Outlook I am pleased with the progress the Company has made in the first half. The companies in our largest asset, Permira IV, continue to demonstrate resilient growth and we have begun to lay the foundations for the execution of our new investment strategy. Looking forward, we are cautious on the macroeconomic outlook, especially for Europe. Whilst it is still possible to sell companies, especially those with a global footprint and growth trajectory, the current uncertainty continues to hamper exits across the asset class and we do not expect conditions to improve in the short term. The portfolio has a significant exposure to companies with global reach and which we believe will continue to demonstrate growth. We continue to believe that the medium to longer term investment environment plays to the strengths of seasoned private equity investors. In the short term, we remain focused on returning capital to shareholders.
10 Aug '12
Lynn Fordham, CEO of SVG Capital commented: "This has been another period of strong performance and progress for SVG Capital. I am pleased to report NAV growth of 12% in the first half, a 9% out-performance of the FTSE All-Share (TR) over the period, and good progress on our strategy. "We have returned £87.4 million to shareholders since December 2011 - more than half of our commitment. We have also moved to manage the assets of our business more actively, selling a number of non-core investments, further strengthening the balance sheet through the release of uncalled commitments. Our investment committee has begun to evaluate potential opportunities for investment, at the appropriate time. "The majority of companies in the portfolio continue to demonstrate resilient earnings growth. We remain mindful of the uncertainty in the macroeconomic environment and the impact this may have on our portfolio companies. However, we feel positive that our exposure to an underlying portfolio of high quality assets and the progress we are making on our strategy will continue to deliver value for our shareholders over the shorter and longer term."
10 Aug '12
Investment portfolio · Total return of 9.8% over the six months to 30 June 2012 · Two largest contributors were Hugo Boss and Valentino Fashion Group (+£53.5 million) and Galaxy Entertainment (+£40.5 million) · Valentino Fashion Group sold at a £34 million premium to December 2011 carrying value · Resilient earnings growth across the majority of portfolio companies, especially at Hugo Boss which is our largest investment · Supported by top-line expansion as management teams pursue organic and inorganic initiatives · 27% and 35% increase in the portfolio's weighted average revenue and earnings growth for the 12 months to June 2012, year-on-year · Despite strong performance of the portfolio, visibility on the macroeconomic outlook remains difficult · Modest strengthening of weighted average earnings multiples (LFL multiples increased by 4.3% to 9.1x) · Continued active management of portfolio company capital structures, opportunistically renegotiating covenants and terms
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