Half year ended 30 June 2015
For release 28 August 2015
Dunedin Enterprise Investment Trust PLC
Half year ended 30 June 2015
Dunedin Enterprise Investment Trust PLC, the private equity investment trust which specialises in investing in UK mid-market buyouts, announces its results for the half year ended 30 June 2015.
Financial Highlights:
· Net asset value total return of -0.1% in the six months to 30 June 2015
· Realisations of £3.0m in the half year
· New investments of £10.6m in the half year
· £0.7m returned to shareholders by way of share buyback
· Final dividend for 2014 paid of 4.7p per share
Comparative Total Return Performance (%)
|
Periods to 30 June 2015 |
Net asset value |
|
Share price |
FTSE Small Cap (ex Inv Cos) Index |
|
Six months |
-0.1 |
|
-9.1 |
11.9 |
|
One year |
1.0 |
|
-24.2 |
8.4 |
|
Three years |
-5.9 |
|
4.6 |
88.3 |
|
Five years |
28.8 |
|
39.0 |
119.5 |
|
Ten years |
45.6*1 |
|
15.8 |
95.2 |
*1 - taken from 31 July for ten years
For further information please contact:
|
Graeme Murray Dunedin LLP 0131 225 6699 0131 718 2310 07813 138367 |
Corinna Osbourne Equity Dynamics Limited 07825 326 440 corinna@equitydynamics.co.uk
|
Chairman's Statement
Between your Company's half year end and the time of writing this statement, market conditions have been turbulent following negative economic news mainly from China. As a consequence, the share price has declined from a recent high of 354.5p at 31 July 2015 to 316.9p at the time of writing.
The market for unquoted businesses is generally not directly correlated with global stock markets. A continuation of this turbulence could help to lower the multiple required to be paid for new investments, but correspondingly may have a negative impact on the IPO market and potential exit valuations achieved.
Performance
The Board is acutely aware of the extent of your Company's underperformance and in particular of the lack of profitable realisations from Dunedin Buyout Fund II LP. The portfolio of investments in this fund is now relatively mature and offers the prospect of good realisations in the near future; advisers have been appointed to assist in the sale of several portfolio companies in order to maximise value and capitalise on the positive exit environment for private businesses. Historically, performance has been partly linked to realisations from the portfolio. The Board has emphasised to the Manager the importance of delivering value for shareholders.
Following the change in strategy in November 2011 to invest primarily in Dunedin funds, the Company committed £60m to Dunedin Buyout Fund III LP ("DBF III") in 2012/2013. As DBF III still has two and a half years left of its five year investment period and is only 38% invested, it is too early to judge the performance of DBFIII.
Board Changes
I am pleased to welcome Angela Lane to our Board from 1 June this year. Angela has worked as an independent director and adviser to private companies and private equity firms. She spent 18 years working in private equity at 3i and has extensive experience of business and financial services, healthcare, travel and aviation, media, consumer goods and infrastructure. I am sure that her experience will prove invaluable
Duncan Budge
27 August 2015
Manager's Review
Results for the six months to 30 June 2015
The results for the six months to 30 June 2015 show strong contributions from CitySprint, Hawksford and Kee Safety as a result of earnings growth and an increase in valuation multiples. This has been offset by the underperformance of Premier Hytemp and EV as a result of trading conditions in the oil and gas sector.
In the six months to 30 June 2015, Dunedin Enterprise's net asset total return per share was -0.1%, after taking account of dividends paid. The unaudited net asset value per share decreased by 1.0% from 510.6p to 505.4p, while the FTSE Small Cap Index (ex Inv. Cos) increased by 9.5%.
During the six months to 30 June 2015 the share price decreased by 10.3% from 352.4p to 316.0p, which equates to a discount of 37.5% to net asset value. This compared with a discount of 31.0% at 31 December 2014.
During June 2015 Dunedin Enterprise no longer qualified for inclusion in the FTSE All-Share Index due to a reduction in the market capitalisation of the Company. This resulted in a number of tracker funds which held shares being required to dispose of their shareholding within a short period of time, resulting in downward pressure on the share price. The majority of these shares were placed with the assistance of the Company's brokers. The balance of shares remaining (£0.7m) were bought back by the Company at a price of 309.8p, a discount of 39% to the net asset value as at 31 December 2014. The removal of these sellers led to a recovery in the share price after the half year end. However, following recent market declines, the share price now stands at 316.9p.
In the six months to 30 June 2015 Dunedin Enterprise invested a total of £10.6m and realised £3.0m from investments.
The Company had outstanding commitments to limited partnership funds of £56.2m at 30 June 2015. This consists of £49.2m to Dunedin managed funds and £7.0m to European funds. It is expected that approximately £34m of this total commitment will be drawn over the next two and a half years. The £20m revolving credit facility is available to the Company until 27 February 2017 and is undrawn at 30 June 2015. The Board and the Manager remain satisfied with the balance between cash resources and outstanding commitments given the expected rate of new investment and potential realisations of existing investments. The Company therefore continues to adopt a going concern basis in preparing the half year report and accounts.
Net asset and cash movements in the half year to 30 June 2015
The movement in net asset value is summarised in the table below:-
|
|
£'m |
|
Net asset value at 31 December 2014 |
106.6 |
|
Unrealised value increases |
6.5 |
|
Unrealised value decreases |
(5.1) |
|
Realised loss over opening valuation |
(1.2) |
|
Dividends paid to shareholders |
(1.0) |
|
Share buyback (including costs) |
(0.7) |
|
Other movements |
(0.8) |
|
Net asset value at 30 June 2015 |
104.3 |
Cash movements in the half year to 30 June 2014 can be summarised as follows:
|
|
£'m |
|
Cash and near cash balances at 31 December 2014 |
9.9 |
|
Investments made |
(10.6) |
|
Investments realised |
3.0 |
|
Dividends paid to shareholders |
(1.0) |
|
Share buyback (including costs) |
(0.7) |
|
Operating activities |
(0.1) |
|
Cash and near cash balances at 30 June 2015 |
0.5 |
Portfolio Composition
Dunedin Enterprise holds investments in unquoted companies through:
• Dunedin managed funds (including direct investments), and
• Third party managed funds.
The investment portfolio can be analysed as shown in the table below.
|
|
Valuation |
Additions |
Disposals |
Realised |
Unrealised |
Valuation |
|
|
at 31-12-14 |
in half year |
in half year |
movement |
movement |
at 30-06-15 |
|
|
£'m |
£'m |
£'m |
£'m |
£'m |
£'m |
|
Dunedin managed |
84.0 |
7.8 |
(1.7) |
(1.2) |
1.6 |
90.5 |
|
Third party managed |
13.2 |
2.8 |
(1.3) |
- |
(0.2) |
14.5 |
|
|
97.2 |
10.6 |
(3.0) |
(1.2) |
1.4 |
105.0 |
New investment activity
In March 2015 an investment of £4.9m was made in Blackrock Programme Management ("Blackrock PM"). Blackrock PM is a professional services firm that provides independent expert witness and construction consulting services for large, international construction projects. The company is headquartered in London and is widely recognised as a market leader, employing individual directors who are experts in their field. Blackrock PM has worked on an extensive range of projects around the globe, including airports, roads, railways, power stations, process plants, manufacturing facilities, health and educational facilities and commercial buildings.
Two follow-on investments were made in the half year. A further investment of £1.5m was made in Red, the IT staffing business, to assist with working capital and a re-setting of bank covenants. An investment of £0.3m was made in Steeper, the provider of prosthetic, orthotic and assistive technology products and services, to assist with a factory improvement programme. There were drawdowns totalling £1.1m made during the half year by Dunedin managed funds for management fees.
Within the European funds a total of £2.6m was drawn down by Realza for two new investments. It invested £1.4m in Litalsa, a provider of packaging finishes. Realza invested a further £1.2m in Cualin Quality, a leading producer of premium tomatoes and a further £0.2m was drawn by the two European funds to meet management fees and operating expenses.
Realisations
In the six months to 30 June 2015 a total of £3.0m was realised from investments. £1.7m was received from Enrich following the successful outcome of the court case against the vendor of the business. A total of £1.0m was returned from Innova/5. This was primarily the result of a successful IPO of the internet portal service provider Wirtualna Polska on the Polish stock exchange and a partial realisation of the stock on flotation. A further distribution of £0.3m was made by Realza as a result of strong cash generation by GTT, the provider of management services to local public entities in Spain.
Unrealised movements in valuation
Unrealised movements in portfolio company valuations in the half year amounted to £1.4m. The largest increases within this total were in the valuation of CitySprint (£3.3m), Hawksford (£1.6m) and Kee Safety (£0.8m). There were reductions in value at the two oil and gas related investments, EV (£2.6m) and Premier Hytemp (£1.0m).
CitySprint continues to grow both organically and through an ongoing programme of bolt-on acquisitions. Organic growth has been generated from services to the healthcare industry and retail sector. In July 2015 the company completed its 20th acquisition whilst under Dunedin's ownership. The earnings multiple applied to the investment has been increased from 8.0x to 9.0x, reflecting the increasing scale of the business. Hawksford has benefited from a reduced level of net external debt and an increase in the multiple applied from 7.0x to 8.0x, to reflect recent transactions in the sector, where multiples of 9x to 10x and above have been paid. The valuation of Kee Safety has benefited from strong earnings growth of 10% in the half year. This is the result of both organic growth and bolt-on acquisitions. The company continues to invest in product development to generate future growth. Since Dunedin's investment the company has completed six acquisitions, expanding the global foot-print of the business.
The maintainable profits of both Premier Hytemp and EV have been impacted by the reduced oil price and the consequent reduced level of demand and lower margins. Premier Hytemp supplies the oil exploration sector and has been significantly impacted since the price of oil fell in late 2014. EV primarily supplies the production side of the oil industry where the market has been impacted to a lesser extent.
The average earnings multiple applied to the valuation of the Dunedin managed portfolio was 7.9x EBITDA (31 December 2014: 7.6x) or 9.9x EBITA (31 December 2014: 9.3x). These multiples are applied to the maintainable earnings of portfolio companies. Within the Dunedin managed portfolio, the weighted average gearing of the companies was 2.1x EBITDA (31 December 2014: 2.2x) or 2.6x EBITA (31 December 2014: 2.7x).
The portfolio continues to be valued in accordance with the International Private Equity Venture Capital valuation guidelines (www.privateequityvaluation.com).
Dunedin LLP
27 August 2015
Ten Largest Investments
(both held directly and via Dunedin managed funds) by value at 30 June 2015
|
|
Approx. |
|
|
Percentage |
|
|||||||
|
|
percentage |
Cost of |
Directors' |
of net |
|
|||||||
|
|
of equity |
investment |
valuation |
assets |
|
|||||||
|
Company name |
% |
£'000 |
£'000 |
% |
|
|||||||
|
CitySprint (UK) Group Limited |
11.9 |
9,838 |
22,256 |
21.3 |
||||||||
|
Hawksford International Limited |
17.8 |
5,637 |
10,428 |
10.0 |
||||||||
|
Weldex (International) Offshore Holdings Limited |
15.1 |
9,505 |
9,885 |
9.5 |
||||||||
|
Realza Capital FCR |
8.9 |
8,788 |
9,008 |
8.6 |
||||||||
|
CGI Group Holdings Limited (Pyroguard) |
41.7 |
9,450 |
8,252 |
7.9 |
||||||||
|
Kee Safety Group Limited |
7.2 |
6,275 |
8,169 |
7.8 |
||||||||
|
Formaplex Group Limited |
17.7 |
1,732 |
6,467 |
6.2 |
||||||||
|
EV Offshore Limited |
10.6 |
7,078 |
5,818 |
5.6 |
||||||||
|
U-POL Group Limited |
5.2 |
5,657 |
5,106 |
4.9 |
||||||||
|
Innova/5 LP |
3.9 |
5,758 |
5,011 |
4.8 |
||||||||
|
|
|
69,718 |
90,400 |
86.6 |
||||||||
Top ten investments (held via funds and direct investments)
CitySprint (UK) Group Limited
Percentage of equity held 11.9%
Cost of Investment £9.8m
Directors' valuation £22.3m
Percentage of net assets 21.3%
CitySprint is the UK's largest national time critical and same day distribution network. It benefits from an asset light business model with almost 3,000 self-employed couriers, making the business both highly flexible and scalable. It operates from 40 service centres in the UK and can deliver to over 87% of the mainland UK population within 60 minutes. It handles over ten million critical same day deliveries a year, providing flexible, reliable and cost-effective solutions.
CitySprint offers a range of services including SameDay Courier, UK Overnight and International courier services, as well as more complex logistics services. It services a number of different sectors, including healthcare, online retail fulfilment and parts fulfilment such as outsourced supply chain services for engineering and servicing companies. CitySprint now has the UK's largest SameDay healthcare courier network.
Hawksford International Limited
Percentage of equity held 17.8%
Cost of Investment £5.6m
Directors' valuation £10.4m
Percentage of net assets 10.0%
Hawksford is one of the largest independent fiduciary services businesses in the Channel Islands, serving high net worth private clients and small and large corporates. It also provides a dedicated range of services for multi-generational families through its family office business and administers specialist investment funds.
In the last four years the business has completed the acquisitions of Key Trust Company Limited, Trustcorp Jersey Limited, L-S&S GmbH, a Swiss boutique private wealth law firm, the funds business of Standard Bank Dubai and Janus Corporate Solutions. These acquisitions have further enhanced Hawksford's market-leading position through additional high quality people and clients. The focus of the business remains on providing excellent service and increasing client choice by growing the international footprint.
Weldex (International) Offshore Holdings Limited
Percentage of equity held 15.1%
Cost of Investment £9.5m
Directors' valuation £9.9m
Percentage of net assets 9.5%
Weldex is a market-leading crawler crane hire business in the UK, with a strong European presence. It serves the offshore wind, oil and gas and commercial construction markets. Its cranes, including two of the largest in the UK, have been used in a number of significant construction projects including the 2012 Olympic site, Crossrail and the new Queensferry crossing over the Firth of Forth.
Weldex was established in 1979 and has grown into the UK's largest crawler crane hire company. The company employs 102 staff and operates nationwide and overseas from its headquarters in Inverness, its depot at Alfreton and its base at Nigg Energy Park which undertakes oil and gas decommissioning work. The company provides its customers with an established team of fully accredited operators, site managers and service engineers and also supplies associated lifting equipment including wheeled cranes, forklifts, lorry loaders and trailers.
Realza Capital FCR
Percentage of equity held 8.9%
Cost of Investment £8.8m
Directors' valuation £9.0m
Percentage of net assets 8.6%
Realza Capital FCR is a Spanish private equity fund making investments in Spain and Portugal. The fund is limited to investing 15% of commitments in Portugal. Dunedin Enterprise's investment is held via Dunedin Fund of Funds LP.
The fund invests in companies with leading market positions and attractive growth prospects either through organic growth or through subsequent merger & acquisition activity. Realza seeks to invest in companies with an enterprise value normally ranging from €20m to €100m. The fund's typical equity investment ranges from €10m to €25m.
C.G.I. Group Holdings Limited (Pyroguard)
Percentage of equity held 41.7%
Cost of Investment £9.5m
Directors' valuation £8.3m
Percentage of net assets 7.9%
Since Dunedin Enterprise first invested in CGI the company has been through two refinancings allowing Dunedin Enterprise to realise a total of £14.5m in capital and income to date from this investment. CGI, trading under the Pyroguard brand, is a leading designer, manufacturer and supplier of specialist fire resistant glass. The company serves the construction markets in the UK, Ireland, France, Holland, Scandinavia, Eastern Europe and the Middle East from its manufacturing bases in Haydock, UK and Seingbouse, France. Significant projects completed by CGI include the installation of fire resistant glass at Manchester Airport, Heathrow Terminal 5, Hong Kong Airport and the Houses of Parliament.
Kee Safety Group Limited
Percentage of equity held 7.2%
Cost of Investment £6.3m
Directors' valuation £8.2m
Percentage of net assets 7.8%
Kee Safety is a UK head-quartered global market-leading provider of collective fall protection, safety systems and solutions. The business has 271 employees in the UK, USA, Canada, Germany, France, Poland, Dubai, China and India and sells its products in more than 50 countries. Its core patent protected product range includes modular barrier systems, guardrails, access platforms and specialist fixings. The business has multiple routes to market through an international direct sales force, direct to OEM, online and through the distributor channel. Kee Safety's customers range from multi-national corporations, to major contractors, distributors and installers.
Formaplex Group Limited
Percentage of equity held 17.7%
Cost of Investment £1.7m
Directors' valuation £6.5m
Percentage of net assets 6.2%
Formaplex is a market-leading engineering company which designs and manufactures integrated tooling and lightweight components for the premium automotive, aerospace, defence and motor sports markets. Operating from three state-of-the-art UK manufacturing facilities in Hampshire, which collectively span over 140,000ft, Formaplex offers a fully integrated service from tool design, prototyping and manufacture, through to final component manufacture, finishing and delivery.
EV Offshore Limited
Percentage of equity held 10.6%
Cost of Investment £7.1m
Directors' valuation £5.8m
Percentage of net assets 5.6%
EV designs, manufactures and provides high performance, ruggedised video cameras that are used to diagnose and analyse problems in oil and gas wells. It offers a highly specialist service, providing skilled engineers to operate its cameras in the most difficult down-hole conditions. The high resolution video images produced by EV's cameras allow oil and gas well operators to identify and solve problems rapidly. EV is based in Aberdeen and Norwich. It has a further presence in seventeen worldwide locations across Northern Europe, Canada, USA, West Africa, the Middle East, Asia and Australasia. The business employs more than 100 staff.
U-POL Group Limited
Percentage of equity held 5.2%
Cost of Investment £5.7m
Directors' valuation £5.1m
Percentage of net assets 4.9%
U-POL is a leading independent manufacturer of automotive refinish products including body fillers, coatings, aerosols, polishing compounds and consumables. The company has a good reputation for product quality and innovation, which is the key to its global success. From its UK manufacturing base in Wellingborough, U-POL exports a range of products to 120 countries worldwide. The company has a strong market position in the UK and a growing position in other large markets such as the USA, the Far East, the Middle East, Africa and Russia. Its growth strategy is to expand in both developed and emerging markets.
U-POL sells primarily through intermediate distributors but has built brand recognition and loyalty with end-users which are mainly comprised of car repair outlets.
Innova/5 LP
Percentage of equity held 3.9%
Cost of Investment £5.8m
Directors' valuation £5.0m
Percentage of net assets 4.8%
Innova/5 LP is €380.8m private equity fund based in Warsaw which makes investments in Central Eastern Europe. Dunedin Enterprise's investment is held via Dunedin Fund of Funds LP.
The fund invests in mid-market buyouts in businesses with an enterprise value of between €50m and €125m. Its investment focus is Financial Services; Technology, Media, & Telecommunications ; Business Services; Construction; Energy; and Industrial & Automotive.
Overview of portfolio
Fund Analysis
|
|
30 June 2015 % |
|
|
Direct |
10 |
|
|
Dunedin Buyout Fund I |
- |
|
|
Dunedin Buyout Fund II |
53 |
|
|
Dunedin Buyout Fund III |
18 |
|
|
Equity Harvest Fund (Dunedin managed) |
5 |
|
|
Third party managed |
13 |
|
|
Cash |
1 |
|
Analysed by valuation method
|
|
30 June 2015 % |
|
|
Cost/written down |
9 |
|
|
Earnings - provision |
23 |
|
|
Earnings - uplift |
65 |
|
|
Net assets |
3 |
|
Analysed by geographic location
|
|
30 June 2015 % |
|
|
UK |
86 |
|
|
Rest of Europe |
13 |
|
|
Cash |
1 |
|
Analysed by sector
|
|
30 June 2015 % |
|
|
Automotive |
3 |
|
|
Construction and building materials |
8 |
|
|
Consumer products & services |
3 |
|
|
Financial services |
13 |
|
|
Healthcare |
4 |
|
|
Industrials |
28 |
|
|
Support services |
40 |
|
|
Technology, media & telecoms |
1 |
|
Analysed by age of investment
|
|
30 June 2015 % |
|
|
<1 year |
10 |
|
|
1-3 years |
23 |
|
|
3-5 years |
29 |
|
|
>5 years |
38 |
|
Consolidated Income Statement
for the six months ended 30 June 2015
|
|
Unaudited Six months ended |
Unaudited Six months ended |
Audited Year ended |
|||||||
|
|
30 June 2015 |
30 June 2014 |
31 December 2014 |
|||||||
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Investment income |
98 |
- |
98 |
292 |
- |
292 |
1,711 |
- |
1,711 |
|
|
Gain / (loss) on investments |
- |
76 |
76 |
- |
(1,430) |
(1,430) |
- |
(1,218) |
(1,218) |
|
|
Total Income |
98 |
76 |
174 |
292 |
(1,430) |
(1,138) |
1,711 |
(1,218) |
493 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Investment management fees |
(51) |
(153) |
(204) |
(61) |
(183) |
(244) |
(104) |
(311) |
(415) |
|
|
Management performance fee |
- |
- |
- |
- |
- |
- |
7 |
22 |
29 |
|
|
Other expenses |
(254) |
- |
(254) |
(323) |
- |
(323) |
(633) |
- |
(633) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit / (loss) before finance costs and tax |
(207) |
(77) |
(284) |
(92) |
(1,613) |
(1,705) |
981 |
(1,507) |
(526) |
|
|
Finance costs |
(62) |
(187) |
(249) |
(75) |
(225) |
(300) |
(138) |
(413) |
(551) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit / (loss) before tax |
(269) |
(264) |
(533) |
(167) |
(1,838) |
(2,005) |
843 |
(1,920) |
(1,077) |
|
|
Taxation |
- |
- |
- |
- |
- |
- |
137 |
162 |
299 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit / (loss) for the period |
(269) |
(264) |
(533) |
(167) |
(1,838) |
(2,005) |
980 |
(1,758) |
(778) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per ordinary share (basic & diluted) |
(1.3)p |
(1.3)p |
(2.6)p |
(0.8)p |
(8.4)p |
(9.2)p |
4.6p |
(8.3)p |
(3.7)p |
|
The Total column of this statement represents the Income Statement of the Group, prepared in accordance with International Financial Reporting Standards as adopted by the EU. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies.
All items in the above statement derive from continuing operations.
All income is attributable to the equity shareholders of Dunedin Enterprise Investment Trust PLC.
Consolidated Statement of Changes in Equity
for the six months ended 30 June 2015
Six months ended 30 June 2015 (unaudited)
|
|
Share capital £'000
|
Capital redemption reserve £'000 |
Capital Reserve realised £'000 |
Capital reserve - unrealised £'000 |
Special Distributable Reserve £'000 |
Revenue account £'000 |
Total retained earnings £'000 |
Total equity £'000 |
|
At 31 December 2014 |
5,217 |
2,709 |
47,552 |
(3,436) |
47,600 |
6,914 |
98,630 |
106,556 |
|
Profit/(loss) for the half year |
- |
- |
(6,750) |
6,486 |
- |
(269) |
(533) |
(533) |
|
Purchase and cancellation of shares |
(56) |
56 |
(700) |
- |
- |
- |
(700) |
(700) |
|
Dividends paid |
- |
- |
- |
- |
- |
(981) |
(981) |
(981) |
|
At 30 June 2015 |
5,161 |
2,765 |
40,102 |
3,050 |
47,600 |
5,664 |
96,416 |
104,342 |
Six months ended 30 June 2014 (unaudited)
|
|
Share capital £'000
|
Capital redemption reserve £'000 |
Capital Reserve realised £'000 |
Capital reserve - unrealised £'000 |
Special Distributable Reserve £'000 |
Revenue account £'000 |
Total retained earnings £'000 |
Total equity £'000 |
|
At 31 December 2013 |
5,492 |
2,434 |
62,832 |
(11,649) |
47,600 |
9,558 |
108,341 |
116,267 |
|
Profit/(loss) for the half year |
- |
- |
(6,917) |
5,079 |
- |
(167) |
(2,005) |
(2,005) |
|
Purchase and cancellation of shares |
(275) |
275
|
(5,288) |
- |
- |
- |
(5,288) |
(5,288) |
|
Dividends paid |
- |
- |
- |
- |
- |
(3,624) |
(3,624) |
(3,624) |
|
At 30 June 2014 |
5,217 |
2,709 |
50,627 |
(6,570) |
47,600 |
5,767 |
97,424 |
105,350 |
Year ended 31 December 2014 (audited)
|
|
Share capital £'000
|
Capital redemption reserve £'000 |
Capital Reserve realised £'000 |
Capital reserve - unrealised £'000 |
Special Distributable Reserve £'000 |
Revenue account £'000 |
Total retained earnings £'000 |
Total equity £'000 |
|
At 31 December 2013 |
5,492 |
2,434 |
62,832 |
(11,649) |
47,600 |
9,558 |
108,341 |
116,267 |
|
Profit/(loss) for the year |
- |
- |
(9,971) |
8,213 |
- |
980 |
(778) |
(778) |
|
Purchase and cancellation of shares |
(275) |
275 |
(5,309) |
- |
- |
- |
(5,309) |
(5,309) |
|
Dividends paid |
- |
- |
- |
- |
- |
(3,624) |
(3,624) |
(3,624) |
|
At 31 December 2014 |
5,217 |
2,709 |
47,552 |
(3,436) |
47,600 |
6,914 |
98,630 |
106,556 |
Consolidated Balance Sheet
As at 30 June 2015
|
|
Unaudited 30 June 2015 £'000 |
Unaudited 30 June 2014 £'000 |
Audited 31 December 2014 £'000 |
|
Non-current assets |
|
|
|
|
Investments held at fair value |
105,061 |
95,127 |
98,371 |
|
|
|
|
|
|
Current assets |
|
|
|
|
Other receivables |
209 |
905 |
269 |
|
Cash and cash equivalents |
396 |
10,078 |
8,726 |
|
|
605 |
10,983 |
8,995 |
|
|
|
|
|
|
Total assets |
105,666 |
106,110 |
107,366 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Other liabilities |
(1,324) |
(626) |
(810) |
|
Current tax liabilities |
- |
(134) |
- |
|
|
|
|
|
|
Net assets |
104,342 |
105,350 |
106,556 |
|
|
|
|
|
|
Capital and reserves |
|
|
|
|
Share capital |
5,161 |
5,217 |
5,217 |
|
Capital redemption reserve |
2,765 |
2,709 |
2,709 |
|
Capital reserve - realised |
40,102 |
50,627 |
47,552 |
|
Capital reserve - unrealised |
3,050 |
(6,570) |
(3,436) |
|
Special distributable reserve |
47,600 |
47,600 |
47,600 |
|
Revenue reserve |
5,664 |
5,767 |
6,914 |
|
Total equity |
104,342 |
105,350 |
106,556 |
|
|
|
|
|
|
Net asset value per ordinary share (basic and diluted) |
505.4p |
504.8p |
510.6p |
Consolidated Cash Flow Statement
for the six months ended 30 June 2015
|
|
Unaudited 30 June 2015 £'000 |
Unaudited 30 June 2014 £'000 |
Audited 31 December 2014 £'000 |
|
Operating activities |
|
|
|
|
Loss before tax |
(533) |
(2,005) |
(1,077) |
|
Adjustments for: |
|
|
|
|
(Gain) / loss on investments |
(76) |
1,430 |
1,218 |
|
Interest paid |
249 |
300 |
551 |
|
(Increase) / decrease in debtors |
60 |
(312) |
324 |
|
(Decrease) / increase in creditors |
514 |
(44) |
140 |
|
Other non cash movements |
- |
- |
199 |
|
Net cash (outflow) / inflow from operating activities |
214 |
(631) |
1,355 |
|
|
|
|
|
|
Servicing of finance |
|
|
|
|
Interest paid |
(249) |
(300) |
(551) |
|
|
|
|
|
|
Investing activities |
|
|
|
|
Purchase of investments |
(10,636) |
(9,768) |
(16,025) |
|
Purchase of 'AAA' rated money market funds |
(6,707) |
(10,379) |
(13,395) |
|
Sale of investments |
3,045 |
2,272 |
6,108 |
|
Sale of 'AAA' rated money market funds |
7,750 |
14,379 |
16,629 |
|
Net cash (outflow) / inflow from investing activities |
(6,548) |
(3,496) |
(6,683) |
|
|
|
|
|
|
Taxation |
|
|
|
|
Tax |
- |
(49) |
116 |
|
|
|
|
|
|
Financing activities |
|
|
|
|
Purchase of ordinary shares |
(700) |
(5,288) |
(5,309) |
|
Dividends paid |
(981) |
(3,624) |
(3,624) |
|
Net cash (outflow) from financing activities |
(1,681) |
(8,912) |
(8,933) |
|
|
|
|
|
|
Effect of exchange rate fluctuations on cash held |
(66) |
(18) |
(62) |
|
|
|
|
|
|
Net (decrease) in cash and cash equivalents |
(8,330) |
(13,406) |
(14,758) |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the start of the period |
8,726 |
23,484 |
23,484 |
|
Net (decrease) in cash and cash equivalents |
(8,330) |
(13,406) |
(14,758) |
|
Cash and cash equivalents at the end of the period |
396 |
10,078 |
8,726 |
Responsibility statement of the Directors
in respect of the half-yearly financial report
We confirm that to the best of our knowledge:
- the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and gives a true and fair view of the assets, liabilities, financial position and profit 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 entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
By Order of the Board
Duncan Budge
Chairman
27 August 2015
Notes to the Accounts
1. Unaudited Interim Report
The comparative financial information contained in this report for the year ended 31 December 2014 does not constitute the Company's statutory accounts but is derived from those accounts. Statutory accounts for the year ended 31 December 2014 have been delivered to the Registrar of Companies. The auditor has reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The financial statements for the six months ended 30 June 2014 and 30 June 2015 have not been audited.
2. Basis of Preparation
These condensed consolidated set of financial statements for the six months ended 30 June 2015 have been prepared in accordance the Disclosure Rules and Transparency Rules of the Financial Conduct Authority (FCA) and IAS 34 Interim Financial Reporting as adopted by the European Union (EU). They do not include all the information required by International Financial Reporting Standards (IFRS) in full annual financial statements and should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2014.
The Association of Investment Companies ('AIC') issued a revised Statement of Recommended Practice for the Financial Statements of Investment Trust Companies and Venture Capital Trusts in November 2014 ('SORP') applicable to accounting periods commencing on or after 1 January 2015. Where presentational guidance set out in the SORP 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 accounting policies applied in these condensed financial statements are the same as those in the Group's consolidated financial statements as at and for the year ended 31 December 2014, copies of which are available on the Company's website.
3. Dividends
|
|
Six months to 30 June 2015 £'000 |
Six months to 30 June 2014 £'000 |
Year to 31 December 2014 £'000 |
|
|
|
|
|
|
Dividends paid in the period |
981
|
3,624
|
3,624
|
4. Investments
All investments are designated fair value through profit or loss at initial recognition, therefore all gains and losses that arise on investments are designated at fair value through profit or loss. Given the nature of the Company's investments the fair value gains recognised in these financial statements are not considered to be readily convertible to cash in full at the balance sheet date and therefore the movement in these fair values are treated as unrealised.
Fair value hierarchy
The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:
• Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.
• Level 2: Valuation techniques based on observable inputs, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.
• Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.
The table below analyses financial instruments, measured at fair value at the end of the reporting period, by the level in the fair value hierarchy into which the fair value measurement is categorised:
|
|
At 30 June 2015 £'000 |
||
|
Level 1 |
|
||
|
'AAA' rated money market funds OEICS |
95 |
||
|
Level 2 |
- |
||
|
Level 3 |
|
||
|
Unlisted investments |
104,966
|
||
|
|
105,061
|
||
|
|
|
|
|
The Group recognises transfers between the levels of the fair value hierarchy as of the end of the reporting period during which the transfer occurred. There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the six months ended 30 June 2015.
Level 3 fair values
Details of the determination of Level 3 fair value measurements and the movements in Level 3 fair values during the six months ended 30 June 2015 are set out below:-
|
|
Level 3 £'000
|
|
Book cost at 31 December 2014 |
100,669 |
|
Unrealised (depreciation) |
(3,436) |
|
Valuation at 31 December 2014 |
97,233 |
|
Purchases at cost |
10,636 |
|
Sales - proceeds |
(3,045) |
|
Sales - realised (losses) against cost |
(6,344) |
|
Increase in unrealised appreciation |
6,486 |
|
Valuation at 30 June 2015 |
104,966 |
|
Book cost at 30 June 2015 |
101,916 |
|
Closing unrealised appreciation |
3,050 |
Valuation of investments
Unquoted investments are fair valued by the Directors in accordance with the following rules, which are consistent with the International Private Equity and Venture Capital Valuation Guidelines:
· Investments are only valued at cost for a limited period after the date of acquisition, otherwise investments are valued on one of the other basis detailed below. Generally the earnings multiple basis of valuation will be used.
· When valuing on an earnings basis, the maintainable earnings of a company are multiplied by an appropriate multiple.
· An investment may be valued by reference to the value of its net assets. This is appropriate for businesses whose value derives mainly from the underlying value of its assets rather than its earnings.
· When investments have obtained an exit (either by listing or trade sale) after the valuation date but before finalisation of the relevant accounts (interim or final), the valuation is based on the exit valuation.
· Accrued interest on loans to portfolio companies is included in valuations where there is an expectation that the interest will be received.
IFRS 13 requires disclosure, by class of financial instrument, if the effect of changing one or more inputs to reasonably possible alternative assumptions would result in a significant change to the fair value measurement. The information used in determination of the fair value of Level 3 investments is chosen with reference to the specific underlying circumstances and position of the investee company. On that basis the Board believe that the impact of changing one or more of the inputs to reasonably possible alternative assumptions would not change the fair value significantly.
The Directors consider the carrying value of financial instruments in the financial statements to represent their fair value.
5. Statement of Principal Risks and Uncertainties
The Directors believe that the principal risks and uncertainties faced by the Company include investment and strategic, liquidity, cash drag, people and loss of investment trust status risks. These risks and other risks, and the way in which they are managed, are described in more detail under the heading "Principal Risks, Risk Management and Regulatory Environment" in the Strategic Report Review in the Company's Annual Report and Accounts for the year ended 31 December 2013. The Company's principal risks and uncertainties have not changed materially since the date of that report and are not expected to change materially for the remaining six months of the Company's financial year.
6. Earnings per share
|
|
Six months to 30 June 2015 £'000
|
Six months to 30 June 2014 £'000
|
Year to 31 December 2014 £'000
|
|
Revenue return per ordinary share (p) |
(1.3) |
(0.8) |
4.6 |
|
Capital return per ordinary share (p) |
(1.3) |
(8.4) |
(8.3) |
|
Earnings per ordinary share (p) |
(2.6) |
(9.2) |
(3.7) |
|
Weighted average number of shares |
20,858,639 |
21,693,838 |
21,277,808 |
The earnings per share figures are based on the weighted average numbers of shares set out above. Earnings per share is based on the revenue profit in the period as shown in the consolidated income statement.
7. Contingent assets
Discussions are ongoing with HMRC regarding the payment of interest on a compound basis relating to the reclaim of VAT on management fees. The amount and timing of any recovery remains uncertain and accordingly no amount has been provided for in the financial statements.
8. Related party transactions
There have been no material changes to the related party transactions described in the last annual report.
ENDS
This information is provided by RNS
Latest directors dealings
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago Smurfit Westrock (DI)
- 1 day ago Menhaden Resource Efficiency
- 1 day ago BP