Trading Statement

RNS Number : 2403Q

Intermediate Capital Group PLC

07 April 2009

 



INTERMEDIATE CAPITAL GROUP - TRADING UPDATE

Intermediate Capital Group PLC ('ICG'), a leading mezzanine and leveraged loan investor and third party fund manager, announces a trading update ahead of its full year results for the 12 months to 31 March 2009 which will be published on 2 June 2009.

Portfolio and financial performance 

Core income for the 12 months to 31 March 2009, defined as interest income and fee income less related operating expenses, is expected to be in line with market expectations.

Our latest quarterly portfolio review which took place last week confirmed that the majority our portfolio companies continue to perform satisfactorily despite the challenging economic conditions across all of our key markets. 

The greater resilience of our largest assets is evidenced by the fact that 17 of our top 20 assets are performing at, or above, last year's level.  In addition, all of our 10 largest equity investments are performing above last year's level.  Together these assets account for close to half of our portfolio.  For the portfolio as a whole, there has been little change in the last six to nine months, with 71% of the companies performing at, or above, the prior year level.

However, while our largest assets held up well, the performance of the companies which we had already identified as the weakest in our portfolio has deteriorated further.  Overall, we still expect the default rate for the year to 31 March 2009 to be approximately 4%, which we believe is substantially better than the market and reflects the defensive nature of our portfolio.

Notwithstanding the fact that there has been no increase in the expected default rate, in light of the deterioration of the performance of our weaker assets and the ongoing weakness of sterling, we expect that provisions for the second half of the year will be materially higher than in the first half. 

In any event, we remain comfortably within our banking agreements for the year.  Our balance sheet is liquid, with approximately £315m of unused debt facilities and only £20m of debt repayment scheduled in the year to March 2010.  

Continuing to raise third party funds

We are pleased with the progress of our Recovery Fund in the difficult fund raising environment and are on track to achieve a second close in the first half of our next financial year.

Investing cautiously into the secondary loan market

We continue to invest selectively in the secondary market for senior loans through our third party funds.  We believe that this market will offer great opportunities over the next few years and that ICG is well positioned to identify and originate investments which provide outstanding value.

  Analyst / Investor enquiries: 

Tom Attwood, Managing Director, ICG PLC                       [phone] 

Philip Keller, Finance Director, ICG PLC                            [phone]

Jean-Christophe Rey, Investor Relations, ICG PLC           [phone]

Media enquiries:

Amanda Fong, Corporate Communications, ICG PLC      [phone]

Charlotte Kirkham, Tim Draper, M:Communications          [phone]

This trading update has been prepared solely to provide additional information to shareholders as a body to meet the relevant requirements of the UK Listing Authority's Disclosure and Transparency Rules. The interim management statement should not be relied on by any other party or for any other purpose. 

This interim management statement may contain forward-looking statements. These statements have been made by the directors in good faith based on the information available to them up to the time of their approval of this report and should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information. 

These written materials are not an offer of securities for sale in the United States. Securities may not offered or sold in the United States absent registration under the US Securities Act of 1933, as amended, or an exemption there from. The issuer has not and does not intend to register any securities under the US Securities Act of 1933, as amended, and does not intend to offer any securities to the public in the United States.  No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in these written materials, will not be accepted.

About ICG

Founded in 1989 and quoted on the London Stock Exchange, Intermediate Capital Group PLC (ICG) is a leading independent investor in leveraged buyouts and third party fund manager. ICG has a large and experienced investment team with over 60 executives operating out of ICG's head office in London and offices in Paris, Madrid, Stockholm, Frankfurt, Amsterdam, Hong Kong, Sydney and New York. Since its inception, ICG has invested more than £10bn in mezzanine and equity in over 340 transactions. In addition ICG manages over £8bn in Mezzanine and Credit Funds on behalf of third parties. Further information at: www.icgplc.com .  

 

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