BCAP.L Regulatory News (BCAP)

Better Capital PCC Limited 2009 Cell and 2012 Cell

29 October 2018

Preliminary NAV views as at 30 September 2018

The General Partners of BECAP Fund LP ("Fund I") and BECAP12 Fund LP ("Fund II") have undertaken a review of the underlying assets within Funds I and II as at 30 September 2018 and have informed the board of Better Capital PCC Limited (the "Company") of the following:

Better Capital 2009 Cell

Omnico closed its year to 30 September 2018 materially below budget. Despite the financial disappointment, the business is profitable and has a strong order book and pipeline. The challenge for the current year is to deliver its new products in a timely manner and within budget.

M-hance is trading broadly in line with expectations.

Fund I's minority holding in Spicers-OfficeTeam ("SPOT") has also suffered a diminution in value as a consequence of trading underperformance. This is further described below.

Early indications are that the 2009 Cell NAV per share will be written down in the region of 30 per cent. from the last published NAV at 31 March 2018 of 114.6p, largely due to the underperformance in Omnico.

Better Capital 2012 Cell

Over the summer, Fund II concluded the sale of Northern Aerospace which enabled the distribution of £48.3 million to the 2012 Shareholders. The General Partner also successfully concluded all aspects of the CAV Aerospace warranty claim in October 2018. Total receipts in relation to Northern Aerospace and the warranty claim were in line with the valuation at 31 March 2018 of £60.0 million.

Further to the Company's announcement on 22 August 2018, Everest and SPOT have continued to underperform.

The operational challenges at Everest have been frustrating, not least because in a weak market place the sales and marketing functions have performed particularly well with the business recording unfulfilled orders of £47 million at the time of writing. Since the announcement of 22 August, significant effort has been injected in driving installation levels which is the critical issue. The trajectory in installations is improving, leading to reasonable expectations of converting the over-full order book into revenue and improving results.

Whilst remaining profitable, profits at SPOT have been lower than expected over the summer, leading to an expectation of a significantly lower valuation at 30 September 2018. SPOT is conducting an internal balance sheet reconstruction between existing parties which will see Fund I receiving an offer for its minority holding in the business from Fund II.

2012 Cell NAV was £138.1 million at 31 March 2018. This corresponded to a NAV per share of 43.4p. The effect of the distribution of capital paid on 10 August and the 2012 Shares buyback and cancellation transaction on 19 June, together with on-going running costs and follow-on funding was to reduce the 2012 Cell NAV to £82 million. Further expected downward reductions in valuation takes this figure to approximately £58 million or 19.2 pence per share.

Interim Results publication

The Company expects to release its Interim Results for the period to 30 September 2018 on 3 December.

Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.