REG - Puma Alpha VCT PLC - Annual Financial Report
24/05/2022 07:00
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RNS Number : 5150M Puma Alpha VCT PLC 24 May 2022
HIGHLIGHTS
· First exit achieved (post period end) with the sale of Tictrac,
doubling the sum invested in only 26 months of hold
· Five additional qualifying investments made
· 17.6% increase in Net Asset Value ("NAV") to 136.48p per share
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present the report and financial statements for Puma Alpha VCT
plc
('the Company') for the year to 28 February 2022.
Overview
The Company's NAV per share at the end of the year stood at 136.48p, a 20.38p
and 17.6% uplift from the same time in the previous year. This uplift has been
driven by impressive performance across a number of the Company's qualifying
investments, which is particularly satisfying given the prevailing market
conditions.
The overall NAV movement arises from those uplifts less set-up fees and
running costs. The Company has not to-date held listed equities or other
liquidity management tools outside cash, so has not suffered from associated
volatility. The Company's profit for the year was £3.0m (2021: £1.6m).
Fundraising
We are happy to report that at the year end the Company had raised £4.3m, and
since the year end a further £3.7m has been raised. This gives the Company
additional deployable funds to continue building a robust portfolio and will
help spread fixed costs over a wider shareholder base. These funds were raised
in a competitive fundraising market, with 27 VCTs raising versus 21 in the
prior year. This level of fundraising, for a relatively new VCT, compared
favourably to the other VCTs in the market that were launched at the same
time. Following Puma Alpha's first exit of TicTrac, post period end, we hope
that the rate of fundraising will accelerate.
Investment Activity and Portfolio
We are pleased to report that 2021-22 has been an active year for the Company
with five qualifying investments having been made in the period, alongside
other Puma managed funds. These investments were: £1.0m into Deazy, a
software developer marketplace platform; £0.90m into Everpress, an e-Commerce
marketplace for independent designers; a follow-on investment of £0.53m into
Dymag, a manufacturer of specialist car and motorbike wheels; a follow-on
investment of £0.60m into Cameramatics, an international fleet and vehicle
safety technology provider; and a follow-on investment of £0.70m into
Connectr, a Human Resources technology company. This brings the overall number
of qualifying investments to nine.
Within the portfolio, The Company's holdings in Cameramatics, Ostmodern and
Ron Dorff have generated positive valuation movements as the positions were
adjusted from being held at cost to being held at market value. In all cases,
the Company benefits from a defensive investment structure which has helped
secure value.
Connectr has continued to perform strongly and was written up accordingly,
also benefitting from a favourable investment structure. Tictrac, the
Company's health and wellness app investment, was written up in value based on
a potential acquisition that was well progressed at the period end and
completed post period end on the 30 April 2022. Le Col had a small
write-up in value and has continued to perform well YoY, but revenue growth in
the latter months of the period showed signs of slowing.
Dymag has had a small write-up in value. Whilst It's pipeline of orders has
grown substantially in recent months; meeting demand continues to be impacted
by supply chain and internal production delays. Post period, in early May
2022, Dymag announced a strategic partnership with Hankuk Carbon Co Ltd, a
major manufacturer of advanced carbon composite materials, which initiated a
period where the companies would work together to scale up production and
explore strategic investment. This has potential to spur material growth for
Dymag.
At the time of writing, the Company has over £4m ready to deploy. This,
together with the fact that the VCT is still relatively new and therefore not
burdened with a large legacy portfolio to defend, positions the Company well
to continue taking advantage of the post Covid landscape. The Investment
Manager continues to see several hundred investment opportunities a year, and
your Board is optimistic that the rapid deployment the Company has enjoyed
to-date will continue. The investment team has heads of terms agreed for three
further potential investments, which gives us confidence that we will continue
to make good progress this year.
Allocation of non-qualifying holdings will continue to be considered by the
Investment Manager as the economic outlook continue to evolve.
Net Asset Value ("NAV")
The Company's NAV stood at 136.48p (2021: 116.10p) at the year end of 28
February 2022. This reflects the upwards revaluations, totalling £4.3m across
the Company's qualifying investments, less running costs.
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. PwC will continue to monitor rule compliance and maintaining the
qualifying status of the Company's holdings in the future.
Outlook
Market conditions and investor sentiment have been badly impacted by recent
geo-political and economic events, especially the war in Ukraine and further
Covid lockdowns in China. This has led to an increase in uncertainty and
volatility coupled with a reduction in liquidity and activity. Rising
inflation, especially in the energy sector, must inevitably lead to continued
upward pressure on interest rates and/or pressure on governments to reduce
spending, and markets are still adjusting to this change in conditions.
Nevertheless, difficult conditions always present opportunities for agile
businesses focused on resilient sectors. Compared with others in the market,
this VCT is relatively new, and therefore can adapt quickly to a volatile
economic environment when developing its portfolio. Notwithstanding the many
short-term uncertainties, the UK continues to benefit from an active and
well-established SME market in which the Manager has a strong reputation as a
provider of capital. This applies especially to well-managed, later-stage SMEs
where bank lending, despite some policy support, continues to remain
challenging for even the best of these businesses. This, alongside the
institutional support the Manager is able to offer, continues to make for a
compelling equity offer from the Company. The ongoing uncertainty and
volatility place added emphasis on the Company's ability to focus efforts on
sectors that are well placed to navigate the current headwinds. We are
confident that we have the team to do this and assemble a portfolio capable of
delivering attractive returns to shareholders.
Egmont Kock
Chairman
23 May 2022
INVESTMENT MANAGER'S REPORT
I'm delighted to see so much progress and value creation within the Company's
portfolio over the
last twelve months and believe this is further validation of our extremely
hands-on approach
to portfolio management.
There is no doubt that working to help our portfolio companies as much as
possible contributes towards more powerful and consistent results and exits.
This is further evidenced by the recent realisation of the Company's holding
in TicTrac, which was acquired by the listed Canadian telehealth business,
Dialogue, in May 2022. The sale of TicTrac provided an attractive money
multiple and a positive Internal Rate of Return for our investors.
I do however need to add some caution when considering the current investment
horizon as we remain in a particularly uncertain and challenging investment
environment. As I cautioned last year, the Covid era was "not a 'conventional'
recession", and the levels of government support we saw, left several
companies alive, but weak, with very stretched working capital positions. Much
of the economy remains far from robust and it is now also being exposed to
several additional interrelated shocks, including inflation, supply-chain
disruption and conflict.
The economic ramifications of the current geopolitical conflict are and will
be, profound. In deciding to weaponise the privilege of running the global
reserve currency and freeze Russian dollar assets, the US has made a very
material move on the world stage. Surprisingly this has not been discussed
widely in the mainstream press, but in taking such action, the US has
effectively denied Russia access to Russian dollar holdings, thereby
signalling that they were the US's dollars all along.
We believe that such a move will dissuade China from depositing spare funds in
US Treasuries, and subsidising consumers in the West through a depressed
exchange rate (and correspondingly cheap exports). In the medium term that
might boost the reshoring of manufacturing in the West, but in the near term
is going to further exacerbate inflationary pressures and the squeeze on
lower-income consumers.
Such a clear signal from the US may also hasten attempts by China to develop a
rival international settlement currency. This risks accelerating a split
between a Western economic sphere and a Chinese economic sphere - the
implications of which would be felt across global trade, supply chain
management, logistics and tech. We believe it would also have permanent cost
implications for Western producers and consumers.
Increased fuel prices, caused generally by co-ordinated global energy demand
post-Covid and specifically by the response to the war in Ukraine, seem to
have finally driven widespread focus on the conversion to renewable energy
sources.
Whilst this may have multiple benefits in the medium to long term, in the near
term it will yet again exacerbate inflationary pressures from increased demand
coupled with supply-chain disruption; as a simple example, carbon fibre -
typically used for lightweighting manufactured consumer goods - is being
diverted for military use, just as it is being called on for wind turbine
manufacture.
And whilst much of our society has now appeared to have 'moved on' from the
Covid pandemic, sadly it remains very much with us. Whilst the UK has had a
fairly successful vaccination-and-exposure policy, we are seeing friction
between surging demand and labour force shortages. Hospitality, travel,
logistics and construction have all experienced operational challenges in
recent months, and this will not improve for some time.
For China, holding on to its zero Covid policy and implementing a series of
rolling lockdowns of real severity is going to become more challenging as the
rest of the world opens up. With China still being such a large manufacturing
hub, this cannot help but cause supply-chain disruption to Western producers
and in turn, yet more inflation.
We see inflation from labour shortages (Covid), inflation from energy prices
(demand and conflict), and inflation from supply-chain friction (conflict,
response to conflict, Covid). Yet the outlook is not as simple as diverting
all our investment activity to gold miners (not permitted within the VCT
rules). On a medium to long-term basis, we are still investing amidst some
powerful deflationary forces - and when investing into illiquid private
companies, you'd better have an eye on the medium to long term - if not for
your own holding period, then for the people you want to sell the positions
to.
The world's population is getting older, and not just in the West. Ageing is
very real for China as well. As populations age, spending is diverted to
saving (and then controlled dis-saving through retirement) and to healthcare.
This is not incompatible with inflation but is a severe dampener to it
(exemplified by the Japanese experience ever since 1990).
In summary, we are looking at an uncertain and high-risk backdrop. For new
investment activity, we will maintain a genuine multi-sector investment
approach, but will add consumer-facing positions selectively - retaining our
bias toward premium (higher-margin) offers. For B2B offers we will be looking
for businesses that have a clear cost-saving proposition. As ever, we will
work extremely closely with the companies we back and help them hone their
sales messages and sales team structures to maximise their growth.
Rupert West
Managing Director
Looking to conquer the US
Ron Dorff
In 2020, the Puma Funds invested £3.59m into men's athleisure wear business,
Ron Dorff. Aligning Swedish functionality with French style, Ron Dorff is
a well-respected premium bodywear brand, having been voted one of the three
best swimwear brands for men in 2020 by Vogue magazine. In February 2022, Puma
Funds made a further investment of £1.67m, to enable the business to continue
its overseas expansion, particularly in the US.
SECTOR OVERVIEW
According to the latest research from McKinsey, global fashion sales are on
track to pick up some momentum this year, as restrictions start to ease, and
consumers are freer to travel and resume their social lives in many key
markets around the world. While Ron Dorff has been affected by the pandemic
like many other premium fashion brands, it is in a strong position to
capitalise on any uptick in consumer demand, given the investments made over
the last two years in both its people and its underlying capability.
During the pandemic, while Ron Dorff physical stores were closed, the business
had strong sales online, which were boosted by investments into a new
ecommerce web platform, designed to optimise the shopping experience for
customers in all countries. When Ron Dorff physical stores were able to
re-open, the business had its strongest sales months throughout the summer.
Sales from the retail store in Earlham Street, London, and in concession
stores in Paris, were particularly good. In 2021, Ron Dorff opened further
stores in the Royal Exchange, London, and Lower Manhattan, New York, and
recently announced it plans to open three further stores in the US.
KEY PLANS FOR THE FUTURE
Ron Dorff has exciting plans for 2022 and beyond, including the opening of
additional stores in US in areas with high e-commerce led demand. It also has
a number of collaborations in the pipeline, including Edge Beauty for its
first fragrance range, to broaden both range and appeal. It is further
investing. in its ecommerce platform, with a view to optimising online sales
further during 2022.
£5.26m Investment (Alpha VCT participation £1.08m)
SUSTAINABILITY
Ron Dorff has set ambitious sustainability and ethical goals for the years
ahead. From the people making the products to the fabrics it uses, right
through to how it minimises transport around the globe and its overall impact
on climate.
Whenever possible, Ron Dorff ensures the fabrics it uses are recycled and can
be easily recycled in the future. Recycled polyester in its swimwear, recycled
wool in its knitwear, recycled paper in its shopping bags and online boxes,
are just a few examples.
Supplies to Ron Dorff are always sourced as close as possible to its warehouse
outside Paris. 90% of production is made in France (accessories), Italy
(knitwear), Portugal (underwear, swimwear and sportswear) and Sweden (body
care). All production is transported by train or by truck. In addition,
Ron Dorff works only with transportation partners that are able to disclose
the carbon footprint of freight, and it is actively working on reducing the
environmental impact of transport.
All European suppliers working with Ron Dorff respect the rigorous labour laws
of the European Union. Suppliers outside the EU all adhere to Ron Dorff's
global code of labour practices for suppliers. The code stipulates minimum
requirements for working conditions, based on the International Labour
Organization (ILO) and UN principles. This includes the right of all workers
to join trade unions, the right to a living wage, reasonable hours of work,
safe working conditions and a legally binding employment contract. Child
labour and all forms of discrimination are strictly banned.
WHY WE'VE INVESTED
Since inception, Ron Dorff has delivered year-on-year revenue growth with
successful expansion into international markets, as well as a number of
collaborations and strategic partnerships. While recent years have been more
challenging, revenues have remained strong and stable, and the investment into
ecommerce has enabled it to increase online sales by more than 50%.
The investments we have made - which include an additional investment of
£1.67m in February 2022 - have enabled Ron Dorff to deliver on its targeted
growth plan, with expansion firmly focused on the US.
Ron Dorff has a clear path to exit, with the potential to maximise global
expansion being
a particularly attractive opportunity.
MANAGEMENT TEAM
Ron Dorff has invested in a highly seasoned team, who bring a wealth of
experience from across the fashion and digital world, including:
CEO - Claus Lindorff. He founded Ron Dorff in 2012. Previously he was Managing
Director at BETC Luxe.
Chief Marketing Officer - Caroline Pannhasiri Caroline Pannhasiri joined from
The Kooples.
Head of E-commerce and Digital - Ibrahim Rahni. Ibrahim Rahni joined from
Serge Blanco.
Building belonging across the world
Connectr
Connectr (formerly known as MyKindaFuture) is a market-leading HR tech
platform that provides smart mentoring software to improve employee
recruitment, retention and attainment. It was born out of a desire to help
organisations improve D&I in their workforce, and Connectr's software has
been developed to address key challenges in our labour markets: namely
under-representation of minority and disadvantaged groups, skill shortages and
increasing employee attrition rates.
Puma initially invested £2.75m in August 2019 to support Connectr to develop
its core product. Following impressive revenue growth in the following two
years, Puma invested
a further £6m across two investment rounds (October 20 and December 21) to
capitalise on the expansion opportunities available to the company.
SECTOR OVERVIEW
The Parker Review was set up to improve levels of diversity and inclusion at
large companies in the UK. First published in 2017, the report set a target
for every FTSE 100 company to have at least one director from a minority
ethnic group on its board by 2021, with FTSE 250 companies given until 2024.
This created a large pipeline of organisations looking to improve levels of
diversity at board level, and throughout the wider organisation. The report
highlighted the need for mentoring programmes as a tool that can "bring down
ethnic barriers and empower talent".
Recent analysis suggests progress is being made - certainly within larger
organisations. According to EY 89 FTSE 100 companies had ethnic diversity on
their boards (December 2021), compared to 74 in November 2020.1 Indeed,
research by FRC/Cranfield has also highlighted that the Black Lives Matter
movement has shifted the quality of the conversation, so that actions and
initiatives are being reviewed with increased scrutiny. Mentoring programmes
are now increasingly seen as "important elements of the overall approach to
ensuring the greater representation of ethnically diverse individuals at
senior levels".
£8.7m Investment (Alpha VCT participation £1.65m)
SUSTAINABILITY
Connectr's sole purpose is to help improve rates of diversity and inclusion
across the global workforce. The purpose runs through everything it does, and
it seeks to champion that at first hand, by offering under-represented groups
meaningful employment itself.
AWARDS WON
Shortlisted in the British HR Awards 2022 in the Technology Company of the
Year and Innovation of the Year categories.
MANAGEMENT TEAM
CEO - Will Akerman. Experienced founder with a track record of scaling and
delivering exits.
Chief Operating Officer - Rachel Morar. Rachel joined in 2013, background in
corporate and third sector sales.
Chief Revenue Officer - Mark Edgeworth. Mark joined Connectr in 2022 from
BeMyEye and has
a track record of scaling SaaS sales and marketing functions.
Chief Finance Office - Ashley Taylor. Ashley has 12 years of experience in
senior finance positions.
WHY WE'VE INVESTED
Connectr is led and managed by a highly experienced team, that offer a
credible and pragmatic voice in a market that is becoming increasingly noisy.
In recent months it has increased its focus at board level for a coherent
D&I strategy that sits around its core platform, and is focused on
providing comprehensive metrics that show where improvements are being made.
Clients are seeing strong ROI on programmes being delivered by Connectr,
including:
· 67% reduction in candidate renege rate
· 41% increase in diversity of hires
· 85% average user engagement rate
It has already partnered with multiple blue-chip global employers to increase
the diversity in the workforce, e.g. GE on its Next Engineers programme,
National Grid, Heathrow.
KEY PLANS FOR THE FUTURE
Connectr has had a number of notable blue-chip wins in the last year,
including GSK, LinkedIn and the NHS, and has a strong pipeline of
opportunities for growth both in the UK and internationally.
It also has product extension plans for a number of clients that grow with the
employee lifecycle - from graduate to executive. It has already launched a new
workplace mentoring platform ("Connectr for Employees") with the first clients
onboarded and using the platform.
Connectr is in a growing sector, and has a number of clear exit routes
available to it at the appropriate time.
Build and scale world class streaming products
Ostmodern
Ostmodern is a digital product specialist and creative technology company. The
team collaborates with businesses to develop unique digital products and
services. It has produced bespoke rich media and video-on-demand for many
high-profile clients across the world, including Fox, ITV and hayU.
Building on the management's expertise in the video-on-demand sector,
Ostmodern has developed a Video Management System (VMS), Skylark, to enable
content owners to better manage and commercialise their video content. In
December 2020, Puma Funds invested £2m in Ostmodern, to enable it to further
develop the Skylark product and continue its transition from a service
provider to a productised offering; the ultimate goal being to provide an
affordable and easy-to-plug-in VMS to a wider range of content owners. The
investment has also helped the company to establish a sales structure to
commercialise the product internationally.
SECTOR OVERVIEW
Ostmodern is a specialist in the management of digital video - a market that
emerged with the first wave of video-on- demand in the mid-2000s. The growth
of digital content consumption, amplified in part by the pandemic, has
disrupted sectors that were traditionally serviced in person, and are
increasingly being serviced through video. The market is now enjoying new
waves of rapid growth, with a proliferation of streaming platforms and media
devices, and increasing demand from sectors outside the traditional
broadcasters, such as education, fitness and corporate training courses.
SUSTAINABILITY
As part of our investment, we have worked closely with management to help
nurture company culture, and ensure that the company's vision permeates
through the organisation to all employees.
We have looked to establish clear reporting lines and dashboards, to help the
board better monitor performance across all functions.
KEY PLANS FOR THE FUTURE
The next 12 months will be about achieving product market fit and driving key
strategic partnerships.
The company also intends to deliver a number of product development updates,
including faster integration and reducing server costs for clients when using
Skylark.
£2m Investment (Alpha VCT participation £0.9m)
WHY WE'VE INVESTED
The pandemic has accelerated the use of digital across many facets of daily
life, and content owners are increasingly looking to commercialise their
content. Sectors such as sports, education and retail are expected to move in
a similar direction to media companies, thereby significantly increasing the
serviceable market for Ostmodern.
Ostmodern is a relatively established business, with an experienced senior
management team. While the pandemic affected buying cycles and delayed the
expected revenue growth, the company adapted its go-to-market strategy, and
has maintained a healthy pipeline of clients for both its product and services
offerings.
During this period, our investment has enabled the business to further develop
the product, reduce onboarding costs, standardise the product framework, and
establish a sales and marketing structure, to better position its message to
the target market and ramp up sales.
MANAGEMENT TEAM
Chief Revenue Officer - Taylor Riese. Taylor has sought to set up a scalable
B2B sales structure to sell the Skylark product. He joined in July 2021, with
ten years of commercial experience with Verizon, where he was MD of EMEA and
India sales.
The company has also hired two new sales representatives to cover EMEA and
APAC.
Head of Marketing - Lasharna Turner. Lasharna joined in August 2021, to set up
an omni-channel marketing function. Lasharna joined with sector experience, to
establish product messaging, improve the company's understanding of its target
market, and work closely with the new sales team to optimise lead
generation.
Driving new standards in vehicle safety
CameraMatics (formerly known as MySafeDrive Limited)
CameraMatics provides award-winning fleet risk management solutions for
businesses, designed from a deep understanding of the customer's need. It
has offered a 100% return on investment within seven months on average.
Working across Ireland, the UK and US, the business is positioned at the
forefront of fleet and vehicle safety technology. Its disruptive solution
incorporates artificial intelligence, machine learning, camera technology,
vision systems and telematics to help fleet operators reduce risks and drive
new safety standards.
In 2021, Puma Funds invested £4.72 m into CameraMatics, with the investment
primarily focused on supporting the additional expansion of the US branch of
CameraMatics, and driving forward its offering to large enterprise customers,
following recent successes in the UK.
SECTOR OVERVIEW
According to Fortune Business Insights, the global fleet management software
market was valued at $18.2bn in 2021, and is projected to grow to $67.4bn by
2029. This is fuelled in part by the growth in online shopping, but also the
need to reduce fleet costs. Demand for management software and services that
enable fleet managers to better optimise fleet delivery, maintenance and
safety is expected to see sustained growth to support more optimised supply
chains, and reduce economic and environmental impacts.
MANAGEMENT TEAM
In addition to the existing team, key hires have been made in the following
areas:
Chief Operating Officer - Darren O'Donohoe Previously worked at Digicel
Head of UK Sales - Elliot Goff. Previously worked at The Vehicle Group
Head of US Sales - Michael Menolascino Previously worked at SmartDrive
Marketing Director - Richard J Moore Previously worked at Inmarsat
SUSTAINABILITY
Understanding a fleet's operating costs and related carbon emissions is not
always straight forward. Techniques to reduce the number of vehicle journeys
rely on actionable data insights and identifying effective practical steps to
take to encourage drivers to drive more economically, which aren't always
obvious. The CameraMatics cloud translates the big data from an array of
vehicular sensors, a bespoke suite of fitted high-definition smart cameras and
edge compute devices into actionable insights. These enable the following
environmental benefits:
• Route optimisation and associated reduction in fuel
costs
• Reduced vehicular wear & tear, and associated
reduction in servicing and parts.
CameraMatics has also recently been selected by the Bord na Móna to take part
in its 'Accelerate Green' programme, for businesses focusing on sustainability
and climate action.
WHY WE'VE INVESTED
CameraMatics provides a scalable customer-centric solution for fleet managers
solving day-to-day issues that have been identified and resolved through
CameraMatic's deep industry experience and knowledge. This focus on the key
customer - the managers of commercial fleets - and the problems that they face
is a key USP for the business. It has a consistent track record of winning
large enterprise contracts, that utilise its scalable technology platform to
solve real-world issues; and the further easing of travel restrictions has
also improved sales performance.
Recently, the company announced that Maritime Transport Limited, one of the
largest transport and logistics operators in the UK, has chosen CameraMatics
as its Fleet Safety and Telematics Partner.
AWARDS WON
· 2021 Technology Ireland Emerging Company of the Year 2022 - Nominated
for EU Future Unicorn Award.
· CameraMatics Co-Founder and CEO, Mervyn O'Callaghan has been named
'Founder of the Year' 2021 by Enterprise Ireland as part of its prestigious
High Performance Start-Up (HPSU) programme.
· CameraMatics was a Finalist in the Business Car Awards 2021,
shortlisted for the Risk Management and Safety Award.
· Prestige Awards 2021 Technology Solutions Specialist of the Year.
KEY PLANS FOR THE FUTURE
The business has made large investments into the Sales and Marketing teams in
2021, and the sales and order pipeline is growing strongly. The plan for 2022
and beyond is to continue the international expansion.
£4.72m Investment (VCT Alpha participation £1.59m)
Matching the growing demand for software talent
Deazy
Deazy is a platform that enables enterprise and PE/VC backed growth companies
to hire high quality software developers, through intelligently matching
developers with project requirements. Founded in 2016, Puma Funds invested
£5m of equity into Deazy in December 2021, to enable the business to scale
its commercial teams, so that it could accelerate its growth plans. It also
sought to double down on the functionality of its platform, and further build
out its own software development teams.
SECTOR OVERVIEW
Given the continued penetration of all things digital into all aspects of our
business and professional lives, it's no surprise that globally there
continues to be a shortage of access to skilled software developers. According
to the Recruitment & Employment Confederation (REC), programmers and
software development professionals is the third highest occupation with worker
shortages
in the UK, and both Brexit and the pandemic did little but increase the demand
further for this talent pool in the UK.
In addition, the introduction of IR35 tax legislation, to identity all those
contractors who were working as 'disguised' employees, has further reduced the
available freelance software resources when companies need them. Platforms
such as Deazy's, that enable talent to be searched and matched to projects,
have seen a surge in demand.
MANAGEMENT TEAM
Deazy has recently recruited an experienced Chief Product Officer - Chris
Dawson, from Zoopla- to sustain the delivery of a market-leading platform
experience, and explore additional opportunities to drive revenue expansion
through the platform.
WHY WE'VE INVESTED
Deazy has demonstrated strong product/market fit within its current market,
achieving impressive revenue growth of 270% in 2021 - with December 2021 being
its highest grossing month to date. The company has done this by growing with
existing customers and expanding into new segments, with increased stickiness
and margin as a result.
Deazy operates in a market with strong fundamentals driven by the shortage in
supply of software developers. It has a differentiated approach from its
competitors, in terms of how it aggregates supply. It achieves this through
working with delivery partners instead of freelancers, and it's attractive,
since it enables organic scale, given delivery partners can build out their
teams to service more demand from Deazy's customers.
It is our belief that the experienced management team have a clear
understanding of their target customers' needs and how to scale up the
delivery partner ecosystem, and we are therefore backing a clear and coherent
growth strategy.
SUSTAINABILITY
Deazy is committed to smashing stereotypes, breaking inequality, and rejecting
discrimination. As a tech business it is really proud to showcase its female
talent. The majority female product team is a rare sight in the tech industry,
which is made up of 75% men, and the organisation is providing lots of support
to help women succeed in tech and provide role models for the industry.
£5m Investment (Alpha VCT participation £1m)
KEY PLANS FOR THE FUTURE
Deazy is continuing to develop further its platform in 2022, to enhance its
operating efficiency and develop new features to assist in capturing further
value from customers. It is also building out its sales and customer success
teams to drive new sales as well and expanding revenue from existing clients.
Deazy will look to target customers where higher margins can be achieved.
Riding high from demand for performance cycling apparel
Le Col
Le Col has a very clear ambition to be the pre-eminent performance cycling
apparel company in the world. In 2018, Puma Funds invested £2.35m to support
Le Col's initial growth plans, and following continued strong performance, a
further £4m was invested in 2020 and February 2022. This additional
investment was to fuel the company's overseas expansion as well as its sales
and marketing efforts, which have significantly raised the brand's profile
over the last two years.
SECTOR OVERVIEW
According to research published by the Bicycle Association, the UK cycling
market was worth £2.31bn in 2020 - an increase of 45% over 2019.1 Cycling has
seen a renaissance since the Covid-19 pandemic struck, given much of the
leisure sector was closed for a considerable period and people looked to
alternative options for their exercise. According to Mintel, more than 1
million extra adults starting cycling in 2020, and there was a 57% rise in the
number of children cycling in the summer of 2020 compared to the previous
year, so we are seeing rising participation rates among adults and children,
which have continued throughout the pandemic.
In addition, fuelled by the growing interest in climate change and reducing
our carbon footprint, the e-bike market has also seen sales surge, with Forbes
suggesting that in European countries, by 2030 17 million e-bikes will be sold
a year, which is more than twice the number of passenger cars being registered
currently in the EU.
Overall, the cycling sector in terms of participants as well as participation
rates looks to be on the increase, which is good news for organisations such
as Le Col.
KEY PLANS FOR THE FUTURE
Le Col continues to invest heavily in its product, with additional line
extensions, as well as more R&D into materials and cuts that help improve
the performance cycling kit. Even the smallest changes can make a difference
to how long and how fast riders can go, which
in trials and events can have significant impacts on results.
Le Col is also looking to continue its international expansion, with
investment into the US and Europe in particular, where the overall cycling
markets are continuing to grow.
£6.35m Investment (Alpha VCT participation £0.72m)
SUSTAINABILITY
Le Col has worked on several projects that encourage people to cycle and to
live a more active and healthier lifestyle. Recently it offered a financial
discount on its products, when people completed 250 minutes of recorded
activity within a challenge period, and it regularly works with Strava on
incentivising exercise and challenging yourself to do more activity.
Le Col is also passionate about women's cycling, and helping deliver female
riders to the biggest stages in the sport. It has recently tripled its
investment in cycling team Le Col - Wahoo - who will be participating in the
Women's Tour de France in 2022, and has agreed investment for
a further two years, so the team can continue to build.
MANAGEMENT TEAM
The team have secured a number of new hires including:
Head of Product Development Jennifer Choi, (ex Rapha).
Digital Director - Andrew Longley (ex Asics, Ben Sherman).
WHY WE'VE INVESTED
Le Col has seen explosive growth over recent years - fuelled in part by
renewed interest in the cycling sector, but also because of the quality of its
product, which has helped deliver results, particularly for competitive
cycling. The business has an impressive management team who are helping the
business scale effectively, and its investment in brand and sponsorship is
starting to pay dividends, with an increase in brand awareness and salience.
Le Col has signed a number of high-profile brand ambassadors, including
Victoria Pendleton and Bradley Wiggins, and has secured a number of strategic
partnerships - including with McLaren, to develop high-performance materials
that deliver a step change in aero-cycling apparel.
Le Col will also be returning to the cycling World Tour this year, with a new
deal to become the technical clothing provider for Bora-Hansgrohe, in a deal
that sees the two parties embark on
a three-year journey together.
Engaging employees for a healthier future
Tictrac
Tictrac is a provider of wellbeing software and services that are designed to
engage, inform and enable businesses to take better care of their employees'
health and wellbeing.
It 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 among large workforces, with associated positive outcomes
for engagement and wellbeing. Tictrac's main customers are large insurance
companies, such as Aviva, Allianz, Prudential, Generali Employee Benefits and
Bupa Hong Kong.
In 2020, Puma Funds invested £5m in Tictrac, to capitalise on the technology
investments made, and build out its distribution and content provision. On 3
May 2022, the Company successfully exchanged on a sale of this position and
realise gains. This generated a cash multiple of nearly twice investment for
the Company.
SECTOR OVERVIEW
There is no doubt that the pandemic brought about change to many industries,
but none more so than those dedicated to employee health and wellbeing. The
toll that the pandemic took on many people's mental health, as well as the
changing nature of most office work, have led many employers to reassess the
wellbeing benefits they provide, and greater focus is now being placed on
holistic and mental health and wellbeing. In a recent survey by JLL, 86% of
employers in the UK stated they were changing their approach to employee
health and wellbeing as a result of Covid-19, and more than half of US
companies are now providing dedicated mental and emotional health programmes;
50% of companies in Asia Pacific are enhancing their healthcare benefits.
In addition, a number of companies are now increasingly looking at data and
wearable tech, to see how they can better support their workforce. Apps that
can track cognitive function and help deliver personalised insights,
competitions that seek to incentivise collective health and wellbeing, along
with tailored health programmes and digital coaching, are all being considered
by companies, large and small. It's no wonder then, that some forecasters
estimate the market for employee wellness software to be worth $370m by 2026.
SUSTAINABILITY
Tictrac's sole purpose is to drive better engagement in people's health and
wellness; it has
a huge amount of data from a number of large organisations it works with. It
suggests huge successes in terms of employee wellbeing, including:
· 65% increase in completed health assessment
· 52% uptake of customers onboarded to wellness programmes
· 40% increase in health engagement
WHY WE'VE INVESTED
Tictrac offers a complete health and wellness solution, which has been
specifically designed to meet the needs of its customers and their employees.
Over the last few years the company has built strong relationships with a
number of large insurers, and is continuing to build out its offering to
include more bespoke content and additional services.
The founders have assembled a strong management team, which they continue to
add to with new specialist skills, and they have gained a strong foothold in
an industry that has seen a surge in interest in recent years.
Tictrac continues to win new clients - Howdens was a notable win in 2021- and
it has a number of pipeline developments with clients across Europe and Asia.
MANAGEMENT TEAM
Tictrac has made a number of new hires recently, including the appointment of
James Henson as Chief Product and Technology Officer. James previously worked
at Just Eat, BorrowMyDoggy and Moonpig.
AWARDS
· Innovator of the Year, British Small Business Awards 2018
· Hottest Health Tech Start-up Finalist, European Tech Start-up Awards
2018
KEY PLANS FOR THE FUTURE
Tictrac plans to continue building upon its established relationships with the
large insurers. As employee benefits programmes become more holistic and
further embedded into organisations beyond the key pension/life/health
insurance provision, the ability to provide meaningful engagement and data
with employees' health will be key.
£5m Investment (Alpha VCT participation £0.9m)
Designing more personalised clothing
Everpress
In August 2021, Puma Funds invested £3.2m into Everpress, an online platform
that connects consumers to unique and sustainable products from independent
designers. Everpress started with a simple mission - to support grassroots
creators and reduce waste in fashion. Today, it provides a full-service
solution through which creators can upload their designs and create campaigns
- using the platform's toolkit to choose garment types, sale duration and
prices - before launching to a global audience via Everpress's website.
SECTOR OVERVIEW
There has been a huge growth in online shopping in recent years, along with an
increasing awareness of ethical fashion and consumers' desire to support
grassroots businesses. A recent report by McKinsey, suggested that more and
more people were buying clothing online before the pandemic, and that
"behaviours that started before 2020 have become an established, even
dominant, preference". It goes on to suggest that there has been a secular
shift in shopping patterns, with the result being that ecommerce is expected
to account for 50% of purchasing in the UK clothing market in 2022, compared
with 35% in 2021.
Everpress is well-placed to capitalise on the growth of online shopping, which
has been accelerated by the pandemic, along with increasing awareness of
ethical fashion.
WHY WE'VE INVESTED
The business has shown an impressive growth trajectory: since 2017 revenues
have grown 70% year-on-year on average, and the business has matured from five
employees in 2016 to over 40 today. There is a strong management team in
place, and a clear business plan in a growing sector. We believe there is
significant opportunity to improve the creator and buyer experience, and we
are already working with Everpress on investments to improve its product.
MANAGEMENT TEAM
CEO - Alex Econs. Experienced entrepreneur with a background in graphic design
and applying technology to improve sustainability within the industry.
Chief Operating Officer- Simon Backhouse. Simon previously worked at Fiorucci,
ASOS, Arcadia.
SUSTAINABILITY
Sustainability is at the heart of Everpress. It was formed to support the
creator economy and democratise fashion, and it has paid out more than £6m to
individual artists using its platform since inception. Its campaigns are run
solely on a pre-order basis, so that garments are only produced once
purchased, eliminating excess stock and wastage. This approach is estimated to
have saved over 336 million litres of water and 124,000 T-shirts from
landfill. Its lack of 'seasonality' and the need to produce changing lines for
changing times of the year, is one of the core principles behind the Ellen
MacArthur Foundation, 'Make Fashion Circular' campaign. In addition, Everpress
moved to 100% sustainable packaging in January 2021, with 90% of its garments
sourced from ethical suppliers. Its goal is to increase this to 100% within
the next 12 months, along with becoming climate and water-positive by 2025.
Everpress has also started the B Corp application process.
KEY PLANS FOR THE FUTURE
Everpress has exciting plans for the future, which includes onboarding more
creators with a high following, and building out new tools to enable them to
sell directly to their own audiences.
Given the current macro-economic uncertainties, the company has pushed back
some of its growth plans, including US expansion, and for the remainder of
this year will focus efforts on incremental improvements to product, processes
and communication.
£3.2m Investment (Alpha VCT participation £1.5m)
Designed for high performance
Dymag
Dymag is a British designer and manufacturer of high-performance car and
motorbike wheels, which was founded in 1974 by Max Bostrom. The company has
been making carbon motorcycle wheels since 1995, and carbon-hybrid automotive
wheels since 2004, and considers itself a racing and road pioneer. The
business continues to grow its presence, both in aftermarket wheels using
relationships with several leading US distributors, and through project work
with several leading performance "original equipment manufacturers" (OEMs).
Puma Funds have made a number of investments into Dymag: £3.6m in December
2018, £1.2m in February 2020, £1.7m in October 2020 and £1.5m in October
2021. These investments have been made to improve scale and reduce production
costs - particularly of carbon- hybrid automotive wheels, which are seeing
significant demand growth.
SECTOR OVERVIEW
Removing surplus weight from vehicle components, or "lightweighting" as it is
known, is very important in automotive technology. It interacts well with two
current global megatrends - emissions reductions, and the global push towards
electric vehicles (EVs). Lighter vehicles use less fuel, and EVs are powered
by large, heavy batteries, meaning that any weight saving amongst the rest of
the vehicle components is a premium.
Lightweight wheels can allow substantial weight savings in other parts of a
vehicle, due to the principal of "un-sprung mass". Wheels are un-sprung mass,
and 1kg of weight saved in the wheels of a vehicle can allow up to 8kg to be
reduced elsewhere. This multiplier of up to 8x increases the premium on the
wheels.
Given these dynamics, the carbon wheels market is estimated to grow at over
32.3% CAGR between 2020 and 2026.
KEY PLANS FOR THE FUTURE
During what was a challenging time during the Covid pandemic, Dymag won over
20 niche OEM wheel projects in the UK and USA, and signed long-term supply
contracts for BX-F™ carbon rims with 14 aftermarket wheel brands worldwide.
Its focus continues to be on securing strategic distribution, and it is
working on several other niche wheel brand deals in Switzerland, the UK and
Latin America, which will they are aiming to announce later this year.
Post the balance sheet date, Dymag entered into a new strategic partnership
with Hankuk Carbon Co. Ltd, in order to mass manufacture their
state-of-the-art carbon composite wheels for the automotive industry. The
partnership is expected to rapidly scale-up carbon composite wheel production,
bringing higher volumes and cost efficiencies for the world's leading auto
Original Equipment Manufacturers.
SUSTAINABILITY
Lightweighting is an important part of emissions reduction for internal
combustion powered vehicles, and also a critical step for the enhancement of
electric vehicle technology. brand deals in Switzerland, the UK and Latin
America, which will they are aiming to announce later this year.
MANAGEMENT TEAM
Investments into the management team have been made throughout the life of the
investment.
Tom de Lange joined as CEO in October 2019 from Dyson, and is a key part of
moving the company forward.
Tom Ellaway - joined in March 2022 as Head of Sales and Marketing.
Additional hires have also been made into the finance and manufacturing teams,
and a Manufacturing Director has accepted an offer, due to start in Q3.
These hires have been made to ensure efficiency and quality standards remain
constant as the company moves to multiple shift patterns.
WHY WE'VE INVESTED
Dymag is a notable player in its rapidly growing field. It has a
well-protected suite of iIntellectual property around its technology and
manufacturing processes, which acts as a substantial barrier to entry for
competitors.
Dymag has seen some revenue growth, as its customer base and channels to
market have increased. YOY growth is averaging 35% over the past two years,
which is impressive, given the restrictions of supply chain throughout the
Covid-19 pandemic environment.
Puma Funds' investments into Dymag have supported an ongoing process of
driving efficiencies in production processes to lower unit cost, including
relocation to a new factory in Chippenham, which was open and fully
operational by mid-February 2021. Investment has also been used to develop a
more sophisticated sales and marketing function, to increase the product range
and to reduce dependence on external suppliers.
Dymag is well positioned to capitalise on the predicted growth in the carbon
wheels market.
£8m Investment (Alpha VCT participation £1.13m)
Investment Portfolio Summary
As at 28 February 2022
Valuation Cost Gain/(loss) Valuation as a % of Net Assets
£'000 £'000 £'000
Qualifying Investment - Unquoted
ABW Group Limited ('Ostmodern') 917 900 17 5%
Deazy Limited 1,000 1,000 - 6%
Dymag Group Limited 1,177 1,130 47 7%
Everpress Limited 900 900 - 5%
Le Col Holdings Limited 2,480 719 1,761 14%
MyKindaCrowd Limited ('Connectr') 2,779 1,650 1,129 16%
MySafeDrive Limited ('CameraMatics') 3,892 1,593 2,298 23%
NQOCD Consulting Limited ('Ron Dorff') 1,457 1,079 378 8%
TicTrac Limited 1,151 600 551 7%
Total Qualifying Investments 15,753 9,572 6,181 91%
Total Investments 15,753 9,572 6,181 91%
Balance of Portfolio 1,450 1,450 - 9%
Net Assets 17,203 11,022 6,181 100%
Of the investments held at 28 February 2022, all are incorporated in England
and Wales, except MySafeDrive Limited which was incorporated in Ireland.
Strategic Report
The Directors present their Strategic Report of the Company for the year ended
28 February 2022.
The purpose of the report is to inform members of the company and help them
assess how the
directors have performed their duty to promote the success of the company.
PRINCIPAL ACTIVITIES AND STATUS
The Company was incorporated on 11 April 2019. The principal activity of the
Company is the making of investments in qualifying and non-qualifying holdings
of shares or securities. The Company is an investment company within the
meaning of Section 833 of the Companies Act 2006. The Company has been granted
provisional approval by the Inland Revenue under Section 274 of the Income Tax
Act 2007 as a Venture Capital Trust. The Directors have managed, and continue
to manage, the Company's affairs in such a manner as to comply with Section
274 of the Income Tax Act 2007. The Company's ordinary shares of 0.01p each
were listed on the Official List of the UK Listing Authority on 5 June 2020.
BUSINESS MODEL AND STRATEGY
The Company operates as a VCT to enable its shareholders to benefit from tax
reliefs available. The Directors aim to maximise tax free distributions to
shareholders by way of dividends paid out of income received from investments
and capital gains received following successful realisations. The Company's
strategy is set out in the Investment Policy set out below.
INVESTMENT POLICY
Puma Alpha VCT plc seeks to achieve its overall investment objective (of
proactively managing the assets of the fund with an emphasis on realising
gains in the medium term) to maximise distributions from capital gains and
income generated from the Company's assets. It intends to do so whilst
maintaining its qualifying status as a VCT, by pursuing the following
Investment Policy:
The Company may invest in a mix of qualifying and non-qualifying assets. The
qualifying investments may be quoted on AIM or a similar market or be unquoted
companies. The Company may invest in a diversified portfolio of growth
orientated qualifying companies which seek to raise new capital on flotation
or by way of a secondary issue. The Company will target investments in
unquoted companies with a strong and experienced management team, a
proposition that is commercially validated through sales volume, a clear and
comprehensive plan for growth, and operating in a well-defined market niche
with proven market fit. The Company had to have in excess of 80% of its assets
invested in qualifying investments as defined for VCT purposes by 28 February
2022.
The portfolio of non-qualifying investments will be managed with the intention
of ensuring the Company has sufficient liquidity to invest in Qualifying
Investments as and when opportunities arise. Subject to the Board and
Investment Manager's view from time to time of desirable asset allocation, it
will comprise quoted and unquoted investments (direct or indirect) in cash or
cash equivalents, secured loans, bonds, equities, vehicles investing in
property and funds of funds or on cash deposit.
A full text of the Company's investment policy can be found within the
Company's prospectus at www.pumainvestments.co.uk
(http://www.pumainvestments.co.uk) .
PRINCIPAL RISKS AND UNCERTAINTIES
The Board have carried out a robust assessment of the Company's emerging and
principal risks, including those that might threaten the Company's business
model, future performance, solvency or liquidity and reputation. The Board
receives regular reports from the Investment Manager and uses this information
along with their own knowledge and experience to identify any emerging risks,
so that appropriate procedures can be put in place to manage or mitigate such
risks.
The principal risks facing the Company relate to its investment activities,
specifically market price risk, as well as interest rate risk, credit risk and
liquidity risk. An explanation of these risks and how they are managed is
contained in note 13 to the financial statements. Additional risks faced by
the Company are as follows:
Market Conditions
There is a risk that the ongoing pandemic, together with the recent
geo-political and economic events, can have an impact on the prospects of
certain of the Company's investments. The Investment Manager maintains close
contact with all investee companies to endeavour to mitigate the risk as far
as possible. Further details of the investments are set out in the Investment
Manager's Report.
Investment Risk
Inappropriate stock selection leading to underperformance in absolute and
relative terms is a risk which the Investment Manager and the Board mitigate
by reviewing performance throughout the year and formally at Board meetings.
There is also a regular review by the Board of the investment mandate and
long-term investment strategy and monitoring of whether the Company should
change its investment strategy.
Regulatory Risk
The Company operates in a complex regulatory environment and faces a number of
related risks. A breach of s274 of the Income Tax Act 2007 could result in the
Company being subject to capital gains on the sale of investments. A breach of
the VCT Regulations could result in the loss of VCT status and consequent loss
of tax relief currently available to shareholders. Serious breach of other
regulations, such as the UKLA Listing Rules and the Companies Act 2006 could
lead to suspension from the Stock Exchange.
The Board receives quarterly reports in order to monitor compliance with
regulations.
In addition, to the principal risks explained above, the principal uncertainty
that may affect the Company relate to material changes to the VCT regulations.
The Board will continue to monitor this and take appropriate action if
required.
RISK MANAGEMENT
The Company's investment policy allows for a large proportion of the Company's
assets to be held in unquoted investments. These investments are not publicly
traded so there is not a liquid market for them. Therefore, these investments
may be difficult to realise.
The Company manages its investment risk within the restrictions of maintaining
its qualifying VCT status by using the following methods:
· the active monitoring of its investments by the Investment Manager
and the Board;
· seeking Board representation associated with each investment, if
possible;
· seeking to hold larger investment stakes by co-investing with other
companies managed by the Investment Manager,
· so as to gain more influence over the investment;
· ensuring a spread of investments is achieved.
BUSINESS REVIEW AND FUTURE DEVELOPMENTS
The Company's business review and future developments are set out in the
Chairman's Statement, the Investment Manager's Report and Investment Portfolio
Summary.
KEY PERFORMANCE INDICATORS
At each board meeting, the Directors consider a number of performance measures
to assess the Company's success in meeting its objectives. The Board believes
the Company's key performance indicators are movement in Net Asset Value per
ordinary share and Total Return per ordinary share. The Board considers that
the Company has no non-financial key performance indicators. In addition, the
Board considers the Company's compliance with the Venture Capital Trust
Regulations to ensure that it will maintain its VCT status. An analysis of the
Company's key performance indicators and the performance of the Company's
portfolio and specific investments is included in the Chairman's Statement,
the Investment Manager's Report and the Investment Portfolio Summary.
VIABILITY STATEMENT
The Directors have conducted a robust assessment of the principal risks facing
the Company including those that would threaten its business model, future
performance, solvency or liquidity. This is summarised above. The Directors
have assessed the prospects of the Company for the three-year period from the
balance sheet date. This is a period for which developments are considered to
be reasonably foreseeable.
This review included consideration of compliance with VCT regulations, the
Company's current financial position and expected cash flows for the period
and the current economic outlook, including the ongoing impact of Covid-19.
Based on this review, the Directors have concluded that there is a reasonable
expectation that the Company has adequate cash resources to enable it to
continue in operation and meet its liabilities as they fall due over the
three-year period to 28 February 2025.
SECTION 172 STATEMENT - DUTY TO PROMOTE THE SUCCESS OF THE COMPANY
Section 172 of the Companies Act requires directors of a company to act in the
way they consider, in good faith, would be most likely to promote the success
of the company for the benefit of its members as a whole, and in doing so have
regard (amongst other matters) to:
a) the likely consequences of any decision in the long term,
b) the interests of the company's employees,
c) the need to foster the company's business relationships with
suppliers, customers and others,
d) the impact of the company's operations on the community and
the environment,
e) the desirability of the company maintaining a reputation for
high standards of business conduct, and
f) the need to act fairly as between members of the company.
This section of the Strategic Report also sets out the disclosures required in
respect how the company engages with suppliers, customers and others in a
business relationship with the company.
The company does not have any employees and delegates day to day operations to
service providers. The board's principal concern is to focus on the needs and
priorities of its shareholders as well as considering the wider community
including the company's service providers and its investee companies (as
disclosed in the Investment Manager's Report. The board consider that the
company's shareholders are its customers and its suppliers are the service
providers.
The Annual Report as a whole sets out how the board promotes the success of
the company for the benefit of its shareholders. The board is focused on
high standards of business conduct
and recognises the need to act fairly between shareholders.
The board engages with the investment manager at every board meeting to ensure
that there is a close and constructive working relationship and a good
understanding of the investee companies.
The company also engages regularly with its other service providers. The board
ensures that the interests of current and potential stakeholders and the
impact of the company's investments on the wider community and the environment
are taken into account when decisions are made.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Strategic Report, the
Directors' Report, the Directors' Remuneration Report, and the financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law, the Directors have elected to prepare the
financial statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable
law). Under company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of
the state of affairs of the Company and of the profit or loss of the Company
for that period. In preparing those financial statements, the directors are
required to:
a) select suitable accounting policies and then apply them consistently;
b) make judgements and accounting estimates that are reasonable and
prudent;
c) state whether applicable UK Accounting Standards (comprising FRS 102
"The Financial Reporting Standard applicable in the UK and Republic of
Ireland", and applicable law) have been followed, subject to any material
departures disclosed and explained in the financial statements;
d) prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements and the Directors'
Remuneration Report comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other
irregularities.
DIRECTORS' STATEMENT PURSUANT TO THE DISCLOSURE AND TRANSPARENCY RULES
Each of the Directors, whose names and functions are listed in the
Directors' Biographies on page 20, confirms that, to the best of each
person's knowledge:
a) the financial statements, prepared in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 102 "The Financial Reporting Standard applicable in the UK and
Republic of Ireland" , and applicable law)., give a true and fair view of the
assets, liabilities, financial position and profit/ (loss) of the Company; and
b) the Chairman's Statement, Investment Manager's Report, the Strategic
Report and Directors' Report contained in the Annual Report include a fair
review of the development and performance of the business and the position of
the Company together with a description of the principal risks and
uncertainties that it faces.
DIRECTORS' STATEMENT REGARDING ANNUAL REPORT AND ACCOUNTS
The Directors consider that the annual report and accounts, taken as a whole,
is fair, balanced and understandable and provides the information necessary
for shareholders to assess the Company's position and performance, business
model and strategy.
ELECTRONIC PUBLICATION
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website. The
financial statements are published on www.pumainvestments.co.uk, a website
maintained by the Investment Manager.
Legislation in the United Kingdom regulating the preparation and dissemination
of the financial statements may differ from legislation in other
jurisdictions.
Egmont Kock
Chairman
23 May 2022
Income Statement
For the year ended 28 February 2022
Year ended 28 February 2022 Year ended 28 February 2021
Note Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Gain on investments 8 (b) - 4,051 4,051 - 1,953 1,953
Income 3 6 - 6 - - -
6 4,051 4,057 - 1,953 1,953
Investment management fees 3 (71) (212) (283) (33) (99) (132)
Performance fee 3 - (519) (519) - - -
Other expenses 4 (224) - (224) (180) - (180)
(295) (731) (1,026) (213) (99) (312)
(Loss)/profit before tax (289) 3,320 3,031 (213) 1,854 1,641
Tax 5 - - - - - -
(Loss)/profit after tax (289) 3,320 3,031 (213) 1,854 1,641
(Loss)/earnings per share - basic and diluted 6 (2.48p) 28.51p 26.03p (3.34p) 29.11p 25.77p
All items in the above statement derive from continuing operations.
There are no gains or losses other than those disclosed in the Income
Statement.
The total column of this statement is the Statement of Total Comprehensive
Income of the Company prepared in accordance with FRS 102 'The Financial
Reporting Standard applicable in the UK and Republic of Ireland'. The
supplementary revenue and capital columns are prepared in accordance with the
Statement of Recommended Practice, 'Financial Statements of Investment Trust
Companies and Venture Capital Trusts' issued by the Association of Investment
Companies.
Balance Sheet
As at 28 February 2022
Note As at As at
28 February 2022
28 February 2021
£'000 £'000
Fixed Assets
Investments 8 15,753 7,977
Current Assets
Debtors 9 124 29
Cash 1,980 2,060
2,104 2,089
Creditors - amounts falling due within one year 10 (654) (33)
Net Current Assets 1,450 2,056
Net Assets 17,203 10,033
Capital and Reserves
Called up share capital 12 126 86
Share premium account 12,271 8,172
Capital reserve - realised (836) (105)
Capital reserve - unrealised 6,182 2,131
Revenue reserve (540) (251)
Equity Shareholders' Funds 17,203 10,033
NAV per Ordinary Share 13 136.48p 116.10p
The financial statements were approved and authorised for issue by the Board
of Directors on 23 May 2022 and were signed on their behalf by:
Egmont Kock
Chairman
Statement of Cash Flows
Year ended 28 February 2022 Year ended 28 February 2021
£'000 £'000
Reconciliation of profit to cash flows from operating activities
Profit before tax 3,031 1,641
Gain on disposal of investments (4,051) (1,953)
Decrease in debtors (95) (16)
Increase/(decrease) in creditors 621 (10)
Outflow from operating activities (494) (338)
Cash flow from investing activities
Purchase of investments (3,725) (4,921)
Outflow from investment activities (3,725) (4,921)
Cash flows from financing activities
Share issues 4,277 5,164
Share issue costs (138) (287)
Redemption of preference shares - (13)
Inflow from financing activities 4,139 4,864
(Decrease)/increase in cash and cash equivalents (80) (395)
Opening cash and cash equivalents 2,060 2,455
Closing cash and cash equivalents 1,980 2,060
Statement of Changes in Equity
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 2020 40 3,763 (6) 178 (38) 3,937
Comprehensive income for the year - - (99) 1,953 (213) 1,641
Issue of shares 46 4,694 - - - 4,740
Share issue cost - (285) - - - (285)
Balance as at 28 February 2021 86 8,172 (105) 2,131 (251) 10,033
Comprehensive income for the year - - (731) 4,051 (289) 3,031
Issue of shares 40 4,237 - - - 4,277
Share issue cost - (138) - - - (138)
Balance as at 28 February 2022 126 12,271 (836) 6,182 (540) 17,203
*There are nil reserves (2021: nil) considered to be distributable to
shareholders.
The Capital reserve-realised will include gains/losses that have been realised
due to the sale of investments, net of related costs. The Capital
reserve-unrealised represents the investment holding gains/losses and shows
the gains/losses on investments still held by the Company not yet realised by
an asset sale.
Share premium account represents premium on shares issued less issue
costs.
The revenue reserve represents the cumulative revenue earned less cumulative
distributions.
1. Accounting Policies
Accounting convention
Puma Alpha VCT plc ("the Company") was incorporated in England on 11 April
2019 and is registered and domiciled in England and Wales. The Company's
registered number is 11939975. The registered office is Cassini House, 57 St
James's Street, London SW1A 1LD. The Company is a public limited company
(limited by shares) whose shares are listed on LSE with a premium listing. The
Company's principal activities and a description of the nature of the
Company's operations are disclosed in the Strategic Report.
The financial statements have been prepared under the historical cost
convention, modified to include investments at fair value, and in accordance
with the requirements of the Companies Act 2006, including the provisions of
the Large and Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008 and with FRS 102 'The Financial Reporting Standard applicable
in the UK and Republic of Ireland' ("FRS 102") and the Statement of
Recommended Practice, 'Financial Statements of Investment Trust Companies and
Venture Capital Trusts' issued in October 2019 by the Association of
Investment Companies ("the SORP").
Monetary amounts in these financial statements are rounded to the nearest
whole £1,000, except where otherwise indicated.
Going concern
The Directors have considered a period of 12 months from the date of this
report for the purposes of determining the Company's going concern status
which has been assessed in accordance with the guidance issued by the
Financial Reporting Council. The Directors have a reasonable expectation that
the Company has adequate resources to continue in operational existence for
the foreseeable future and believe that it is appropriate to continue to apply
the going concern basis in preparing the financial statements. This is
appropriate as the Company's listed shares are held for liquidity purposes and
will be sold as and when required to ensure the Company has adequate cash
reserves to meet the Company's running costs.
Investments
All investments are measured at fair value. They are all held as part of the
Company's investment portfolio and are managed in accordance with the
investment policy.
Listed investments are stated at bid price at the reporting date.
Unquoted investments are stated at fair value by the Directors with reference
to the International Private Equity and Venture Capital Valuation Guidelines
("IPEV") as follows:
· Investments which have been made within the last twelve months or
where the investee company is in the early stage of development will usually
be valued at either the price of recent investment or cost except where the
company's performance against plan is significantly different from
expectations on which the investment was made, in which case a different
valuation methodology will be adopted.
· Investments in debt instruments will usually be valued by
applying a discounted cash flow methodology based on expected future returns
of the investment, to arrive at the fair value.
· Alternative methods of valuation such as multiples or net asset
value may be applied in specific circumstances if considered more
appropriate.
Realised surpluses or deficits on the disposal of investments are taken to
realised capital reserves, and unrealised surpluses and deficits on the
revaluation of investments are taken to unrealised capital reserves.
Income
Dividends receivable on listed equity shares are brought into account on the
ex-dividend date. Dividends receivable on unquoted equity shares are brought
into account when the Company's right to receive payment is established and
there is no reasonable doubt that payment will be received. Interest
receivable is recognised wholly as a revenue item on an accruals basis.
Performance fees
Upon its inception, the Company agreed performance fees payable to the
Investment Manager, Puma Investment Management Limited, and members of the
investment management team at 20% of the amount by which the Performance Value
per Share at the end of an accounting period exceeds the High Water Mark
(being the higher of 120p and the highest Performance Value per Share at the
end of any previous accounting period), and multiplied by the number of Shares
in issue at the end of the relevant period.
At each balance sheet date, the Company accrues for any performance fee
payable based on the calculation set out above.
Expenses
All expenses (inclusive of VAT) are accounted for on an accruals basis.
Expenses are charged wholly to revenue, with the exception of:
· expenses incidental to the acquisition or disposal of an
investment charged to capital; and
· the investment management fee, 75% of which has been charged to
capital to reflect an element which is, in the directors' opinion,
attributable to the maintenance or enhancement of the value of the Company's
investments in accordance with the Board's expected long-term split of return;
and
· the performance fee which is allocated proportionally to revenue
and capital based on the respective contributions to the Net Asset Value.
Tax
Corporation tax is applied to profits chargeable to corporation tax, if any,
at the applicable rate for the year. The tax effect of different items of
income/gain and expenditure/loss is allocated between capital and revenue
return on the marginal basis as recommended by the SORP.
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date, where transactions or
events that result in an obligation to pay more, or right to pay less, tax in
the future have occurred at the balance sheet date. This is subject to
deferred tax assets only being recognised if it is considered more likely than
not that there will be suitable taxable profits from which the future reversal
of the underlying timing differences can be deducted. Timing differences are
differences arising between the Company's taxable profits and its results as
stated in the financial statements which are capable of reversal in one or
more subsequent periods. Deferred tax is measured on a non-discounted basis at
the tax rates that are expected to apply in the periods in which timing
differences are expected to reverse, based on tax rates and laws enacted or
substantively enacted at the balance sheet date.
Reserves
Realised losses and gains on investments, transaction costs, the capital
element of the investment management fee and taxation are taken through the
Income Statement and recognised in the Capital Reserve - Realised on the
Balance sheet. Unrealised losses and gains on investments and the capital
element of the performance fee are also taken through the Income Statement and
are recognised in the Capital Reserve - Unrealised.
Debtors
Debtors include other debtors and accrued income which is recognised at
amortised cost, equivalent to the fair value of the expected balance
receivable.
Creditors
Creditors are initially measured at the transaction price and subsequently
measured at amortised cost, being the transaction price less any amounts
settled.
Dividends
Final dividends payable are recognised as distributions in the financial
statements when the Company's liability to make payment has been established.
The liability is established when the dividends proposed by the Board are
approved by the Shareholders. Interim dividends are recognised when paid.
Key accounting estimates and assumptions
The Company makes estimates and assumptions concerning the future. The
resulting accounting estimates and assumptions will, by definition, seldom
equal the related actual results. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of
assets within the next financial year relate to the fair value of unquoted
investments, especially due to the ongoing impact of COVID-19. Further details
of the unquoted investments are disclosed in the Investment Manager's Report
and notes 8 and 14 to the financial statements.
2. Income
Year ended 28 February 2022 Year ended 28 February 2021
£'000 £'000
Income from investments
Qualifying interest income 6 -
6 -
3. Investment Management Fee
Year ended 28 February 2022 Year ended 28 February 2021
£'000 £'000
Investment management fee 283 132
Performance fee (see note 11) 519 -
802 132
Puma Investment Management Limited ("Puma Investments") has been appointed as
the Investment Manager of the Company for an initial period of five years,
which can be terminated by not less than twelve months' notice, given at any
time by either party, on or after the fifth anniversary. The Board is
satisfied with the performance of the Investment Manager. Under the terms of
this agreement Puma Investments will be paid an annual fee of 2% of the Net
Asset Value payable quarterly in arrears calculated on the relevant quarter
end NAV of the Company. These fees commenced on 16 January 2020 (the date of
the first share allotment). These fees are capped, the Investment Manager
having agreed to reduce its fee (if necessary to nothing) to contain total
annual costs (excluding performance fee and trail commission) to within 3.5%
of Net Asset Value. Total costs this year were 2.9% of the Net Asset Value
(2021: 3.1%).
In addition to the investment manager fees disclosed above, during the year
ended 28 February 2022, Puma Investments Management Limited charged fees
totalling £60,521 (2021: £142,197) in relation to share issue costs.
4. Other expenses
Year ended 28 February 2022 Year ended 28 February 2021
£'000 £'000
Accounting and administration services 47 23
Directors Remuneration 60 60
Social security costs 5 3
Auditor's remuneration for statutory audit 48 29
Insurance 8 5
Legal and professional fees - 8
Other expenses 56 52
224 180
Puma Investments provides accounting and administrative services to VCT 13,
payable quarterly in advance. The fee is calculated as 0.35% of Alpha VCT's
NAV, using the latest published NAV and the number of shares in issue at each
quarter end.
Directors' fees paid in the year are disclosed in the Directors' Remuneration
Report. The Company has no employees other than non-executive Directors
(2021: none). The average number of non-executive Directors during the year
was 3 (2021: 3).
Auditor's fees of £40,000 (2021: £24,000) has been grossed up in the table
above to be inclusive of VAT. No non-audit services were provided by the
Company's auditor in the year (2021: £nil).
5. Taxation
Year ended 28 February 2022 Year ended 28 February 2021
£'000 £'000
Factors affecting tax charge for the period
Profit before tax 3,031 1,641
Current tax at 19% (2021: 19%) 576 312
Gains on investments (770) (372)
Tax losses carried forward 194 60
- -
Capital returns are not taxable as the Company is exempt from tax on realised
capital gains whilst it continues to comply with the VCT regulations, so no
corporation tax is recognised on capital gains or losses.
Due to the intention to continue to comply with the VCT regulations, the
Company has not provided for deferred tax on any realised or unrealised
capital gains and losses. No deferred tax asset has been recognised in respect
of the tax losses carried forward due to the uncertainty as to recovery.
6. Basic and diluted return/(loss) per Ordinary Share
Year ended 28 February 2022
Revenue Capital Total
£'000 £'000 £'000
Total comprehensive income for the (289) 3,320 3,031
year (£'000)
Weighted average number of shares 11,645,061 11,645,061 11,645,061
(Loss)/profit per share (2.48)p 28.51p 26.03p
Year ended 28 February 2021
Revenue Capital Total
£'000 £'000 £'000
Total comprehensive income for the (213) 1,854 1,641
year (£'000)
Weighted average number of shares 6,368,652 6,368,652 6,368,652
Return per share (3.34)p 29.11p 25.77p
7. Dividends
The Directors will not propose a resolution at the Annual General Meeting to
pay a final dividend (2021: nil).
8. Investments
(a) Movements in investments Qualifying investments Total
£'000 £'000
Book cost at 1 March 2021 5,846 5,846
Net unrealised gain at 1 March 2021 2,131 2,131
Valuation at 1 March 2021 7,977 7,977
Purchases at cost 3,725 3,725
Net unrealised gain 4,051 4,051
Valuation at 28 February 2022 15,753 15,753
Book cost at 28 February 2022 9,571 9,571
Unrealised gains at 28 February 2022 6,182 6,182
Valuation at 28 February 2022 15,753 15,753
(b) Gains/(losses) on investments
Year ended 28 February 2022 Year ended 28 February 2021
£'000 £'000
Unrealised gains in period 4,051 1,953
4,051 1,953
The Company's investments are revalued each year, so until they are sold any
unrealised gains or losses are included in the fair value of the
investments.
All the Company's investments as at 28 February 2022 and 28 February 2021 were
unquoted.
Further details of these investments (including the unrealised gain in the
year) are disclosed in the Chairman's Statement, Investment Manager's Report,
Investment Portfolio Summary and Significant Investments of the Annual
Report.
9. Debtors
As at 28 February 2022 As at 28 February 2021
£'000 £'000
Other debtors 6 -
Prepayments 118 29
124 29
10. Creditors - amounts falling due within one year
As at 28 February 2022 As at 28 February 2021
£'000 £'000
Accruals 654 29
Other creditors - 4
654 33
11. Management Performance Incentive Arrangement
On 5 July 2019, the Company entered into an Agreement with the Investment
Manager such that they will be entitled to a performance incentive fee payable
in relation to each accounting period, subject to the Performance Value per
Share being at least 120p at the end of the relevant period. The amount of the
performance incentive fee will be equal to 20% of the amount by which the
Performance Value per Share at the end of an accounting period exceeds the
High Water Mark (being the higher of 120p and the highest Performance Value
per Share at the end of any previous accounting period), and multiplied by the
number of Shares in issue at the end of the relevant period.
The performance incentive structure provides a strong incentive for the
Investment Manager to ensure that the Company performs well, enabling the
Board to approve distributions as high and as soon as possible.
The profit and loss expense for the year in relation to this Agreement is
£519,000 (2021: £nil).
12. Called Up Share Capital
As at 28 February 2022 As at 28 February 2021
£'000 £'000
Allotted, called up and fully paid:
12,604,822 (2021: 8,641,325) Ordinary shares of £0.01 each 126 86
During the year, 3,963,495 shares were issued at an average price of 109.3p
per share (2021: 4,634,855 shares were issued at a price of 102.3p per share).
The consideration received for these shares was £4.3 million (2021: £4.7
million).
Following the year end, a further 3,273,701 shares were issued at an average
price of 121.9p. The consideration received for these shares was £4.0
million.
13. Net Asset Value per Ordinary Share
As at As at
28 February 2022
28 February 2021
Net assets 17,202,908 10,033,000
Number of shares in issue for purposes of Net
Asset Value per share calculation 12,604,822 8,641,327
Net asset value per share 136.48p 116.10p
14. Financial Instruments
The Company's financial instruments comprise its investments, cash balances,
debtors and certain creditors. The fair value of all of the Company's
financial assets and liabilities is represented by the carrying value in the
Balance Sheet. Excluding cash balances, the Company held the following
categories of financial instruments:
As at 28 February 2022 As at 28 February 2021
£'000 £'000
Financial assets at fair value through profit or loss 15,753 7,977
Financial assets measured amortised cost 124 29
Financial liabilities measured at amortised cost (654) (33)
15,223 7,973
Management of risk
The main risks the Company faces from its financial instruments are market
price risk, being the risk that the value of investment holdings will
fluctuate as a result of changes in market prices caused by factors other than
interest rate or currency movements, liquidity risk, credit risk and interest
rate risk. The Board regularly reviews and agrees policies for managing each
of these risks. The Board's policies for managing these risks are summarised
below and have been applied throughout the period.
Credit risk
Credit risk is the risk that the counterparty to a financial instrument will
fail to discharge an obligation or commitment that it has entered into with
the Company. The Investment Manager monitors counterparty risk on an ongoing
basis. The Company's maximum exposure to credit risk is as follows:
As at 28 February 2022 As at 28 February 2021
Investments in loans, loan notes and bonds 299 -
Cash at bank and in hand 1,980 2,060
Other receivables 124 29
2,403 2,089
The cash held by the Company at the year-end is held in RBS. Bankruptcy or
insolvency of the bank may cause the Company's rights with respect to the
receipt of cash held to be delayed or limited. The Board monitors the
Company's risk by reviewing regularly the financial position of the bank and
should it deteriorate significantly the Investment Manager will, on
instruction of the Board, move the cash holdings to another bank.
Credit risk associated with other receivables are predominantly covered by the
investment management procedures.
Investments in loans and loan notes comprises a fundamental part of the
Company's venture capital
investments, therefore credit risk in respect of these assets is managed
within the Company's main
investment procedures.
Market price risk
Market price risk arises mainly from uncertainty about future prices of
financial instruments held by the Company. It represents the potential loss
the Company might suffer through holding investments in the face of price
movements. The Investment Manager actively monitors market prices and
reports to the Board, which meets regularly in order to consider investment
strategy.
The Company's strategy on the management of market price risk is driven by the
Company's investment policy as outlined in the Strategic Report. The
management of market price risk is part of the investment management process.
The portfolio is managed with an awareness of the effects of adverse price
movements through detailed and continuing analysis, with an objective of
maximising overall returns to shareholders.
Holdings in unquoted investments may pose higher price risk than quoted
investments. Some of that risk can be mitigated by close involvement with
the management of the investee companies along with review of their trading
results.
All of the Company's investments are unquoted investments.
Liquidity risk
Details of the Company's unquoted investments are provided in the Investment
Portfolio summary. By their nature, unquoted investments may not be readily
realisable and the Board considers exit strategies for these investments
throughout the period for which they are held. As at the year end, the Company
had no borrowings.
The Company's liquidity risk associated with investments is managed on an
ongoing basis by the Investment Manager in conjunction with the Directors and
in accordance with policies and procedures in place as described in the
Directors' Report and the Strategic Report. The Company's overall liquidity
risks are monitored on a quarterly basis by the Board. The Company maintains
access to sufficient cash resources to pay accounts payable and accrued
expenses.
Fair value interest rate risk
The benchmark that determines the interest paid or received on the current
account is the Bank of England base rate, which was 0.5% at 28 February 2022
(2021: 0.1%).
Cash flow interest rate risk
The Company has exposure to interest rate movements primarily through its cash
deposits which track either the Bank of England base rate or LIBOR.
Interest rate risk profile of financial assets
The Company's only asset was cash at bank at 28 February 2022 of £1,980,000,
which is in a non-interest bearing bank account.
Foreign currency risk
The reporting currency of the Company is Sterling. The Company has not held
any non-Sterling investments during the year.
Fair value hierarchy
Financial assets and liabilities measured at fair value are disclosed using a
fair value hierarchy that reflects the significance of the inputs used in
making the fair value measurements, as follows:-
· Level 1 - Fair value is measured using the
unadjusted quoted price in an active market for identical assets.
· Level 2 - Fair value is measured using inputs
other than quoted prices that are observable using market data.
· Level 3 - Fair value is measured using
unobservable inputs.
Fair values have been measured at the end of the reporting period as
follows:-
As at 28 February 2022 As at 28 February 2021
Level 3
Unquoted investments 15,753 7,977
15,753 7,977
The Level 3 investments have been valued in line with the Company's accounting
policies and IPEV guidelines. This comprises of both loan an equity
instruments, which are considered to be one instrument due to them being bound
together when assessing the portfolio's returns to the shareholders.
Further details of these investments are provided in the Significant
Investments section of the Annual Report.
15. Capital management
The Company's objectives when managing capital are to safeguard the Company's
ability to continue as a going concern, so that it can provide an adequate
return to shareholders by allocating its capital to assets commensurate with
the level of risk.
The Company must have an amount of capital, at least 80% (as measured under
the tax legislation) of which must be, and remain, invested in the relatively
high risk asset class of small UK companies within three years of that capital
being subscribed.
The Company accordingly has limited scope to manage its capital structure in
the light of changes in economic conditions and the risk characteristics of
the underlying assets. Subject to this overall constraint upon changing the
capital structure, the Company may adjust the amount of dividends paid to
shareholders, issue new shares, or sell assets to maintain a level of
liquidity to remain a going concern.
The Board has the opportunity to consider levels of gearing, however there are
no current plans to do so. It regards the net assets of the Company as the
Company's capital, as the level of liabilities is small, and the management of
those liabilities is not directly related to managing the return to
shareholders.
16. Contingencies, Guarantees and Financial Commitments
There were no commitments, contingencies or guarantees of the Company at the
year-end (2021: none).
17. Controlling Party
In the opinion of the Directors there is no immediate or ultimate controlling
party.
18. Post Balance Sheet Events
As detailed in note 12, since the year end 3,273,701 ordinary shares have been
issued for cash consideration of £4.0 million.
On 3(rd) May 2022, the VCT realised it position in Tictrac Limited for total
proceeds of £1.2 million.
The financial information set out in this announcement does not constitute the
Company's statutory financial statements in accordance with section 434
Companies Act 2006 for the year ended 28 February 2022 but has been extracted
from the statutory financial statements for the year ended 28 February 2022
which were approved by the Board of Directors on 23 May 2022 and will be
delivered to the Registrar of Companies. The Independent Auditor's Report on
those financial statements was unqualified and did not contain any emphasis of
matter nor statements under s 498(2) and (3) of the Companies Act 2006.
The statutory accounts for the year ended 28 February 2021 have been delivered
to the Registrar of Companies and received an Independent Auditors report
which was unqualified and did not contain any emphasis of matter nor
statements under s 498(2) and (3) of the Companies Act 2006.
Copies of the full annual report and financial statements for the year ended
28 February 2022 will be available to the public at the registered office of
the Company at Cassini House, 57 St James's Street, London, SW1A 1LD and will
be available for download from
https://www.pumainvestments.co.uk/pages/view/investors-information-vcts..
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