Annual Financial Report

RNS Number : 6546T

BMO Private Equity Trust PLC

22 March 2019

 

To: Stock Exchange	For immediate release:
	22 March 2019

BMO Private Equity Trust PLC

LEI: 2138009FW98WZFCGRN66

Preliminary Announcement for the Year to 31 December 2018

 

BMO Private Equity Trust PLC today announces its unaudited financial results for the year ended 31 December 2018.

Financial Highlights

·      Net Asset Value of 386.29p and Net Asset Value total return for the year of 12.4 per cent for the Ordinary Shares. *

 

·      Share price total return for the year of -2.6 per cent for the Ordinary Shares. *

·      Total dividends of 14.37p per Ordinary Share which represents growth of 2.4 per cent in comparison to the previous year.

·      Dividend yield of 4.5 per cent based on the year-end share price. *

*see Alternative Performance Measures

Chairman's Statement

I am pleased to report that your Company has achieved a net asset value ("NAV") total return for the year ended 31 December 2018 of 12.4 per cent. The NAV total return in the fourth quarter was 5.8%. The discount * at the year-end was 17.9 per cent (2017: 5.1 per cent), the share price total return for the year was -2.6 per cent. This compares to a total return from the FTSE All-Share Index for the year of   -9.5 per cent. The share price at the year-end was 317.00p per share (2017: 339.00p), and NAV per share was 386.29p (2017: 357.23p). Since the year end the share price has increased resulting in a reduction in the discount. 

During the year the Company made new investments either through funds or as co-investments, totalling £71.8 million. Realisations and associated income totalled £82.7 million. Outstanding undrawn commitments at the year-end were £130.9 million of which £16.0 million was to funds where the investment period has expired.

The Company's performance fee arrangements contain a hurdle rate, calculated over rolling three-year periods, of an IRR of 8.0 per cent per annum. The annual IRR of the NAV for the three-year period ended 31 December 2018 was 13.9 per cent and, consequently, a performance fee of £2.3 million is payable to the Manager, BMO Investment Business Limited, in respect of 2018. This is the sixth consecutive year that a performance fee has been payable, demonstrating consistent performance and providing shareholders with an attractive total return, which includes capital growth and an above average dividend yield.

Dividends

Since 2012 your Company has paid a substantial dividend from realised capital profits allowing shareholders to participate, to some degree, directly in the proceeds of the steady stream of private equity realisations which the Company achieves. This policy has been well received by shareholders and provides for a steadily growing dividend with downside protection. Your Board is fully committed to maintaining this general approach for the foreseeable future.

The Company's quarterly dividends are payable in respect of the quarters ended 31 March, 30 June, 30 September and 31 December and are paid in the following July, October, January and April respectively. As shareholders do not have an opportunity to approve a final dividend at each Annual General Meeting, shareholders are asked to approve the Company's dividend policy at the forthcoming Annual General Meeting.

In accordance with the Company's stated dividend policy, the Board recommends a further quarterly dividend of 3.65p per Ordinary Share, payable on 30 April 2019 to shareholders on the register on 5 April 2019 and an ex-dividend date of 4 April 2019. Total dividends paid for the year therefore amount to 14.37p per Ordinary Share equivalent to a dividend yield of 4.5 per cent at the year-end.

Financing

At 31 December 2018 the Company had a net debt position of £5.5m leaving the bulk of the £70m loan facility from RBS available should it be required. It remains the Company's policy to employ moderate levels of gearing as a means of enhancing shareholder returns. The record levels of realisations during the year have acted to limit the effective gearing of the Company despite a very active programme of new investments. It is the Company's intention to arrange a fresh five year borrowing facility to replace the current facility when it expires at the end of June 2019. It is likely that this facility will be somewhat larger to reflect the growth of the company over the last five years.

Twenty Year Anniversary

Today is the twentieth anniversary of the admission of the Company's shares to the Official List of the London Stock Exchange.  During that period the Company has grown in size from net assets of £106.4 million as at 22 March 1999 to £285.6 million at 31 December 2018. In addition, there has been a strong flow of dividends over this period totalling £65.6 million for ordinary shareholders. NAV total return for this period has been 478.4 per cent in comparison to 149.9 per cent total return from the FTSE All Share. In other words £100 invested in the Company's ordinary shares and with dividends reinvested would now be worth £578.39. The equivalent figure for investment in the FTSE All Share would be £249.92. This demonstrates strikingly the long-term benefits of investment in a well-diversified portfolio of private equity investments.  

Many individuals have been involved with the success of the Company during this period and I thank them all on behalf of the Board and Shareholders.  However, I make special mention of Hamish Mair and Neil Sneddon who have represented the Company's investment managers throughout its twenty-year life.  Their vision and thorough knowledge and understanding of the private equity industry has made the Company the success it is.

Directorate Change

The Board recognises the value in both attracting fresh talent and the maintenance of continuity and accordingly a plan has been developed to ensure an orderly succession as directors retire.

As part of this process, at the Annual General Meeting to be held on 23 May 2019 Douglas Kinloch Anderson will retire from the Board.  Douglas has served as a Director since December 2000 and before that on the board of The Scottish Eastern Investment Trust, the entity from which this Company arose. I wish to place on record my appreciation for his support and guidance to me over my tenure as Chairman.  In addition, the Board and the Company's advisors have greatly valued Douglas' guidance and wish to add their thanks for his contribution to the Company's success and affairs.

The Manager

During the year, the Company's investment manager re-branded from F&C Investment Business Limited to BMO Investment Business Limited.  BMO Investment Business Limited became part of the BMO Financial Group in 2014.  BMO was founded over 200 years ago as Bank of Montreal and is now the 8th largest bank by assets in North America.  It provides a broad range of financial products to over 12 million customers worldwide.  During 2018 BMO re-branded those of its investment products and legal entities which operated under the "F&C" prefix to "BMO". In accordance with this the Company changed its name to BMO Private Equity Trust PLC in November 2018.

The investment policy and process remains the same under the same Manager with Hamish Mair as Fund Manager. 

Brexit

The Board has continued to monitor the potential impact of Brexit upon the Company.  While the impact of Brexit on financial markets both in the UK and the EU cannot be assessed, any volatility would be managed as part of our normal investment processes.  Any other consequences are considered to be minimal.

Annual General Meeting

The Annual General Meeting will be held at 12 noon on 23 May 2019 at the offices of BMO Global Asset Management (EMEA), Exchange House, Primrose Street, London EC2A 2NY.  This will be followed by a presentation by Hamish Mair, the Company's lead fund manager. This is a good opportunity for shareholders to meet the Manager and the Board and we would encourage you to attend.

Outlook

The Company has delivered a strong outcome for the year. The performance is broadly based and the benefits of having a well diversified international portfolio are well demonstrated by the heterogeneity of the portfolio. Many of the companies are operating in specific niches and these can often show growth, which is more closely linked to the adoption of a product or service than to the background economy or dynamics of a particular industrial sector. The portfolio is well placed to deliver further growth in 2019.

Mark Tennant

Chairman

Investment Manager's Review

Introduction

The private equity market internationally has had another strong year with impressive totals for deal activity and fund raising. It is therefore not surprising that in our portfolio 2018 has seen a substantial amount of turnover. A record level of distributions at £82.7m, including associated income, brought the total realised over the past four years to almost £300m. Most of the deals in which we invest, either through funds or co-investments, are planned around a four or five-year hold.  This level of realisations is consistent with this being achieved. With an evergreen structure it is essential that the proceeds of exits are reinvested steadily to lay the foundations of future growth. During the year new investments totalled £71.8m. Because we have a range of investment partners covering many geographies and sectors there is constant dealflow and redeploying capital appears to happen automatically.  In fact the money is invested following much research and multiple stages of decision-making by our investment partners and ourselves.  To maintain steady growth in shareholder value it is necessary to have a portion of the portfolio maturing each year. More than 50% of our portfolio is more than three years old which provides a healthy stock of maturing holdings. As exits tend to occur at a material uplift to the latest carrying value there is a close link between the level of realisations and value growth. The other components are growth in profits and the valuation multiples or other parameters which are used.

Although the market conditions vary through the cycle with a broadly-based approach there will always be opportunities to invest. In our target market of lower mid-market Europe there are tens of thousands of companies which could potentially use private equity as a means of financing their growth. Our portfolio on a look though basis has over 400 companies. Each of these investments carries significant risk but the heterogeneity of the portfolio reduces the risk at a portfolio level very substantially.

Through detailed analysis of the portfolio, on a look through basis, it is possible to summarise the portfolio's financial characteristics.  The indicative weighted average acquisition price at entry is an enterprise value to EBITDA multiple of 7.1x. The average age of holdings is around four years. The current valuation implies an enterprise value to EBITDA ratio of 8.9x with a debt to EBITDA ratio of 2.7x. Neither of these are high by the standards of the international private equity market and this indicates scope for higher values on ultimate exit and also that the financial gearing at company level is moderate.

New Investments

Seven new commitments to funds were made during the year. In addition, we acquired two secondary positions in funds and made seven co-investments. The co-investment portfolio now numbers 29 holdings and accounts for 39% of the portfolio by value.

In the UK we have backed Apiary Capital I (£5m), a new fund specialising in the lower mid-market. We have also reinforced our longstanding relationship with Inflexion through commitments to their Buy-out Fund IV (£4m) and Partnership Capital Fund II (£3.5m). In the Nordic region we have backed Verdane Edda (£4.3m) in a fund focusing on technology enabled growth. We have also backed Volpi Capital I (£6.3m) who cover Northern Europe, also seeking companies with a clear technology angle. We have renewed our commitment to Iberia through Corpfin V (€ 6m), one of the most experienced mid-market investors in the region. Investing on a sectoral basis we have committed $5m to MVM V, a healthcare fund seeking value priced special situations mainly in the US and Europe. Two funds, both in Italy were acquired in the secondary market. NEM Impresse III (£3.9m) was acquired as part of a reorganisation of the private equity activities of Banco Populare de Vincenza. Progressio II (£2.1m) was added to our existing holding through exercise of pre-emption rights. Both of these funds were acquired at an attractive discount to NAV.

The co-investment portfolio broadened over the year. The South Eastern Europe large format pet store chain Pet Centar (£3.8m) is led by TRG and the expansion across the region is well underway. Coincidentally we have also invested in a UK based pet store chain in the Kester Capital led investment in Jollyes (£4.4m). This investment is based upon the introduction of a new management team with new initiatives to strengthen the UK number two. In the US we have invested with hospitality experts Trispan in 'polished casual' Mexican restaurant chain Rosa Mexicana (£3.6m). In North Wales we have invested with Inflexion in leading independent builders' merchant Huws Gray. Since the initial investment in May there has been a major acquisition further expanding the company's geographic coverage (£5.6m). We have invested in print managed solutions company DMC Canotec alongside Horizon (formally known as Lyceum) (£2.3m) which provides Canon photocopiers and associated services to a wide range of SME customers. 

Two new co-investments were added during the final quarter. £3.0m was invested in the MVM led investment AccuVein, the fast-growing company which has developed a revolutionary device for vein visualisation using near infra-red technology to highlight veins and arteries. This is considered to be a major advance in venepuncture. We have invested alongside MVM who have been in the company for several years and believe that a value creating breakthrough is close.

£3.6m was invested in Coretrax, a Buckthorn led oil services company based in Aberdeen. Coretrax is a leading player internationally in wellbore clean up, plug and abandonment products. The business has grown rapidly and is well placed to accelerate its international expansion.

Drawdowns

A total of £31.0m has been invested in co-investments during 2018. In addition to this £40.8m has been drawn by funds for investment. The detail of many of the significant drawdowns has been reported earlier in the year. The notable drawdowns in the final quarter are described below.

In the UK Inflexion have been active with £1.3m, combined, drawn from Inflexion Enterprise Fund IV and Inflexion Partnership Capital Fund I. Their Enterprise Fund IV made two new investments. PMC Treasury is a provider of treasury and risk management services to portfolio companies of private equity and infrastructure funds. Inflexion acquired a 38% minority stake.  LifeCare Group is a specialist travel vaccination business focused on the UK and Danish markets. Inflexion have taken a 49% stake and plan to grow it via buy-and-build acquisitions.  Inflexion Partnership Capital have made an additional investment in outdoor clothing chain Mountain Warehouse. They have also made new investments in niche motor insurer Granite and in UKFast, a Manchester based business critical IT cloud hosting infrastructure provider.

August Equity IV has called £0.8m for a top-up investment in funerals business Fosters and for a new investment in the Dermatology Partnership, a merger of three clinics. SEP V have called £0.5m for Totally Money, a holding from the earlier SEP III fund which has moved its business model from a credit card comparison site to a free credit card report which is used for lead generation for consumer financial services companies. TDR Capital have made a follow-on investment in the longstanding modular buildings company Algeco Scotsman. Our share of this was £0.4m.

There have been several new investments in Europe in the final quarter. In France Astorg VI called £1.1m mainly for IGM Resins, a company specialising in resins which are cured by exposure to ultra violet. A small part of the drawdown was for Echosens, the non-invasive liver diagnostic company. In Hungary, ARX CEE IV invested £0.5m for us in TMX, a company which repairs mobile phones and provides installation and logistics services to OEMs. In Germany Chequers Capital XVII have added to one of their holdings with the addition of Senior Living to its care home operator business Emvia Living. Our share is £0.4m. In the Netherlands Bencis V called £0.7m mainly for fitness chain Fit for Free which has been combined with SportCity.

In the US Blue Point Capital IV has added £0.4m to its platform aerospace castings business Precision Products Corp. Graycliff III has called £0.4m for industrial electric motors company WWE. 

Realisations

Over the fourth quarter realisations totalled £19.9m. Together with associated income this brings the total for the year to £82.7m, as noted above a new record for the Company. The principal exits in the year so far have been covered in earlier reports. The key realisations in the fourth quarter cover a wide variety of geographies and sectors.

In the UK RJD Partners III exited body art supplies (tatoo consumables) company Barber of Sheffield returning £2.5m (4.2x, 92% IRR) which was a strong outcome for this highly niche business. Inflexion realised media and exhibitions company Closer Still through a sale to Providence Private Equity. Across the three funds in which it was held (2010, 2012 and Partnership Capital) a combined £1.4m was returned (2.8x, 27% IRR). August Equity III returned £0.7m from the sale of Vet Partners to BC Partners (4.8x, 131% IRR) and private schools group Minerva to an investor syndicate (1.8x, 12.8% IRR). Equity Harvest Fund, managed by Dunedin exited longstanding holding CET (drainage repair and testing) returning £1.1m.

In Continental Europe Argan Capital sold GCE, the Sweden based medical and industrial gases company yielding £2.3m (1.7x, 5% IRR). Chequers Capital XVI exited three holdings yielding a combined £1.2m; German intensive care provider Deutsche Fachpflege Group (DFG) (2.0x, 14%) - through a sale to Advent, Rollon (conveyer belt components) (6.4x,47%), and Cordenka (Rayon for tyres) (2.0x).

In the US Graycliff III has achieved an excellent exit of Impakt Holdings, a provider of design, engineering and agile manufacturing solutions which has been sold to strategic buyer Celestica. £2.9m has been returned (7.2x, 138% IRR).

In addition to these conventional exits there have been two substantial realisations which fall under the category of secondary deals. TDR Capital have sold their holding in pub company Stonegate to a new vehicle under their management with funding from Landmark Partners. Both the holdings through TDR Capital II and its Annex fund were sold with combined proceeds of £2.3m, with the returns for each fund of 2.0x and 14% IRR and 2.5x and 18% IRR respectively. In Spain N+1 Fund II has been brought to an effective conclusion by the sale of its three remaining assets to one of the fund investors Partners Group. The deal was struck at a premium to December 2017 NAV of 5.2%. This yielded £2.2m which was considered an acceptable outcome. As the private equity market and its associated secondary market grows it is likely that, on occasion, it will make sense for us to exit 'rump' positions where we have little visibility or confidence that managing out 'normally' is going to deliver an adequate return.

Valuation Changes

There have been a large number of notable valuation changes over the course of the year.  These cover both the funds and co-investment elements of the portfolio.

The largest individual contribution was from Active Pharmaceutical Ingredient company Ambio which contributed £7.5m. Most of this came from the exit of 75% of our holding through the acquisition by Carlyle Asia but a further uplift of £1.7m results from Carlyle's subsequent investment of a further $20m into the company at the same price as the deal but with additional value attributed to the earn-out component which we had not included in our valuation.

Oil Services company Ashtead is trading well and has integrated a substantial acquisition sucessfully and this is uplifted by £2.7m. Huws Gray, the co-investment in the enlarged builders' merchant chain noted above, has performed well fundamentally with revenues and profits in FY 2018 up 42% and 27% respectively. This results in an uplift of £1.4m. The Inflexion stable of funds, as a whole, have performed strongly with various exits and good trading. Taking all our Inflexion fund holdings together the uplift for the year is £3.2m.

Blue Point Capital has had some strong exits during the year and contributes £3.2m of uplift. Also in the US Graycliff III is up by £1.6m reflecting exits and good trading of portfolio companies. In France Chequers XVI contributes £1.3m. In Spain Corpfin Capital IV is up by £1.4m. In Italy the secondary, NEM Impresse, is up by £2.3m. In Norway insurance services company Recover Nordic has had a good year and is up by £1.3m.

Our look through holding via an FPE LP in Eventbrite shares, which we received as part of the consideration for Ticketscript is up by £2.2m following Eventbrite's listing in September 2018. RJD Partners III is up by £1.0m reflecting the sale of Barber noted above. Canada based software company Tier1 CRM is growing well and is up by £1.0m. Volpi refinanced one of its holdings and this has allowed an uplift of £0.9m. There were several other uplifts for funds and co-investments over the year.

The largest individual negative was training company Babington which has been reduced by £1.8m. This reflects the delayed benefits of the introduction of the apprenticeship levy which has not progressed smoothly. A recovery is under way and we remain optimistic about the final outcome. Earlier in the year superfoods company Nutrisure was put into administration by its debt provider with the loss of all £1.2m of our equity value.  There were a number of other smaller downgrades.

Financing

The Company is in good shape financially. Net debt at 31 December was only £5.5m and this has subsequently decreased slightly. Our £70m banking facility from RBS which consists of a term loan element and a revolving credit facility expires at the end of June. We will be working to conclude a fresh agreement with a larger facility over the next couple of months. We have routinely borrowed the term loan element of the facility in euros to provide a partial hedge against our considerable exposure to the euro. The exchange rate has been quite volatile due to Brexit related concerns and borrowing in euros has proved helpful in dampening, but not eliminating, the impact of currency on our NAV. We have generally taken the view that currency risks come along with investing internationally.

Outlook

The performance of the portfolio is broadly based and the benefits of having a well diversified international portfolio are well demonstrated by the multiple uplifts and exits across the portfolio.  Despite some obvious headwinds in Europe and the UK, the companies in the underlying portfolio are able to make good progress. The rise in the price of private equity deals internationally is well documented but, based on the deals done by our investment partners, it does seem possible to find attractively priced companies in the lower mid-market across a range of sectors and geographies. There are several threats to economic growth as we enter the second quarter of 2019, but the deliberative investment processes that distinguish private equity allows each of these factors to be considered and built into the investment thesis of each investment. From here we expect to make further progress for shareholders in 2019.

Hamish Mair

Investment Manager

BMO Investment Business Limited

 

BMO Private Equity Trust PLC

Statement of Comprehensive Income for the

year ended 31 December 2018

	(Unaudited)
	Revenue £'000	Capital £'000	Total £'000
Income
Gains on investments held at fair value	-	36,966	36,966
Exchange gains	-	35	35
Investment income	2,340	-	2,340
Other income	81	-	81
Total income	2,421	37,001	39,422
Expenditure
Investment management fee - basic fee	(660)	(1,980)	(2,640)
Investment management fee - performance fee	-	(2,277)	(2,277)
Other expenses	(760)	-	(760)
Total expenditure	(1,420)	(4,257)	(5,677)
Profit before finance costs and taxation	1,001	32,744	33,745
Finance costs	(428)	(1,286)	(1,714)
Profit before taxation	573	31,458	32,031
Taxation	(109)	109	-
Profit for year/total comprehensive income	464	31,567	32,031
Return per Ordinary Share - Basic	0.63p	42.69p	43.32p
Return per Ordinary Share - Fully diluted	0.63p	42.69p	43.32p

 

BMO Private Equity Trust PLC

Statement of Comprehensive Income for the

year ended 31 December 2017

	(Audited)
	Revenue £'000	Capital £'000	Total £'000
Income
Gains on investments held at fair value	-	21,216	21,216
Exchange losses	-	(1,019)	(1,019)
Investment income	1,422	-	1,422
Other income	51	-	51
Total income	1,473	20,197	21,670
Expenditure
Investment management fee - basic fee	(641)	(1,922)	(2,563)
Investment management fee - performance fee	-	(2,037)	(2,037)
Other expenses	(830)	-	(830)
Total expenditure	(1,471)	(3,959)	(5,430)
Profit before finance costs and taxation	2	16,238	16,240
Finance costs	(428)	(1,283)	(1,711)
(Loss)/profit before taxation	(426)	14,955	14,529
Taxation	-	-	-
(Loss)/profit for year/total comprehensive income	(426)	14,955	14,529
Return per Ordinary Share - Basic	(0.58)p	20.23p	19.65p
Return per Ordinary Share - Fully diluted	(0.58)p	20.23p	19.65p

BMO Private Equity Trust PLC

Balance Sheet

	As at 31 December 2018 (Unaudited)	As at 31 December 2017 (Audited)
	£'000	£'000
Non-current assets
Investments at fair value through profit or loss	295,242	266,536
	295,242	266,536
Current assets
Other receivables	142	232
Cash and cash equivalents	21,335	26,765
	21,477	26,997
Current liabilities
Other payables Interest-bearing bank loan	(4,267) (26,821)	(3,081) -
	(31,088)	(3,081)
Net current (liabilities)/assets	(9,611)	23,916
Total assets less current liabilities	285,631	290,452
Non-current liabilities
Interest-bearing bank loan	-	(26,308)
Net assets	285,631	264,144
Equity
Called-up ordinary share capital	739	739
Share premium account	2,527	2,527
Special distributable capital reserve	15,040	15,040
Special distributable revenue reserve	31,403	31,403
Capital redemption reserve	1,335	1,335
Capital reserve	234,587	213,100
Revenue reserve	-	-
Shareholders' funds	285,631	264,144
Net asset value per Ordinary Share	386.29p	357.23p

 

BMO Private Equity Trust PLC

Statement of Changes in Equity

 

	Share Capital	Share Premium Account	Special Distributable Capital Reserve	Special Distributable Revenue Reserve	Capital Redemption Reserve	Capital Reserve	Revenue Reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
For the year ended 31 December 2018 (unaudited)
Net assets at 1 January 2018	739	2,527	15,040	31,403	1,335	213,100	-	264,144
Profit for the year/total comprehensive income	-	-	-	-	-	31,567	464	32,031
Dividends paid	-	-	-	-	-	(10,080)	(464)	(10,544)
Net assets at 31 December 2018	739	2,527	15,040	31,403	1,335	234,587	-	285,631
For the year ended 31 December 2017 (audited)
Net assets at 1 January 2017	739	2,527	15,040	31,403	1,335	203,679	4,800	259,523
Profit/(loss) for the year/total comprehensive income	-	-	-	-	-	14,955	(426)	14,529
Dividends paid	-	-	-	-	-	(5,534)	(4,374)	(9,908)
Net assets at 31 December 2017	739	2,527	15,040	31,403	1,335	213,100	-	264,144

 

 

BMO Private Equity Trust PLC

Statement of Cash Flows

	Year ended 31 December 2018 (Unaudited)		Year ended 31 December 2017 (Audited)
		£000	£000
Operating activities
Profit before taxation	32,031		14,529
Adjustments for: (Gains)/losses on disposals of investments	(45,288)		(32,637)
Decrease in holding gains	8,322		11,421
Exchange differences	(35)		1,019
Interest income	(81)		(51)
Interest received	81		51
Investment income Investment income received	(2,340) 2,340		(1,422) 1,422
Finance costs	1,714		1,711
(Increase)/ decrease in other receivables	(2)		1
Increase in other payables	999		26
Net cash outflow from operating activities	(2,259)		(3,930)
Investing activities
Purchases of investments	(71,909)		(69,546)
Sales of investments	80,261		63,068
Net cash inflow/(outflow) from investing activities	8,352		(6,478)
Financing activities
Interest paid	(1,310)		(1,497)
Equity dividends paid	(10,544)		(9,908)
Net cash outflow from financing activities	(11,854)		(11,405)
Net decrease in cash and cash equivalents	(5,761)		(21,813)
Currency gains	331		3
Net decrease in cash and cash equivalents	(5,430)		(21,810)
Opening cash and cash equivalents	26,765		48,575
Closing cash and cash equivalents	21,335		26,765

 

Notes (unaudited)

1.         The unaudited financial results, which were approved by the Board on 21 March 2019, have been prepared in accordance with the Companies Act 2006 and International Financial Reporting Standards ('IFRS') as adopted by the European Union. Where presentation guidance set out in the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ('SORP') issued  by the Association of Investment Companies in November 2014 is consistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.  The Directors have assessed Going Concern and consider it the appropriate basis for the figures presented in the announcement.

The accounting policies adopted are consistent with those of the previous financial year, except that the following new standards have been adopted in the current year:

IFRS 9 Financial Instruments

In the current period the Company has adopted IFRS 9 Financial Instruments on its effective date of 1 January 2018. IFRS 9 replaces IAS 39 Financial Instruments: Recognition and Measurement and introduces new requirements for classification and measurement, impairment and hedge accounting. IFRS 9 is not applicable to items that have already been derecognised at 1 January 2018, the date of initial application. Receivables that were previously measured at amortised cost under IAS 39 are held to collect contractual cash flows and give rise to cash flows representing solely payments of principal and interest. Therefore, such instruments continue to be measured at amortised cost under IFRS 9. The classification of financial liabilities under IFRS 9 remains broadly the same as under IAS 39. The main impact on measurement from the classification of liabilities under IFRS 9 relates to the element of gains or losses for financial liabilities designated at fair value through profit or loss attributable to changes in credit risk. The Company has not designated any financial liabilities at fair value through profit or loss therefore this requirement has not had an impact on the Company. IFRS 9 requires the Company to record expected credit losses on all of its receivables, either on a 12 month or lifetime basis. As the Company has limited exposure to credit risk, this amendment has not had a material impact on the financial statements as the Company only holds receivables with no financing component that have maturities of 12 months or less. This requirement has not changed the carrying amounts of the Company's financial assets under IFRS 9. Therefore, there was no impact of adopting IFRS 9 for the Company.

                IFRS 15 Revenue from Contracts with Customers

The Company adopted IFRS 15 Revenue from Contracts with Customers on its effective date of 1 January 2018. IFRS 15 replaces IAS 18 Revenue and establishes a five-step model to account for revenue arising from contracts with customers. In addition, guidance on interest and dividend income have been moved from IAS 18 to IFRS 9 without significant changes to the requirements. Therefore, there was no impact of adopting IFRS 15 for the Company.

Standards issued but not yet effective

There are no standards or amendments to standards not yet effective that are relevant to the Company and should be disclosed

2.         Returns per Ordinary Share are based on the following weighted average number of shares in issue during the year:

Basic:               73,941,429 (2017: 73,941,429)

Diluted:              73,941,429 (2017: 73,941,429)

The net asset value per Ordinary Share is based on the following number of shares in issue at the year-end: 73,941,429 (2017: 73,941,429)

During the year ended 31 December 2018, the Company issued nil Ordinary Shares.  During the previous year ended 31 December 2017, the Company issued nil Ordinary Shares.  No warrants remain in issue.

3.         The Board has proposed an interim dividend of 3.65p per Ordinary Share, payable on 30 April 2019 to those shareholders on the register on 5 April 2019.

4.         This results announcement is based on the Company's unaudited financial statements for the year ended 31 December 2018 which have been prepared in accordance with International Financial Reporting Standards as adopted by the EU ('IFRS').           

5.         This announcement is not the Company's statutory accounts.  The full audited accounts for the year ended 31 December 2017, which were unqualified and had no emphasis of matters, have been lodged with the Registrar of Companies.  The statutory accounts for the year to 31 December 2018 (on which the audit report has not been signed) will be delivered to the Registrar of Companies following the Company's Annual General Meeting which will be held at the offices of BMO Global Asset Management (EMEA), Exchange House, Primrose Street, London, EC2A 2NY on 23 May 2019 at 12 noon.

6.         The Annual Report and Accounts for the year will be sent to shareholders and will be available for inspection at the Company's registered office, Quartermile 4, 7a Nightingale Way, Edinburgh, EH3 9EG and the Company's website www.bmoprivateequitytrust.com. The Company intends to issue a subsequent annual financial report announcement.

  For more information, please contact:

Hamish Mair (Investment Manager)	0131 718 1000
Scott McEllen  (Company Secretary)	0131 718 1000
[e-mail]  / [e-mail]

Alternative Performance Measures

The Company uses the following Alternative Performance Measures ('APMs'):

Total Return - The return to shareholders calculated on a per share basis by adding dividends paid in the period to the increase or decrease in the Share Price or NAV. The dividends are assumed to have been reinvested in the form of Ordinary Shares or Net Assets, respectively, on the date on which they were quoted ex-dividend.

Dividend Yield - The annualised dividend divided by the share price at the year end. 

Discount (or premium) - If the share price of an Investment Trust is less than its Net Asset Value per share, the shares are trading at a discount.  If the share price is greater than the Net Asset Value per share, the shares are trading at a premium.

 

END

 

 

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