Interim Results
For immediate
release
27 September 2007
Puma VCT II plc
Unaudited preliminary interim results for the six months ended 30
June 2007
Highlights
* Undiluted net asset value per share of 116.38p, a 3.1%
increase from year-end (3.9% including the 0.9p dividend). Fully
diluted net asset value of 112.92p, an increase of 2.4% (3.2%
including the 0.9p dividend).
* Continued growth from alternative asset investments with
qualifying investments now contributing
* Four qualifying investments made in the period
* Large qualifying investments in pipeline expected to
complete in coming months
Sir Aubrey Brocklebank Bt of Puma VCT plc said:
"In the six months to 30 June 2007, the Company continued to grow the
net asset value in line with its targets. The Investment Manager
currently has a pipeline of interesting qualifying opportunities in
private equity deals. We also expect the VCT's offering of growth
mezzanine and equity capital for asset-backed growing companies to be
increasingly attractive in a climate of tightening terms for
conventional credit."
Enquiries
Shore
Capital
020 7408 4090
Chris Ring
Graham
Shore
Citigate Dewe
Rogerson
020 7638 9571
Sarah Gestetner
Fiona
Mulcahy
Notes to Editors
Puma VCT II plc is managed by Shore Capital's successful fund
management team. The Company's investment objective is to achieve
high distributions to shareholders. It will invest in a diversified
portfolio of smaller companies, including both AIM and Plus Markets
traded and unquoted companies, selecting companies which Shore
Capital believes will have a relatively lower risk profile than is
typical for their size whilst having the opportunity for value
appreciation. Initially, whilst suitable VCT Qualifying Companies are
being identified, the Investment Manager invests the Company's funds
in a range of investments intended to generate a positive return,
including funds of hedge funds and other products which aim to
achieve an absolute return. The VCT will continue to hold a
proportion of such products after building up the desired holdings of
VCT Qualifying Companies.
Chairman's Statement
Introduction
During the six months to 30 June 2007, the Company continued to grow
the net asset value in line with its targets. The growth came from
the qualifying company investments, which have been selected as lower
risk, and the non-qualifying investments with their lower volatility,
absolute return approach.
The Company made four qualifying investments during the first half of
the year. There is a pipeline, including signed term sheets,
representing significant potential investments, which the Company's
Investment Manager, Shore Capital, hopes to complete in the coming
months. The current turmoil in the credit markets and consequent
more cautious bank lending should also give rise to more
opportunities to provide growth capital on attractive terms. As a
result, demand should grow for the VCT's offering of mezzanine loans
and equity to asset backed companies.
Net asset value
The Company made a good start to 2007 with net asset value up 3.1% to
116.38p (3.9% including the 0.9p dividend). The diluted net asset
value is up 2.4% to 112.92p (3.2% including the 0.9p dividend) after
accruing for potential performance fees. The increase derives from a
combination of continuing performance from the hedge fund portfolio
and other non-qualifying listed investments and the qualifying
investments starting to deliver.
The total return for the six month period to 30 June 2007 was 3.50p,
comprising a revenue return of 0.19p and a capital return of 3.31p.
Dividends
As set-out in the 2006 full year accounts, a dividend of 0.9p per
ordinary share was paid during the period. Your Board is not
proposing a dividend in relation to this interim period but
reiterates the intention to distribute a large element of the
available income and, if appropriate, realised capital gains in the
medium term.
Qualifying investments
During the six months a total of �425,000 was invested in the
following companies:
* Universe Group Plc (�120,000): an AIM quoted provider of
EPOS hardware and software to the petrol forecourt market.
* Invu Inc (�81,000): a leading provider of document
management software to the SME market, quoted on AIM.
* Mediasurface Plc (�71,000): a web-content management
software provider to the private and public sector; which raised
new equity to finance the acquisition of a smaller competitor.
* Mount Engineering Plc (�153,000): a provider of engineering
equipment, principally to the oil and gas sector. The Company
invested as part of the AIM IPO.
The Company's largest investment, Cadbury House Hotel & Country
Club, has had a strong first half to the year. The 72 bed hotel
wing was opened in June and has subsequently exceeded all
expectations in terms of occupancy and room rates achieved. In
addition, the leisure club continues to operate at full capacity. A
planned extension will enable the membership to grow further.
Vertu Motors Plc is the second largest holding for Puma VCT II Plc.
The company is executing on its buy-and-build strategy in the motor
dealership sector, having completed a �40m acquisition of the
Bristol Street Group in February and three further smaller deals
later on in the year. Although its share price has come down from
the highs seen at in the first months of the year, it is still
comfortably above our entry price.
The Company's third largest holding is in Stocklight Limited, which
is the parent of Bloomsbury Auctions, a fast growing specialist
auctioneer. Bloomsbury Auctions is finalising its new auction
rooms, to be opened later in the year and we expect further good
news flow which should underpin its growth strategy.
The investment climate on AIM in the period under review for VCT
qualifying companies remained buoyant. As a result the Investment
Manager has had to pass on numerous opportunities due to
unrealistically high valuations and more generally a lack of
sufficient downside protection. The Investment Manager therefore
continued to focus on identifying unquoted companies with a defined
exit strategy. Such deals take longer to complete but the amounts
invested are substantially higher.
The qualifying portfolio now consists of eleven investments and
represents approximately 35% of assets as at 30 June 2007. With
some larger qualifying investments to be made in the near-term,
your Board is confident the requirement for at least 70% to be
invested in qualifying companies after three years will be met
within the timescale.
Non-qualifying investments
The Investment Manager's non-qualifying portfolio performed
strongly in the six months to 30 June 2007 adding approximately
3.2p to the net asset value per share. However, since the end of
the period, the non-qualifying portfolio has dropped reflecting the
difficult markets and has reduced the net asset value per share to
31 August 2007 by 2p.
Year End Change
During the period the Company took the opportunity to change its
financial year end from 31 December to 28 February. The Puma VCT II
is now required to be 70% invested in qualifying investments by the
new financial year end. The next Annual Report shall be for the
period ended 28 February 2008.
Outlook
The Investment Manager currently has a pipeline of interesting
qualifying opportunities in private equity deals. In addition,
subsequent to the date of these accounts, the Company has invested
a further �221,000 in AIM listed companies, including a follow-on
investment in Interactive World Plc of �140,000.
Despite the recent volatility in the equity markets the quoted
investments in the Company's portfolio have generally held their
value. We are hopeful, that once calm is restored, further AIM
opportunities should come forward at more realistic valuations. We
also expect the VCT's offering of growth mezzanine and equity
capital for asset-backed growing companies to be increasingly
attractive in a climate of tightening terms for conventional
credit.
I look forward to reporting the progress of the Company with the
next Annual Report for the period ended 28 February 2008. In the
meantime, shareholders should note that the Company publishes its
net asset value per share each month over the London Stock
Exchange's electronic system as well Shore Capital's website,
www.shorecap.co.uk/investor-information-puma.php.
Sir Aubrey Brocklebank Bt
Chairman
27 September 2007
Income Statement (unaudited)
For the six months ended 30 June 2007
1 January 2007 to 1 January 2006 to 1 January 2006 to
30 June 2007 30 June 2006 31 December 2006
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note �'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000
Gains on
investments - 432 432 - 479 479 - 752 752
Income 92 - 92 89 - 89 206 - 206
92 432 524 89 479 568 206 752 958
Investment
management
fees 4 28 85 113 24 73 97 54 162 216
Performance
fees 3 69 72 4 82 86 12 119 131
Other
expenses 47 - 47 38 - 38 87 - 87
78 154 232 66 155 221 153 281 434
Return on
ordinary
activities
before
taxation 14 278 292 23 324 347 53 471 524
Tax on
return on
ordinary
activities
capital 3 (3) - (6) 6 - (8) 8 -
Return on
ordinary
activities
after tax
attributable
to
equity
shareholders 17 275 292 17 330 347 45 479 524
Return per
Ordinary
Share
(pence) 2 0.19p 3.31p 3.50p 0.20p 3.98p 4.18p 0.54p 5.77p 6.31p
The revenue 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 30 June 2007
As at As at As at
30 June 30 June 31 December
Note 2007 2006 2006
�'000 �'000 �'000
Fixed Assets
Investments 6 9,602 7,918 8,962
Current Assets
Debtors 97 65 53
Cash 38 1,256 505
135 1,321 558
Creditors - amounts falling
due within one year (77) (89) (149)
Net Current Assets 58 1,232 409
Total Assets less Current
Liabilities 9,660 9,150 9,371
Creditors - amounts falling
due after more than one year
(including convertible debt) (1) (1) (1)
Net Assets 9,659 9,149 9,370
Capital and Reserves
Called up share capital 83 83 83
Capital reserve - realised 331 65 115
Capital reserve - unrealised 891 733 832
Other reserve 286 170 214
Revenue reserve 8,068 8,098 8,126
Equity Shareholders' Funds 9,659 9,149 9,370
Net Asset Value per Ordinary
Share 3 116.38 110.24p 112.90p
Diluted Net Asset Value per
Ordinary Share 3 112.92 108.19p 110.32p
Cash Flow Statement (unaudited)
For the six months ended 30 June 2007
1 January
1 January 2007 1 January 2006 2006 to
to to 31 December
30 June 2007 30 June 2006 2006
�'000 �'000 �'000
Operating activities
Investment income 71 38 167
received
Investment management (164) (95) (157)
fees paid
Cash paid to directors (7) (7) (14)
Foreign exchange 18 (18) (36)
gain/(loss) on cash
Other cash payments (54) (42) (67)
Net cash outflow from
operating activities (136) (124) (107)
Equity dividend paid (75) - -
Capital expenditure and
financial investment
Purchase of investments (2,832) (2,733) (4,564)
Proceeds from sale of 2,563 1,580 2,492
investments
Decrease in trades in - 339 339
advance
Acquisition costs - - (3)
Net realised gain on
forward foreign exchange
contracts 13 229 383
Net cash outflow from
capital expenditure and
financial investment (256) (585) (1,353)
Decrease in cash (467) (709) (1,460)
Reconciliation of net
cash flow to movement in
net funds
Decrease increase in cash (709) (1,460)
for the period (467)
Net cash at start of the 505 1,965 1,965
period
Net funds at the period 38 1,256 505
end
Reconciliation of Movements in Shareholders' Funds (unaudited)
For the six months ended 30 June 2007
Called Capital Capital
up reserve- reserve- Other Revenue
share realised unrealised reserve reserve
capital �'000 �'000 �'000 �'000 Total
�'000 �'000
For the six months ended 30 June 2007
Balance at 1
January 2007 83 115 832 214 8,126 9,370
Total recognised
gains for the
period - 216 59 72 17 364
Equity dividend
paid - - - - (75) (75)
Balance at 30
June 2007 83 331 891 286 8,068 9,659
For the six months ended 30 June 2006
Balance at 1
January 2006 83 (213) 681 83 8,081 8,715
Total recognised
gains for the
period - 278 52 87 17 434
Balance at 30
June 2006 83 65 733 170 8,098 9,149
For the year ended 31 December 2006
Balance at 1
January 2006 83 (213) 681 83 8,081 8,715
Total recognised
gains for the
year - 328 151 131 45 655
Balance at 31
December 2006 83 115 832 214 8,126 9,370
Notes to the Interim Report
For the six months ended 30 June 2007
1. 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"
("SORP") December 2005. Although this SORP principally applies to
Investment Trusts, many of the characteristics of Investment Trusts
are shared by VCTs therefore the Company will continue to follow
the SORP until investment company status is revoked.
The Company is required to comply with a number of new UK Financial
Reporting Standards (FRS), which now represent UK Generally
Accepted Accounting Practice (UK GAAP), in presenting its financial
statements for the year ending 31 December 2006. These Standards
have been introduced as part of the process of aligning UK
accounting principles with International Accounting Standards. The
unaudited interim financial statements for the six months ended 30
June 2007 have been prepared in compliance with the new Standards.
There is no change with respect to the accounting policies from
those used in preparing the annual financial statements for the
year ended 31 December 2006.
2. Return per Ordinary Share
The total return per share of 3.50p (30 June 2006 - 4.18p) is based
on the profit for the period of �292,000 (30 June 2006 - �347,000)
and the weighted average number of shares in issue as at 30 June
2007 of 8,299,300 (30 June 2006 - 8,299,300).
3. Net asset value per share
+-----------------------------------------------------------------+
| | | | Net Asset Value per |
| | | | share |
| |------------+-----------+---------------------|
| | Net assets | Shares in | Basic | Diluted |
| Period | | issue | | |
|------------------+------------+-----------+----------+----------|
| 30 June 2007 | �9,659,000 | 8,299,300 | 116.38p | 112.92p |
|------------------+------------+-----------+----------+----------|
| 31 December 2006 | �9,370,000 | 8,299,300 | 112.90p | 110.32p |
|------------------+------------+-----------+----------+----------|
| 30 June 2006 | �9,149,000 | 8,299,300 | 110.24p | 108.19p |
+-----------------------------------------------------------------+
4. Management fees
The Company pays the Investment Manager an annual management fee of
2% (plus VAT) 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. The financial information for the six months ended
30 June 2007 and the six months ended 30 June 2006 has not been
audited and does not comprise full financial statements within the
meaning of Section 240 of the Companies Act 1985. The financial
information for the year ended 31 December 2006 has been extracted
from the company's full financial statements for the year then
ended that have been delivered to the Registrar of Companies, and
on which the report of the Auditors was unqualified. The interim
financial statements have been prepared on the same basis as the
annual financial statements.
6. Investment portfolio summary
Cost Valuation Valuation as a % of
As at 30 June 2007 �'000 �'000 Net Assets
Qualifying investment -
unquoted
Cadbury House Hotel & Country
Club plc 1,278 1,545 16%
Stocklight Limited 279 279 3%
Qualifying investment - quoted
@UK plc 285 76 1%
Clarity Commerce Solutions plc 98 87 1%
Interactive World plc 70 78 1%
INVU inc 81 81 1%
Mediasurface plc 71 77 1%
Mount Engineering plc 153 153 1%
Patsystems plc 214 385 4%
Universe Group plc 120 120 1%
Vertu Motors plc 407 475 5%
Total qualifying investments 3,056 3,356 35%
Non-qualifying investments
Hedge fund portfolio -
unquoted 2,405 2,830 29%
Loan stock - interest bearing 2,000 2,027 21%
Other quoted investments 1,024 1,389 14%
Total non-qualifying
investments 5,429 6,246 64%
Total investments 8,485 9,602 99%
Balance of portfolio 57 57 1%
Net Assets 8,542 9,659 100%
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