Edison review on Electra Private Equity (ELTA)

London, UK, 3 December 2021

Edison issues review on Electra Private Equity (ELTA)

On 2 November and 2 December 2021, Electra Private Equity (ELTA) reiterated its corporate strategy for moving its listing from the Main Market of the London Stock Exchange to AIM, and provided updates on current trading for its remaining corporate investment, Hotter Shoes. With respect to trading, there was ongoing strength in Hotter's revenue growth. Management's medium-term guidance for Hotter suggests a revenue CAGR of 12% and EBIT CAGR of c 86% in FY22-25e. This guidance excludes incremental revenue from potential new brand partnerships as Unbound seeks to leverage its core target demographic, which management believes could double profits again in the medium term. Applying the median EV/sales multiple of UK online consumer peers to Hotter's FY22 and FY23 guidance suggests an equity value of £22-33m, an average of £27.5m, versus its last reported (30 September 2021) adjusted net asset value (NAV) of £33.5m, before any incremental revenue and profit from the new brand partnerships. Unbound's equity value will likely be enhanced when it is listed on AIM by the transfer of residual cash from Electra. Our estimated NAV for ELTA is £36.1m compared to the current market cap of £24.8m.

Electra Private Equity's (ELTA) investment objective has been to follow a realisation strategy to crystallise value for shareholders by balancing the timing of returning cash to shareholders with maximisation of value. Following the demerger of Hostmore in November 2021, Hotter Shoes is ELTA's only corporate investment. It is expected to relist on AIM as Unbound Group.

Click here to view the full report or here to sign up to receive research as it is published.

All reports published by Edison are available to download free of charge from its website

www.edisongroup.com

About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached - across institutions, family offices, wealth managers and retail investors - Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings.

Having been the first in-market 17 years ago, Edison now has more than 100 analysts covering every economic sector. Headquartered in London, Edison also has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in Athens, Johannesburg and Sydney.

Edison is authorised and regulated by the Financial Conduct Authority.

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information, please contact Edison:

Victoria Chernykh +44(0)20 3077 5700 investmenttrusts@edisongroup.com

Russell Pointon +44(0)20 3077 5700 consumer@edisongroup.com

Learn more at www.edisongroup.com and connect with Edison on:

LinkedIn www.linkedin.com/company/edison-group-/

Twitter www.twitter.com/Edison_Inv_Res 

YouTube www.youtube.com/edisonitv