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19 Nov 2008 13:21
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GRAPHITE ENTERPRISE TRUST PLC
INTERIM MANAGEMENT STATEMENT
QUARTER ENDED 30 SEPTEMBERΒ 2008
Β
Graphite Enterprise Trust PLCΒ ('Graphite Enterprise'Β or 'the Company')Β presents itsΒ InterimΒ ManagementΒ Statement for the quarter ended 30Β SeptemberΒ 2008. ThisΒ isΒ the Company'sΒ secondΒ interim management statement for the financial year ending 31 December 2008, as required by the UK Listing Authority's Disclosure and Transparency Rule 4.3.
Investment objective
The objective of Graphite Enterprise is to provide shareholders with long term capital growth through investment in unquoted companies, mostly through specialist funds but also directly.
Unaudited net asset value per shareΒ
The unaudited net asset value per shareΒ as at 30Β SeptemberΒ 2008 wasΒ 511.3p. This represents aΒ fallΒ ofΒ 1.8%Β fromΒ the levelΒ atΒ 30 JuneΒ 2008. On 3 November, the Company announced that it had exchanged contracts to sell interests in ten funds (the "Interests")Β toΒ funds managed by AlpInvest Partners NV. TheΒ effectΒ of this is set out later in this statement.
Share priceΒ and discount
The share priceΒ fellΒ byΒ 15.5%Β to 355.0p in the periodΒ fromΒ 30 JuneΒ to 30 September.Β ThisΒ compares with a fall ofΒ 13.0% in the FTSE All-Share Index in the same period. The discountΒ toΒ theΒ net asset value per shareΒ increasedΒ from 19.3%Β toΒ 30.6%.
Since the quarter endΒ stock markets haveΒ been volatile. Listed private equity share prices have fallen sharply and discounts to net asset values have widened significantly. GraphiteΒ EnterpriseΒ has not been immuneΒ fromΒ these developments and its share price and discount to net asset value have followed these trends.
The share price at the close of business on 18 NovemberΒ wasΒ 197.0p, whichΒ wasΒ 44.5% lower than at 30 September,Β butΒ 13.2% higher than immediately prior to the announcement of the sale of the Interests. The share priceΒ ofΒ 197.0pΒ representedΒ a discountΒ ofΒ 61.5%Β to the 30 September net asset valueΒ per share andΒ atΒ a discount ofΒ 60.2% to the proΒ forma net asset value per shareΒ adjusted for the sale of the InterestsΒ (see below).
Β Β BalanceΒ sheet
The summary balance sheet as at 30 SeptemberΒ 2008Β (excluding theΒ effectΒ of the sale of the Interests)Β is set out below:
|
Β
|
Β£m
|
% of total assets
|
|
Fund investments
|
252.1
|
66.4%
|
|
Direct investments
|
49.2
|
12.9%
|
|
Total portfolio
|
301.3
|
79.3%
|
|
Cash and near cash
|
78.7
|
20.7%
|
|
Total assets
|
380.0
|
100.0%
|
|
Net asset value per share
|
511.3p
|
Β
|
Β
TheΒ investment portfolio accounted forΒ 79.3% of total assets atΒ 30 SeptemberΒ 2008 (72.4% atΒ 30 JuneΒ 2008). On 18 November cash and near cash was Β£75.2 million.
Valuations
The investment portfolio has been valued using the latest available managers' reports,Β with 33.8%Β by value based onΒ managers' reports as at 30 September. TheΒ greatΒ majority of the remainingΒ portfolioΒ has been valued using managers' reports as at 30 JuneΒ as subsequent reports have not yet been received.
The portfolio fell in value by 2.5% in the quarter to 30 September. The net reductionΒ in underlying portfolio valuationsΒ of 3.0%Β wasΒ partially offset by theΒ positiveΒ impact ofΒ currency movements of 0.5%.
Commitments
Outstanding commitmentsΒ fell by 9.8%Β from Β£346.4Β million to Β£312.4Β million during the period.Β Β Overcommitment, the level by which commitments exceed cash and near cash,Β decreased to Β£233.7Β million, orΒ 61.5% of net assets.Β No new commitments were madeΒ in the quarter.
Investments and realisations
In the three months toΒ 30 SeptemberΒ 2008,Β net cash invested in the investment portfolio was Β£28.5 million. The Company madeΒ newΒ investmentsΒ of Β£35.0Β million,Β almost allΒ of whichΒ was into funds,Β andΒ the portfolio generated proceeds ofΒ Β£6.5Β million.
Pro forma impact of sale of part of fund portfolio
On 3 November, the Company announced that it had exchanged contracts to sell interests in ten funds (the "Interests")Β toΒ funds managed by AlpInvest Partners NV.Β The saleΒ is expected to generate proceeds of approximatelyΒ Β£47.1Β millionΒ and to release the Company fromΒ undrawn commitmentsΒ of approximatelyΒ Β£45.2 million. The net asset value of the Interests was Β£60.2 million.
The sale agreement included a price adjustment mechanismΒ under which the price would have fallen ifΒ the MXEU Europe IndexΒ had fallen below a certain level. That mechanism has not been triggered and the expected proceeds are unchanged from those set out above.
TheΒ net asset value per share and balance sheetΒ as at 30 September do not take account of the sale of the Interests. If the transaction had occurred at 30 September, the balance sheet and commitments would have been as shown below:
Β
|
Β
|
Β£m
|
% of total assets
|
|
Fund investments
|
191.9
|
52.3%
|
|
Direct investments
|
49.2
|
13.4%
|
|
Total portfolio
|
241.1
|
65.7%
|
|
Cash and near cash
|
125.8
|
34.3%
|
|
Total assets
|
366.9
|
100.0%
|
|
Net asset value per share
|
494.5p
|
Β
|
|
Commitments
|
267.2
|
Β
|
|
Overcommitment
|
141.4
|
Β
|
|
Overcommitment as % of total assets
|
38.5%
|
Β
|
Β
If the saleΒ had completed at the quarter endΒ it would haveΒ reducedΒ the level of overcommitmentΒ at 30 SeptemberΒ from 61.5% of net assets to 38.5% andΒ would haveΒ increasedΒ cash and near cash balances from Β£78.7 million to Β£125.8 million.
TheΒ Directors are not aware of any other events or transactions which have taken place betweenΒ 30Β SeptemberΒ 2008 and the date of publication of this statement which have had a material effect on the financial position of the company.
This information has not been auditedΒ or reviewed by the Company's auditors.
Enquires:
Stephen Cavell
Tim Spence
0207 825 5300
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