Half-yearly Report
Strategic Equity Capital plc
Half Yearly Report & Financial Statements
for the six months to 31 December 2010
Key highlights:
- Net assets per share increased by 35.6% to 90.5p per share
- Company outperformed the comparable FTSE SmallCap (ex Investment
Companies Index) by 14.8%
- Portfolio companies continued to display strong earnings growth
- Company reclassified by AIC to UK Smaller Companies sector
- Revised investment management arrangements now in place
For further information, please contact:
Capita Sinclair Henderson Limited
Tracey Brady 01392 477513
SVG Investment Managers Limited
Rebekka Lambert/Adam Steiner 020 7010 8900
Investment objective
The investment objective of the Company is to achieve absolute returns (i.e.
growth in the value of investments) rather than relative returns (i.e.
attempting to outperform selected indices) over a medium-term period,
principally through capital growth.
The Company's investment policy can be found below.
Investment Manager's strategy
The Investment Manager, SVG Investment Managers Limited ("SVGIM") employs a
strategy to invest in publicly quoted companies which will create value
through strategic, operational and management change. SVGIM follows a practice
of constructive corporate engagement and aims to work with management teams in
order to enhance shareholder value.
A more detailed explanation can be found in the Investment manager's report
below.
Website
Further information on the Company can be accessed via the Company's website
www.strategicequitycapital.com
Neither the contents of the Company's website nor the contents of
any website accessible from hyperlinks on the Company's on the Company's
website (or any other website) is incorporated into, or forms part of, this
announcement.
Capital structure
Issued share capital
79,815,974 Ordinary shares of 10p each: £7,981,597.
At 31 December 2010 the issued share capital of the Company was 79,815,974
Ordinary shares. All shares have equal voting rights.
Treasury shares
At 31 December 2010 the total number of shares held in treasury was 3,045,500
(2009: 3,045,500). Shares held in treasury have no voting, dividend or other
rights and are excluded from net asset value and return per share
calculations. As at 24 February, the Company's issued share capital remained
as stated above, and the total voting rights figure was 76,770,474.
Financial summary
1 July 2010 to Year to 1 July 2009 to
31 December 2010 30 June 2010 31 December 2009
Total return:
Total return £18,450,000 £12,907,000 £12,512,000
Return per Ordinary share* 24.03p 17.03p 16.72p
Revenue:
Net revenue after taxation £(5,000) £234,000 £101,000
Revenue return per Ordinary share* (0.01)p 0.31p 0.14p
As at As at As at
31 December 2010 30 June 2010 31 December 2009
Assets (investments valued at bid-market prices):
Net assets £69,442,000 £51,222,000 £50,827,000
Net asset value ("NAV")per Ordinary share
- (including current period revenue) 90.45p 66.72p 66.21p
Middle market quotation:
Ordinary shares 68.25p 51.25p 50.75p
Discount to NAV 24.54% 23.19% 23.35%
* Returns per Ordinary share are calculated based on 76,770,474 Ordinary
shares (30 June 2010: 75,785,546 and 31 December 2009: 74,845,290) being the
weighted average number of Ordinary shares, excluding shares held in treasury,
in issue throughout the period.
Investment policy
The Company invests primarily in equity and equity-linked securities quoted on
markets operated by the London Stock Exchange where the Investment Manager
believes the securities are undervalued and could benefit from strategic,
operational and management change. The Company also has the flexibility to
invest up to 20% of the Company's gross assets at the time of investment in
securities quoted on other recognised exchanges.
The Company may meet all calls on its undrawn loan commitment to Strategic
Recovery Fund II ("SRF II") and to Vintage 1 Limited ("Vintage"). Subject
thereto, until such time as all of the undrawn loan commitment to SRF II has
been called or, if earlier, SRF II's investment period has expired, save for
investments pursuant to its commitments to SRF II and Vintage, the Company
will not make any further investments in unquoted securities. Thereafter, the
Company may invest up to 20% of its gross assets at the time of investment in
unquoted securities, provided that, for the purpose of calculating this limit,
any undrawn commitment to Vintage which may still be called shall be deemed to
be an unquoted security.
The maximum investment in any single investee company will be no more than 15%
of the Company's investments at the time of investment.
The Company will not invest more than 10%, in aggregate, of the value of its
total assets at the time the investment is made in other listed closed-end
investment funds provided that this restriction does not apply to investments
in any such funds which themselves have published investment policies to
invest no more than 15% of their total assets in other listed closed-end
investment funds.
Other than as set out above, there are no specific restrictions on
concentration and diversification. The Board does expect the portfolio to be
relatively concentrated, with the majority of the value of investments
typically concentrated in the securities of 10 to 15 issuers across a range of
industries. There is also no specific restriction on the market capitalisation
of issues into which the Company will invest, although it is expected that the
majority of the investments by value will be invested in companies with a
market capitalisation of less than £300 million.
The Company's Articles of Association permit the Board to take on borrowings
of up to 25% of the net asset value at the time the borrowings are incurred
for investment purposes.
Chairman's report
Introduction
Market conditions in the second half of 2010 continued to benefit the
Company's investment strategy. Despite the backdrop of fiscal austerity,
rising inflation and continued problems in the international banking sector,
the world economy remained reasonably robust. The high level of stock market
volatility experienced over the summer dramatically subsided over the
remainder of the year. The corporate sector saw improving returns on capital
and further margin expansion and continued to pay down debt to the extent that
corporate gearing ended the period near all time record lows.
There was a considerable improvement in the valuation of smaller public
companies in the UK. The FTSE SmallCap (ex Investment Companies) Index rallied
by 21.2%, broadly in line with the All-Share Index. However, unlike the
broader market, which on a total return basis ended the year within 1% of its
all time high, our benchmark remained nearly 30% below its mid-2007 peak,
implying that there remains some ground to be made up before the full extent
of corporate recovery is fully reflected.
The Investment Manager used this rapid uplift in valuations to exit positions
which had achieved full value, and reallocate the proceeds into those
companies which had not yet had their operational improvements recognised by
the market. In addition some smaller new holdings were accumulated in
companies which the Investment Manager has identified as undervalued and
potential beneficiaries of future operational improvement.
Performance
Net asset value per share ("NAV") increased by 35.6% over the period. This was
driven by a combination of continued strong operating performance across the
portfolio and the positive impact of the Company's investment in Strategic
Recovery Fund II. As a result the Company experienced its fourth consecutive
half of NAV growth, which has now risen by over 120% since the end of 2008.
The Company's performance was considerably better than that of its investment
benchmark; it outperformed the FTSE SmallCap (ex Investment Companies) Index
by 14.8% over the period. This strong performance means that it has now
outperformed its benchmark by 4.6% over the last three years.
Discount Management
The average discount to NAV narrowed again to 22.2%, as compared to 25.3% over
the prior six month period. This was below the level of comparable activist
trusts but still slightly greater than that of diversified UK smaller
companies trusts. The Board does remain committed to buying back shares when
it believes that this is in the best interests of shareholders as a whole
after taking into account all relevant factors, including alternative uses for
any available cash balances, market conditions and the constraints imposed by
legal and regulatory requirements, including the public hands test and concert
party matters.
Reclassification to UK Smaller Companies Sector
The Board was pleased to note that in November 2010 the Association of
Investment Companies reclassified Strategic Equity Capital from the UK Growth
to the UK Smaller Companies sector. The Board believes that this
classification more accurately reflects both the investment activity and
investment objective of the Company.
Investment Manager
Having reviewed the Investment Manager's reports I can confirm that on the
basis of this they have complied with our investment restrictions and the FSA
rules. A number of changes to the terms of the Investment Management Agreement
were outlined in detail in the circular to shareholders dated 12 October 2010.
Following the passing of the relevant resolution at the General Meeting of the
Company held on 9 November 2010 the changes have now become effective.
Banking Arrangements
The Company currently has a £5 million revolving facility with RBS which
expires on 14 July 2011. This facility is currently unutilised. Following the
better than expected reduction in undrawn commitments to unlisted investments,
the Board has authorised the Manager to use this facility to increase
investment flexibility over the short term.
Dividend
The Directors continue to expect that returns for shareholders will derive
primarily from the capital appreciation of the shares rather than from
dividends. In line with previous years the Board does not intend to propose an
interim dividend.
Continuation Vote
Shareholders will be given an opportunity to vote on an ordinary resolution to
continue the Company at this year's Annual General Meeting, if the NAV total
return per share over the three years ending 30 June 2011 has outperformed the
total return on the FTSE SmallCap (ex Investment Companies) Index and the
average discount over the three months ending on the preceding 30 June 2011 is
not wider than the average discount of the UK Smaller Companies sector over
that period. If the Company fails either of those tests, the Board will bring
forward proposals which are expected to allow shareholders to realise their
investment. The Investment Manager strongly supports this approach and has
agreed that, if any such continuation vote is not passed or if either or both
the performance tests are not met and alternative proposals are brought
forward, the Company will be entitled to terminate the Investment Manager's
appointment without any compensation being payable to the Investment Manager
in lieu of any period of notice otherwise required under the Investment
Management Agreement.
Outlook
The investment outlook for the Company remains positive. Despite strong
performance since its 2008 low, the UK smaller companies market remains both
undervalued in an absolute sense, and one of the cheapest equity markets in
the world on a relative basis. Investor appetite for smaller companies appears
to be increasing, reflected in both increased M&A activity and net buying of
equities and funds by investors for the first time in several years. From a
portfolio specific basis, the majority of portfolio companies continue to
deliver strong results and appear to have strong momentum to propel them into
2011.
J Hodson
24 February 2011
Investment manager's report
Investment strategy
Our strategy is to invest in publicly quoted companies which will create value
through strategic, operational and management change. We follow a practice of
constructive corporate engagement and aim to work with management teams in
order to enhance shareholder value. We aim to build a consensus with other
stakeholders, and prefer to work alongside like-minded co-investors as
leaders, followers or supporters. We try to avoid confrontation with investee
companies as we believe that there is strong evidence that constructive
corporate engagement generally generates strong returns for investors.
We are long-term investors; we typically aim to hold companies for the
duration of three year investment plans that include an entry and exit
strategy and a clearly identified route to value creation. The duration of
these plans can be shortened by transactional activity or lengthened by
adverse economic conditions. Before investing we undertake an extensive due
diligence process focused on fundamental company analysis as well as assessing
market conditions, management and stakeholders. Our investments are
underpinned by valuations, which we derive using private equity-based
techniques. These include a focus on cash flows, the potential value of the
company to trade or financial buyers and the capital structure.
Our typical investee company has a market capitalisation of under £150 million
at the time of initial investment. We believe that smaller companies provide
the greatest opportunity for our investment style as they are relatively
under-researched, often have more limited resources and frequently can be more
attractively valued.
We believe that this approach, if properly executed, will generate favourable
risk adjusted returns for shareholders over the long term.
Investment report
As at 31 December 2010 the Company had net assets of £69.4 million (90.5p per
share). This represented an increase of 35.6% over the six months.
The period saw a reversal of the market trends of the first half of 2010. The
macroeconomic concerns, in particular those regarding sovereign debt, that had
suppressed market confidence in the first half of the year were cast aside and
equities experienced a bull run across all market capitalisations. The FTSE
SmallCap (ex Investment Companies) Index marginally underperformed the FTSE
100 Index by approximately 0.5%, leaving it roughly 5.0% ahead for 2010, in
line with the long term trend. Once again the best performing segment of the
market was the FTSE 250 Index, to which the Company has little exposure. As
smaller companies return to favour it is unsurprising to see this part of the
market performing well as large institutions attempt to gain exposure to
smaller company returns. The FTSE 250 ended 2010 trading at an all time high,
a performance which was mirrored by a very strong year for "smaller companies"
with market capitalisations in excess of £500 million. Many of these companies
are now on materially higher ratings despite offering similar earnings growth
prospects to the smaller companies in the FTSE SmallCap (ex Investment
Companies) Index. Unsurprisingly we see less value in this part of the market.
In other respects the market remained little changed. The reduced liquidity in
smaller companies that we reported in June 2010 only improved marginally, and
remained materially below the levels seen between 2000 and 2007. Given these
conditions we were surprised at how little impact there was on the sell-side,
with few notable names disappearing and little consolidation in the market.
This is a mixed blessing for the Company's shareholders; reduced sell-side
coverage of smaller companies will ultimately lead to increased opportunities
for the Company to add value through its investment strategy, but may also
limit the excitement around the smaller companies sector in general.
Performance over the period was driven principally by stock specific factors.
Whereas the last period saw a considerable contribution to performance from
our exposure to technology stocks, this half saw a bigger contribution from
specialist electronics. Our focus on companies undergoing material change was
also clear, with seven of the top eight contributors having recently
experienced either significant change to their board of directors or major
restructuring programmes, and in many cases both.
The scale and pace of change, combined with a resurgent market, led to some
very large share price movements over the period. Lavendon Group rallied by
99.6% after it announced a change of Chairman and was "put into play" by TVH,
a prospective Belgian trade buyer. We believe that the offer materially
undervalued the company, and spent much of December lobbying the company
regarding the reconstitution of its board and next steps.We were delighted
when it appointed Jan Astrand, who is an adviser to SVG Investment Managers,
and Andrew Wood, a highly regarded figure within the plc world, as
non-executive directors. The company is currently undergoing a broad
operational review which we believe will highlight the long term value of the
group. Gooch & Housego delivered a total return of 91% and e2v Technologies
80.2%, in both cases as a result of material upgrades to analysts' earnings
expectations. In e2v's case, these were particularly welcome following the
difficult restructuring, and resultant industrial action, of the group's
operations in France.
Given their large share price movements, it is unsurprising that the three
companies mentioned above were amongst the top contributors to fund
performance. The Company's holding in Strategic Recovery Fund II ("SRF II")
increased in value by 39.2% over the period, and made a £1 million
distribution which was matched with a simultaneous call for the same amount.
This reduced the outstanding undrawn commitment to SRF II to £1.4 million.
KCOM Group rallied following the announcement in November of strong interim
results, a 130% increase in its interim dividend and a commitment to 10%
annual dividend growth until at least March 2013.
Top 5 contributors to performance
Company Valuation Period attribution
e2v Technologies 6,855 +7.76%
Lavendon Group 6,597 +5.37%
SRF II 9,674 +4.75%
Gooch & Housego - +2.92%
KCOM Group 6,693 +2.87%
Bottom 5 contributors to performance
Company Valuation Period attribution
Wilmington Group 781 0.05%
CVS Group 1,277 -0.03%
Pinewood Shepperton 2,467 -0.05%
Western & Oriental - -0.11%
Redstone 40 -0.15%
There were no material negative contributors to performance over the period,
and only four holdings saw a decrease in their value. The residual holding of
Western & Oriental was sold at a discount after a private individual with
connected interests took a controlling stake in the business, and we continued
to sell our holding in Redstone following our decision not to participate in
its second rescue fundraising. The negative attributions from Pinewood and CVS
reflect share price declines of 4.3% and 1.3% respectively. Neither of these
moves were related to specific company news.
Portfolio review
We maintained our tactic of investing in highly cash generative, niche market
leaders with sustainable sources of competitive advantage and ideally a high
proportion of overseas earnings. The tactic of avoiding companies with
exposure to UK public or consumer spending has worked well, although some
quality, niche UK consumer facing stocks are beginning to look more
interesting than for some time, given they are trading at undemanding
multiples of their underlying cashflows.
The portfolio remained highly focused, with a total of 17 holdings and with
the top 10 holdings accounting for 80% of the portfolio at the end of the
financial period. The portfolio remains predominantly invested in quoted
equities. The percentage of the portfolio invested in unlisted securities
(including SRF II) reduced by 0.2% to 16.3% at the end of the period as both
unlisted investments performed roughly in line with the Company's public
equity holdings. 7.2% of the portfolio was invested in cash at the period end.
The level of portfolio activity was relatively low over the period, with £10
million of disposals in the period representing around 17.6% of the weighted
average NAV. £6.2 million of purchases were made with 35% of purchases
representing money into new investments, the remainder being additions to
existing holdings. Portfolio activity continued to be focused on realising
mature investments that had achieved or exceeded our target prices, and
"tidying" the portfolio by exiting small toe-hold investments that we believed
would not contribute materially to performance over the longer term.
The primary source of proceeds over the period was from reductions in our
mature holdings of technology and electronics stocks. Gooch & Housego, an
investment made in early 2010, was exited at over 2.2x cost after a
surprisingly rapid re-rating in the market combined with strong earnings
upgrades. While the company has excellent growth prospects we believe that the
company's valuation now accurately reflects its risk profile, and were happy
to sell to more momentum-orientated investors. Other realisations included the
sale of our remaining holdings of Spirent Communications, Filtronic and Intec
Telecom Systems. The only other material sale over the period was a
significant reduction in the Company's holding of Thorntons. The turnaround
programme there has not met our original expectations, with the retail side of
the business continuing to perform poorly. Whilst the continued success of the
commercial side of the business and the appointment of a new CEO may
ultimately resolve this issue, we believe that the timescale is currently too
uncertain to merit continued investment.
Purchases over the period predominantly related to follow-on investments in
existing holdings, with an additional £2.4 million investment in Lupus Capital
being the largest use of cash by some distance. The Company also took toe-hold
positions in a business to business media group and a niche consumer facing
business, both of which are highly cash generative. We believe they are
materially undervalued and, with the potential for earnings recovery,
re-rating and dividends, have the potential to generate 2x return within a
three to four year horizon.
Portfolio as at 31 December 2010 - Sector split
Sector Percentage
Support services 19.7
Technology 18.0
Unquoted investments 16.3
Manufacturing 14.0
Media 12.2
Telecoms 9.7
Net cash 7.2
Retail 2.9
Portfolio as at 31 December 2010 - Size split (by market capitalisation)
Size Percentage
Net cash 7.2
Unquoted 16.3
<£100m 24.7
£100m-£500m 51.8
Operationally the portfolio has continued to perform very well, leading to
improved valuation characteristics despite the material increase in NAV over
the period. The low absolute valuation of the portfolio, along with its strong
expected earnings growth, makes us optimistic about the potential for further
NAV uplift in the medium term. We believe that the majority of portfolio
holdings continue to trade at significant discounts to comparable trade
multiples.
Portfolio characteristics as at 31 December 2010
Consensus median portfolio characteristics Strategic Equity Capital Strategic Equity Capital
(weighted median) (weighted average) Smaller
Companies
Price/Earnings ratio (FY1) 10.5 12.0 11.5
Dividend yield (FY1) 0.9% 2.1% 3.2%
Price/ Book ratio 0.8X 2.0X 1.3X
Price/ Sales ratio 0.6X 0.7X 0.5X
SVG cash flow yield 15.6% 14.9% N/A
Forecast earnings growth (FY1) 10.1% 22.3% 8.2%
Forecast debt to equity 1.3X 1.4X 1.9X
The figures above are all consensus forecasts with the exception of the
Price/Book and Price/Sales ratios which are historic.
Source: Factset Portfolio Analysis System, Investec.
Unlisted investments
Over the period the Company received a distribution of £1 million from SRF II
matched by a call for the same amount. The Company also received a
distribution of £316,347 from Vintage 1. At the period end, the outstanding
commitments relating to these two vehicles were £1.4 million and €2.2 million
respectively. The manager of Vintage 1 has communicated that they do not
expect to make any further net draw downs.
Investee company review
4imprint Group is the fourth largest distributor of promotional products in
the world with an international network of companies in the UK, USA, Hong Kong
and Europe. We have been involved with the company since a change of
management in 2003 and ultimately the appointment of Ken Minton, a member of
our Industry Advisory Panel, as Executive Chairman in 2004. Having delivered
considerable value for shareholders Ken announced retirement plans during the
period. We worked closely with the company to identify a suitable successor,
John Poulter, who oversaw the successful restructuring of Filtronic plc and
who was confirmed as Executive Chairman in 2010. The company has benefitted
recently from material upgrades to forecast earnings. We expect the new
Chairman to announce his strategy for the company following consultation with
significant shareholders. Funds managed by SVGIM currently hold approximately
13% of the company's equity.
Allocate Software is the leading workforce optimisation software applications
provider for global organisations with large, multiskilled workforces. It is
the clear European market leader in the healthcare vertical market, where the
compelling return on investment for clients is driving significant growth. It
is also the clear lead provider of optimisation software for the global
offshore and defence markets. A strong management team is focused on
delivering continued profitable growth by maximising the commercial potential
of the product suite. SVGIM became a major shareholder as part of a placing to
fund the acquisition of its Nordic equivalent, Timecare AB, in December 2009.
The company has subsequently acquired Dynamic Change, a complementary business
in the UK. The business is progressing to plan, with 15% organic growth
delivered in the year to May 2010. Funds managed by SVGIM currently hold
approximately 6% of the company's equity.
e2v Technologies is a global market leader in the design and manufacture of
specialist electronic components and low volume/high value and high
reliability semiconductors, predominately for the medical, aerospace, defence
and industrial markets. An ill-timed acquisition in September 2008 funded by
debt left the balance sheet of the business over-stretched as the economic
downturn began. A new Finance Director, well known to SVGIM, was appointed in
May 2009. The Company made its initial investment during December 2009 via a
placing to pay down debt as well as restructure the UK and French cost base
and subsequently added to its holding. Despite a "wobble" in France during
February, final results to the end of March were in line at all levels and
degearing was materially better than anticipated. Interim results in November
highlighted that the restructuring is ahead of plan. Funds managed by SVGIM
currently hold approximately 10% of the company's equity.
KCOM Group is a provider of communications solutions to businesses and the
public sector in the UK. It has a very strong regional consumer-based business
around Hull in East Yorkshire. Following discussions instigated by
shareholders the company announced major changes to its management team in
November 2008. Following further consultation with shareholders the company
has implemented an innovative remuneration package that closely aligns
shareholders and management. Since then, the company has undergone a strategic
review and announced an important network sharing deal with BT Group. The
market has started to recognise the group's strong cash generation and
earnings recovery potential. The dividend was increased by 130% in November
2010. Funds managed by SVGIM currently hold approximately 7% of the company's
equity.
Lavendon Group is the market leader in the rental of powered aerial work
platforms in both Western Europe and the Gulf States. The group entered the
current downturn having over-spent on equipment, and with an overstretched
balance sheet. The nature of powered access equipment is such that capital
expenditures can be reduced materially for a significant amount of time
without detriment to the fleet. We believe that the company will generate
significant surplus cash flow over the next two years which will be used to
pay down debt and thus create value for equity shareholders. We invested in
the company via a fundraising in late 2009 which brought the company's debt
down to high but manageable levels. Since our investment we have helped the
company with the reconstitution of a large part of its board, and to rebuff
two unwelcome takeover approaches. John Standen, the company's Chairman, has
announced a broad review which we believe will lead to improvements in
corporate strategy and operations. Jan Astrand, an advisor to SVG Investment
Managers, joined the board in November 2010. Funds managed by SVGIM currently
hold approximately 9% of the company's equity.
Lupus Capital is an industrial holding company. Its primary building products
division manufactures and sells hardware and seals for new build and
replacement windows and has market leadership in a number of niches in EU and
North America. "Gall Thomson", its second division, manufactures industrial
couplings for niche applications in the offshore sector. The group was built
by acquisition by Greg Hutchings, who resigned from the board in June 2009. A
well regarded Chairman, well known to SVGIM, was appointed in November 2009
and is rebuilding the board and improving governance. We believe that the
group will benefit from de-gearing from cash flow and disposal of the
couplings business, cyclical earnings recovery from the building products
business and a re-rating to normalised multiples. Lupus appointed two highly
regarded non-executive directors in December 2009, and a new CEO was announced
in January 2010 and Financial Director in May 2010. Following these management
changes results in March 2010 and September 2010 were ahead of expectations.
Funds managed by SVGIM currently hold approximately 6% of the company's
equity.
Mecom Group is a European media business. The Group owns over 300 printed
titles and over 200 websites in its four divisions, with substantial
operations in the Netherlands, Denmark, Norway and Poland, generating
readership of 23 million per week and attracting 32 million unique website
users per month. The company has undergone substantial corporate restructuring
in the last two years having over-extended its balance sheet through
acquisitions in the run up to the recession. We have engaged extensively with
the company, investigating the progress of its turn around, assisting it with
investor relations and lobbying on its behalf for greater coverage by the
analyst community. Having originally invested in 2005 and fully realised the
cost of that investment before the recession struck, we have revisited the
investment case and added to our holding. We believe that the company is worth
multiples of its current share price based on precedent transactions and
should create substantial value through de-gearing. Positive trading
statements in November 2009 and January 2010, and results in March 2010, July
2010 and October 2010 indicate that the company is trading ahead of our plan.
Funds managed by SVGIM currently hold approximately 4% of the company's
equity.
Pinewood Shepperton provides facilities for major national and international
film production, filmed television, studio television recording, the filming
of commercials and post production sound services. It is engaged in "Project
Pinewood", which will expand its operating capacity as well as releasing value
from its substantial property assets. This is a longer term project, but
ultimately should deliver significant returns for shareholders. It has
recently been subject to a public campaign by an activist shareholder, leading
to takeover speculation and an increase in its share price. We are actively
engaged with the company on this and other issues. Funds managed by SVGIM
currently hold approximately 7% of the company's equity.
RPC Group is Europe's leading manufacturer of rigid plastic packaging.
Following lobbying from SVGIM and another shareholder acting in concert the
group has initiated a strategic and operational review and made substantial
changes to its board. The CEO has performed well against RPC's new objectives,
leading to a significant reduction in group debt and ongoing focus on
improving return on invested capital. While this is a longer term investment
we believe that there is still more for the taking, particularly when taking
into account the improvement in the pricing of its raw materials. In December
the company announced its intention to acquire Superfos, a Scandinavian
competitor, and a deeply discounted rights issue to finance the deal. We have
followed our money, and believe that the acquisition should create shareholder
value and lead to a re-rating of the company. Funds managed by SVGIM currently
hold approximately 5% of the company's equity.
StatPro is a rapidly growing provider of asset management software and asset
pricing to the investment industry worldwide. SVG became a major shareholder
after offering to replace the company's banking facilities provided by
Kaupthing with equity financing following the bank being put into
administration by the UK government. We believe that the company has resilient
cash flows and strong growth characteristics given their potential to move
into new areas, and that these characteristics are not yet properly valued by
the market when compared to precedent transactions in the industry. The Group
announced several large contract wins in the final quarter of 2010. Funds
managed by SVGIM currently hold approximately 4% of the company's equity.
Outlook
We believe sentiment will continue to be volatile in the medium term as
investors grapple with, on the one hand, global economic imbalances and, on
the other, strong corporate earnings and news flow. The UK still has to
resolve excessive government borrowing, an over-geared consumer sector, partly
nationalised banks and rising inflation. However, it is important to make the
distinction between the UK economy and the UK stock market. We recognise that
the UK economy continues to face significant challenges not least in its
domestic banking sector, which we continue to avoid, along with sectors
directly exposed to the UK consumer.
We believe all four drivers of equity value are firmly in place. Corporate
debt levels have rapidly come down from record highs in 2009 they have
de-geared at their most rapid pace in 20 years and continue to do so, and
earnings growth remains robust. The UK market is forecast to grow earnings in
excess of 15% in 2011 and with now low levels of corporate debt, we believe
this should result in significant dividend growth at least in-line with
earnings, along with potential for share buybacks and/or special dividends and
rising M&A activity.
M&A activity has to date been relatively muted but is building and average
buy-out premiums are currently 31%, with some deals happening at premiums well
in excess of this. We believe that corporate M&A will contribute to driving a
re-rating of equities going forward.
We continue to view the portfolio as a collection of undervalued and highly
attractive assets, and we believe this is borne out by the current SVGIM free
cash flow yield on the portfolio of 15.6%, at the top end of its historic
range.
SVG Investment Managers Limited
24 February 2011
All statements of opinion and/or belief contained in this Investment manager's
report and all views expressed and all projections, forecasts or statements
relating to expectations regarding future events or the possible future
performance of the Company represent SVG Investment Managers Limited's own
assessment and interpretation of information available to it at the date of
this report. As a result of various risks and uncertainties, actual events or
results may differ materially from such statements, views, projections or
forecasts. No representation is made or assurance given that such statements,
views, projections or forecasts are correct or that the objectives of the
Company will be achieved.
Top 10 holdings
as at 31 December 2010
% of
invested % of
portfolio at invested % of
Sector Date of first Cost Valuation 31 December portfolio at net
Company Classification investment £'000 £'000 2010 30 June 2010 assets
Strategic Recovery
Fund II Unlisted Jul 2009 3,988 9,674 15.01 13.94 13.93
e2v Technologies Technology Oct 2009 3,722 6,855 10.63 8.48 9.87
KCOM Group Telecoms May 2007 4,153 6,693 10.38 9.04 9.64
Lavendon Group Support services Nov 2009 3,991 6,597 10.23 6.63 9.50
Construction &
Lupus Capital materials Dec 2007 4,178 5,785 8.97 4.38 8.33
RPC Group Manufacturing Feb 2007 3,887 5,432 8.43 9.79 7.82
4imprint Group Support services Feb 2006 4,885 5,229 8.11 7.87 7.53
Mecom Group Media Aug 2005 5,996 3,865 6.00 5.15 5.57
StatPro Group Technology May 2007 1,695 2,943 4.57 5.43 4.24
Allocate Software Technology Dec 2009 1,980 2,736 4.24 4.98 3.94
38,475 55,809 86.57 75.69 80.37
Interim management report
The important events that have occurred during the period under review are set
out in the Chairman's report and Investment manager's report, which also
include the key factors influencing the financial statements.
The Directors do not consider that the principal risks and uncertainties have
changed since the publication of the annual report for the year ended 30 June
2010. The principal risks are set out in the annual report.
In summary these risks are:
- general risk;
- market risk;
- regulatory risk;
- financial risk; and
- financial instruments.
Going concern
The Directors believe, bearing in mind the nature of the Company's business
and assets, that the Company has adequate resources to continue in operational
existence for the foreseeable future. For this reason, they continue to adopt
the going concern basis in preparing the accounts.
Responsibility statement
The Directors confirm that to the best of their knowledge:
- the condensed set of financial statements has been prepared in accordance
with the Statement on Half Yearly Financial Reports issued by the
International Accounting Standards Board and gives a true and fair view of the
assets, liabilities, financial position and profit/(loss) of the Company.
- the interim management report includes a fair review of the information
required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication
of important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements;
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the Company during that period; and any changes in the related
party transactions described in the last annual report that could do so.
This Half Yearly Report was approved by the Board of Directors on 24 February
2011 and the above responsibility statement was signed on its behalf by John
Hodson, Chairman.
Statement of comprehensive income
for the 6 month period ended 31 December 2010
6 month period ended Year ended 6 month period ended
31 December 2010 30 June 2010 31 December 2009
unaudited audited unaudited
Revenue Capital Revenue Capital Revenue Capital
return return Total return return Total return return Total
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investments
Net gains on investments
at fair value through profit
or loss - 18,455 18,455 - 12,674 12,674 - 12,411 12,411
Exchange losses - - - - (1) (1) - - -
Net investment result - 18,455 18,455 - 12,673 12,673 - 12,411 12,411
Income
Dividends 2 550 - 550 1,087 - 1,087 553 - 553
Interest 2 13 - 13 16 - 16 14 - 14
Underwriting commission 2 - - - 24 - 24 24 - 24
Total operating income 2 563 - 563 1,127 - 1,127 591 - 591
Expenses
Investment Manager's
fee 9 (221) - (221) (396) - (396) (185) - (185)
Other expenses 3 (322) - (322) (447) - (447) (300) - (300)
Total expenses (543) - (543) (843) - (843) (485) - (485)
Net return before finance
cost and taxation 20 18,455 18,475 284 12,673 12,957 106 12,411 12,517
Finance costs
Interest payable (25) - (25) (50) - (50) (5) - (5)
Total finance costs (25) - (25) (50) - (50) (5) - (5)
Net return/(loss) before taxation (5) 18,455 18,450 234 12,673 12,907 101 12,411 12,512
Taxation 11 - - - - - - - - -
Net return/ (loss) and
total comprehensive
income for the period 11 (5) 18,455 18,450 234 12,673 12,907 101 12,411 12,512
Returns per ordinary share pence pence pence pence pence pence pence pence pence
- Basic and diluted 5 (0.01) 24.04 24.03 0.31 16.72 17.03 0.14 16.58 16.72
The total column of this statement is the Statement of comprehensive income of
the Company. All items in the above statement derive from continuing
operations. These accounts are unaudited and have not been reviewed by the
Company's auditors. These are not the Company's statutory accounts. These
accounts have been prepared under International Financial Reporting Standards,
and in accordance with the accounting policies below.
Statement of changes in equity
for the 6 month period ended 31 December 2010
Share
Share premium Special Capital Revenue
capital account reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
For the 6 month period ended
31 December 2010
1 July 2010 7,981 5,246 60,398 (23,014) 611 51,222
Comprehensive income for the
year - - - 18,455 (5) 18,450
Dividend paid - - - - (230) (230)
31 December 2010 7,981 5,246 60,398 (4,559) 376 69,422
For the year to 30 June 2010
1 July 2009 7,262 2,070 60,398 (35,687) 607 34,650
Comprehensive income for the year - - - 12,673 234 12,907
Dividend paid - - - - (230) (230)
New shares issued in the year 719 3,176 - - - 3,895
30 June 2010 7,981 5,246 60,398 (23,014) 611 51,222
For the 6 month period ended
31 December 2009
1 July 2009 7,262 2,070 60,398 (35,687) 607 34,650
Comprehensive income for the
year - - - 12,411 101 12,512
Dividend paid - - - - (230) (230)
New shares issued in the
period 719 3,176 - - - 3,895
31 December 2009 7,981 5,246 60,398 (23,276) 478 50,827
These accounts have been prepared under International Financial Reporting
Standards, and in accordance with the accounting policies below.
Balance sheet
as at 31 December 2010
Note As at As at As at
31 December 30 June 31 December
2010 2010 2009
unaudited audited unaudited
£'000 £'000 £'000
Non-current assets
Fair value through profit or loss -
Investments 6 64,458 49,859 48,470
Current assets
Other receivables 221 177 164
Cash and cash equivalents 4,918 1,367 2,350
5,139 1,544 2,514
Total assets 69,597 51,403 50,984
Current liabilities
Other payables 155 181 157
155 181 157
Total assets less current liabilities 69,442 51,222 50,827
Net assets 69,442 51,222 50,827
Represented by:
Shareholders' equity
Share capital 7,981 7,981 7,981
Share premium account 5,246 5,246 5,246
Special reserve 60,398 60,398 60,398
Capital reserve (4,559) (23,014) (23,276)
Revenue reserve 376 611 478
Total shareholders' equity 69,442 51,222 50,827
Net asset value per share pence pence pence
Basic and diluted 90.45 66.72 66.21
Shares in issue Number number number
Ordinary shares (excluding shares
held in treasury) 76,770,474 76,770,474 76,770,474
These accounts have been prepared under International Financial Reporting
Standards and in accordance with the accounting policies below.
The half yearly financial information in this announcement was approved by the
Board of Directors and authorised for issue on 24 February 2011. It was signed
on behalf of the Board by
J Hodson
Chairman
24 February 2011
Statement of cash flows
for the 6 month period ended
31 December 2010
6 month 6 month
period ended Year ended period ended
31 December 30 June 31 December
2010 2010 2009
unaudited audited unaudited
Note £'000 £'000 £'000
Operating activities
Net return before finance costs and taxation 18,475 12,957 12,517
Adjustment for gains on investments (18,455) (12,673) (12,411)
Interest paid (25) (50) (5)
Operating cash flows before movements in working capital (5) 234 101
Increase in receivables (26) (72) (12)
(Decrease)/increase/in payables (27) 39 11
Purchases of portfolio investments (7,197) (25,168) (11,089)
Sales of portfolio investments 11,036 20,212 11,112
Net cash inflow/(outflow) from operating activities 3,781 (4,755) 123
Financing activities
Equity dividend paid 4 (230) (230) (230)
Shares issued in the year - 3,895 -
Net cash (outflow)/inflow from financing activities (230) 3,665 (230)
Increase/ (decrease) in cash and cash equivalents for period 3,551 (1,090) (107)
Cash and cash equivalents at start of period 1,367 2,457 2,457
Cash and cash equivalents at
31 December 2010 4,918 1,367 2,350
These accounts have been prepared under International Financial Reporting
Standards and in accordance with the accounting policies below.
Notes to the half yearly report for the 6 month period ended 31 December 2010
1.1 Corporate information
Strategic Equity Capital plc is a public limited company incorporated and
domiciled in the United Kingdom, registered in England and Wales whose shares
are publicly traded. The Company is registered as a public limited company and
is an investment company as defined by Section 833 of the Companies Act 2006.
The Company carries on business as an investment trust within the meaning of
Sections 1158/1159 of the Corporation Tax Act 2010.
1.2 Basis of preparation/statement of compliance
The condensed interim financial statements of the Company have been prepared
in accordance with International Accounting Standard ("IAS") 34, `Interim
financial reporting' issued by the International Accounting Standards Board
("IASB") (as adopted by the EU). They do not include all the information
required for a full report and financial statements and should be read in
conjunction with the report and financial statements of the Company for the
year ended 30 June 2010, which have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by the EU.
Where presentational guidance set out in the Statement of Recommended Practice
("SORP") for investment trusts issued by the Association of Investment
Companies ("AIC") (as revised in 2009) is consistent with the requirements of
IFRS the Directors have sought to prepare financial statements on a basis
compliant with the recommendations of the SORP.
The condensed interim financial statements do not comprise Statutory Accounts
within the meaning of Section 434 of the Companies Act 2006. Statutory
Accounts for the year ended 30 June 2010 were approved by the Board of
Directors on 5 October 2010 and delivered to the Registrar of Companies. The
report of the Auditors on those Financial Statements was unqualified, did not
contain an emphasis of matter paragraph and did not contain any statement
under Section 498 of the Companies Act 2006.
Convention
The financial statements are presented in Sterling, being the currency of the
primary environment in which the Company operates, rounded to the nearest
thousand.
Segmental reporting
The Directors are of the opinion that the Company is engaged in a single
segment of business, being investment business.
1.3 Accounting policies
The accounting policies, presentation and method of computation used in these
condensed financial statements are consistent with those used in the
preparation of the financial statements for the year ended 30 June 2010.
1.4 New standards and interpretations not applied
IASB and IFRIC have issued the following standards and interpretations which
are not effective for the period ended 31 December 2010 and have not been
applied in preparing these financial statements.
International Accounting Standards (IAS/IFRS) Effective date
IFRS 9 Financial Instruments: Classification & Measurement 1 January 2013
IAS 24 Related Party Disclosures (revised) 1 January 2011
Improvements to IFRS (issued April 2009) Various dates
International Financial Reporting Interpretations Committee (IFRIC)
IFRIC 14 Amendment: Prepayments of a Minimum Funding Requirement 1 January
2011
The Directors do not anticipate that the initial adoption of the above
standards, amendments and interpretations will have a material impact on the
Group's financial statements in the period of initial application.
2. Income
31 December 2010 30 June 2010 31 December 2009
£'000 £'000 £'000
Income from investments:
UK dividend income 550 1,087 553
Liquidity fund income 13 16 14
563 1,103 567
Other income:
Underwriting commission - 24 24
563 1,127 591
Total income comprises:
Dividends 563 1,087 567
Interest - 16 -
Underwriting commission - 24 24
563 1,127 591
Income from investments:
Listed UK 550 1,087 553
Listed overseas 13 16 14
563 1,103 567
3. Other expenses
6 month period ended 6 month period ended
31 December 2010 Year ended 30 June 2010 31 December 2009
(unaudited) (audited) (unaudited)
Revenue Capital Revenue Capital Revenue Capital
return return Total return return Total return return Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Secretarial
services 35 - 35 73 - 73 39 - 39
Auditors'
remuneration
for:
audit services 10 - 10 24 - 24 12 - 12
Directors'
remuneration 50 - 50 89 - 89 41 - 41
Other expenses 227 - 227 261 - 261 75 - 75
Action by
Shareholders - - - - - - 133 - 133
322 - 322 447 - 447 300 - 300
4. Dividend
For the year to 30 June 2010 the Company declared a final dividend of 0.30p
per Ordinary share on 76,770,474 shares,amounting to £230,311 (30 June 2009: £230,311).
The dividend was paid on 16 November 2010 to shareholders on the register at 22 October 2010.
5. Return per Ordinary share
6 month period ended Year ended 6 month period ended
31 December 2010 30 June 2010 31 December 2009
Revenue Capital Revenue Capital Revenue Capital
return return Total return return Total return return Total
pence pence pence pence pence pence pence pence pence
Return per Ordinary share - basic and diluted (0.01) 24.04 24.03 0.31 16.72 17.03 0.14 16.58 16.72
Returns per Ordinary share are calculated based on 76,770,474 (30 June 2010:
75,785,546 and 31 December 2009: 74,845,290) being the weighted average number of Ordinary shares,
excluding shares held in treasury, in issue throughout the period.
6 Investments
31 December 2010
£'000
Investment portfolio summary:
Listed investments at fair value through profit or loss 53,160
Unlisted investments at fair value through profit or loss 11,298
64,458
Listed Unlisted 31 December 2010
£'000 £'000 £'000
Analysis of investment portfolio movements:
Opening book cost 58,106 4,470 62,576
Opening investment holding (losses)/gains (16,719) 4,002 (12,717)
Opening valuation 41,387 8,472 49,859
Movements in the year:
Purchases at cost 6,186 1,011 7,197
Sales - proceeds (9,722) (1,331) (11,053)
- realised (losses)/gains on sales (3,498) 226 (3,272)
Increase in unrealised appreciation 18,807 2,920 21,727
Closing valuation 53,160 11,298 64,458
Closing book cost 51,072 4,376 55,448
Closing investment holding gains 2,088 6,922 9,010
53,160 11,298 64,458
A list of the top ten portfolio holdings by their aggregate market values is
given in the Investment manager's report.
31 December 2010
Total
£'000
Analysis of capital gains:
Realised losses on sales (3,272)
Foreign exchange losses -
Movement in unrealised appreciation 21,727
18,455
The Company adopted the amendment to IFRS 7, effective 1 January 2009, which
requires the Company to classify fair value measurements using a fair value
hierarchy that reflects the significance of the inputs used in making the
measurements. The fair value hierarchy has the following levels:
- Quoted prices (unadjusted) in active markets for identical assets or
liabilities (level 1).
- Inputs other than quoted prices included within level 1 that are observable
for the asset or liability, either directly (that is, as prices) or indirectly
(that is, derived from prices) (level 2).
- Inputs for the asset or liability that are not based on observable market
data (that is, unobservable inputs) (level 3).
The level in the fair value hierarchy within which the fair value measurement
is categorised is determined on the basis of the lowest level input that is
significant to the fair value of the investment.
The following table analyses within the fair value hierarchy the Company's
financial assets and liabilities (by class) measured at fair value at 31
December 2010.
Financial instruments at fair value through profit and loss
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Equity investments 53,160 9,674 1,624 64,458
Investments whose values are based on quoted market prices in active markets,
and therefore classified within level 1, include active listed equities. The
Company does not adjust the quoted price for these instruments.
Financial instruments that trade in markets that are not considered to be
active but are valued based on quoted market prices, dealer quotations or
alternative pricing sources supported by observable inputs are classified
within level 2. As level 2 investments include positions that are not traded
in active markets and/or are subject to transfer restrictions, valuations may
be adjusted to reflect illiquidity and/or non-transferability, which are
generally based on available market information.
Investments classified within level 3 have significant unobservable inputs.
Level 3 instruments include private equity, as observable prices are not
available for these securities, the Company has used valuation techniques to
derive the fair value. In respect of unquoted instruments, or where the market
for a financial instrument is not active, fair value is established by using
recognised valuation methodologies, in accordance with International Private
Equity and Venture Capital ("IPEVC") Valuation Guidelines.
There were no transfers between levels for the period ended 31 December 2010.
The following table presents the movement in level 3 instruments for the
period ended 31 December 2010 by class of financial instrument.
Equity investments Total
£'000 £'000
Opening balance 1,524 1,524
Purchases - -
Sales (93) (93)
Total gains for the year
included in the Statement of
comprehensive income 193 193
Closing balance 1,624 1,624
7 Share capital
31 December
2010
£'000
Authorised:
120,000,000 Ordinary 12,000
shares at 10p each
Number £'000
Allotted, called up and fully paid 79,815,974 7,981
8 Own shares held in treasury
During the period ended 31 December 2010 no shares were repurchased by the
Company. At 31 December 2010 the Company held 3,045,500 (2009: 3,045,000)
shares in treasury for a consideration of £1,884,000 (2009: £1,884,000).
9 Investment Manager's fee
A basic management fee is payable to the Investment Manager at the lower of
the annual rate of 1% of the adjusted Net Asset Value (`NAV') of the Company
or 1% per annum of the market capitalisation of the Company. Following the
acquisition of SRF II calculation of the basic management fee was adjusted as
the Investment Manager is appointed to act as investment manager to both the
Company and SRF II. In order to avoid double charging of basic management fees
payable to the Investment Manager by the Company, the NAV of the
Company is reduced by the aggregate of the value of the Company's Limited
Partnership Interest in SRF II and the amount of the Company's undrawn loan
commitment to SRF II. The basic management fee accrues weekly and is payable
quarterly in arrears.
10 Investment Manager's performance fee
The Company agreed a new performance fee on the following terms after
shareholder approval at a General Meeting held on 9 November 2010:
- the Company's performance is measured over rolling three year
periods ending on 30 June in each year, with the first Performance Period
commencing on 1 July 2008 and ending on 30 June 2011;
- the Company's performance is measured by comparing the NAV total
return per share over a Performance Period against the total return
performance of the FTSE SmallCap (ex. Investment Companies) Index, being
the index against which the Board has historically compared the Company's
investment performance;
- if the NAV total return per share (calculated before any accrual
for any performance fee to be paid in respect of the relevant Performance
Period) at the end of the relevant Performance Period exceeds both:
(i) the NAV per share at the beginning of the relevant Performance Period as
adjusted by the aggregate amount of (a) the total return on the FTSE SmallCap
(ex. Investment Companies) Index (expressed as a percentage) and (b) 2.0 % per
annum over the relevant Performance Period; and
(ii) the High Watermark (which, until exceeded at the end of a Performance
Period in respect of which the Investment Manager earns a performance fee,
will remain at 118.82p);
- the Investment Manager will be entitled to 15 % of the excess over the
higher of the Benchmark NAV per share and the High Watermark; and
- payment of a performance fee that has been earned will be deferred to the
extent that the amount payable exceeds 1.75 per cent. per annum of the
Company's NAV at the end of the relevant Performance Period (amounts deferred
will be payable when, and to the extent that, following any later Performance
Period(s) with respect to which a performance fee is payable, it is possible
to pay the deferred amounts without causing that cap to be exceeded or the
relevant NAV total return per Share to fall below the relevant Benchmark NAV
per Share and the relevant High Watermark).
11 Taxation
The tax charge for the half year is £nil (30 June 2010: £nil and 31 December
2009: £nil) based on an estimated effective tax rate of 0% for the year ended
30 June 2010. The estimated effective tax rate is 0% as investment gains are
exempt from tax owing to the Company's status as an Investment Company and
there is expected to be an excess of management expenses over taxable income.
12 Capital commitments and contingent liabilities
The Company has a commitment to invest €2,160,000 in Vintage 1 and an
outstanding commitment of £1,360,000 in SRF II.
Since the period end SRF II made a call of £710,000, which was funded via
retained earnings, resulting in a reduction of the Company's outstanding
commitment to £650,000. Following this call, the Investment Manager of SRF II
confirmed that the Fund would not make any further gross calls and would not
seek to extend the Investment Period, which ends on 15 June 2011.
13 Related party transactions
The Investment Manager, SVGIM is regarded as a related party of the Company.
The Investment Manager may draw upon advice from the Industry Advisory Panel
("IAP") of which Sir Clive Thompson, a Director of the Company, is a member.
The IAP was established to provide advice to SVGIM in relation to the
strategy, operations and management of potential investee companies.
The amounts paid to SVGIM, in respect of management fees, during the period to
31 December 2010 was £221,000 (30 June 2010: £396,000 and 31 December 2009:
£185,000), of which £107,000 (30 June 2010: £109,000 and 31 December 2009:
£96,000) was outstanding at 31 December 2010. The management fees reflect the
changes to the Investment Manager's fee as referred to in note 9.
In June 2009 SVGIM entered into a Commission Sharing Arrangement with four
executing brokers. Under this arrangement the amount of commission received by
SVGIM in relation to trading activities carried out on behalf of the Company
for the period to 31 December 2010 was £5,000 (30 June 2010: £6,000 and 31
December 2009: £5,000).
Directors & advisers
J Hodson*
Sir Clive M Thompson
J E Cornish*
M C Phillips*
I Dighé*
* Independent of the Investment Manager
Investment Manager
SVG Investment Managers Limited
61 Aldwych
London WC2B 4AE
Tel: 020 7010 8900
Secretary and registered office
Capita Sinclair Henderson Limited
trading as Capita Financial Group -
Specialist Fund Services
Beaufort House
51 New North Road
Exeter EX4 4EP
Enquiries: 01392 477513
Registrar and transfer office
Computershare Investor Services plc
The Pavilions
Bridgwater Road
Bristol BS13 8AE
Shareholder enquiries: 0870 707 1285
Brokers
Canaccord Genuity Limited
Cardinal Place, 7th Floor
80 Victoria Street
London SW1E 5JL
Custodian
HSBC Global Services
Level 27
8 Canada Square
London E14 5HQ
Auditors
Ernst & Young LLP
1 More London Place
London SE1 2AF
Solicitors
Slaughter and May
One Bunhill Row
London EC1Y 8YY
Stephenson Harwood
One, St Paul's Churchyard
London EC4M 8SH
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