REG - Puma Alpha VCT PLC - Half-year Report
08/11/2024 11:15
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RNS Number : 5576L Puma Alpha VCT PLC 08 November 2024
Highlights
· £1.9 million raised in new equity during the period with a
further £1.2 million raised post period-end
· One new investment added and a further three follow-on
investments in the six months to 31 August 2024
Introduction
Your Board is pleased to present the half-yearly report for Puma Alpha VCT plc
("the Company") for the period to 31 August 2024.
Fundraising
We are happy to report that at the period-end the Company had raised £1.9
million, and since the period-end a further £1.2 million 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.
Investment activity
Since the last Report and Accounts, the Company has made one new investment of
£0.8 million into Aveni, a provider of cutting-edge speech analytics for
regulated industries. The Company has also made three follow-on investments of
£0.5 million into Bikmo, a provider of cycle, triathlon and travel insurance,
£1.0 million into Le Col a performance cycling apparel company and £0.4
million into Pockit, a digital account provider.
The Company has 80% of its NAV invested in qualifying investments as at the
period-end.
Investment portfolio
Within the portfolio, the Company's holdings in CameraMatics, Ron Dorff and
Pockit have generated the largest positive valuation movements.
CameraMatics has had a write-up of £1.3 million as a result of revenue
continuing to grow on a monthly basis, driven by adding new clients across all
three geographies it operates in.
Ron Dorff has had a write-up of £0.9 million, reflecting the valuation of a
recently completed external fundraise.
Pockit has had a write up of £0.5 million due to driving revenues to the
highest monthly levels seen by the company after successfully increasing its
average revenue per customer.
Net Asset Value (NAV)
The Company's NAV stood at 107.45p (February 2024: 108.35p) at the period-end
of 31 August 2024. This figure reflects adjustments in the carrying value of
the qualifying portfolio, movements in the value of the non-qualifying
portfolio offset by the management fees and other expenses incurred in the
period.
VCT qualifying status
Shoosmiths LLP ("Shoosmiths") 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. Shoosmiths and other specialist advisers will continue to assist the
Investment Manager in establishing the status of potential investments as
qualifying holdings. Shoosmiths will continue to monitor rule compliance and
maintaining the qualifying status of the Company's holdings in the future.
Outlook
The global economic picture remains mixed and has yet to return to a period of
sustained stability. Nevertheless, there is some positive news in that
inflation has continued to abate and interest rates in the West are now on a
downward trend. The International Monetary Fund's latest forecasts, published
in July, show the global economy in a holding pattern through to 2025, with
year on year growth maintaining the same 3% level seen last year.
This relatively serene picture is somewhat misleading as the picture varies
greatly across countries. The US economy seems to be cooling, Germany
stagnating, China facing headwinds and the UK outperforming the G7 in the
first half of this year. This momentum seems to have held up over the summer
with the recent general election paving the way for a period of political
stability. The latest Deloitte CFO survey conducted in the immediate aftermath
of the general election showed a big drop in perceptions of external risk
alongside rising levels of confidence and risk appetite.
Stimulating growth is rightly a priority of the new government although it
remains to be seen whether we will see the level of investment needed to make
this happen. The recent extension to the VCT "sunset clause" to April 2035 is
of course a step in the right direction.
We cannot of course ignore the potential downside of ongoing geopolitical
risk. The wars in Ukraine and the Middle East continue to undermine sentiment.
Who knows what the future will hold especially given the turbulence and shifts
in political fortunes in the US? It seems that the election result will hinge
on the outcomes in a handful of states and as things stand is too close to
call.
This VCT is in a position to adapt quickly to changes in the political and
economic environment when developing its portfolio. 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.
Recent political and policy changes place emphasis on the Company's ability to
adapt and focus efforts on businesses which are well placed to thrive in this
new environment. 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
8(th) November 2024
Investment Manager's Report
Qualifying Investments
In this section, we look at the following investments within our portfolio in
more detail.
Aveni
Aveni harnesses artificial intelligence and natural language processing (NLP)
expertise to help financial services companies improve their productivity and
risk oversight. Its two platforms, Aveni Assist and Aveni Detect, use NLP to
record, transcribe and analyse conversations to deliver voice-driven
automation and efficiency. Aveni had a strong trading period in the eight
months leading up to 31 August 2024, securing a number of new client logos and
building pipeline. It won Fintech of the Year by the Scottish Financial
Technology awards which recognises the fintech that has achieved the most
significant growth, development and commercial success.
Bikmo
Bikmo is a specialist cycle and e-mobility insurer that protects over 75,000
riders in the UK, Ireland, Germany and Austria. Its focus over the past few
months has been on putting the building blocks in place to accelerate growth
over the next period, such as onboarding key partners and hires to capitalise
on the market opportunity.
Over the summer, Bikmo has secured several key partnerships with leading
brands in the industry, including Trek, one of the largest bike brands
globally; Cycling UK, the second-largest membership organisation in the UK,
following British Cycling (who it already works with); and the Association of
Cycle Traders, a dealer-focused sales agent covering 90% of the UK's market
dealerships.
CameraMatics
CameraMatics is an award-winning solution for fleet risk management. Its
current focus is on scaling key markets by targeting larger enterprise fleets
and increasing annual recurring revenue.
The company has strengthened its executive team by hiring a new CFO and a Head
of Operations, as it continues to scale. It has also secured major new
clients, including Evri and XPO Logistics. Additionally, the company launched
its Zero by CameraMatics product, a tool that enables businesses to measure
and track emissions from their employees' and contractors' journeys. This
positions CameraMatics uniquely in the market, with a holistic product suite
that appeals to enterprise customers.
Iris
IRIS is an audio specialist, which has developed an AI-powered software that
removes distracting background noise from calls, integrating seamlessly with
existing platforms. IRIS is committed to growing its revenue in the contact
centre market, particularly through embedding its technology into existing
software solutions. It is also exploring alternative use cases for the product
across different sectors, such as mission-critical applications.
IRIS recently announced an extension of its existing partnership with Sigma.
After successfully improving call quality for Sigma's UK customers, IRIS Audio
Technologies will be rolled out across Sigma's contact centres in South
Africa.
Le Col
Le Col is a high-performance cycling apparel business, selling its products
online to cyclists across the world. The company's current focus is on
effectively navigating the challenging trading environment.
Le Col recently launched ARC, a new range specifically designed for gravel
riders. This range expands its product offering to customers, takes advantage
of the growing interest in gravel riding, and allows it to reach new customer
groups.
Lucky Saint
Lucky Saint is the UK's number one dedicated alcohol-free beer brand, renowned
for its premium lager available across grocery and on-trade sectors.
Lucky Saint's focus is on solidifying its leading position in the market,
while increasing overall market share across all channels. Puma is actively
supporting the company to execute on its strategic goals.
Pockit
Pockit provides pre-paid spending cards and current accounts primarily to
customers from under-served communities. Pockit has recently launched a
personal credit offering, and has brought in ClearScore and Credit Karma as
new affiliate partners. Pockit's Fast Track to Credit plan is expected to be a
valuable proposition for ClearScore and Credit Karma referrals, as these
consumers are seeking to improve their credit scores, and Pockit's Credit
Builder offering can assist with this. The company is currently working with a
fractional Chief Marketing Officer (formerly of Monzo) to develop the
marketing strategy and enhance the marketing function.
Ron Dorff
Ron Dorff is a premium menswear brand that currently operates in the US, UK
and the EU, and has stores in all of these markets. Ron Dorff has recently
partnered with sustainable trainer brand, Loci, and has further brand
collaborations in the pipeline. Additionally, for the third successive year
the brand launched a pop-up in Fire Island. Looking ahead, the brand is
exploring strategic partnerships to capitalise on its strong position in the
premium menswear category.
Transreport
Transreport's flagship technology, the Passenger Assistance app, supports
anyone who needs assistance while travelling, facilitating quicker and easier
use of public transport. The company is focused on increasing its market
penetration across new territories and into new markets. This includes
expansion of its rail product, with a particular focus on securing additional
train operating companies in Japan, as well as other global territories. In
addition, the new aviation product is due to go live with its first deployment
at East Midlands Airport in Q4 2024, alongside ongoing conversations with a
number of additional airports and airlines.
TravelLocal
TravelLocal, a leading online platform for tailor-made holidays, connecting
clients directly with local experts in their planned holiday destinations. The
company is focused on driving more requests into the top of the funnel and
improving conversion metrics, which falls under the remit of the new Chief
Growth Officer.
Prioritising the US market, TravelLocal is experiencing significant demand and
growth, with the US now representing over 50% of trade and growing 34% year on
year. Additionally, there is concentrated effort to boost sales from repeat
customers and recommendations, as these channels clearly provide higher
margins. Notably, the company's Net Promoter Score remains over 80, a positive
indicator of the quality of its offerings.
Liquidity management investments
The rules for VCTs limit the income which can be received from bank deposits,
making them an unattractive way of holding funds waiting to be invested. As a
result, during a period where funds remain not yet deployed in qualifying
investments in smaller companies, a VCT needs to hold other investments.
The Company's liquidity management strategy focuses on short term bonds held
through collective investment schemes. At the beginning of the year, the
Company held £3.5 million in the strategy, as at the period end, this
increased to £5.0 million after further investment of £1.4 million and £63k
of unrealised gains.
Investment strategy
We are pleased to have invested the Company's funds in a diverse range of
businesses to date. With future fundraising, we hope to diversify the
portfolio further over the coming months. We remain focused on generating
strong returns for shareholders, while balancing these returns with
maintaining an appropriate risk exposure. Overall, we remain confident that
our portfolio is well positioned to deliver positive returns to shareholders.
Puma Investment Management Limited
8(th) November 2024
Income Statement (unaudited)
For the six months ended 31 August 2024
Six months ended Six months ended Year ended
31 August 2024
31 August 2023
29 February 2024
Note Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gain/(loss) on fixed asset investments - 97 97 - (932) (932) - (3,458) (3,458)
Gain on current asset investments - 62 62 - - - - 75 75
Income 118 - 118 49 - 49 192 - 192
118 159 277 49 (932) (883) 192 (3,383) (3,191)
Investment management fees 4 (73) (218) (291) (66) (197) (263) (140) (419) (559)
Performance fee 6 - - - - - - - - -
Other expenses (207) - (207) (247) - (247) (378) - (378)
(280) (218) (498) (313) (197) (510) (518) (419) (937)
Loss before tax (162) (59) (221) (264) (1,129) (1,393) (326) (3,802) (4,128)
Tax - - - - - - - - -
Loss after tax (162) (59) (221) (264) (1,129) (1,393) (326) (3,802) (4,128)
Basic and diluted loss per Ordinary Share (pence) 2 (0.60p) (0.22p) (0.82p) (1.30p) (5.58p) (6.88p) (1.44p) (16.82p) (18.26p)
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.
There were no items of other comprehensive income during the period.
Balance Sheet (unaudited)
As at 31 August 2024
Note As at As at As at
31 August 2024 31 August 2023 29 February 2024
£'000 £'000 £'000
Fixed assets
Investments 7 23,378 21,512 22,254
Current assets
Cash 770 5,397 1,817
Applications cash 573 1,462 826
Investments 5,032 - 3,534
Debtors 343 215 282
6,718 7,074 6,459
Current liabilities (766) (1,634) (1,047)
Net current assets 5,952 5,440 5,412
Net assets 29,330 26,952 27,666
Capital and reserves
Called up share capital 273 218 255
Share premium account 12,683 6,155 10,816
Capital reserve - realised (1,250) (809) (1,032)
Capital reserve - unrealised 2,718 5,010 2,559
Revenue reserve (1,396) 16,378 (1,234)
Special distributable reserve 16,302 - 16,302
Total equity 29,330 26,952 27,666
Net Asset Value per Ordinary Share 3 107.45p 123.50p 108.35p
Egmont Kock
Director
8(th) November 2024
Cash Flow Statement (unaudited)
For the six months ended 31 August 2024
Six months ended Six months ended Year ended
31 August 2024
31 August 2023
29 February 2024
£'000 £'000 £'000
Reconciliation of loss after tax
Loss before tax (221) (1,393) (4,128)
(Gain)/loss on fixed asset investments (97) 932 3,458
Gain on current asset investments (62) - (75)
Increase in debtors (61) (30) (97)
(Decrease)/increase in creditors (29) (9) 40
Outflow from operating activities (470) (500) (802)
Cash flow from investing activities
Purchase of fixed asset investments (1,027) (2,264) (5,532)
Purchase of current asset investments (1,435) - (3,459)
Outflow from investing activities (2,462) (2,264) (8,991)
Cash flow from financing activities
Proceeds received from issue of ordinary share capital 1,942 4,439 9,252
Expense paid for issue of share capital (57) (189) (304)
Movement in applications account (253) 1,037 401
Dividends paid - - (1,249)
Inflow from financing activities 1,632 5,287 8,100
Net (decrease)/increase in cash and cash equivalents (1,300) 2,523 (1,693)
Cash and cash equivalents at the beginning of the period 2,643 4,336 4,336
Cash and cash equivalents at the end of the period 1,343 6,859 2,643
Cash and cash equivalents comprise
Cash at bank 770 5,397 1,817
Applications cash 573 1,462 826
Cash and cash equivalents at the end of the year 1,343 6,859 2,643
Statement of Changes in Equity (unaudited)
For the six months ended 31 August 2024
Called up share capital Share premium account Capital reserve - realised Capital reserve - unrealised Revenue reserve Special distributable reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 1 March 2023 185 1,938 (612) 5,941 16,643 - 24,095
Comprehensive income for the period
Loss after tax - - (197) (931) (265) - (1,393)
Total comprehensive income for the period - - (197) (931) (265) - (1,393)
Transactions with owners, recognised directly in equity
Issue of shares 33 4,406 - - - - 4,439
Share issue costs - (189) - - - - (189)
Total transactions with owners, recognised directly in equity 33 4,217 - - - - 4,250
Balance as at 31 August 2023 218 6,155 (809) 5,010 16,378 - 26,952
Comprehensive income for the period
Loss after tax - - (223) (2,451) (61) - (2,735)
Total comprehensive income for the period - - (223) (2,451) (61) - (2,735)
Transactions with owners, recognised directly in equity
Issue of shares 37 4,776 - - - - 4,813
Share issue costs - (115) - - - - (115)
Dividends paid - - - - - (1,249) (1,249)
Total transactions with owners, recognised directly in equity 37 4,661 - - - (1,249) 3,449
Other movements
Re-classification to Special distributable reserve - - - - (17,551) 17,551 -
Total other movements - - - - (17,551) 17,551 -
Balance as at 29 February 2024 255 10,816 (1,032) 2,559 (1,234) 16,302 27,666
Comprehensive income for the period
(Loss)/profit after tax - - (218) 159 (162) - (221)
Total comprehensive income for the period - - (218) 159 (162) - (221)
Transactions with owners, recognised directly in equity
Issue of shares 18 1,924 - - - - 1,942
Share issue costs - (57) - - - - (57)
Total transactions with owners, recognised directly in equity 18 1,867 - - - - 1,885
Balance as at 31 August 2024 273 12,683 (1,250) 2,718 (1,396) 16,302 29,330
Notes to the Interim Report
For the six months ended 31 August 2024
1. Accounting policies
The financial statements have been prepared under the historical cost
convention, modified to include the revaluation of fixed asset investments,
and in accordance with applicable Accounting Standards and with the Statement
of Recommended Practice, Financial Statements of Investment Trust Companies
and Venture Capital Trusts ("SORP") and in accordance with the Financial
Reporting Standard 102 ("FRS102").
2. Return per Ordinary Share
The total loss per share of 0.82p is based on the loss for the period of
£221,000 and the weighted average number of shares in issue for the period
ended 31 August 2024 of 26,828,976.
3. Net Asset Value per share
31 August 2024 31 August 2023 29 February 2024
Net assets 29,330,000 26,952,000 27,666,000
Shares in issue 27,296,930 21,823,140 25,534,137
Net Asset Value per share
Basic 107.45p 123.50p 108.35p
Diluted 107.45p 123.50p 108.35p
4. Investment management fees
The Company pays the Investment Manager an annual management fee of 2% of the
Company's net assets. The fee is payable quarterly in arrears. The annual
management fee is allocated 75% to capital and 25% to revenue.
5. Financial information provided
The financial information for the period ended 31 August 2024 has not been
audited and does not comprise full financial statements within the meaning of
Section 423 of the Companies Act 2006. The interim financial statements have
been prepared on the same basis as will be used to prepare the annual
financial statements.
6. Management performance incentive arrangement
The amount of the Performance Incentive Fee (PIF) is 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),
multiplied by the number of relevant Ordinary Shares in issue at the end of
the relevant period.
The accrued profit and loss expense for the period in relation to this
agreement is £nil.
7. Investment portfolio summary
Valuation Cost Gain/(loss) Valuation as a % of Net Assets Multiple
As at 31 August 2024 £'000 £'000 £'000
Qualifying investments
ABW Group Limited ('Ostmodern') - 1,008 (1,008) 0% 0.00
Aveni Limited 758 758 - 3% 1.00
Bikmo Limited 211 211 - 1% 1.00
Deazy Limited 1,000 1,000 - 3% 1.00
Dymag Group Limited - 1,957 (1,957) 0% 0.00
Everpress Limited 1,649 2,100 (451) 6% 0.79
Forde Resolution Company Limited ('HR Duo') 455 347 108 2% 1.31
Iris Audio Technologies Limited 488 265 223 2% 1.84
Le Col Holdings Limited 2,063 2,731 (668) 7% 0.76
Muso Limited 840 500 340 3% 1.68
MyKindaCrowd Limited ('Connectr') 1,168 1,950 (782) 4% 0.60
MySafeDrive Limited ('CameraMatics') 7,288 2,515 4,773 25% 2.90
NQOCD Consulting Limited ('Ron Dorff') 4,043 2,545 1,498 14% 1.59
Not Another Beer Co Limited ('Lucky Saint') 711 711 - 2% 1.00
Pockit Limited 1,032 530 502 4% 1.95
Thingtrax Limited 422 422 - 1% 1.00
Transreport Limited 1,017 1,017 - 3% 1.00
TravelLocal Limited 234 234 - 1% 1.00
Total qualifying investments 23,378 20,801 2,577 80% 1.12
Balance of portfolio 5,953 20%
Net assets 29,331 100%
Of the investments held at 31 August 2024, all are incorporated in England and
Wales, except for MySafeDrive Limited and Forde Resolution Company Limited,
which are incorporated in Ireland.
Copies of this Interim Statement will be made available on the website:
https://www.pumainvestments.co.uk/resource-centre/literature
(https://www.pumainvestments.co.uk/resource-centre/literature)
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