Jpel Priv Eqty Regulatory News (JPEL)

26 Oct 2007 11:48

Bear Stearns Private Equity Limited26 October 2007 Company Bear Stearns Private Equity Limited Headline Final Results Bear Stearns Private Equity Limited HSBC Private Bank Building, Rue du Pre, St Peter Port, Guernsey GY1 1LU 26 October 2007 Regulatory News Service London Stock Exchange London EC4M 7LS Dear Sir, Preliminary Announcement of Results for the year ended 30 June 2007. I am happy to report that BSPEL had its second consecutive year of strongperformance. In its fiscal year ending 30 June 2007, the net asset value of theEquity Shares increased 34.5%, ending the period at a record $1.60 per EquityShare. The NAV of BSPEL's ZDP Shares rose 7.3%, ending the period at 47.81p pershare. The share price of the Equity Shares also appreciated significantly over theyear, finishing with a gain of 36.0%. Although the shares traded at a both apremium and a discount to NAV at times during the period, the shares ended theyear at a 0.7% premium to the latest announced NAV as at 30 June. Moreover,behind the strength of the NAV growth during the latter part of the fiscal year,Equity Shares traded at an average 6.7% premium during the fourth quarter. ZDPShares ended the period at premium of 3.0%. The Company ended the period with $521.2 million in net assets. Investment Activity During the course of the year, the Company was very active investing in newtransactions. This investment activity was complemented by a consistent streamof distributions from existing investments. The Company purchased interests in 25 private equity funds and made fouradditional co-investments during the period. These investments represented totalcommitments of $199.3 million compared to total commitments of $140.7 million infiscal 2006. After starting the period with $89.9 million in private equity NAV,the Company subsequently concluded fiscal 2007 with $260.0 million in privateequity assets. In addition, the new investments had the effect of (i) increasingBSPEL's overall exposure to the European and Asian buyout markets, effectivelydecreasing its US asset base, and (ii) expanding the Company's position in themezzanine and distressed private equity markets. Secondary Commitments The Company's investment activities continued to focus on opportunisticsecondary purchases. 19 of the 25 fund investments purchased over the year weremade via the secondary market. These investments represented $145.7 million incommitments, more than 73% of all capital committed during the period. Co-Investments The Company made four new direct investments this period, including BSPEL'sfirst co-investment in an Asian company. Co-investments have performed well forBSPEL over the past two years and the Company anticipates allocating more ofBSPEL's capital to these type of investments in the coming year. Primary Commitments BSPEL continues to selectively make limited primary fund commitments, focusingon funds that are either (i) attached to attractive secondary interests (a 'stapled transaction') or (ii) significantly invested at the time BSPEL makes itscommitment (a 'funded primary' interest). For the period, the Company completedfour stapled transactions and two funded primary investments. Capital Calls and Distributions BSPEL's private equity portfolio produced approximately $36.2 million ofdistributions, versus capital calls of approximately $26.7 million. The Companycontinues to invest with a goal of delivering consistent NAV growth and highlevel of distributions. Corporate Actions On 27 April 2007, the Company raised approximately $308.9 million of new monies(before expenses) by issuing an additional 201,867,774 new Equity Shares. ThePlacing Price per New Equity Share was $1.53, representing a 1.9% premium to thethen existing Equity Share NAV of $1.50. The placing increased BSPEL's total assets from approximately $189 million toapproximately $494 million, providing significant capital for deployment in theCompany's private equity program. The new capital raise was sufficient to fundthe Company's secondary deal flow for the remainder of 2007. The Company entered into a bridge commitment arrangement with Bear Stearnspending the completion of the placing in order to secure its acquisition ofapproximately $78.8 million of secondary commitments to Europe's leadingmezzanine funds through a joint venture with the Bank of Scotland. The Companyused a portion of the proceeds of the offering to complete the acquisition. BSPEL's Board of Directors has previously approved a policy selectively buyingback shares to enhance shareholder returns. In September 2006, the Companysuccessfully purchased 530,310 shares on the open market. In addition, theCompany follows a policy of bi-annual redemptions for up to 15% of theoutstanding shares. BSPEL redeemed 7,628,577 shares in January 2007 based on a31 December 2006 NAV. Outlook Not withstanding the well-publicised issues relating to the global debt capitalmarkets, the Company remains optimistic that it is well positioned to perform ina turbulent market environment. The Company has focused on lower middle markettransactions purchased at discounted multiples, and pursued several investmentswith the specific purpose of benefiting from a tightening credit market. BSPEL now stands with sufficient capital to opportunistically pursuetransactions resulting from recent market fluctuations. In the near term, theCompany may deploy capital in special situations investments and seek to acquireassets that are deemed value investments. The Company will continue toemphasise the development of a diverse, seasoned pool of private equity assetsconsistent with its current portfolio of 66 funds and over 900 companies. Trevor Ash Chairman 25 October 2007 Company Balance Sheet at 30 June 2007 30/6/2007 30/6/2006 £'000 £'000Non-current assetsInvestments 105,401 48,598Subsidiaries 24,232 - 129,633 48,598 Current assetsCash and cash equivalents 131,931 40,216Receivables 500 88 132,431 40,304Current liabilitiesPayables and accruals (2,630) (407) Net current assets 129,801 39,897 Non-current liabilitiesZero dividend preference shares (28,433) (26,497) Net Assets 231,001 61,998 Represented by: Share Capital 29 9Reserves 230,972 61,989 231,001 61,998NAV per Equity share £0.80 £0.64 Consolidated Balance Sheet at 30 June 2007 30/6/2007 £'000Non-current assetsInvestments 150,460 Current assetsCash and cash equivalents 132,177Receivables 500 132,677Current liabilitiesPayables and accruals (2,768) Net current assets 129,909 Non-current liabilitiesZero dividend preference shares (28,433)Loan (14,876) (43,309) Net assets 237,060 Represented by: Share Capital 29Reserves 230,972 Total equity attributable to equity holders of the Company 231,001 Minority Interest 6,059 Total equity 237,060 NAV per Equity share £0.80 Company Income Statement for the year end 30 June 2007 01/07/2006 28/04/2005 to to 30/06/2007 30/06/2006 £'000 £'000IncomeInterest income 1,802 1,246 ExpensesInvestment management fee (1,234) (555)Valuers' fees - (74)Administrative fee (117) (83)Audit fee (15) (14)Directors' fees (67) (58)Performance fee (2,069) (203)Other expenses (736) (147) Total Expenses (4,238) (1,134) Net (loss)/profit before finance costs (2,436) 112 Finance costsInterest payable (2,013) (1,385) Gains from investmentsNet gains on investments 31,593 7,459Unrealised gain on Subsidiaries 3,596 - Profit for the period 30,740 6,186 Basic earnings per share 24.0p 10.6p All items in the above statement are derived from continuing operations. Consolidated Income Statement for the year end 30 June 2007 01/07/2006 to 30/06/2007 £'000IncomeInterest income 1,802 Expenses Investment management fee (1,234)Valuers' fees -Administrative fee (117)Audit fee (15)Directors' fees (67)Performance fee (2,069)Other expenses (859) Total Expenses (4,361) Net loss before finance costs (2,559) Finance costsInterest payable (2,947) Gains from investmentsNet gains on investments 37,306 Profit for the period 31,800 Attributable to equity holders of the Company 30,711Attributable to minority interests 1,089 31,800 Basic earnings per share 24.0p All items in the above statement are derived from continuing operations. Company Statement of Changes in Equity for the period ended 30 June 2006 Share Share Accumulated Capital Currency Special Total Capital Premium Losses Reserve Translation Distributable Reserve Reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 28 April 2005 - - - - - - -(Date ofIncorporation) Issue of equity 9 59,144 - - - - 59,153shares Redemption of (298) - - - - (298)equity shares Issue costs - (1,586) - - - - (1,586) Reduction of - (57,260) - - - 57,260 -share premium Effect of - - - - (1,457) - (1,457)translation topresentationcurrency Movement for the - - (1,273) 7,459 - - 6,186period At 30 June 2006 9 - (1,273) 7,459 (1,457) 57,260 61,998 Company Statement of Changes in Equity for the year ended 30 June 2007 Share Share Accumulated Capital Currency Capital Special Total Capital Premium Losses Reserve Translation Redemption Distributable Reserve Reserve Reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1 July 2006 9 - (1,273) 7,459 (1,457) - 57,260 61,998 Issue of equity 21 157,327 - - - - - 157,348shares Redemption of (1) - - - - - (5,968) (5,969)equity shares Transfer to - - - - - 1 (1) -capitalredemptionreserve Issue costs - (2,998) - - - - - (2,998) Effect of - - - - (10,118) - - (10,118)translation topresentationcurrency Movement for - - (4,449) 35,189 - - - 30,740the year At 30 June 2007 29 154,329 (5,722) 42,648 (11,575) 1 51,291 231,001 Consolidated Statement of Changes in Equity for the year ended 30 June 2007 Accum- Currency Capital Special Minority Share Share ulated Capital Translation Redemption Distrib- Total Interest Total Capital Premium Losses Reserve Reserve Reserve utable £'000 £'000 £'000 £'000 £'000 £'000 Reserve £'000 £'000 £'000 £'000 At 1 July 9 - (1,273) 7,459 (1,457) - 57,260 61,998 - 61,9982006 Issue of 21 157,327 - - - - - 157,348 - 157,348equity shares Redemption of (1) - - - - - (5,968) (5,969) - (5,969)equity shares Transfer to - - - - - 1 (1) - - -capitalredemptionreserve Issue Costs - (2,998) - - - - - (2,998) - (2,998) Effect of - - - - (10,089) - - (10,089) (40) (10,129)translationofpresentationcurrency Movement for - - (5,317) 36,028 - - - 30,711 1,089 31,800the year Issue of - - - - - - - - 5,010 5,010shares insubsidiary tominorityinterests At 30 June 29 154,329 (6,590) 43,487 (11,546) 1 51,291 231,001 6,059 237,0602007 Company Statement of Cash Flows for the year ended 30 June 2007 01/07/2006 28/04/2005 to to 30/06/2007 30/06/2006 £'000 £'000Operating activitiesProfit for the period 30,740 6,186Adjustments for:Interest income (1,802) (1,246)Interest expense 2,013 1,385Net gains on investments (31,593) (7,459)Unrealised gains from subsidiaries (3,596) - Operating cash flows before changes in working capital (4,238) (1,134) Increase in receivables (109) (92)Increase in payables 2,343 423 Cash flows from operating activities (2,004) (803) Investing activitiesPurchase of investments (46,219) (54,064)Return of capital from investments 14,745 11,484Investment in subsidiary (21,588) -Interest received 1,802 1,246 Cash flows from investing activities (51,260) (41,334) Financing activitiesProceeds on issue of equity shares 157,348 59,153Equity shares buy back (5,969) (298)Issue costs (2,998) (1,586)Proceeds from issue of zero dividend preference shares - 25,163 Cash flows from financing activities 148,381 82,432 Net increase in cash and cash equivalents 95,117 40,295Cash and cash equivalents at 30 June 2006 40,216 -Effects of exchange difference arising from cash and cash equivalents (3,402) (79)Cash and cash equivalents at 30 June 2007 131,931 40,216 Consolidated Statement of Cash Flows for the year ended 30 June 2007 01/07/2006 to 30/06/2007 £'000Operating activitiesProfit for the year 31,800Adjustments for:Interest income (1,802)Interest expense 2,947Net gains on investments (37,306) Operating cash flows before changes in working capital (4,361) Increase in receivables (109)Increase in payables 2,487 Cash flows from operating activities (1,983) Investing activitiesPurchase of investments (87,334)Return of capital from investments 14,745Interest received 1,802 Cash flows from investing activities (70,787) Financing activitiesProceeds on issue of equity shares 157,348Equity shares buy back (5,969)Issue costs (2,998)Loan proceeds received 15,490Interest paid (759)Issue of shares in subsidiary to minority interest 5,010 Cash flows from financing activities 168,122 Net increase in cash and cash equivalents 95,352Cash and cash equivalents at 30 June 2006 40,216Effects of exchange difference arising from cash and cash equivalents (3,391)Cash and cash equivalents at 30 June 2007 132,177 Statement of compliance This report has been prepared in accordance with International FinancialReporting Standards ("IFRS") issued and adopted by the International AccountingStandards Board (the "IASB"), interpretations issued by the InternationalFinancial Reporting Interpretations Committee, applicable legal and regulatoryrequirements of Guernsey Law and the Listing Rules of the UK Listing Authority. Basis of Preparation This report is presented in sterling, rounded to the nearest thousand. The accounting policies have been consistently applied to the results, assets,liabilities and cash flows of the company. The preparation of this report in conformity with IFRS, requires management tomake judgement, estimates and assumptions that affect the application ofpolicies and the reported amounts of assets and liabilities, income andexpenses. The estimates and associated assumptions are based on historicalexperience and various other factors that are believed to be reasonable underthe circumstances, the results of which form the basis of making judgementsabout the carrying values of assets and liabilities that are not readilyapparent from other sources. Actual results may differ from these estimates. This information is provided by RNS The company news service from the London Stock Exchange