SLPE.L Regulatory News (SLPE)

6 December 2010

STANDARD LIFE EUROPEAN PRIVATE EQUITY TRUST PLC

RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2010

Highlights

·; For the financial year ended 30 September 2010 the Company's undiluted net asset value per ordinary share ("NAV") rose by 18.4% to 195.3p (diluted NAV - 193.3p).

·; The 30.4p rise in NAV during the year comprised 3.4p of net realised gains and income from the Company's portfolio of 39 private equity fund interests, 37.5p of net unrealised gains on the portfolio on a constant exchange rate basis, 7.8p of negative foreign exchange rate movements on the portfolio and 2.7p of costs and other movements.

·; The closing mid-market price of the Company's ordinary shares on 30 September 2010 was 113.75p, a rise of 1.3% over the year and a discount of 41.2% to the diluted NAV.

·; The Board is recommending a final dividend of 0.2p per ordinary share for the financial year.

·; At 30 September 2010 the Company's net assets were £315.2 million. The Company had interests in 39 private equity funds with a value of £369.6 million. In preparing the Company's year end valuation, 89.8% by value of the portfolio was valued at 30 September 2010.

·; Reflecting the gradual improvement in the European private equity market, draw downs during the year increased to £48.0 million and distributions to £23.0 million. At 30 September 2010 the Company's net indebtedness was £54.2 million.

·; On 29 November 2010 the Company entered into a new £120 million syndicated revolving credit facility, led by The Royal Bank of Scotland plc. This facility expires on 31 December 2013.

·; The Company made no new fund commitments during the year and had £150.3 million of outstanding commitments at 30 September 2010.

·; During the period from 30 September 2010 to 2 December 2010 the Company funded £13.7 million of draw downs and received £10.8 million of distributions. At 2 December 2010 the Company's total outstanding commitments and net indebtedness were £134.5 million and £57.5 million respectively.

Quote from Scott Dobbie, Chairman:-

"The last year has seen a continuing recovery in the European private equity market, with an increasing number and value of new investments and realisations. Positive earnings growth at the underlying investee companies also gives confidence in our investment portfolio. With the Company's funding position and outstanding commitments now in better balance, the Board believes that the building blocks for future growth are in place."

For further information please contact:-

Peter McKellar of SL Capital Partners LLP (on 0131 245 0055)

Chairman's Statement

Results and performance

The year ended 30 September 2010 was more positive for the Company, following the challenges experienced in the aftermath of the financial crisis in late 2008. During the financial year there was a gradual improvement in the level of activity in the European private equity market, while valuations across the Company's portfolio rose, driven by earnings growth at underlying investee companies. For the year ended 30 September 2010 the Company's NAV increased by 18.4% to 195.3p (diluted NAV - 193.3p), from 164.9p at 30 September 2009 (diluted NAV - 163.4p). Accordingly, the Company can now report five consecutive quarterly increases in NAV. At 30 September 2010 the Company's net assets were £315.2 million.

The closing mid-market price of the Company's ordinary shares on 30 September 2010 was 113.75p, compared to 112.25p a year earlier. The Company's share price was trading at a 41.2% discount to the Company's diluted NAV at the year end. The share price to NAV discount remained wide throughout the financial year, in line with most of the Company's listed European peer group.

The Company's practice is one of reinvestment and to pay a dividend marginally in excess of the minimum required to maintain investment trust status. The Board is recommending a final dividend of 0.2p per ordinary share for the financial year. Subject to shareholder approval at the forthcoming Annual General Meeting, this dividend will be paid on 28 January 2011 to shareholders on the Company's share register at 31 December 2010. Shareholders will have the opportunity to elect to receive the final dividend in the form of ordinary shares. A circular and an election form are enclosed with the Company's annual report and accounts.

Private equity is a long-term asset class. For the five years ended 30 September 2010 the Company's share price total return fell 23.5%, compared to positive returns of 24.7% in the FTSE All-Share Index and 2.1% in the MSCI Europe Index (in euros) on a total return basis. The fall in the Company's share price total return over the five year period reflects, in particular, the fall in the Company's share price in 2008-2009 and the continued wide discount to NAV. Over the same five year period, the Company's NAV total return was 41.9%.

Valuation

At 30 September 2010 the Company's portfolio comprised 39 private equity fund interests. During the financial year the value of the investment portfolio rose by 26.1%. At 30 September 2010 the value of the portfolio was £369.6 million, of which unrealised gains arising during the year were £47.9 million. This latter amount was net of £12.6 million of unrealised foreign exchange losses.

The unrealised gains before foreign exchange rate movements arose from increased profits at the underlying investee companies, enhanced by the impact of gearing within those companies. In contrast, listed comparable valuation multiples, embodied in the Company's valuation process, declined during the year. The unrealised foreign exchange losses were as a result of sterling appreciating by 5.5% relative to the euro. Of the Company's gross assets of £376.1 million at 30 September 2010, £283.8 million comprised euro denominated assets and £65.3 million dollar denominated assets.

Around 89.8% by value of the private equity funds held by the Company were valued by the relevant fund manager at 30 September 2010. In undertaking the valuations the fund managers have followed the International Private Equity and Venture Capital Valuation Guidelines. In so doing, the primary valuation methodology is to use listed comparable valuation multiples.

Investment activity

The last eighteen months has seen a rise in the number and value of new private equity investments and realisations completed in Europe. The value of all buy-out transactions completed in the European private equity market during the year ended 30 September 2010 was €51.1 billion (year ended 30 September 2008 and 2009 - €92.0 billion and €21.3 billion respectively). In particular, the mid-market segment of the European buy-out market has been active, albeit a significant number of the transactions have arisen from one private equity owner selling to another. It is expected that this trend will reverse over the coming year, as more buy and sell-side transactions are undertaken by corporate owners. 

Reflecting the gradual improvement in the European private equity market, the Company's draw downs during the year increased to £48.0 million and distributions to £23.0 million. The distributions received generated net realised gains and income of £10.1 million, equivalent to an average return on the Company's acquisition cost of the realised investments of 1.8 times. Most of the distributions received came from investments made between 2003 and 2006. It is still too early to expect significant distributions from investments made in the peak years of 2007 and 2008.

The Company's aggregate outstanding commitments were £150.3 million at 30 September 2010. Where drawn they will be funded from the Company's cash resources, distributions received from the portfolio of fund investments and the use of the Company's borrowing facility. A number of the private equity funds held by the Company have, however, completed their respective investment periods and any future draw downs are likely to be limited. Accordingly, the Manager believes that up to £30 million of the Company's existing outstanding commitments are unlikely to be drawn. At 30 September 2010 the Company's net indebtedness was £54.2 million.

The European private equity market is starting to see a number of the more experienced mid and large buy-out managers attempting to raise new funds. This is against a background of very few such funds having been raised since 2008. It is the Board's hope that, as distributions to the Company increase and the Company's net indebtedness starts to decline, the Company will be able to make new fund commitments.

During the period from 30 September 2010 to 2 December 2010 the Company funded £13.7 million of draw downs and received £10.8 million of distributions. At 2 December 2010 the Company's total outstanding commitments and net indebtedness were £134.5 million and £57.5 million respectively.

New debt facility

On 29 November 2010 the Company entered into a new £120 million syndicated revolving credit facility, led by The Royal Bank of Scotland plc. This facility expires on 31 December 2013 and is an increase on the existing £100 million facility.

Clive Sherling, who has served on the Board since December 2006, and who has subsequently increased his range of business interests, intimated some time ago, to the regret of his colleagues, that he wished to step down from the Board after the Annual General Meeting in January 2011. Clive has made a significant contribution to the Board, where his expertise was particularly valuable on private equity related matters. Clive carries with him the best wishes of the Board and the Manager for continued success in the future.

The Company has announced that Jonathan Taylor has been co-opted to the Board and will stand for election at the Annual General Meeting. Jo Taylor, who was selected with the help of recruitment consultants, worked for almost 25 years in 3i Group, where before retirement in 2008 he headed the Ventures Division and was a member of the Group management and investment committees. Jo has deep practical knowledge of the European private equity and ventures businesses and his new colleagues believe he will provide a material addition to the expertise available to the Company.

Outlook

The last year has seen a continuing recovery in the European private equity market, with an increasing number and value of new investments and realisations. Positive earnings growth at the underlying investee companies gives confidence in our investment portfolio. With the Company's funding position and outstanding commitments now in better balance, the Board believes that the building blocks for future growth are in place.

Scott Dobbie CBE

Chairman

INCOME STATEMENT (audited)

for the year ended 30 September 2010

INCOME STATEMENT (audited)

for the year ended 30 September 2009

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS (audited)

BALANCE SHEET (audited)

CASHFLOW STATEMENT (audited)

Notes:

1. Standard Life European Private Equity Trust PLC is an investment company managed by SL Capital Partners LLP, the ordinary shares of which are admitted to listing by the UK Listing Authority and to trading on the London Stock Exchange. It seeks to conduct its affairs so as to continue to qualify as an investment trust under section 1158-1165 of the Corporation Taxes Act 2010. The Board is wholly independent of the Manager and Standard Life plc.

4. The number of ordinary shares in issue as at 30 September 2010 was 161,372,793 (30 September 2008 - 161,066,017). The return per ordinary share is based on the weighted average number of ordinary shares in issue.

5. The Directors recommend that a final dividend of 0.20p (2009 - 0.10p) per ordinary share be paid on 28 January 2011 to shareholders on the Company's share register as at the close of business on 31 December 2010. The ex-dividend date for the final dividend is 29 December 2010.

6. The financial information for the year ended 30 September 2010 comprises non-statutory accounts as defined in sections 434-436 of the Companies Act 2006. The financial information for the year ended 30 September 2009 has been extracted from published accounts that have been delivered to the Registrar of Companies and on which the report of the auditors was unqualified. The statutory accounts for the year ended 30 September 2010 contain an unqualified audit report and will be delivered to the Registrar of Companies following the Company's Annual General Meeting, which will be held at The Balmoral Hotel, 1 Princes Street, Edinburgh EH2 2EQ on 25 January 2011 at 12.30pm.

7. The report and accounts for the year ended 30 September 2010 will be posted to shareholders in mid-December 2010 and copies will be available from the Company Secretary - Aberdeen Asset Management PLC, 40 Princes Street, Edinburgh EH2 2BY.

for Standard Life European Private Equity Trust PLC,

Aberdeen Asset Management PLC Company Secretary

END