COVID-19 Update

RNS Number : 4723H

Oakley Capital Investments Limited

25 March 2020

 

25 March 2020

Oakley Capital Investments Limited

COVID-19 Update

The Board of Oakley Capital Investments Limited¹ (the "Company" or "OCI"), would like to provide an update in light of the COVID-19 pandemic and its global impact.

OCI and Oakley Capital, the Investment Adviser³ , are placing the safety and welfare of its colleagues, investors, and all other stakeholders as its highest priority and are taking all necessary steps to protect individuals, ensure business continuity and provide support to our portfolio companies.

Oakley Capital has increasingly focused on investing in companies that provide software solutions and digital infrastructure services and that utilise online delivery platforms. These types of business models are potentially less susceptible to disruptions caused by the pandemic compared with the broader economy. Nonetheless, the probability that we enter a global recession has increased considerably which brings with it significant challenges. OCI and Oakley Capital are taking a proactive approach to the situation and remain confident in the continued long-term performance of the Oakley Funds².  

OCI balance sheet

· Net cash - the Company has no leverage and a strong balance sheet, with £152 million of net cash as at 25 March 2020. This represents 78p per share and 22% of NAV as at 31 December 2019. The Board continues to be comfortable with the cash position, which remains conservative, and is in continual dialogue with the Investment Adviser. · Commitments - OCI has outstanding commitments to the Oakley Funds of £429 million at year end . £313 million of t his is committed to the recently launched Fund IV, which will be deployed in new investments over a five-year period.

Portfolio companies & NAV impact

· Net Asset Value - while it is too early to fully evaluate, it is anticipated there will be an adverse effect on OCI's NAV as a result of COVID-19. The scale of the impact is dependent on many factors including the duration and severity of the virus, as well as the response from governments and consumers. The recent significant fall in the OCI share price presented an attractive opportunity to continue the NAV per share-enhancing buy-back programme, with the purchase and cancellation of 3 million shares. This approach to capital management will continue, with further share buy-backs anticipated. · Valuations - the fall in equity markets as a result of COVID-19 will put downward pressure on portfolio companies' valuations, where there are comparable publicly listed peers. · Trading performance - over 70% of the portfolio companies operate a subscription-based or recurring revenue business model and are therefore less vulnerable to temporary declines in customer demand. In addition, 65% of the portfolio either deliver products or services digitally or have the ability to shift to digital delivery in a short time frame. While there will be an impact on trading, Oakley's sector focus h as the potential to provide some resilience during this period of disruption.

Response from Oakley Capital

· Safety - the welfare of colleagues, investors, portfolio company employees and business partners is Oakley Capital's highest priority. Steps have been taken both to protect individuals and to provide support to our portfolio companies and management teams. · Business continuity - t he Oakley Capital team is well prepared with secure remote access and has continued to communicate and work without interruption. · Response - risk assessments have been carried out on each of the portfolio companies and the team has confidence in the response plans that management teams are executing. As a highly engaged investor, Oakley has strong lines of communications with all portfolio companies and is monitoring all businesses. This is especially important at times like these and as such the Oakley team is in constant dialogue with all portfolio companies to understand the impact and to support bespoke contingency planning, with a particular focus on liquidity and cash preservation in the short term. Oakley is also enabling the sharing of information, analysis and insights across all businesses. · Investment - Fund III is currently 78% invested and as such has capital available to support and grow the current portfolio. With Fund IV currently 27% invested, it is also well positioned to partner with new investee companies as opportunities arise.

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For further information please contact:

Oakley Capital Limited

[phone]

Steven Tredget, Investor Relations

Greenbrook Communications Limited

[phone]

Alex Jones / Gina Bell / James Williams

Liberum Capital Limited (Financial Adviser & Broker)

[phone]

Gillian Martin / Owen Matthews

Notes:

LEI Number: 213800KW6MZUK12CQ815

¹  About Oakley Capital Investments Limited ("OCI")

OCI is a Specialist Fund Segment ("SFS") traded investment vehicle, which provides access to the Oakley Funds². It is a liquid vehicle that aims to provide capital growth and dividends to investors.

²  The Oakley Funds

Oakley Capital Private Equity L.P. and its successor funds, Oakley Capital Private Equity II, Oakley Capital Private Equity III and Oakley Capital IV, are unlisted mid-market private equity funds with the aim of providing investors with significant long-term capital appreciation. The investment strategy of the funds is to focus on buy-out opportunities in industries with the potential for growth, consolidation and performance improvement.

³  The Investment Adviser

Founded in 2002, Oakley Capital Limited has demonstrated the repeated ability to source attractive growth assets at attractive prices. To do this it relies on its sector and regional expertise, its ability to tackle transaction complexity and its deal generating entrepreneur network.

Important information

Specialist Fund Segment securities are not admitted to the Official List of the Financial Conduct Authority. Therefore the Company has not been required to satisfy the eligibility criteria for admission to listing on the Official List and is not required to comply with the Financial Conduct Authority's Listing Rules. The London Stock Exchange has not examined or approved the contents of the Prospectus.

The Specialist Fund Segment is intended for institutional, professional, professionally advised and knowledgeable investors who understand, or who have been advised of, the potential risk from investing in companies admitted to the Specialist Fund Segment.

 

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