Interim Results

Dunedin Enterprise Inv Trust PLC 15 December 2006 For release 07.00am 15 December 2006 Dunedin Enterprise Investment Trust PLC Preliminary Results for the half year ended 31 October 2006 Dunedin Enterprise Investment Trust PLC, the private equity investment trust which focuses on UK mid-market buyouts announces its preliminary results for the half year ended 31 October 2006. Financial Highlights: • Investments during the half year of £15.5 million • Commitment of £75 million to Dunedin Buyout Fund II • Realisations totalling £10.4 million • Net asset value per share increased by 1.6% to 506.4p per share • Total net assets now £153.2 million • Total return per ordinary share increased to 17.3p • Interim dividend of 2.1p; an increase of 5% • Investments post half year end of £6.4 million Comparative Performance Periods to 31 October 2006 6 months 1 Year 3 Year 5 Year 10 Year % % % % % Net asset value per ordinary share 1.6 12.2 60.9 55.7 84.7 Share price -2.5 8.6 77.5 57.2 103.9 FTSE Small Cap Index 1.2 19.1 41.7 53.8 62.8 FTSE All Share Index 2.2 17.8 47.4 29.6 60.1 Edward Dawnay, Chairman of Dunedin Enterprise Investment Trust PLC, commented: 'The past six months have seen interest rates rise with a slowdown in consumer spending offset in other sectors driven by corporate and government spending. Against this backdrop Dunedin Enterprise has had a steady six months. I can report another increase in net asset value of some 1.6% for the six months to 31 October 2006. This compares favourably to the FT Small Cap Index which rose by 1.2% over the same period. The performance of the portfolio overall continues to be strong and profitability in the underlying investments continues to grow. I believe the outlook for Dunedin Enterprise remains positive.' For further information please contact: Ross Marshall Claire McCorquodale Chief Executive Marketing Manager Dunedin Capital Partners Limited Dunedin Capital Partners Limited 0131 225 6699 0131 718 2313 07768 794 180 07740 912 043 ross.marshall@dunedin.com claire.mccorquodale@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 and management buyins with a transaction size of £10 million - £75 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 Aberdeen Asset Managers helpline on 0500 00 40 00 or visit the website at www.dunedinenterprisetrust.co.uk. Manager's Review Overview In the six months to 31 October 2006, Dunedin Enterprise invested £15.5 million in two new investments and ten follow-on investments. A commitment of £75 million was made to the Dunedin Buyout Fund II LP which held a final close in September 2006 with total commitments of £252.5 million. Three portfolio companies were realised in the half year and there were a number of other loan stock redemptions and distributions from limited partnership funds totaling £10.4 million. The unaudited net asset value rose from £151.3 million at 30 April 2006 to £153.2 million at 31 October 2006. Net asset value per share increased by 1.6% in the six months to 31 October 2006 from 498.2p to 506.4p. This increase compares to an increase of 1.2% in the FTSE Small Cap Index over the same period. During the six months the share price of Dunedin Enterprise fell from 457.75p to 446.5p, a decrease of 2.5%. The interim dividend has been increased by 5% to 2.1p per ordinary share. This will be paid on 31 January 2007 to shareholders on the register at close of business on 29 December 2006. The ex-dividend date is 27 December 2006. Investments In June 2006, Dunedin Enterprise invested £3.2 million in the management buyout of etc.venues Group Limited. etc.venues is one of London's leading independent providers of meeting, training and event space. The company has six training and conference venues in operation across London. All venues are purpose designed and renowned for their well resourced facilities. The company has plans to rollout these facilities to regions throughout the UK. In August 2006, Dunedin Enterprise invested £8.3 million in the management buyout of Capula Group Limited. Capula provides real time automation systems to the nuclear, power generation and utilities markets. This is a specialised business which involves complex software programming and systems engineering. Capula has a strong market position in its core markets, providing IT systems which control much of the electricity distributed across the UK and IT services to the majority of plants at the Sellafield nuclear site. Follow-on investments and further drawdowns by limited partnership funds amounted to £4.0 million. Realisations During the half year three direct investments were realised. AIM Group was sold to a listed company, Computer Software Group, generating proceeds of £1.7 million. AIM was recapitalised in July 2001, producing a 19% IRR and a money multiple of 1.8 times. Travel & General and Blaze Signs were realised for £2.6 million and £1 million respectively. A number of successful disposals have been achieved from within the LGV Private Equity limited partnership funds generating proceeds of £3.9 million. Following the half year end approximately half of the remaining shareholding in Davenham Group was realised at 303p per share. This generated proceeds of £3.5 million. Results for the six months to 31 October 2006 The movement in net asset value is summarised in the table below: £'m Net asset value at 30 April 2006 151.3 Unrealised valuation increases 6.1 Unrealised valuation decreases (4.1) Realised profit over opening valuation 1.7 Other capital movements (1.8) Net asset value at 31 October 2006 153.2 The valuation of the portfolio is in accordance with the International Private Equity and Venture Capital Valuation Guidelines and revised UK GAAP requirements. The unrealised valuation increase of £6.1 million has been generated by a number of portfolio companies. Practice Plan and Zenith are investments which were made in September 2005 and June 2005 respectively. Each have since achieved a period of strong trading and it has been possible to value them on an earnings basis for the first time generating uplifts of £2.6 million and £0.9 million respectively. A mixture of strong trading performance and debt reduction at ABI and CGI has resulted in valuation uplifts of £1.1 million and £0.6 million respectively. The portfolio companies held within LGV 4 Private Equity Fund have added a further £0.5 million of uplifts. Unrealised valuation decreases totalled £4.1 million in the half year. The valuation of the investment in New Horizons has been reduced by £0.9 million in the period as the company's growth is behind plan. The share price of Davenham fell from 335.25p at 30 April 2006 to 313p at 31 October 2006. This has resulted in a valuation decrease of £0.6 million. Portfolio companies held within LGV Private Equity Funds have contributed a further £1.2 million of the unrealised valuation decreases. The weighted average price earnings multiple used to value the portfolio at 31 October 2006 was 10.7 (30 April 2006: 9.8), a discount of 22% to the FTSE All Share price earnings multiple of 13.8 on that date (30 April 2006: 32% discount to the FTSE All Share multiple of 14.5). The discount has reduced as a result of a difference in portfolio sector weightings between Dunedin Enterprise and the FTSE All Share. At 31 October 2006, the discount to directly comparable FTSE All Share sector price earnings multiples was 47% (30 April 2006: 50%). Share Buyback During the half year 111,000 shares were repurchased and cancelled by Dunedin Enterprise. These shares were purchased at a price of 421.6p per share. It continues to be the Board's intention to utilise the power to buyback shares when a repurchase would be in the best interest of shareholders. Financial Services Authority ('FSA') review of the Private Equity industry In early 2006, the FSA decided to undertake a review of the private equity industry. This review was initiated by the significant growth in the level of funds flowing into the private equity sector, the expanding reach of private equity transactions and the increasing levels of leveraged finance being provided to private equity transactions. In November 2006, the FSA published a discussion paper setting out the results of this investigation. The FSA has highlighted a number of risks attaching to private equity which require to be managed. However, they believe that private equity can significantly enhance capital market efficiency by widening the availability of capital, increasing the effectiveness of company valuations, identifying companies with growth potential and facilitating their transformation. It is encouraging to note that the FSA is making efforts to understand and engage with the private equity industry. Outlook Dunedin Enterprise continues to focus on investing in UK lower mid market management buyouts. A significant commitment by Dunedin Enterprise to the Dunedin Buyout Fund II LP ensures continued access to this market. The Manager continues to generate a strong pipeline of UK lower mid market investment opportunities. In the £10 million to £75 million deal size range there have been 86 deals completed in the first nine months of 2006 with a total value of £2,583 million. On 12 December 2006, Dunedin Enterprise invested £6.4 million in WFEL Limited, the UK's leading manufacturer of mobile bridging systems. This is the first investment made by the Dunedin Buyout Fund II LP. It is the intention of the company to change its accounting year end from 30 April to 31 December. This will align the company with the majority of the private equity industry and make performance comparison an easier task. The change in accounting date will take effect from 31 December 2007. Dunedin Capital Partners Limited 14 December 2006 DUNEDIN ENTERPRISE INVESTMENT TRUST PLC PRELIMINARY RESULTS FOR HALF YEAR ENDED 31 OCTOBER 2006 Ten Largest Investments (both held directly and via Dunedin managed funds) The ten largest investments account for 42% of the net assets of Dunedin Enterprise as listed below: Company Fully diluted Cost of Directors' Percentage of equity investment valuation net assets percentage % £'m £'m % CGI Group Limited 37.9 5.9 11.9 7.7 Capula Group Limited 35.7 8.3 8.3 5.4 Davenham Group plc 10.1 0.2 8.1 5.3 ZVC Group Limited 20.8 7.1 8.0 5.2 Practice Plan Group (Holdings) Limited 26.2 4.3 6.9 4.5 Portman Holdings Limited 16.8 2.0 5.7 3.8 New Horizons (Child Care) Holdings Limited 31.6 6.4 4.3 2.8 RSL Steeper Holdings Limited 28.9 4.0 4.0 2.6 LGV 4 Private Equity Fund 2.7 2.4 3.4 2.2 etc.venues Group Limited 28.0 3.2 3.2 2.1 ___ ____ ___ 43.8 63.8 41.6 Overview of Portfolio Analysed by valuation basis 31 October 30 April 2006 2006 % % A Price of recent investment 39 45 B Earnings multiple 61 48 C Imminent sale price - 4 D Net assets - 3 Analysed by industry sector 31 October 30 April 2006 2006 % % A Construction and building materials 16 17 B Consumer products and services - - C Financial services 12 17 D Healthcare 15 19 E Leisure and hotels 6 7 F Specialist manufacturing 2 2 G Support services 49 38 Analysed by deal type 31 October 30 April 2006 2006 % % A Management buyouts/buyins 86 79 B Buyout funds 9 12 C Technology funds 4 5 D Other 1 4 Analysed by age of investment 31 October 30 April 2006 2006 % % A Less than 1 year 22 25 B 1-3 years 36 20 C 3-5 years 2 5 D More than 5 years 40 50 Income Statement for the six months ended 31 October 2006 Unaudited Unaudited Audited Six months ended 31 October 2006 Six months ended 31 October 2005 Year ended 30 April 2006 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 3,706 3,706 - 11,597 11,597 - 24,982 24,982 Income 2,901 - 2,901 2,827 - 2,827 6,200 - 6,200 Investment management fee (268) (686) (954) (361) (917) (1,278) (743) (2,022) (2,765) Other expenses (297) - (297) (242) - (242) (558) - (558) Net return before finance 2,336 3,020 5,356 2,224 10,680 12,904 4,899 22,960 27,859 costs and taxation Interest payable and similar (27) (81) (108) (27) (81) (108) (54) (161) (215) charges Return on ordinary activities 2,309 2,939 5,248 2,197 10,599 12,796 4,845 22,799 27,644 before taxation Tax on ordinary activities (592) 592 - (296) 296 - (609) 609 - Return attributable to equity 1,717 3,531 5,248 1,901 10,895 12,796 4,236 23,408 27,644 shareholders Earnings per ordinary share Basic and diluted 17.3p 42.1p 91.0p The total column of this statement represents the profit and loss account of the Company. All items in the above statement derive from continuing operations. Reconciliation of movements in shareholder funds for the six months ended 31 October 2006 Unaudited six months ended 31 October 2006 Share Capital Capital Capital premium redemption reserve - reserve - account reserve realised unrealised Revenue account Share £'000 £'000 £'000 £'000 Total capital £'000 equity £'000 £'000 At 30 April 2006 7,592 47,600 334 87,978 1,598 6,202 151,304 Net return on ordinary - - - 1,811 1,720 1,717 5,248 activities Dividends paid - - - - - (2,859) (2,859) Purchase of own shares (27) - 27 (471) - - (471) At 31 October 2006 7,565 47,600 361 89,318 3,318 5,060 153,222 Unaudited six months ended 31 October 2005 Share Capital Capital Capital premium redemption reserve - reserve - account reserve realised unrealised Revenue account Share £'000 £'000 £'000 £'000 Total capital £'000 equity £'000 £'000 At 30 April 2005 7,592 47,600 334 51,709 14,459 4,729 126,423 Net return on ordinary - - - (5,544) 16,439 1,901 12,796 activities Dividends paid - - - - - (2,156) (2,156) At 31 October 2005 7,592 47,600 334 46,165 30,898 4,474 137,063 Audited year ended 30 April 2006 Share Capital Capital Capital premium redemption reserve - reserve - account reserve realised unrealised Revenue account Share £'000 £'000 £'000 £'000 Total capital £'000 equity £'000 £'000 At 30 April 2005 7,592 47,600 334 51,709 14,459 4,729 126,423 Net return on ordinary - - - 36,269 (12,861) 4,236 27,644 activities Dividends paid - - - - - (2,763) (2,763) At 30 April 2006 7,592 47,600 334 87,978 1,598 6,202 151,304 Balance Sheet as at 31 October 2006 Unaudited Unaudited Audited 31 October 31 October 30 April 2006 2005 2006 £'000 £'000 £'000 Investments held at fair value through profit or 122,215 131,858 144,847 loss Current assets Debtors 86 274 196 Cash at bank 31,073 4,976 6,371 31,159 5,250 6,567 Current liabilities Creditors: amounts falling due within one year (152) (45) (110) Net assets 153,222 137,063 151,304 Capital and reserves Called up share capital 7,565 7,592 7,592 Share premium 47,600 47,600 47,600 Capital redemption reserve 361 334 334 Capital reserve - realised 89,318 46,165 87,978 Capital reserve - unrealised 3,318 30,898 1,598 Revenue reserve 5,060 4,474 6,202 Total equity shareholders' funds 153,222 137,063 151,304 Net asset value per share 506.4p 451.3p 498.2p Cash Flow Statement for the six months ended 31 October 2006 Unaudited Unaudited Audited Six months ended Six months ended Year ended 31 October 2006 31 October 2005 30 April 2006 £'000 £'000 £'000 £'000 £'000 £'000 Net cash inflow from operating 1,801 1,263 3,824 activities Financing Purchase of investments (15,501) (13,994) (21,645) Purchase of 'AAA' rated money market (8,907) (5,655) (57,518) funds Sale of investments 10,406 10,003 70,015 Sale of 'AAA' rated money market funds 40,341 10,600 10,600 Net cash inflow from financial 26,339 954 1,452 investment Equity dividends paid (2,859) (2,156) (2,763) Net cash inflow 25,281 61 2,513 Financing Interest paid (108) (108) (215) Purchase of ordinary shares (471) - - Cash assumed on liquidation of - - 2,926 subsidiary Increase/(decrease) in cash at bank 24,702 (47) 5,224 Notes 1. Financial Information The financial information contained in this report does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The financial information for the six months ended 31 October 2006 and 31 October 2005 has not been audited. The information for the year ended 30 April 2006 has been extracted from the latest published audited financial statements. The audited financial statements for the year ended 30 April 2006 have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under Section 237(2) or (3) of the Companies Act 1985. 2. Basis of Preparation The financial information for the six months ended 31 October 2006 has been prepared in accordance with the Listing Rules of the Financial Services Authority and in accordance with the accounting policies that are expected to be adopted for the year ending 30 April 2007, which are consistent with the accounting policies which are set out in the 2006 financial statements. 3. Dividends Six months to 31 Six months to 31 October 2006 October 2005 Year to 30 April 2006 £'000 £'000 £'000 Dividends paid in the period 2,859 2,156 2,763 The Directors recommend an interim dividend of 2.1p per share for the half year to 31 October 2006. The interim dividend will be paid on 31 January 2007 to shareholders on the register at close of business on 29 December 2006. The ex-dividend date is 27 December 2006. 4. Earnings per share Six months to 31 Six months to 31 October 2006 October 2005 Year to 30 April 2006 Revenue return per ordinary share 5.7 6.2 13.9 Capital return per ordinary share 11.6 35.9 77.1 Earnings per ordinary share (basis and diluted) 17.3 42.1 91.0 Weighted average number of shares 30,290,313 30,369,943 30,369,943 The earnings per share figures are based on the weighted average numbers of shares set out above. 5. Share Buy Backs Six months to 31 Six months to 31 October 2006 October 2005 Year to 30 April 2006 Number of shares bought back 111,000 - - Average price per share 421.6p - - Total cost including expenses 471,217 - - Number of shares in issue at the end of the period 30,258,943 30,369,943 30,369,943 All shares bought back were subsequently cancelled. 6. Investments Investments held in the Dunedin Buyout Fund I and Equity Harvest Fund are shown on a look through basis. This information is provided by RNS The company news service from the London Stock Exchange

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