Last checked at 
11 May 2017 10:52
Dunedin Enterprise Investment Trust PLC (Company No SC52844) - Quarterly Update
Whilst there is no longer a requirement to publish an Interim Management Statement ("IMS") the Board of Dunedin Enterprise Investment Trust PLC ("Dunedin Enterprise") has decided to continue to provide an update on the net asset value of the Trust in a similar format to that previously provided in the IMS on a quarterly basis. This net asset value update is as at 31 March 2017.
1. Unaudited net asset value per share
The unaudited net asset value per share at 31 March 2017 was 506.1p. This represents an increase of 0.6% from the level at 31 December 2016. This is stated prior to the final dividend of 17.5p per share payable on 18 May 2017.
2. Share price
The share price has increased by 12.7% from 306p to 345p in the quarter to 31 March 2017. This compares to an increase in the FTSE Small Cap Index of 5.4% over the same period. The discount to net asset value at 31 March 2017 was 31.8%.
3. Balance Sheet
The unaudited balance sheet as at 31 March 2017 is noted below:-
£'m | |
Investments:- | |
Dunedin managed | 80.0 |
Third party managed | 20.1 |
100.1 | |
Cash and near cash *1 | 12.2 |
Other assets and liabilities | (7.8) |
Total net assets | 104.5 |
| |
Net asset value per share (p) | 506.1p |
*1 - stated before drawdown for FRA which will be up to £7.3m and a final dividend of £3.6m
4. Net asset value movements
The portfolio of investments has been re-valued at 31 March 2017. The increase in net asset value in the quarter can be attributed to:-
· Within the Dunedin managed portfolio there were valuation increases at Kee Safety (£0.9m), Alpha (£0.5m), Blackrock (£0.4m) and Kingsbridge (£0.2m). Maintainable earnings at Kee Safety continue to grow both organically and by acquisition. Each of Blackrock, Alpha and Kingsbridge have benefited from an increase in maintainable earnings.
· These valuation increases have been offset by decreases in valuation at CitySprint (£0.5m), Formaplex (£0.2m), and Premier (£0.2m). CitySprint has been impacted by a softer market and increased competition. Formaplex has been impacted by an increased working capital requirement. Premier Hytemp continues to be impacted by the lower oil price albeit that it is trading ahead of budget.
5. New investment and realisations
New investments in the quarter totalled £8.0m. An investment of up to £7.3m was made in Forensic Risk Alliance ("FRA"). FRA is an international consultancy business that provides forensic accounting data analytics and e-discovery to help businesses manage risk in an increasingly regulated global environment.
A further £0.3m was drawn down by Innova/5 for a follow-on investment in a current portfolio company.
Management fees accounted for £0.4m.
In February Steeper was realised generating proceeds of £8.9m of which £6.7m is capital and £2.2m is income. The overall return to Dunedin Enterprise was 1.9 times the original investment of £5.6m. A further £0.8m was received from Innova/5 being the final proceeds from the sale of WP. Overall this investment has generated a return of 2.7 times original cost.
6. Cash and Commitments
The Company had cash and near cash balances of £12.2m at 31 March 2017. In addition the Company has a revolving credit facility of £20m available until 31 May 2018.
As at 31 March 2017 the Company had outstanding capital commitments to limited partnership funds of £36.6m. This is stated before the drawdown for FRA and the final dividend both of which will be made in May 2017. The cash balance following each of these outflows will reduce to £1.3m with outstanding commitments also being reduced to £29.3m. Of this £29.3m it is forecast that approximately £13m will be drawn.
The Board and Manager remain satisfied with the balance between available credit facilities and outstanding commitments given the expected rate of new investment and potential realisations of existing investments.
7. Dividend
A final dividend of 17.5p per share is payable to shareholders on 18 May 2017.
8. Outlook
The Board remains committed to maximising shareholder value through an orderly wind-down process. This could be achieved partly by the judicious and timely sales of fund interests on the secondary market or by continuing to hold these interests if this is likely to provide a better return to shareholders. Despite the ongoing political uncertainty the pricing for realisations of quality businesses remains buoyant.
For further information on Dunedin Enterprise please go to www.dunedinenterprise.com