Other expenses (135) - (135) (131) - (131) (250) - (250)
(209) (221) (430) (195) (192) (387) (378) (385) (763)
-------- -------- -------- -------- -------- -------- --------
Return on
ordinary activities
before taxation 50 1,799 1,849 55 505 560 299 3,597 3,896
Tax on return
on ordinary
activities (10) 10 - (10) 10 - (57) 57 -
Return on
ordinary activities
after tax
attributable
to equity
shareholders 40 1,809 1,849 45 515 560 242 3,654 3,896
======== ======== ======== ======== ======== ======== ======== ======== ========
Basic and
diluted
Return per
Ordinary Share
(pence) 2 0.13p 5.85p 5.98p 0.14p 1.67p 1.81p 0.78p 11.82p 12.60p
======== ======== ======== ======== ======== ======== ======== ======== ========
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 2021
As at As at As at
31 August 31 August 28 February
Note 2021 2020 2021
GBP'000 GBP'000 GBP'000
Fixed Assets
Investments 6 19,224 23,227 25,512
----------- ----------- -------------
Current Assets
Prepayments 2,880 3,132 2,866
Cash 8,319 70 167
----------- ----------- -------------
11,199 3,202 3,033
Creditors - amounts falling
due within one year (197) (460) (168)
Net Current Assets 11,002 2,742 2,865
----------- ----------- -------------
Net Assets 30,226 25,969 28,377
=========== =========== =============
Capital and Reserves
Called up share capital 19 19 19
Capital reserve - realised 2,214 (1,634) (1,780)
Capital reserve - unrealised (547) (1,647) 1,638
Revenue reserve 28,540 29,231 28,500
Equity Shareholders' Funds 30,226 25,969 28,377
=========== =========== =============
Net Asset Value per Ordinary
Share 3 97.79p 84.02p 91.81p
=========== =========== =============
Diluted Net Asset Value per
Ordinary Share 3 97.79p 84.02p 91.81p
=========== =========== =============
Cash Flow Statement (unaudited)
For the period ended 31 August 2021
Period ended Period ended Year ended
31 August 31 August 28 February
2021 2020 2021
GBP'000 GBP'000 GBP'000
Operating activities
Profit on ordinary activities
after tax 1,849 560 3,896
Realised loss on investment - 60 -
Unrealised gains on investment (2,020) (757) (3,982)
Increase in debtors (14) (380) (101)
Increase/(decrease) in creditors 29 297 (8)
Net cash used in operating
activities (156) (220) (195)
------------- ------------- -------------
Cash flow from investing activities
Purchase of investments - (2,145) (2,145)
Proceeds from disposal of
investments 8,308 3,339 4,339
Net cash generated from investing
activities 8,308 1,194 2,194
------------- ------------- -------------
Cash flow from financing activities
Dividends paid - (927) (1,855)
Net cash used from financing
activities - (927) (1,855)
------------- ------------- -------------
Increase in cash 8,152 47 144
Net cash at start of the period 167 23 23
Net cash at the period end 8,319 70 167
============= ============= =============
Statement of Changes in Equity (unaudited)
For the period ended 31 August 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 1
March 2020 19 - (1,392) (2,404) 30,113 26,336
Dividends paid - - - - (927) (927)
Total recognised
(losses)/gains for
the period - - (242) 757 45 560
Balance as at 31
August 2020 19 - (1,634) (1,647) 29,231 25,969
Total recognised
(losses)/gains for
the period - - (86) 3,225 197 3,336
Transfer realised
loss from prior
period - - (60) 60 - -
Dividends paid - - - - (928) (928)
Cancellation of
share premium - - - - - -
Balance as at 28
February 2021 19 - (1,780) 1,638 28,500 28,377
Reserves movement 3,511 (3,511)
Total recognised
gains for the period - - 483 1,326 40 1,849
Balance as at 31
August 2021 19 - 2,214 (547) 28,540 30,226
========== ========= ============ ============== ========= ========
Notes to the Interim Report
For the period ended 31 August 2021
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 return per ordinary share of 5.98p is based on the
profit for the period of GBP1,849,000 and the weighted average
number of shares in issue as at 31 August 2021 of 30,909,188.
3. Net asset value per share
As at As at As at
31 August 31 August 28 February
2021 2020 2021
Net assets 30,226,000 25,969,000 28,377,000
Shares in issue 30,909,188 30,909,188 30,909,188
Net asset value per share
Basic 97.79p 84.02p 91.81p
Diluted 97.79p 84.02p 91.81p
4. Investment 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 2021
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.
6. Investment portfolio summary
Valuation
as a % of
Valuation Cost Gain/(loss) Net Assets
As at 31 August 2021 GBP'000 GBP'000 GBP'000
Qualifying Investments
Growing Fingers Limited 420 420 - 1%
Kid & Play Limited 1,694 1,694 - 6%
Signal Building Services
Limited 200 200 - 1%
Applebarn Nurseries
Limited 1,833 1,833 - 6%
Hot Copper Pub Company
Limited 3,051 4,053 (1,002) 10%
Sunlight Education Nucleus
Limited 4,426 2,350 2,076 15%
Sweat Union Limited - 3,421 (3,421) 0%
SA Fitness Holdings
Limited 1,573 1,417 156 4%
TicTrac Limited 3,789 2,145 1,644 13%
Total Qualifying Investments 16,986 17,533 (547) 56%
---------- -------- ------------ ------------
Non-Qualifying Investments
Piccadilly Lending Limited 11 11 - 0%
Victoria Lending Limited 317 317 - 1%
Tottenham Lending Limited 510 510 - 2%
Marble Lending Limited 1,400 1,400 - 5%
Total Non-Qualifying
Investments 2,238 2,238 - 8%
---------- -------- ------------ ------------
Total Investments 19,224 19,771 64%
Balance of Portfolio 11,002 36%
Net Assets 30,226 100%
---------- -------- ------------ ------------
Of the investments held at 31 August 2021, all are incorporated
in England and Wales.
Copies of this Interim Statement will be made available on the
website:
http://www.pumainvestments.co.uk/pages/view/investors-information-vcts
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END
IR UKURRASUAAAA
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