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14 Aug 2014 07:00
EMBARGOED UNTIL 07:00AM, 14 AUGUST 2014
ELECTRA PRIVATE EQUITY PLC
Interim Management Statement for the three month period to 30 June 2014
The information contained in this announcement is restricted and is not for release, publication or distribution, directly or indirectly, nor does it constitute an offer of securities for sale in the United States, Canada, Japan, Australia or New Zealand.
References in this announcement to Electra Private Equity PLC and its subsidiaries have been abbreviated to 'Electra' or the 'Company'. References to Electra Partners LLP have been abbreviated to 'Electra Partners' or 'the Manager'.
Unaudited Financial Highlights for the three month period to 30 June 2014
· Diluted NAV per share down 0.1% to 2,910p
· Share price up 3% against a 2% total return for the FTSE All-Share Index
· Share price increased by 21% over the year to 30 June 2014 against a total return of 13% for theFTSE All-Share Index
· Liquid resources (net of bank borrowings) reduced by £85 million to £209 million as cash is deployed
Portfolio Highlights for the three months to 30 June 2014
· £124 million invested, including £81 million in Ogier Fiduciary Services ("OFS") and £33 million in Innovia Group
· £47 million realised (inclusive of income)
Subsequent to 30 June 2014
· Acquisition of DiGiCo and combination with existing portfolio companies Allen & Heath and Calrec to form a dynamic professional audio group
· £20 million invested in Southview and Manor Park leisure parks, taking total investment in the holiday parks sector to over £100 million
· Electra Partners has been approved as Electra's Alternative Investment Fund Manager ("AIFM")
Roger Yates, Chairman of Electra Private Equity, said:
"Recent performance continues to be strong with the investments made over the past two years already starting to generate returns. Making full use of its flexible investment strategy, Electra Partners has been busy actively pursuing value creation strategies across the portfolio and has completed a number of attractive investments in the period. Electra is very well positioned to continue its record of delivering consistently superior long-term returns for its shareholders."
Hugh Mumford, Managing Partner of Electra Partners, said:
"The current financial year has continued to be busy, with the completion of the previously announced OFS and Innovia deals as well as another two bolt-on transactions in the quarter. Bolt-on transactions, of which we have completed a total of six in the past year, have been mainly off-market and will drive value in the portfolio through synergies and other benefits. Our pipeline of investment opportunities remains strong and we continue to act with our customary patience and discipline."
For further information please contact:
For Roger Yates/Hugh Mumford:
Andrew Honnor, Charlotte Balbirnie or Matthieu Roussellier, Greenbrook Communications +44(0)20 7952 2000
Andrew Kenny or Nick Board, Investor Relations, Electra Partners LLP +44(0)20 7214 3902
1 Unaudited Net Asset Value
As is usual for the calculation of Electra's net asset value for the purposes of Interim Management Statements, the investment portfolio (apart from listed investments) has not been revalued at 30 June 2014 although it does reflect purchases and sales of investments, currency movements and bid values in respect of listed investments at that date. The impact of these changes resulted in a decrease in the diluted net asset value of 0.1% since 31 March 2014.
30 Jun 2014 | 31 Mar 2014 | Movement | |
p | p | % | |
NAV per share (diluted) | 2,910 | 2,914 | (0.1) |
2 Share Price Performance
Electra's share price at 30 June 2014 was 2,682p, an increase of 3% over the three months to 30 June 2014 compared to a total return of 3% for the Morningstar Private Equity Index* and 2% for the FTSE All-Share Index. Over the year to 30 June 2014, Electra's share price was up 21% compared to a total return of 13% for both the Morningstar Private Equity Index* and the FTSE All-Share Index.
* The Morningstar Private Equity Index, prepared by Morningstar UK Limited, reflects the performance of 19 private equity vehicles, excluding Electra, quoted on the London Stock Exchange.
3 Resources and Commitments
30 Jun 2014 | 31 Mar 2014 | |
£m | £m | |
Liquid resources | 360 | 449 |
Bank borrowings (facility committed until 2017) | (151) | (155) |
ZDP shares (repayable 2016) | (64) | (63) |
Convertible Bond (repayable 2017 if not previously converted) | (83) | (83) |
Net Cash | 62 | 148 |
At 30 June 2014 outstanding commitments to private equity funds amounted to £76 million or 7% of NAV(£80 million or 7% of NAV at 31 March 2014). Liquid resources (net of bank borrowings) at 30 June 2014 were £209 million (£294 million at 31 March 2014).
4 Investment Portfolio
* 30 Jun 2014 | 31 Mar 2014 | |
£m | £m | |
Direct unlisted | 842 | 732 |
Secondaries | 98 | 112 |
Funds | 85 | 92 |
Listed | 94 | 103 |
Investment portfolio | 1,119 | 1,039 |
* Valued on the basis of Note 1 (Unaudited Net Asset Value).
In the three months to 30 June 2014 currency movements decreased the value of the portfolio by £11 million, although this was partially offset by gains of £5 million arising from the hedging arrangements of drawings under Electra's multi-currency loan facility.
5 Investments and Realisations
Electra invested a total of £124 million in the three months to 30 June 2014. The largest investments in the period were £81 million in Ogier Fiduciary Services, £33 million in Innovia Group and £5 million to support the acquisition of Happy Child Nurseries by Electra's existing portfolio company Treetops Nurseries.
Realisations inclusive of income over the same period totalled £47 million, including £17 million received from the sale of Electra's remaining interest in LondonMetric Property and a further £7 million received as a result of distributions from the EP1 Secondary Portfolio.
6 Key Investments
Top Twenty Direct Unlisted Investments and Secondary Investments*
Fair value ofholding at31 Mar 2014 | Netpayments/(receipts) | Netperformancein period | ** Fair value of holding at 30 Jun 2014 | Cost of holding at30 Jun 2014 | |
Company | £m | £m | £m | £m | £m |
AXIO Data Group | 125 | (3) | − | 122 | 71 |
Park Resorts | 96 | (1) | 1 | 96 | 70 |
EP1 Secondary Portfolio | 90 | (7) | (2) | 81 | 49 |
Hotter Shoes | 84 | − | − | 84 | 84 |
Ogier Fiduciary Services | − | 81 | − | 81 | 81 |
Allen & Heath | 59 | − | − | 59 | 54 |
Allflex Corporation | 48 | − | (1) | 47 | 57 |
Peverel Group | 42 | − | − | 42 | 22 |
Premier Asset Management | 40 | − | − | 40 | 56 |
Cala Group | 34 | 1 | − | 35 | 32 |
Innovia Group | − | 33 | (1) | 32 | 33 |
Daler-Rowney | 29 | − | − | 29 | 17 |
Nuaire | 27 | − | − | 27 | 13 |
Promontoria | 22 | − | (1) | 21 | 12 |
PINE | 22 | − | − | 22 | 14 |
South Lakeland Parks | 21 | − | − | 21 | 19 |
Davies Group | 18 | − | − | 18 | 39 |
Labco | 15 | (1) | − | 14 | 25 |
Sentinel Performance Solutions | 15 | − | − | 15 | 16 |
Treetops | 9 | 5 | − | 14 | 12 |
Sub total | 796 | 108 | (4) | 900 | 776 |
Other investments | 48 | (9) | 1 | 40 | |
Total Direct Unlisted andSecondary Investments | 844 | 99 | (3) | 940 |
Key Direct Listed Investments*
Fair value ofholding at31 Mar 2014 | Netpayments/(receipts) | Net performance in period | ** Fair value of holding at 30 Jun 2014 | Cost of holding at30 Jun 2014 | |
Company | £m | £m | £m | £m | £m |
Zensar Technologies | 39 | − | 5 | 44 | 4 |
Dinamia | 10 | − | 2 | 12 | 14 |
Sub total | 49 | − | 7 | 56 | 18 |
Other investments | 54 | (18) | 2 | 38 | |
Total Listed Investments | 103 | (18) | 9 | 94 |
Fund Investments*
Fair value ofholding at31 Mar 2014 | Netpayments/(receipts) | Net performance in period | ** Fair value of holding at 30 Jun 2014 | Cost of holding at30 Jun 2014 | |
£m | £m | £m | £m | £m | |
Funds | 92 | (5) | (2) | 85 | 135 |
* Excludes liquidity funds.
** Valued on the basis of Note 1 (Unaudited Net Asset Value).
7 Innovia Group
In April 2014 Electra invested £33 million in the acquisition of Innovia Group, a leading manufacturer of films used for packaging, and substrate used in polymer banknotes.
8 Ogier Fiduciary Services
In June 2014, Electra invested £81 million in the acquisition of Ogier Fiduciary Services, which offers trust, fund and company administration services to 3,000 corporate, private and investment fund clients worldwide.
9 LondonMetric Property
Between October 2013 and June 2014, following a strong rise in LondonMetric Property's share price, Electra sold its interest in the company, receiving proceeds of £36 million. Over the seven years of its investment Electra received total proceeds, including dividends, of £49 million, a return of 1.6x and an IRR of 10%.
10 DiGiCo
On 1 August 2014 Electra announced the acquisition of professional audio mixing console manufacturer DiGiCo in a transaction which brings DiGiCo together with existing portfolio companies Allen & Heath and Calrec.
11 Southview and Manor Park
On 4 August 2014 Electra announced an investment of £20 million in the acquisition of Southview and Manor Park holiday parks. The purchase has been made in partnership with Electra's existing portfolio company, Park Resorts, which will continue to manage both parks, having done so since 2010. This latest investment takes Electra's total investment in the holiday parks sector to over £100 million.
12 AIFM Appointment
On 11 July 2014 Electra Partners was approved as the Company's alternative investment fund manager (the "AIFM") and in agreement with the UK's Financial Conduct Authority varied its regulatory status to become the Company's AIFM. Consequently from this date Electra Partners became subject to Alternative Investment Fund Managers Directive ("AIFMD") regulations. No material changes to the management of the Company or Electra Partners as a result of compliance with AIFMD are envisaged.
13 Keyman Disclosure
As part of Electra Partners long-term succession plan, Alex Fortescue has replaced Tim Syder as a Keyman under the limited partnership agreement.
Disclaimer
This statement aims to give an indication of material events and transactions that have taken place during the period from 1 April 2014 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 difficulties 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.
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.
The 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 any securities, the "Securities") in the United States or any other jurisdiction. The Company is not registered under the U.S. Investment Company Act, as amended (the "Investment Company Act"), and holders of any Securities will not be entitled to the benefits of the Investment Company Act. These 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, Canada, Japan, Australia or New Zealand. 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.
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