ELTA.L Regulatory News (ELTA)

3 Feb 2009 09:17



Electra Private Equity Plc ("Electra") - Interim Management Statement

3 February 2009

This is an Interim Management Statement issued by Electra in accordance with the FSA's Disclosure and Transparency Rule 4.3. This statement relates to the three month period from 1 October 2008 to 31 December 2008.

Sir Brian Williamson, Electra's Chairman said:

"Electra is well positioned to withstand the recessionary consequences of the credit crisis and subsequent decline in stock markets with adequate cash resources to meet its future commitments and to support and build the portfolio.

The majority of the largest investments in the unquoted portfolio are trading above their previous year's levels and have manageable levels of borrowings although we expect to see the effect of the downturn on some of these investments over the coming months. Although many of these investments have good defensive characteristics and are not consumer facing, the 31 March 2009 valuation of the unquoted portfolio, which includes investments in third party funds, will be impacted by the changes since 30 September 2008 of multiples of comparable quoted companies.

Against this background a key part of the strategy going forward is to protect the existing portfolio and ensure that portfolio companies protect their cash resources. At Electra Partners we have a management team which has considerable experience in managing private equity portfolios through a number of economic cycles.

The decline of Electra's share price over the past three months has, we believe, been driven by a negative perception of the entire listed private equity sector rather than by any company specific factor relevant to Electra.

In the short term both acquisitions and realisations of investments are expected to remain at a subdued level. Looking further ahead, it is likely that market conditions will give rise to favourable buying opportunities for Electra, which will enhance future shareholder value."

1. Resources and Commitments

At 31 December 2008 Electra had cash and floating rate notes of £287 million, a multicurrency revolving credit facility of £250 million, of which £201 million was drawn down, and a quoted portfolio valued at £73.5 million. Commitments to third party funds, which may be drawn down over the next five years, amounted to £121 million at that date.

2. Unaudited Net Asset Value Per Share

The investment portfolio, which comprises direct investments and investments through third party private equity funds has not been revalued at 31 December 2008. However, calculated on the basis of the net asset value at 30 September 2008 adjusted to reflect the purchases and sales of investments, currency movements and bid values in respect of quoted investments, the unaudited net asset value at 31 December 2008 was 1,742p per share compared with 1,801p at 30 September 2008, a decrease of 3%.

3. Composition of Portfolio

Electra's portfolio of unquoted and quoted investments consists of securities held in a number of companies (the "investment portfolio") together with cash or near cash offset by borrowings ("net liquid resources"). The investment portfolio consists primarily of direct investments together with investments in funds where investments are held in limited partnerships managed by other private equity managers. Investments in funds are made primarily for the purpose of generating co-investment opportunities and gaining exposure to other geographic areas.

*Based on values at 30 September 2008 adjusted as detailed in 2 above

**Excludes accrued income on the investment portfolio of £9,385,000 at 31 December 2008 (30 September 2008: £9,034,000)

The increase in direct unquoted investments of £85 million in the three months is principally made up of purchases of investments, the reclassification of a fund investment and currency movements.

Electra had direct investments in 68 companies with an aggregate value of £466 million and investments in 32 private equity funds with an aggregate value of £94 million at 31 December 2008. The top 10 and 20 direct investments accounted for 59% and 84% respectively of the total direct investments.

Many of the unquoted investments have good defensive characteristics and are not consumer facing. The largest investment in the portfolio was in Allflex which at 31 December 2008 represented 12% of the unquoted portfolio. Allflex is an international manufacturer and supplier to the agricultural sector.

4. Share Price Performance

Electra's share price at 31 December was 567p, a decline of 54% over the three months while the FTSE All-Share Index declined by 11% over the same period. Over the year to 31 December 2008, Electra's share price decreased by 64% while the FTSE All-Share Index decreased by 33%. 

5. Investments and Realisations

Electra invested a total of £54 million in the three months to 31 December 2008 of which £5.7 million was drawn down under commitments to third party funds.

Included in direct unquoted investments was an investment of £30.4 million in a secondary fund position in Steadfast, which invests in medium sized businesses in German-speaking and Dutch markets. Electra also invested £13 million in a special purpose vehicle established to purchase corporate debt at a discount, in line with its flexible investment policy.

Realisation proceeds totalled £15.9 million for the three months to 31 December 2008 inclusive of a £7.6 million receipt from a French private equity fund.

6. Share Buybacks

During the three months to 31 December 2008, Electra made on market purchases at a cost of £2.08 million and cancelled 257,000 shares. The Company currently has the ability to buy back and cancel up to a further 4.2 million shares during the remaining period of this authority which will cease at today's Annual General Meeting when Directors will seek to renew this general authority.

Ends

For information please contact

Sir Brian Williamson, Chairman Electra Private Equity PLC 020 7306 3883

Hugh Mumford, Managing Partner, Electra Partners LLP 020 7214 4200

Nick Miles, M Communications Limited 020 7153 1535

This statement aims to give an indication of material events and transactions that have taken place during the period from 1 October 2008 to the date of publication of this statement and their impact on the financial position of Electra Private Equity Plc. These indications reflect the Board's current view. They are subject to a number of risks and uncertainties and could change. Factors which could contribute to such differences include, but are not limited to, general economic and market conditions and specific factors affecting the financial prospects or performance of individual investments within Electra's portfolio.

The information contained in this announcement is restricted and is not for release, publication, or distribution, directly or indirectly, in or into the United States, Canada, Japan or Australia. The information in these materials does not constitute an offer for securities for sale in the United States, Canada, Japan or Australia.

No information contained in this announcement shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction.

This announcement is not an offer to sell or a solicitation of any offer to buy any securities of Electra Private Equity PLC (the "Company", and such securities, the "Securities") in the United States or any other jurisdiction. The Company is not registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act"), and holders of any Securities will not be entitled to the benefits of the Investment Company Act. The Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be reoffered, resold or transferred in the United States or to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the Securities Act) unless registered under the Securities Act or an exemption from such registration is available. Copies of this announcement are not being, and should not be, distributed or sent into the United States. No public offering of Securities is being made in the United States. If for any reason in the future an offering of the Securities is made, such offering will be made by means of a prospectus that may be obtained from the Company and will contain all relevant information about the Company, its management and its financial statements.