TIDMPU11
RNS Number : 9741X
Puma VCT 11 PLC
30 November 2017
Puma VCT 11 plc
Interim Report
For the period ended 31 August 2017
Officers and Professional Advisers
Directors Auditor
Harold Paisner (Chairman) RSM UK Audit LLP
Maurice Shear Chartered Accountants
Graham Shore 25 Farringdon Street
London EC4A 4AB
Secretary
Eliot Kaye Sponsors and Solicitors
Howard Kennedy
Registered Number No 1 London Bridge
09197956 London SE1 9BG
Registered Office Bankers
Bond Street House The Royal Bank of Scotland
14 Clifford Street plc
London W1S 4JU London City Office
PO Box 412
62-63 Threadneedle Street
Investment Manager London EC2R 8LA
Puma Investment Management
Limited Lloyds Bank International
Bond Street House Limited
14 Clifford Street Sarnia House
London W1S 4JU Le Truchot
St Peter Port
Guernsey, GY1 4EF
Registrar VCT Tax Advisor
SLC Registrars PricewaterhouseCoopers
42-50 Hersham Road LLP
Walton-on-Thames 1 Embankment Place
Surrey London WC2N 6RH
KT12 1RZ
Administrator Custodian
PI Administration Services Howard Kennedy
Limited No 1 London Bridge
Bond Street House London SE1 9BG
14 Clifford Street
London W1S 4JU
Chairman's Statement
Highlights
-- Funds fully invested in a diverse range of high quality businesses and projects
-- Requirement that qualifying investments are 70% of the fund on an HMRC basis now met
-- NAV per share up 0.59p in the half year at 98.25p (adding back dividends paid to date)
-- 3p per share dividend paid during the period
Chairman's Statement
Introduction
I am pleased to present the interim report for Puma VCT 11 plc
(the 'Company') for the period to 31 August 2017. The Company has
now effectively deployed all its funds in both qualifying and
non-qualifying investments, and met and exceeded its minimum
qualifying investment percentage of 70 per cent. Our portfolio is
well positioned to deliver attractive returns to shareholders
within its expected remaining time horizon.
Net Asset Value ('NAV')
The NAV per share at the period end was 98.25p, comprising
profits after tax for the period of GBP180,000 and representing a
return of 0.59p per ordinary share during the period. The Company's
total net assets at the period end were just over GBP29
million.
Investments
Qualifying Investments
Growing Fingers - Children's Nursery
As reported in the Company's previous annual report, the Company
had made a GBP686,000 qualifying investment (as part of a GBP2.8
million investment alongside other Puma VCTs) in Growing Fingers
Limited, and a further GBP294,000 was invested during the period.
The investment is funding 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. Growing Fingers is a new venture headed by a management
team with many years' operational experience in nurseries and
healthcare facilities. The Company benefits from first charge
security over the Wendover site and the Growing Fingers
business.
Mini Rainbows - Children's Nursery
As previously reported, the Company invested GBP2.5 million in
Mini Rainbows Limited (as part of a GBP5 million investment
alongside other Puma VCTs), which was established to operate a
trading business in the childcare sector and/or to acquire
businesses which operate within that sector. We are pleased to
report that, shortly after the period end, Mini Rainbows commenced
its trade by acquiring a mature children's day nursery in
Murrayfield, an affluent part of Edinburgh. The nursery was founded
in 1995, has capacity for up to 90 children and is currently
operating at 70% capacity so the Mini Rainbows' experienced
management team anticipate improvement in the medium term.
Welcome Health - Chain of Pharmacies
The Company had previously invested GBP2.5 million (as part of a
GBP5 million investment alongside other Puma VCTs) in Welcome
Health Limited. We are pleased to report that, during the period,
Welcome Health Limited commenced its trade, acquiring a series of
mature pharmacies across the North East of England. The
entrepreneur behind Welcome Health has experience in this geography
and is focused on providing pharmaceutical services to a currently
underserviced and low socioeconomic market. As at the date of this
report, Welcome Health owns and operates five pharmacies and
expects to acquire further units in the new year.
Warm Hearth - Pubs with Microbreweries
In late 2015, the Company invested GBP2.5 million (as part of a
GBP5 million investment alongside other Puma VCTs) in Warm Hearth
Limited, a pub business seeking to capitalise on the strong growth
trends within the craft beer sub-market. As previously reported,
Warm Hearth entered into a franchise agreement with Brewhouse &
Kitchen Limited ("B&K"), a strong and fast-growing national
branded operator, offering craft micro-brewing activities within
each of its pub units as a point of focus. Warm Hearth acquired
three substantial freehold pub assets in Chester, Wilmslow and
Bedford, all of which opened during 2016 and are trading as fully
branded B&K units. The units are taking some time to establish
themselves under the new brand and this issue is the priority for
the management team.
The Company has completed seven new qualifying investments since
the period end, details of which are as follows.
Signal Building Services - Construction projects
In September 2017, the Company invested GBP1 million (as part of
a total investment round of GBP2 million) into Signal Building
Services Limited, a recently established business specialising in
delivering turnkey solutions to construction projects. The
management team have over 40 years' of combined experience in the
construction sector and we understand that they are in advanced
negotiations to commence their first project.
Applebarn Nurseries - Children's Nursery
In October 2017, the Company invested GBP1.1 million in
Applebarn Nurseries Limited (as part of a GBP2.2 million qualifying
investment alongside another Puma VCT) which is developing and will
operate a new 120 place children's day nursery in Altrincham, South
Manchester. The management team behind Applebarn include Stewart
Pickering (the founder of Kidsunlimited which he built up to 50
nurseries before a successful exit) and experienced developer and
contractor, the McGoff Group. The nursery is expected to open in
the third quarter of 2018.
Kid and Play - Children's Nursery
The Company made a GBP1.7 million qualifying investment in Kid
and Play Limited, alongside funds invested by another Puma VCT
totalling GBP3.4 million, in October 2017. Kid and Play is seeking
to develop, own and operate a new children's day nursery and has
identified a first site in Bromley, South London.
South West Cliffe - Children's Nursery
In October 2017, the Company invested GBP2.1 million (as part of
a GBP4.2 million qualifying investment alongside another Puma VCT)
in South West Cliffe Limited, supporting an experienced management
team to roll out a portfolio of purpose built day nurseries.
Knott End - Pubs with Microbreweries
The Company invested GBP2.4 million (as part of a GBP4.8 million
qualifying investment alongside another Puma VCT) in Knott End
Limited which has entered into a franchise agreement with Brewhouse
& Kitchen Limited to roll out a portfolio of pubs offering
on-site craft micro-brewing activities and good quality food. The
management team at Knott End have already identified several
possible locations for their first unit and expect to open their
first pub early next year.
Sunlight Education Nucleus - Special Educational Needs
Schools
In November, the Company made a GBP1.35 million qualifying
investment (as part of a GBP4.7 million investment alongside other
Puma VCTs) in Sunlight Education Nucleus Limited, a company seeking
to develop, own and operate a series of special education needs
schools across the United Kingdom.
Pure Cremation - Crematorium and Direct Cremations
In November, the Company invested GBP2 million in Pure Cremation
Holdings Limited (as part of a GBP5 million qualifying investment
alongside another Puma VCT). Pure Cremation is a leading provider
of so-called direct cremations, meeting the needs of a growing
number of people in the United Kingdom who want a respectful direct
cremation arranged without any funeral, leaving them free to say
farewell how, where and when is right for them. The Pure Cremation
team have many years' experience in the funeral services sector and
have secured an option over a site near Andover on which they will
seek to develop a new crematorium and central facility.
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. It
was intended that these positions would be liquidated in due course
as the Company makes qualifying investments. Details of the loans
that these lending businesses have made, many of which were repaid
in full during the period, are set out below.
Residential Development Project, Beckenham
The loan of GBP3 million (together with loans from other
vehicles managed and advised by your Investment Manager totalling
GBP5.3 million) advanced to Northern Land Developments Limited
continues to perform. The loans facilitated the acquisition of two
large residential houses in Beckenham, Kent, funded planning costs
to replace these two units with seven town houses and are now
funding planning costs to develop a larger scheme on an adjacent
larger parcel of land. The loans are secured with a first charge
over both sites. During the period, it was agreed that all accrued
interest would be repaid and that the loans be extended for a
further 12 months.
Citrus Group
As previously reported, a series of loans had been advanced to
various entities within the Citrus Group, which at the start of the
period stood at GBP1.4 million. These loans, together with loans
from other vehicles managed and advised by your Investment Manager,
formed part of a series of revolving credit facilities to provide
working capital to the Citrus PX business. Citrus PX operates a
property part exchange service facilitating the rapid purchase of
properties for developers and homeowners. During the period and
shortly after the period end, the loans were repaid in full giving
a good rate of return.
Portfolio of freehold ground rent interests
In June 2016, an GBP800,000 loan was advanced and secured
against a portfolio of freehold assets and the associated ground
rents, as part of a package from other vehicles managed and advised
by the Investment Manager totalling GBP4.3 million. We are pleased
to report that, during the period, the loan was repaid in full
giving a good rate of return.
Care Home for the Elderly, Formby
During the period, a GBP800,000 loan (as part of an overall
facility of GBP6.7 million) was agreed with New Care (Sefton)
Limited to fund the development and initial trading of a 75-bed
purpose-built care home in Formby, Merseyside. The New Care Group
is an experienced developer and operator of care homes. The loan is
secured with a first charge over the site.
Care Home for the Elderly, Egham
As previously reported, a loan of GBP1.2 million had been
advanced to Windsar Care (UK) LLP to fund the development and
initial trading of a 68-bed purpose-built care home in Egham,
Windsor. This loan, together with loans from other vehicles managed
and advised by the Investment Manager totalling GBP5.3 million, are
secured with a first charge over the site. We understand that
construction is behind schedule and over budget as a result of the
non-performance of the original building contractor which has been
substantially resolved by the developer and construction manager,
Alyth Trading. However, it is anticipated that the value of the
scheme on completion of construction will exceed the total value of
the loans made.
Care Home for the Elderly, Mill Hill
As previously reported, a loan of GBP2.5 million (together with
loans from other vehicles managed and advised by the Investment
Manager totalling GBP5.6 million) was made to Toppan Holdings
Limited to fund the development of a 65 bed purpose built care home
in Mill Hill, London. We are pleased to report that the loan was
repaid in full during the period generating an attractive
return.
Care Home for the Elderly, Hamilton
A loan of GBP2 million (as part of a GBP6.9 million facility
from other vehicles managed and advised by the Investment Manager)
was made to Richmond Global Properties Limited to fund the
development of a 112 bed purpose built care home in Hamilton,
Scotland. We are pleased to report that, during the period, the
loan was repaid in full, the project having reached practical
completion with the home being fitted out ready to accept its first
residents.
Care Home for the Elderly, Dover
As previously reported, a GBP116,000 loan (as part of a GBP4.4
million facility from other vehicles managed and advised by the
Investment Manager) had been advanced to Athena (Alpha) Limited to
fund the development of a new purpose-built, 80-bed residential
care home in Dover, Kent. We are pleased to report that, during the
period, the borrower sold the care home shortly following practical
completion and our loan was repaid in full giving a good rate of
return.
Construction of Airport Hotel, Edinburgh
During the period, a GBP1.6 million loan (as part of an overall
facility of GBP13.5 million) was advanced to Ability Hotels
(Edinburgh) Limited to fund the development of a new 175-room
Hampton by Hilton hotel at Edinburgh Airport. The hotel is
scheduled to open in the summer of 2019 at which time it will be
the newest and nearest hotel to the airport terminal building. The
Ability Group is an experienced developer and operator of hotels
and the loan is secured with a first charge over the site.
Following the period end, Ability obtained planning permission to
increase the number of rooms to 240 and the overall facility is
anticipated to increase accordingly to GBP17.75 million.
IVF Clinic, Wickford
Loans of GBP400,000 were advanced to HPC (Wickford) Limited in a
total loan package of GBP2.85 million together with other vehicles
managed and advised by the Investment Manager. These loans are to
facilitate the development and initial trading of a purpose-built
IVF Fertility Clinic in Wickford, Essex. HPC (Wickford) Limited has
entered into a lease with Bourn Hall Limited, one of the UK's
largest independent fertility clinic groups. Construction is well
progressed and is expected to reach practical completion in the
first quarter of 2018.
Care Home Project, Melton Mowbray
A GBP1.35 million loan (together with loans from other vehicles
managed and advised by the Investment Manager totalling GBP5.4
million) had been advanced to Regent Formations 265 Limited to fund
the development of a new 88 bed care home in Melton Mowbray,
Leicestershire. We previously reported that the borrower was in
discussions with a potential purchaser of this care home on terms
which would see the loan repaid in full. We are pleased to confirm
that this transaction completed during the period and the loans
were repaid in full with a good rate of return.
Ironbridge Group
We previously reported that a GBP1.2 million facility (as part
of a total facility of GBP3 million) had been advanced to an entity
within the Ironbridge Group, providing the senior 70% slice of
"stretched senior" bridging loans on non-owner-occupied properties
in London and the South East with Ironbridge funding the
subordinated 30% slice. The GBP1.2 million facility was repaid
shortly following the period end.
Liquidity Management
To further manage liquidity, the Company had exposure to a
floating rate note issued by Royal Bank of Canada and a floating
rate note issued by Commonwealth Bank of Australia. These positions
were liquidated during the period and post period end as the
Company made the qualifying investments referred to above.
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, as stated above, shortly after the period
end the Company met its minimum qualifying investment percentage,
which now stands at just under 74% of the fund on an HMRC basis.
PwC will continue to assist the Investment Manager in monitoring
rule compliance.
Principal risks and uncertainties
The economy has showed some signs of a slowdown associated with
high personal debt levels and low growth in real wages. 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.
Patient Capital Review
We are pleased that, in its response to the Financing Growth in
Innovative Firms Consultation published with the Autumn Budget on
22 November 2017 ("the Patient Capital Review"), the Government has
recognised the continuing importance of VCTs in providing much
needed investment in SMEs. We note that proposed changes arising
out of the Patient Capital Review include increasing VCTs' minimum
qualifying investment percentage threshold from 70% to 80% with
effect from 6 April 2019. As reported above, the Company has
already met its minimum qualifying investment percentage and we
therefore believe that it is on track to meet this revised target
in due course.
Outlook
We are pleased that the Company's net assets are now fully
deployed in a diverse range of high quality businesses and projects
which should offer the prospect of further growth in net assets per
share. Whilst there may be some further changes in the composition
of the portfolio to ensure that the Company continues to satisfy
its HMRC qualifying targets, the Board expects to concentrate in
the future primarily on the monitoring of our existing investments
and considering options for exits.
Harold Paisner
Chairman
30 November 2017
Income Statement (unaudited)
For the period ended 31 August 2017
Period ended
Period ended Period ended 28 February
31 August 2017 31 August 2016 2017
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) (2) - 50 50 - 49 49
Income 656 - 656 573 - 573 1,317 - 1,317
656 (2) 654 573 50 623 1,317 49 1,366
-------- -------- -------- -------- -------- -------- --------
Investment
management
fees 4 (75) (224) (299) (74) (222) (296) (149) (447) (596)
Other expenses (133) - (133) (130) - (130) (245) - (245)
(208) (224) (432) (204) (222) (426) (394) (447) (841)
-------- -------- -------- -------- -------- -------- --------
Profit/(loss)
on ordinary
activities
before
taxation 448 (226) 222 369 (172) 197 923 (398) 525
Tax on
return
on ordinary
activities (85) 43 (42) - - - (184) 110 (74)
Profit/(loss)
on ordinary
activities
after tax
attributable
to equity
shareholders 363 (183) 180 369 (172) 197 739 (288) 451
======== ======== ======== ======== ======== ======== ======== ======== ========
Basic and
diluted
Profit/(loss)
per Ordinary
Share (pence) 2 1.19p (0.60p) 0.59p 1.21p (0.56p) 0.65p 2.42p (0.94p) 1.48p
======== ======== ======== ======== ======== ======== ======== ======== ========
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 2017
As at As at As at
31 August 31 August 28 February
Note 2017 2016 2017
GBP'000 GBP'000 GBP'000
Fixed Assets
Investments 6 27,307 30,720 28,820
----------- ----------- -------------
Current Assets
Prepayments 1,876 476 1,220
Cash 177 132 35
----------- ----------- -------------
2,053 608 1,255
Creditors - amounts falling
due within one year (298) (1,784) (277)
Net Current Assets 1,755 (1,176) 978
----------- ----------- -------------
Net Assets 29,062 29,544 29,798
=========== =========== =============
Capital and Reserves
Called up share capital 19 19 19
Share premium account 29,473 29,473 29,473
Capital reserve -
realised (905) (613) (728)
Capital reserve -
unrealised 16 23 22
Revenue reserve 459 642 1,012
Equity Shareholders'
Funds 29,062 29,544 29,798
=========== =========== =============
Net Asset Value per
Ordinary Share 3 95.25p 96.83p 97.66p
=========== =========== =============
Diluted Net Asset
Value per Ordinary
Share 3 95.25p 96.83p 97.66p
=========== =========== =============
Cash Flow Statement (unaudited)
For the period ended 31 August 2017
Period Period Period
ended ended ended
31 August 31 August 28 February
2017 2016 2017
GBP'000 GBP'000 GBP'000
Operating activities
Profit/(loss) after tax 180 197 451
Unrealised (gain)/loss
on investments 2 (50) (49)
Decrease in debtors (656) 1,724 980
Increase in creditors 21 528 (979)
Net cash generated from
operating activities (453) 2,399 403
----------- ----------- -------------
Cash flow from investing
activities
Purchase of investments (294) (5,275) (4,964)
Proceeds from disposal
of investments and repayment
of loans and loan notes 1,805 495 2,083
Net cash used in investing
activities 1,511 (4,780) (2,881)
----------- ----------- -------------
Cash flow from financing
activities
Dividends paid (916) - -
Net cash used in financing
activities (916) - -
----------- ----------- -------------
Decrease in cash 142 (2,381) (2,478)
Net cash at start of
the period 35 2,513 2,513
Net funds at the period
end 177 132 35
=========== =========== =============
Reconciliation of Movements in Shareholders' Funds
(unaudited)
For the period ended 31 August 2017
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 2016 19 29,473 (365) (53) 273 29,347
Return after
taxation attributable
to equity shareholders - - (248) 76 369 197
Balance as at 31 August 2016 19 29,473 (613) 23 642 29,544
Realised loss from prior period - - (56) 56 - -
Return after
taxation attributable
to equity shareholders - - (59) (57) 370 254
Balance as at 28 February 2017 19 29,473 (728) 22 1,012 29,798
Dividends paid - - - - (916) (916)
Return after
taxation attributable
to equity shareholders - - (177) (6) 363 180
Balance as at 31 August 2017 19 29,473 (905) 16 459 29,062
========= ======== =========== ============= ======== =======
Notes to the Interim Report
For the period ended 31 August 2017
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 profit per share of 0.59p is based on the profit for
the period of GBP180,000 and the weighted average number of shares
in issue as at 31 August 2017 of 30,511,969 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 As at As at
31 August 31 August 28 February
2017 2016 2017
Net assets 29,062,000 29,544,000 29,798,000
Shares in issue 30,511,969 30,511,969 30,511,969
Net asset value
per share
Basic 95.25p 96.83p 97.66p
Diluted 95.25p 96.83p 97.66p
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 2017
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 2017
6. Investment portfolio summary
Valuation Cost Gain/(loss)
Valuation
as a %
As at 31 August of Net
2017 GBP'000 GBP'000 GBP'000 Assets
Qualifying Investment
- Unquoted
Warm Hearth Limited 2,500 2,500 - 9%
Mini Rainbows
Limited 2,500 2,500 - 9%
Welcome Health
Limited 2,500 2,500 - 9%
Growing Fingers
Limited 980 980 - 3%
Total Qualifying
Investments(1) 8,480 8,480 - 30%
---------- -------- ------------ ----------
Non-Qualifying
Investments
Palmer Lending
Limited 125 125 - 0%
Valencia Lending
Limited 550 550 - 2%
Primrose Lending
Limited 2,000 2,000 - 7%
Mayfield Lending
Limited 3,000 3,000 - 10%
Lothian Lending
Limited 2,874 2,874 - 10%
Lavender Lending
Limited 116 116 - 0%
Latimer Lending
Limited 2,481 2,481 - 9%
Meadow Lending
Limited 2,575 2,575 - 9%
Tottenham Lending
Limited 800 800 - 3%
Marble Lending
Limited 600 600 - 2%
Sloane Lending
Limited 800 800 - 3%
Total Non-Qualifying
investments 15,921 15,921 - 55%
---------- -------- ------------ ----------
Liquidity Management
Commonwealth Bank
of Australia bonds
(2) (via Palmer
Lending Limited) 1,296 1,289 7 4%
Royal Bank of
Canada bonds (2)
(via Bayswater
Lending Limited) 1,610 1,601 9 6%
Total Liquidity
Management Investments 2,906 2,890 16 10%
---------- -------- ------------ ----------
Total Investments 27,307 27,291 16 95%
Balance of Portfolio 1,755 1,755 - 5%
Net Assets 29,062 29,046 16 100%
---------- -------- ------------ ----------
(1) As discussed in the Chairman's statement, a substantial
number of qualifying investments were made following the period
end, such that over 70% of the portfolio on the HMRC basis is now
qualifying.
(2) Quoted investment listed on the London Stock Exchange
Of the investments held at 31 August 2017, all are incorporated
in England and Wales with the exception of the liquidity management
holdings.
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 company news service from the London Stock Exchange
END
IR EANFEDDPXFEF
(END) Dow Jones Newswires
November 30, 2017 04:42 ET (09:42 GMT)
Puma Vct 11 (LSE:PU11)
Historical Stock Chart
From Apr 2024 to May 2024
Puma Vct 11 (LSE:PU11)
Historical Stock Chart
From May 2023 to May 2024