Interim Results
Dunedin Enterprise Inv Trust PLC
14 December 2004
For release 07.00 am 14 December 2004
Dunedin Enterprise Investment Trust PLC ('Dunedin Enterprise' or ' the Trust')
Interim Results for six months ended 31 October 2004
Dunedin Enterprise Investment Trust PLC, the private equity investment trust
which specialises in the provision of private equity for management buyouts,
management buyins and growing businesses throughout the UK, announces its
interim results for the six months ended 31 October 2004.
Financial Highlights:
* Net asset value per share increased by 9.9% to 377.9p per share
* Interim dividend of 1.9p per share (2003: 1.9p)
Comparative Performance
Periods to 31 Net asset value Share price FTSE Small Cap FTSE All Share
October 2004 (ex Inv Cos) Index (ex Inv Cos)Index
Six months +9.9% +11.6% -1.8% +2.7%
One year +20.1% +14.5% +4.1% +8.2%
Three years +16.2% +1.4% +13.0% -4.9%
Five years -0.6% -11.5% 0.0% -21.1%
Ten years +96.8% +89.5% +48.3% +50.3%
Operating Highlights:
* Realisations of £13.7 million in the half year
* Flotation of Jessops and Goals Soccer Centres
* New investment of £4.5 million in the half year
Edward Dawnay, Chairman of Dunedin Enterprise Investment Trust PLC, commented:
'The six months since reporting our final results in June has been a busy period
with nine portfolio company disposals and two new investments. The UK buyout
market is anticipated to show a second successive year of growth in 2004 after
suffering two years of decline. The market for divestments has also improved
with private equity firms realising record value from their investments.
Your Manager has generated a strong flow of investment opportunities for
consideration but continues to take new investments only in companies with good
growth prospects. The outlook for Dunedin Enterprise portfolio companies remains
positive, with the majority trading ahead of last year.'
For further information please contact
Ross Marshall Jacqui Graves / Victoria Stephens
Managing Director Binns & Co PR Ltd
Dunedin Capital Partners 0207 153 1486 / 0207 153 1482
0131 225 6699
07768 794 180
ross.marshall@dunedin.com
Notes to Editors
Dunedin Enterprise Investment Trust PLC is managed by Dunedin Capital Partners
Limited. Dunedin Capital Partners Limited is an independent private equity
company owned by its directors. The company specialises in providing equity
finance for management buyouts, management buyins and growing businesses with a
transaction size of £10 - 50 million. It operates throughout the United Kingdom
from its offices in Edinburgh and London.
Dunedin Capital Partners is itself the result of a management buyout which took
place in 1996.
Dunedin Enterprise's primary objective is to achieve substantial long term
growth in its assets through capital gains from its investments.
For more information on Dunedin Enterprise, its portfolio and investment
approach, please visit the website www.dunedin.com.
Investors can buy shares in the company through regular savings, PEP/ISA and
pension plans. For further information, call the Edinburgh Fund Managers
helpline on 0800 028 6789 or visit the website at
www.dunedinenterprisetrust.co.uk.com.
Manager's Review
Overview
The unaudited net asset value attributable to ordinary shareholders at 31
October 2004 was £116.1 million compared to £105.7 million at 30 April 2004. Net
asset value per share increased by 9.9% in the six months to 31 October 2004
from 344.0p to 377.9p per ordinary share. The increase of 9.9% compares to a
decrease, over the same period, of 1.8% in the FTSE Small Cap Index (ex
investment companies). During the same six month period, the share price of
Dunedin Enterprise rose to 288p from 258p, an 11.6% increase.
Dunedin Enterprise invested £4.5 million in one new investment, five follow-on
investments and made a £5 million commitment to a new buyout fund during the
half year. Disposals by Dunedin Enterprise during the half year realised £13.7
million and produced a gain of £1.1 million over valuations at 30 April 2004.
Disposals by the Trust, following the half year end, realised a further £13.2
million on the flotation of Jessops and Goals Soccer Centres.
Investments
In August 2004, Dunedin Enterprise invested £3.5 million in the £92 million
management buyout of Total Fitness. Total Fitness operates health and fitness
facilities in the North of England and Ireland. The company operates 21 clubs
and has 157,000 members. Total Fitness clubs are large facilities with an
emphasis on exercise and rehabilitation.
The company is positioned at the value end of the sector, generally being the
lowest cost provider of a full facility club. All of the clubs have swimming
pools and a number have indoor running tracks. The company's plan is to continue
rolling out the Total Fitness model throughout the UK. With the current sites
being concentrated in the North of England there are plans to roll out the low
cost, large format clubs to other areas.
A further £1 million was invested in existing portfolio companies.
During the half year Dunedin Enterprise made a £5 million commitment to the LGV4
Private Equity Fund. This fund will focus on mid market buyouts primarily in the
UK with an enterprise value of between £60 million and £300 million. This offers
Dunedin Enterprise exposure to larger buyouts.
Realisations
A recapitalisation of C.G.I. Group, the manufacturer and supplier of fire
resistant glass, allowed Dunedin Enterprise to realise £5.3 million from this
investment and to retain a significant shareholding in the recapitalised
company. From an initial investment of £4.4 million, capital and income of £10.8
million has been received by the Trust together with a continuing investment
valued at £5.9 million. This represents a total multiple of 3.8 times and an
annual return of 41.7%.
Earls Court, the operator of exhibition centres, was sold during the half year
generating £2.2 million. This investment was acquired as part of the Group Trust
portfolio and Dunedin Enterprise has received capital and income of £2.4 million
in return for £1 million invested. This represents a multiple of 2.4 times money
invested and an annual return of 34.9%.
Two portfolio companies, Letts Filofax and ABI, repaid all of Dunedin
Enterprise's outstanding loan stock, returning £1.5 million and £3.0 million
respectively. This reflects strong trading conditions at each company,
particularly so at ABI, where your Company's initial investment of £3.2 million
was made in February 2004.
The remaining realisations totalled £1.7 million and were achieved through loan
stock repayments, preference share redemptions and other smaller disposals.
Following the half year end, in November 2004, Jessops, the specialist
photographic retailer, listed on the London Stock Exchange. Dunedin Enterprise
realised all its loan stock in Jessops and 36% of its ordinary shareholding. At
a listing price of 155p per share the Trust received capital, income and shares
totalling £6.1 million from an original investment of £3.1 million. This
represents a money multiple of 1.9 times, an annual return of 53.5% and an
uplift of £1.9 million from the valuation at 30 April 2004.
In December 2004, Goals Soccer Centres, the operator of five-a-side football
centres, successfully listed on the Alternative Investment Market. Dunedin
Enterprise realised its entire investment on listing. This was a successful
outcome for the Trust which invested £4.8 million in Goals Soccer Centres in
2000. Dunedin Enterprise received £10.5 million in capital and income proceeds
from this investment resulting in a money multiple of 2.2 times, a return of
22.2% per annum over four years and an uplift of £4.1 million from the valuation
at 30 April 2004.
Portfolio
There has been continued focus on actively managing the portfolio during the
half year with the disposal of a number of old investments with limited growth
potential. At 31 October 2004, Dunedin Enterprise's portfolio comprised
investments in 31 unlisted companies (representing 89% of the portfolio value),
eight buyout funds (7%) and four technology funds (4%).
Results for the six months to 31 October 2004
The movement in net asset value is summarised in the table below:
£'m
Net asset value at 30 April 2004 105.7
Unrealised valuation increases 15.1
Unrealised valuation decreases (5.6)
Realised profit over opening valuation 1.1
Other capital movements (0.2)
------
Net asset value at 31 October 2004 116.1
======
The Directors' valuation of the portfolio is in accordance with British Venture
Capital Association guidelines.
The weighted average price earnings multiple used to value the portfolio at 31
October 2004 was 8.1 (30 April 2004: 8.4), a discount of 47% to the FTSE All
Share price earnings multiple of 15.3 on that date (30 April 2004: 53% discount
to FTSE All Share multiple of 17.9).
Five portfolio companies account for the majority of the unrealised valuation
increases. Exit valuations placed on Goals Soccer Centres and Jessops account
for £4.1 million and £1.9 million of the uplift respectively. A discount of 10%
has been applied to the proceeds received post half year end from the sale of
ordinary shares in Goals Soccer Centres and a 20% discount has been applied to
the remaining quoted shareholding in Jessops. A combination of strong trading
and reduced gearing allow for increased valuations of £3.9 million at ABI, £1.9
million at Caledonian Building Systems and £1.5 million at Letts Filofax.
Poor trading at two portfolio companies has led to the value of these
investments being written down. Your Manager is taking active steps to achieve a
return of value to these investments in due course.
Dividend
The interim dividend has been maintained at 1.9p per ordinary share at a cost of
£583,717. The interim dividend will be paid on 28 January 2005 to shareholders
on the register at close of business on 7 January 2005. The ex-dividend date is
5 January 2005.
Prospects
Economic conditions in the UK remain benign with historically low levels of
interest rates and inflation.
The UK buyout market is anticipated to show a second successive year of growth
in 2004 after suffering two years of decline. The market for divestments has
also improved in 2004 with private equity firms having already realised a record
value from their investments.
In the three years to 2003, UK private equity firms have raised £30 billion,
whilst over the same period only £18 billion has been invested. This has created
a competitive market place for new investments. Your Manager has generated a
strong flow of investment opportunities for consideration but continues to take
new investments only in companies with good growth prospects.
The outlook for Dunedin Enterprise portfolio companies remains positive, with
the majority trading ahead of last year.
Dunedin Capital Partners Limited
13 December 2004
Ten Largest Investments
by value at 31 October 2004
Approx. Cost of Directors' Percentage of
Company name Percentage investment valuation net assets
of equity
%* £'000 £'000 %
Letts Filofax 41.1 345 13,130 11.3
Group Limited
Davenham Group 34.4 4,960 11,516 9.9
Holdings
Limited
Goals Soccer 39.7 ** 4,807 8,780 7.6
Centres
Limited
C.G.I. Group 37.9 5,941 5,941 5.1
Limited
Caledonian 32.4 3,808 5,745 4.9
Building
Systems
Limited
Jessops 4.0 ** 3,142 5,050 4.4
Limited
ABI (UK) 18.5 185 4,046 3.5
Limited
Dunedin Buyout 13.0 2,356 3,796 3.3
Fund LP
Portman 16.8 2,516 3,749 3.2
Holdings
Limited
Gardner Group 15.0 3,610 3,610 3.1
Limited ------ ------ ----
31,670 65,363 56.3
====== ====== ====
* 'Approx. percentage of equity' relates to ordinary share capital of the
relevant company and assumes full exercise of outstanding options, warrants and
conversion rights.
** Equity percentage prior to listing.
Overview of Portfolio
Analysed by valuation basis
31 October 30 April
2004 2004
Price of recent investment 25% 33%
Earnings Multiple 55% 42%
Imminent sale price 17% 5%
Net assets 3% 10%
Analysed by industry sector
31 October 30 April
2004 2004
Aerospace & defence 5% 5%
Chemicals -% 6%
Construction & building materials 15% 18%
General retailers 6% 4%
Household goods & textiles 18% 18%
Insurance 2% 3%
Leisure & hotels 21% 11%
Software & computer services 6% 6%
Speciality & other finance 15% 14%
Support services 12% 15%
Analysed by deal type
31 October 30 April
2004 2004
Management buyouts/buyins 86% 86%
Buyout funds 7% 7%
Technology funds 4% 3%
Other 3% 4%
Analysed by age of investment
31 October 30 April
2004 2004
Less than 1 year 16% 14%
1-3 years 12% 17%
3-5 years 57% 48%
More than 5 years 15% 21%
Group Statement of Total Return (incorporating the Revenue Account)
(unaudited) for the six months ended 31 October 2004
Six months ended Six months ended Year ended
31 October 2004 31 October 2003 30 April 2004
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains on - 10,609 10,609 - 2,428 2,428 - 13,191 13,191
investments
Income from 1,837 - 1,837 1,868 - 1,868 4,391 - 4,391
investments
Deposit 116 - 116 117 - 117 233 - 233
Interest
Investment (304) (912) (1,216) (335) (1,006) (1,341) (671) (2,014) (2,685)
management
fee
Other (211) - (211) (209) - (209) (459) - (459)
expenses
Net return 1,438 9,697 11,135 1,441 1,422 2,863 3,494 11,177 14,671
before
finance costs
and tax
Interest (31) (95) (126) (156) (468) (624) (251) (1,201) (1,452)
payable and
similar
charges
Return on 1,407 9,602 11,009 1,285 954 2,239 3,243 9,976 13,219
ordinary
activities
before tax
Tax on (362) 362 - (210) 210 - (397) 397 -
ordinary
activities
Return on 1,045 9,964 11,009 1,075 1,164 2,239 2,846 10,373 13,219
ordinary
activities
after tax
Dividends (584) - (584) (587) - (587) (2,645) - (2,645)
Transfer to 461 9,964 10,425 488 1,164 1,652 201 10,373 10,574
reserves
Basic return 3.4p 32.4p 35.8p 3.5p 3.8p 7.3p 9.2p 33.6p 42.8p
per ordinary
share
Dividends per 1.9p 1.9p 8.57p
share
Group Balance Sheet
(unaudited) as at 31 October 2004
31 October 31 October 30 April
2004 2003 2004
£'000 £'000 £'000
Fixed asset investments 112,804 107,250 103,733
Current assets
Debtors 185 1,321 429
Cash at bank 5,165 9,513 5,050
5,350 10,834 5,479
Creditors: amounts falling due within one (623) (671) (2,144)
year
Net current assets 4,727 10,163 3,335
Total assets less current liabilities 117,531 117,413 107,068
Creditors: amounts falling due after more (1,419) (20,269) (1,381)
than one year
116,112 97,144 105,687
Capital and reserves
Called up share capital 7,680 7,718 7,680
Share premium 47,600 47,600 47,600
Capital redemption reserve 246 208 246
Capital reserve - realised 46,113 35,598 42,123
Capital reserve - unrealised 11,746 3,467 5,772
Revenue reserve 2,727 2,553 2,266
Total equity shareholders' funds 116,112 97,144 105,687
Net asset value per share 377.9p 314.7p 344.0p
Group Cash Flow Statement
(unaudited) for the six months ended 31 October 2004
Six months Six months Year
ended ended ended
31 October 31 October 30 April
2004 2003 2004
£'000 £'000 £'000 £'000 £'000 £'000
Net cash 715 81 1,590
inflow from
operating
activities
Servicing of
finance
Interest (126) (624) (1,003)
paid
Financial
investment
Purchase of (4,507) (5,943) (14,869)
investments
Purchase of (9,587) (6,496) (22,888)
'AAA' rated
money market
funds
Sale of 13,669 7,495 27,746
investments
Sale of 'AAA' 2,000 12,500 31,750
rated money
market
funds
Net cash 1,575 7,556 21,739
inflow from
financial
investment
Equity (2,049) (3,087) (3,674)
dividends
paid
Net cash 115 3,926 18,652
inflow before
financing
Financing
Purchase of - - (379)
ordinary
shares
Currency loan - - (3,810)
reduction
Term loan - - (15,000)
reduction
Increase/ 115 3,926 (537)
(decrease) in
cash at
bank
Notes to the Financial Statements
(unaudited) for the six months ended 31 October 2004
1. The calculation of the revenue and capital return per share is based on the
return on ordinary activities after tax for the period and on 30,721,941
(2003: 30,871,941) ordinary shares, being the weighted average number
of ordinary shares in issue during the half year.
2. The calculation of net asset value per share is based on the net assets at
the end of the period divided by 30,721,941 (2003: 30,871,941) ordinary
shares, being the number of shares in issue at that date.
3. The unaudited financial statements for the six months ended 31 October 2004
and 31 October 2003 do not constitute statutory accounts within the meaning
of Section 240 of the Companies Act 1985 and have not been delivered to
the Registrar of Companies. The financial information for the year ended 30
April 2004 has been extracted from audited financial statements for that
year, which have been delivered to the Registrar of Companies; the
independent auditors' report on those financial statements under Section
235 of the Companies Act 1985 was unqualified.
4. Copies of this interim report have been mailed to shareholders and are
available from the registered office of the company, 10 George Street,
Edinburgh, EH2 2DW.
This information is provided by RNS
The company news service from the London Stock Exchange
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