Interim Results
For immediate
release
27 September 2007
Puma VCT plc
Unaudited Preliminary interim results for the six months ended 30
June 2007
Highlights
* Undiluted net asset value per share of 116.37p, 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
* Five 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 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 five 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
116.37p (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 0.22p and a capital return of 3.28p.
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 �820,000 was invested in the
following companies:
* Cadbury House Hotel & Country Club Ltd (�200,000): the
second instalment of our refinancing of the hotel, leisure club and
conferencing development, described in the 2006 year end accounts.
* Universe Group Plc (�174,000): an AIM quoted provider of
EPOS hardware and software to the petrol forecourt market.
* Invu Inc (�119,000): a leading provider of document
management software to the SME market, quoted on AIM.
* Mediasurface Plc (�104,000): 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 (�223,000): 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 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 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
large 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 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 �322,000 in AIM listed companies, including a follow-on
investment in Interactive World Plc of �204,000.
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/press.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 - 624 624 - 703 703 - 1,101 1,101
Income 134 - 134 134 - 134 306 - 306
134 624 758 134 703 837 306 1,101 1,407
Investment
management
fees 4 41 124 165 35 106 141 79 236 315
Performance
fees 6 100 106 7 121 128 19 175 194
Other
expenses 65 - 65 53 - 53 119 - 119
112 224 336 95 227 322 217 411 628
Return on
ordinary
activities
before
taxation 22 400 422 39 476 515 89 690 779
Tax on
return on
ordinary
activities 4 (4) - (11) 11 - (15) 15 -
Return on
ordinary
activities
after tax
attributable
to
equity
shareholders 26 396 422 28 487 515 74 705 779
Return per
Ordinary
Share
(pence) 2 0.22p 3.28p 3.50p 0.23p 4.03p 4.26p 0.61p 5.83p 6.44p
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 13,096 11,533 12,908
Current Assets
Debtors 138 94 76
Cash 945 1,819 881
1,083 1,913 957
Creditors - amounts falling
due within one year (112) (128) (217)
Net Current Assets 971 1,785 740
Total Assets less Current
Liabilities 14,067 13,318 13,648
Creditors - amounts falling
due after more than one year
(including convertible debt) (1) (1) (1)
Net Assets 14,066 13,317 13,647
Capital and Reserves
Called up share capital 121 121 121
Capital reserve - realised 464 47 108
Capital reserve - unrealised 1,283 1,086 1,243
Other reserve 417 245 311
Revenue reserve 11,781 11,818 11,864
Equity Shareholders' Funds 14,066 13,317 13,647
Net Asset Value per Ordinary
Share 3 116.37p 110.17p 112.90p
Diluted Net Asset Value per
Ordinary Share 3 112.92p 108.14p 110.32p
Cash Flow Statement (unaudited)
For the six months ended 30 June 2007
1 January
1 January 2007 1 January 2006 to
to 2006 to 31 December
30 June 2007 30 June 2006 2006
�'000 �'000 �'000
Operating activities
Investment income received 102 60 250
Investment management fees (239) (138) (228)
paid
Cash paid to directors (11) (11) (21)
Foreign exchange gain/(loss) 27 (7) (24)
on cash
Other cash payments (72) (58) (89)
Net cash outflow from
operating activities (193) (154) (112)
Equity dividend paid (109) - -
Capital expenditure and
financial investment
Purchase of investments (3,411) (3,995) (6,512)
Proceeds from sale of 3,758 2,344 3,670
investments
Decrease in trades in - 494 494
advance
Acquisition costs - - (4)
Net realised gain on forward
foreign exchange contracts 19 318 533
Net cash inflow/(outflow)
from capital expenditure and
financial investment 366 (839) (1,819)
Increase/(decrease) in cash 64 (993) (1,913)
Reconciliation of net cash
flow to movement in net funds
Increase/(decrease) in cash 64 (993) (1,913)
for the period
Net cash at start of the 881 2,812 2,812
period
Net funds at the period end 945 1,819 881
Reconciliation of Movements in Shareholders' Funds (unaudited)
For the six months ended 30 June 2007
Called
up Capital Capital
share reserve- reserve- Other Revenue
capital realised unrealised reserve reserve Total
�'000 �'000 �'000 �'000 �'000 �'000
For the six months ended 30 June 2007
Balance at 1
January 2007 121 108 1,243 311 11,864 13,647
Total recognised
gains for the
period - 356 40 106 26 528
Equity dividend
paid - - - - (109) (109)
Balance at 30
June 2007 121 464 1,283 417 11,781 14,066
For the six months ended 30 June 2006
Balance at 1
January 2006 121 (371) 1,017 117 11,790 12,674
Total recognised
gains for the
period - 418 69 128 28 643
Balance at 30
June 2006 121 47 1,086 245 11,818 13,317
For the year ended 31 December 2006
Balance at 1
January 2006 121 (371) 1,017 117 11,790 12,674
Total recognised
gains for the
year - 479 226 194 74 973
Balance at 31
December 2006 121 108 1,243 311 11,864 13,647
Notes to the Interim Report
For the six months ended 30 June 2007
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" ("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.
2. Return per Ordinary Share
The total return per share of 3.50p (30 June 2006 - 4.26p) is based
on the profit for the period of �422,000 (30 June 2006 - �515,000)
and the weighted average number of shares in issue as at 30 June 2007
of 12,087,700 (30 June 2006 - 12,087,700).
3. Net asset value per share
+-------------------------------------------------------------------+
| | | | Net Asset Value per |
| | | | share |
| |-------------+------------+---------------------|
| | Net assets | Shares in | Basic | Diluted |
| Period | | issue | | |
|------------------+-------------+------------+----------+----------|
| 30 June 2007 | �14,066,000 | 12,087,700 | 116.37p | 112.92p |
|------------------+-------------+------------+----------+----------|
| 31 December 2006 | �13,647,000 | 12,087,700 | 112.90p | 110.32p |
|------------------+-------------+------------+----------+----------|
| 30 June 2006 | �13,317,000 | 12,087,700 | 110.17p | 108.14p |
+-------------------------------------------------------------------+
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 1,911 2,300 16%
Stocklight Limited 407 407 3%
Qualifying investment - quoted
@UK plc 415 111 1%
Clarity Commerce Solutions plc 142 127 1%
Interactive World plc 102 113 1%
INVU inc 119 119 1%
Mediasurface plc 104 113 1%
Mount Engineering plc 223 222 1%
Patsystems plc 311 560 4%
Universe Group plc 174 174 1%
Vertu Motors plc 593 692 5%
Total qualifying investments 4,501 4,938 35%
Non-qualifying investments
Hedge fund portfolio 3,501 4,106 30%
Loan stock - interest bearing 2,000 2,027 14%
Other quoted investments 1,486 2,025 14%
Total non-qualifying
investments 6,987 8,158 58%
Total investments 11,488 13,096 93%
Balance of portfolio 970 970 7%
Net Assets 12,458 14,066 100%
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