REG - Puma VCT 13 PLC - Half-year Report
08/11/2024 11:00
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RNS Number : 5566L Puma VCT 13 PLC 08 November 2024
Highlights
· £31.5 million raised in new equity during the period
· 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 VCT 13 plc
("the Company") for the period to 31 August 2024.
Fundraising
We are pleased to report that the Company's 2023/24 share offer raised £46
million. Of this, £31.5 million was raised during the period.
Following the period-end, shareholder approval was received to allow the VCT
to raise further funds. This will put the VCT in a stronger position to
exploit the investment environment, add further diversification, and spread
fixed costs over a wider base. This VCT is now open for fundraising and the
market reaction to date has been positive.
Investment activity
Since the last Report and Accounts, the Company has made one new investment of
£4.7 million into Aveni, an AI tool which analyses speech to assist service
providers, particularly in regulated industries such as financial services.
The Company has also made three follow-on investments of £5.2 million into
Bikmo, a provider of cycle, triathlon and travel insurance, £3.0 million into
Le Col a performance cycling apparel company and £1.5 million into Pockit, a
digital account provider.
Investment portfolio
Within the portfolio, the Company's holdings in Pockit, Influencer and Ron
Dorff have generated the largest positive valuation movements:
· Pockit has had a write up of £3.1 million after growing its revenues
by successfully increasing its average revenue per customer.
· Influencer has had a write-up of £1.7 million as a result of overseas
expansion, in particular in the US which is growing at pace.
· Ron Dorff has had a write-up of £1.3 million reflecting the
valuation of a recently completed external fund-raising.
Net Asset Value (NAV)
The NAV per share at the period-end was 127.56p (Feb 2024: 124.48p). 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.
Dividend
I am pleased to remind you that your Board declared an interim dividend of 3p
per share on 24(th) September 2024, reflecting the positive income and capital
gains generated from the Company's non-qualifying portfolio. The dividend will
be payable on or about 16 December 2024 to shareholders on the register as at
22 November 2024.
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
As we approach the end of 2024, the UK economy is navigating a landscape of
modest growth. The economy is projected to grow by around 0.5% to 1.1% for the
year, reflecting ongoing adjustments post-Brexit and the global economic
environment. Looking ahead to 2025, consensus forecasts are for growth to
strengthen a bit, reflecting increased Government investment and a less tight
monetary squeeze.
Inflation has been a key focus throughout 2024, with efforts to stabilise it
around the Bank of England's target of 2%. By the end of the year, inflation
is expected to be under control, allowing for a reduction in interest rates.
These rates, which peaked at 5.25% saw a small further reduction this month.
This reduction will be crucial for economic stability, easing borrowing costs
for businesses and consumers alike.
The job market has remained relatively stable, but challenges persist with
productivity and the limited growth in the working-age population. To address
these issues, the UK will need to continue focusing on increasing its capital
stock and improving productivity. Investments in technology, infrastructure,
and skills development will be essential to enhance workforce efficiency and
output, setting the stage for more robust economic performance in 2025.
The new Labour government has made economic growth a central part of its
agenda, aiming for the highest sustained growth in the G7. Key initiatives
include a commitment to an industrial strategy and leveraging advancements in
technology and the transition to net zero. It hopes that these policies will
create a more resilient and sustainable economy, capable of withstanding
future shocks and fostering long-term prosperity.
However, several risks could impact the UK's economic outlook. Global economic
conditions, geopolitical tensions, and domestic policy changes remain
significant uncertainties. These factors could influence consumer spending,
investment, and overall economic stability.
The Autumn Budget has introduced significant changes that will impact most
sectors. The rise in employers' National Insurance contributions, coupled with
a significant increase in the minimum wage, is expected to put pressure on
businesses, particularly those in the service sector with large numbers of
lower-waged staff such as pubs. This could lead to tighter profit margins and
potential cost-cutting measures.
SMEs are expected to play a crucial role in generating economic growth and
innovation, particularly with the government's stated focus on fostering a
supportive business environment. The outlook for investing in SMEs in the UK
appears slightly more promising as we head into 2025, with the extension of
the VCT scheme signalling the importance of continued support for these
enterprises.
Our VCT is strategically positioned to capitalise on these opportunities by
investing in dynamic and high-potential new companies. By doing so, we aim
to drive returns for our investors while supporting the growth and innovation
of the UK's SME sector, ultimately contributing to a robust and resilient
economy.
David Buchler
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 at the Scottish Financial
Technology awards which recognises the fintech which 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 securing 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
which appeals to enterprise customers.
Iris
IRIS is an audio specialist, which has developed an AI-powered software which
removes distracting background noise from telephone calls, integrating
seamlessly with existing call centre 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 trading environment in this sector
has recently been challenging and the company's current focus is to navigate
this effectively.
Le Col recently launched ARC, a new range specifically designed for gravel
(off-road) 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.
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 improved marketing, seeking more requests from potential
customers and improving conversion rates.
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 £24.8 million in the strategy, as at the period end, this
increased to £57.9 million after further investment of £32.4 million and
£0.7 million of unrealised gains.
Investment strategy
We are pleased to have invested the Company's funds in a diverse range of
businesses to date. With the re-opening of fund-raising, 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 - 3,467 3,467 - (368) (368) - (6,478) (6,478)
Gain on current asset investments - 719 719 - - - - 551 551
Income 1,165 - 1,165 148 - 148 857 - 857
1,165 4,186 5,351 148 (368) (220) 857 (5,927) (5,070)
Investment management fees 4 (364) (1,093) (1,457) (278) (836) (1,114) (572) (1,715) (2,287)
Performance fees 6 - - - - - - - - -
Other expenses (480) - (480) (382) - (382) (740) - (740)
(844) (1,093) (1,937) (660) (836) (1,496) (1,312) (1,715) (3,027)
Profit/(loss) before tax 321 3,093 3,414 (512) (1,204) (1,716) (455) (7,642) (8,097)
Tax - - - - - - - - -
Profit/(loss) after tax 321 3,093 3,414 (512) (1,204) (1,716) (455) (7,642) (8,097)
Basic and diluted return/(loss) per Ordinary Share (pence) 2 0.28p 2.70p 2.98p (0.62p) (1.45p) (2.07p) (0.53p) (8.89p) (9.42p)
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 88,866 70,803 78,497
Current assets
Cash 6,277 41,390 15,289
Applications cash 2 82 6,756
Investments 57,883 - 24,799
Debtors 577 237 619
64,739 41,709 47,463
Current liabilities (676) (628) (7,414)
Net current assets 64,063 41,081 40,049
Net assets 152,929 111,884 118,546
Capital and reserves
Called up share capital 62 45 50
Share premium account 39,061 79,030 8,104
Capital reserve - realised (5,342) (3,105) (4,249)
Capital reserve - unrealised 17,943 19,052 13,757
Revenue reserve (1,917) 16,862 (2,238)
Special distributable reserve 103,122 - 103,122
Total equity 152,929 111,884 118,546
Net Asset Value per Ordinary Share 3 127.56p 131.18p 124.48p
David Buchler
Chairman
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 profit/(loss) after tax
Profit/(loss) before tax 3,414 (1,716) (8,097)
(Gain)/loss on fixed asset investments (3,467) 368 6,478
Gain on current asset investments (719) - (551)
Decrease/(increase) in debtors 42 18 (364)
Increase/(decrease) in creditors 16 (774) (662)
Outflow from operating activities (714) (2,104) (3,196)
Cash flow from investing activities
Purchase of fixed asset investments (6,903) (12,627) (27,631)
Purchase of current asset investments (32,364) - (24,249)
Proceeds from disposal of investments - - 1,201
Outflow from investing activities (39,267) (12,627) (50,679)
Cash flow from financing activities
Proceeds received from issue of ordinary share capital 31,480 22,261 36,322
Expense paid for issue of share capital (511) (429) (591)
Movement in applications account (6,754) (6,199) 475
Shares cancelled in the year - - (856)
Inflow from financing activities 24,215 15,633 35,350
Net (decrease)/increase in cash and cash equivalents (15,766) 902 (18,525)
Cash and cash equivalents at the beginning of the period 22,045 40,570 40,570
Cash and cash equivalents at the end of the period 6,279 41,472 22,045
Cash and cash equivalents comprise
Cash at bank 6,277 41,390 15,289
Applications cash 2 82 6,756
Cash and cash equivalents at the end of the year 6,279 41,472 22,045
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 36 57,207 (2,269) 19,420 17,374 - 91,768
Comprehensive income for the period
Loss after tax - - (836) (368) (512) - (1,716)
Total comprehensive income for the period - - (836) (368) (512) - (1,716)
Transactions with owners, recognised directly in equity
Share issues 9 22,252 - - - - 22,261
Share issue costs - (429) - - - (429)
Total transactions with owners, recognised directly in equity 9 21,823 - - - - 21,832
Balance as at 31 August 2023 45 79,030 (3,105) 19,052 16,862 - 111,884
Comprehensive income for the period
(Loss)/profit after tax - - (1,124) (5,315) 58 - (6,381)
Total comprehensive income for the period - - (1,124) (5,315) 58 - (6,381)
Transactions with owners, recognised directly in equity
Share issues 5 14,056 - - - - 14,061
Share issue costs - (162) - - - - (162)
Cancellation of share premium - (84,820) - - - 84,820 -
Repurchase of own shares (856) (856)
Total transactions with owners, recognised directly in equity 5 (70,926) - - - 83,964 13,043
Other movements
Prior year fixed asset gains now realised - - (20) 20 - - -
Re-classification to Special distributable reserve - - - - (19,158) 19,158 -
Total other movements - - (20) 20 (19,158) 19,158 -
Balance as at 29 February 2024 50 8,104 (4,249) 13,757 (2,238) 103,122 118,546
Comprehensive income for the period
(Loss)/profit after tax - - (1,093) 4,186 321 - 3,414
Total comprehensive income for the period - - (1,093) 4,186 321 - 3,414
Transactions with owners, recognised directly in equity
Share issues 12 31,468 - - - - 31,480
Share issue costs - (511) - - - - (511)
Total transactions with owners, recognised directly in equity 12 30,957 - - - - 30,969
Balance as at 31 August 2024 62 39,061 (5,342) 17,943 (1,917) 103,122 152,929
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 return per share of 2.98p is based on the profit for the period of
£3,414,000 and the weighted average number of shares in issue for the period
ended 31 August 2024 of 114,627,087.
3. Net Asset Value per share
As at As at As at
31 August 2024
31 August 2023
29 February 2024
Net assets 152,929,000 111,884,000 118,546,000
Shares in issue 119,889,133 85,291,146 95,234,828
Net Asset Value per share
Basic 127.56p 131.18p 124.48p
Diluted 127.56p 131.18p 124.48p
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 110p 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') - 1,292 (1,292) 0% 0.00
Aveni Limited 4,716 4,716 - 3% 1.00
Bikmo Limited 2,031 2,031 - 1% 1.00
Deazy Limited 2,900 2,900 - 2% 1.00
Dymag Group Limited - 5,787 (5,787) 0% 0.00
Everpress Limited 2,748 3,514 (766) 2% 0.78
Forde Resolution Company Limited ('HR Duo') 2,937 2,238 699 2% 1.31
Hot Copper Pub Company Limited 468 847 (379) 0% 0.55
Influencer Limited 12,955 1,800 11,155 8% 7.20
Iris Audio Technologies Limited 9,955 5,400 4,555 7% 1.84
Le Col Holdings Limited 7,866 8,699 (833) 5% 0.90
MyKindaCrowd Limited ('Connectr') 4,887 5,915 (1,028) 3% 0.83
MySafeDrive Limited ('CameraMatics') 7,149 3,882 3,267 5% 1.84
Muso Limited 3,968 2,361 1,607 3% 1.68
Not Another Beer Co Limited ('Lucky Saint') 3,289 3,289 - 2% 1.00
NQOCD Consulting Limited ('Ron Dorff') 5,379 3,218 2,161 4% 1.67
Open House London Limited 1,974 1,800 174 1% 1.10
Pockit Limited 7,043 3,920 3,123 5% 1.80
Thingtrax Limited 750 750 - 0% 1.00
Transreport Limited 5,418 5,418 - 4% 1.00
TravelLocal Limited 2,433 2,433 - 2% 1.00
Total qualifying investments 88,866 72,210 16,656 58% 1.23
Balance of portfolio 64,063 42%
Net assets 152,929 100%
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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