Interim Results

RNS Number : 5364V

Standard Life Euro Pri Eqty Tst PLC

30 May 2008

 



30 May 2008

STANDARD LIFE EUROPEAN PRIVATE EQUITY TRUST PLC

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2008

Highlights

• The Company's net asset value per ordinary share ('NAV') rose by 10.0% to 265.5p as at 31 March 2008 (diluted NAV - 261.4p) (30 September 2007 - undiluted 241.3p; diluted 237.7p).

• The 24.2p uplift in NAV during the period comprised 18.9p from realised gains and income from the Company's portfolio of private equity fund interests, 23.3p from favourable exchange rate movements on the portfolio, offset by 15.2p of an unrealised loss on the portfolio on a constant exchange rate basis, and a net 2.8p from costs and other movements.

• The closing mid-market price of the Company's ordinary shares on 31 March 2008 was 219.0p (30 September 2007 - 226.5p).

• In line with the Company's dividend policy, the Board has not declared an interim dividend.

• Private equity is a long term asset class. Over the five year period from 1 April 2003 the Company's NAV and share price have materially out-performed the two most relevant stock market indices, rising by 185.2% and 186.3% respectively, while the FTSE All-Share Index and the MSCI Europe Index (sterling adjusted) have risen by 68.6% and 96.0% respectively.

• As at 31 March 2008 the Company's net assets were £424.6 million (30 September 2007 - £385.7 million). The Company had interests in 50 private equity funds with a value of £396.4 million (30 September 2007 - 48 funds and £322.6 million) and held £28.5 million in cash and money market balances (30 September 2007 - £64.2 million). 

• Distributions received totalled £42.7 million (six months ended 30 September 2007 - £87.2 million), including £30.3 million of realised gains and income (six months ended 30 September 2007 - £57.7 million). The average return on the Company's acquisition cost of realised investments was 3.4X (six months ended 30 September 2007- 3.0X).

• The Company funded £73.3 million of draw downs (six months ended 30 September 2007 - £70.7 million), which was relatively high, reflecting the completion of transactions which had been in negotiation prior to, and during, the initial credit market turbulence. 

• Notwithstanding difficult financial markets and a weakening macro-economic environment, the valuation of the Company's private equity fund interests rose, with unrealised gains during the period of £12.8 million (six months ended 30 September 2007 - £1.6 million).

Quote from Scott Dobbie, Chairman:-

'The Company delivered a solid performance for the six months ended 31 March 2008 against the background of difficult market conditions. The Board believes that the Company's focus on the premier European buy-out funds, tight portfolio construction and a rigorous manager and fund selection process should continue to generate strong relative and absolute returns over the medium term. In the short term, NAV growth will also be influenced by the rate of realisations, comparable listed valuation multiples and the strength of profitability and cashflow generation at underlying investee companies.'

For further information please contact:-

Peter McKellar of SL Capital Partners LLP (on 0131 245 0055)

CHAIRMAN'S STATEMENT

Results and performance

As I anticipated in my Statement at the end of 2007, the European private equity market saw a significant reduction in new investment and realisation activity during the first half of the Company's financial year. This was a result of credit market turbulence, reduced availability of debt and concerns about a macro-economic slow down. Against this background, the Company received lower distributions, realised gains and income than in recent periods from its private equity investments. For the six months ended 31 March 2008 the Company's NAV rose by 10.0% to 265.5p (diluted - 261.4p) (30 September 2007 - undiluted 241.3p; diluted 237.7p). As at 31 March 2008 the Company's net assets were £424.6 million (30 September 2007 - £385.7 million). 

The 24.2p uplift in NAV during the period comprised 18.9p from realised gains and income from the Company's portfolio of private equity fund interests, 23.3p from favourable exchange rate movements on the portfolio, offset by 15.2p of an unrealised loss on the portfolio on a constant exchange rate basis, and a net 2.8p from costs and other movements, including the payment of the final dividend of 3.5p per ordinary share for the year ended 30 September 2007. 

The Company's Board and Manager have always believed that private equity is a long term asset class and that performance should be viewed over a similar time horizon. The Company was listed in May 2001. Over the five year period from 1 April 2003 the Company's NAV and share price have materially out-performed the two most relevant stock market indices, increasing by 185.2% and 186.3% respectively, compared to rises of 68.6% in the FTSE All-Share Index and 96.0% in the MSCI Europe Index (sterling adjusted).

The closing mid-market price of the Company's ordinary shares on 31 March 2008 was 219.0p (30 September 2007 - 226.5p). The Board and the Manager monitor closely the Company's share price relative to its NAV, the volatility of any share price discount and the supply/demand balance in the Company's shares. 

In line with the Company's dividend policy, the Board has not declared an interim dividend.

Valuation 

As at 31 March 2008 the Company's portfolio comprised 50 private equity fund interests, of which the largest 20 fund interests represented 78.0% by value of the portfolio. The Board continues to believe that such portfolio construction provides an appropriate balance between diversification and concentration, in an asset class that traditionally has demonstrated a high dispersion of return between different managers and funds.

Against the background of difficult financial markets and a weakening macro-economic environment, the portfolio rose in value during the period through a combination of net new investment activity and unrealised gains. As at 31 March 2008 the value of the portfolio was £396.4 million (30 September 2007 - £322.6 million), of which unrealised gains arising during the period were £12.8 million (six months ended 30 September 2007 - £1.6 million). This performance was attributable primarily to favourable exchange rate movements and positive trading and cashflow generation at most underlying investee companies, partially offset by many valuations being undertaken using lower comparable listed valuation multiples, following the decline in stock markets.

Aggregate cash and money market balances fell over the period to £28.5 million as at 31 March 2008 (30 September 2007 - £64.2 million), with the reduction reflecting principally a slow down in distributions received. At the period end, the percentage of the Company's gross assets invested in private equity assets had risen to 93.3% (30 September 2007 - 83.3%).

Exchange rate movements had a material impact on NAV over the period, as sterling depreciated by 12.4% relative to the euro and by 2.4% relative to the US dollar. As at 31 March 2008 the Company had £424.9 million of gross assets, of which £327.0 million (sterling equivalent) comprised euro denominated assets and £53.2 million (sterling equivalent) dollar denominated assets (30 September 2007 - £387.2 million, £271.6 million and £54.1 million respectively). 

Investment activity 

The overall quantum of European private equity investment undertaken during the period fell materially, with a total of €52.0 billion of transactions by enterprise value completed in the six month period to 31 March 2008, compared to €117.0 billion in the comparable six month period last year and €225.0 billion in the year ended 30 September 2007. In addition, the number of buy-out transactions fell, most notably for individual transactions over €1.5 billion in enterprise value. The middle and small company segments of the European buy-out market have been the least affected by the down turn, although even in these segments the average multiple of debt offered on transactions has declined and the percentage of equity funding has increased to its highest average percentage for a decade. The Company funded £73.3 million of draw downs in the six month period to 31 March 2008 (six months ended 30 September 2007 - £70.7 million). This relatively high level of activity reflected, to an extent, the completion of transactions which had been in negotiation prior to, and during, the initial credit market turbulence. 

As for cash inflow, the six month period saw the Company receive £42.7 million of distributions (six months ended 30 September 2007 - £87.2 million). The fall in distributions received, to the lowest semi annual total since the first half of 2004, reflected the slow down in realisation activity. Of the distributions received, £29.3 million were realised gains and £1.0 million were income (six months ended 30 September 2007 - £54.6 million and £3.2 million respectively). Positively, the average return on the Company's acquisition cost of realised investments was 3.4X (six months ended 30 September 2007 - 3.0X) reflecting some exceptional gains. 

During the six month period the Company made two new fund commitments totalling £84.0 million. These were £53.8 million to Advent Global Private Equity VI and £30.2 million to TowerBrook Investors III, both of which are buy-out funds. Commitments made to private equity funds are traditionally drawn down over a 3-5 year period and the Board and the Manager believe that it is important for the Company to commit to new funds, even in more difficult markets, in order to ensure that the opportunity to invest in individual transactions in more attractive markets is achieved. The performance of the fund commitments made by the Company in 2001 and 2002 demonstrates the benefit of this strategy.

In light of the new fund commitments made, draw downs funded and the foreign exchange movements over the period, the Company's aggregate outstanding commitments to its private equity fund interests increased to £416.4 million as at 31 March 2008 (30 September 2007 - £366.0 million). These commitments will be funded from the Company's existing cash and money market holdings, distributions received from the Company's private equity fund interests and, if necessary, the use of bank borrowings. As at 31 March 2008 the Company's £60 million revolving credit facility with The Royal Bank of Scotland plc remained undrawn.

Principal risks and uncertainties

The principal risks facing the Company relate to the Company's investment activities and include the following:-

• manager selection risk; 

• cashflow/liquidity risk;

• market risk;

• currency risk; and

• operating and control environment risk

Information on each of these risks, and an explanation of how they are managed, is contained in the Company's Annual Report for the year ended 30 September 2007.  

Outlook

The Company delivered a solid performance for the six months ended 31 March 2008 against the background of difficult market conditions. As the broader financial issues widen from credit market volatility to macro-economic weakness, the Board believes that the Company's focus on the premier European buy-out funds, tight portfolio construction and a rigorous manager and fund selection process should continue to generate strong relative and absolute returns over the medium term. In the short term, NAV growth will also be influenced by the rate of realisations and, for the unrealised portfolio, comparable listed valuation multiples and the strength of profitability and cashflow generation at underlying investee companies.

Finally, the Board believes that the counter cyclicality inherent in private equity investing may offer good investment opportunities, particularly from early 2009 onwards, when hopefully lower vendor price expectations and earnings should provide attractive purchase prices.

Scott Dobbie CBE

Chairman

Directors' responsibility statement

The Directors are responsible for preparing the half yearly financial report, in accordance with applicable laws and regulations. The Directors confirm that to the best of their knowledge:-

• the condensed set of financial statements within the half yearly financial report has been prepared in accordance with the UK Accounting Standards Board's Statement 'Half Yearly Financial Reports'; 

• the Chairman's Statement (constituting the interim management report) includes a fair view of the information required by 4.2.7R of the FSA's Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and a description of the principal risks and uncertainties for the remaining six months of the year; and

• in accordance with 4.2.8R of the FSA's Disclosure and Transparency Rules there have been no related party transactions during the first six months of the financial year and, therefore, nothing to report on any material effect by such a transaction on the financial position or the performance of the Company during that period.

The half yearly financial report was approved by the Board on 29 May 2008 and the above responsibility statement was signed on its behalf by Scott Dobbie CBE, Chairman.

INCOME STATEMENT

	(unaudited) Six months to 31 March 2008
	Revenue	Capital	Total
	£'000	£'000	£'000
Total capital gains on investments	-	44,210	44,210
Currency gains	-	249	249
Income	2,022	-	2,022
Investment management fee	(167)	(1,501)	(1,668)
Administrative expenses	(260)	-	(260)
	________	________	________
Return before finance costs and taxation	1,595	42,958	44,553
Interest payable and similar charges	(14)	(129)	(143)
	________	________	________
Return on ordinary activities before taxation	1,581	42,829	44,410
Taxation on ordinary activities	(482)	474	(8)
	________	________	________
Return on ordinary activities after taxation	1,099	43,303	44,402
	________	________	________
Return per ordinary share	0.69p	27.08p	27.77p
	________	________	________
Diluted return per ordinary share	0.68p	26.70p	27.38p
	________	________	________

___________________________________________________________________________________

	(unaudited) Six months to 31 March 2007
	Revenue	Capital	Total
	£'000	£'000	£'000
Total capital gains on investments	-	37,596	37,596
Currency gains	-	4	4
Income	6,186	-	6,186
Investment management fee	(128)	(1,154)	(1,282)
Administrative expenses	(295)	-	(295)
	________	________	________
Return before finance costs and taxation	5,763	36,446	42,209
Interest payable and similar charges	(11)	(100)	(111)
	________	________	________
Return on ordinary activities before taxation	5,752	36,346	42,098
Taxation on ordinary activities	(1,746)	377	(1,369)
	________	________	________
Return on ordinary activities after taxation	4,006	36,723	40,729
	________	________	________
Return per ordinary share	2.52p	23.07p	25.59p
	________	________	________
Diluted return per ordinary share	2.48p	22.74p	25.22p
	________	________	________

__________________________________________________________________________________

	(audited) Year ended 30 September 2007
	Revenue	Capital	Total
	£'000	£'000	£'000
Total capital gains on investments	-	94,094	94,094
Currency losses	-	(56)	(56)
Income	10,781	-	10,781
Investment management fee	(280)	(2,517)	(2,797)
Administrative expenses	(475)	-	(475)
	________	________	________
Return before finance costs and taxation	10,026	91,521	101,547
Interest payable and similar charges	(30)	(273)	(303)
	________	________	________
Return on ordinary activities before taxation	9,996	91,248	101,244
Taxation on ordinary activities	(3,022)	837	(2,185)
	________	________	________
Return on ordinary activities after taxation	6,974	92,085	99,059
	________	________	________
Return per ordinary share	4.38p	57.80p	62.18p
	________	________	________
Diluted return per ordinary share	4.31p	56.85p	61.16p
	________	________	________

The total column of this statement represents the profit and loss account of the Company.

The Company has no recognised gains or losses other than those recognised in the income statement above.

All revenue and capital items in the above statement derive from continuing operations.

No operations were acquired or discontinued in the period.

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

	Total
For the period ended 31 March 2008	£'000
Balance at 30 September 2007	385,707
Total recognised gains	44,402
Conversion of founder A shares	95
Dividends paid	(5,597)
	________
Balance at 31 March 2008	424,607
	________
	Total
For the period ended 31 March 2007	£'000
Balance at 30 September 2006	289,802
Total recognised gains	40,729
Dividends paid	(3,820)
	________
Balance at 31 March 2007	326,711
	________
	Total
For the year ended 30 September 2007	£'000
Balance at 30 September 2006	289,802
Total recognised gains	99,059
Conversion of founder A shares	666
Dividends paid	(3,820)
	________
Balance at 30 September 2007	385,707
	________

BALANCE SHEET

	(unaudited)	(unaudited)	(audited)
	As at	As at	As at
	31 March 2008	31 March 2007	30 September 2007
	£'000	£'000	£'000
Non-current assets
Investments at fair value through profit or loss	396,359	279,909	322,633
Current assets
Investments at fair value through profit or loss	15,855	40,935	56,645
Debtors	78	224	292
Cash and short term deposits	12,604	8,011	7,599
	________	________	________
	28,537	49,170	64,536
Creditors: amounts falling due within one year	(289)	(2,368)	(1,462)
	________	________	________
Net current assets	28,248	46,802	63,074
	________	________	________
Total assets less current liabilities	424,607	326,711	385,707
	________	________	________
Capital and reserves
Called up share capital	354	354	354
Share premium	78,535	77,775	78,440
Special reserve	79,148	79,148	79,148
Capital redemption reserve	2	1	1
Capital reserve - realised	219,745	136,289	189,597
Capital reserve - unrealised	41,062	25,853	27,907
Revenue reserve	5,761	7,291	10,259
	________	________	________
Total shareholders' funds	424,607	326,711	385,707
	________	________	________
Analysis of shareholders' funds
Equity interests (ordinary shares)	424,572	326,676	385,672
Non-equity interests (founder shares)	35	35	35
	________	________	________
Total shareholders' funds	424,607	326,711	385,707
	________	________	________
Net asset value per equity share	265.5p	205.3p	241.3p
Net asset value per equity share (diluted)	261.4p	202.1p	237.7p

CASHFLOW STATEMENT

	(unaudited)	(unaudited)	(audited)
	Six months to	Six months to	Year to
	31 March 2008	31 March 2007	30 September 2007
	£'000	£'000	£'000
Revenue before finance costs and taxation	44,553	42,209	101,547
Adjusted for:
Realised gains on investments	(31,055)	(33,928)	(88,372)
Unrealised gains on investments	(13,155)	(3,668)	(5,722)
Currency (gains)/ losses	(249)	(4)	56
Decrease/(increase) in accrued income	198	(50)	(95)
Decrease/(increase) in other debtors	16	15	(8)
Increase/(decrease) in creditors	(650)	129	86
Irrecoverable tax deducted from non - UK income	(8)	(29)	(31)
Net cash (outflow)/inflow from operating activities	(350)	4,674	7,461
Net cash outflow from servicing of finance	(144)	(152)	(342)
Net cash outflow from taxation	(522)	(860)	(2,501)
Financial investment
Purchase of investments	(95,884)	(114,149)	(266,564)
Disposal of investments	107,158	114,614	265,055
Net cash inflow/(outflow) from financial investment	11,274	465	(1,509)
Ordinary dividend paid	(5,597)	(3,820)	(3,820)
	________	________	________
Net cash inflow/(outflow) before financing	4,661	307	(711)
Net cash inflow from financing
Net proceeds of issue of ordinary shares	95	-	666
	________	________	________
Increase/(decrease) in cash	4,756	307	(45)
	________	________	________
Reconciliation of net cash flow to movement in net funds
Increase/(decrease) in cash as above	4,756	307	(45)
Currency movements	249	4	(56)
	________	________	________
Movement in net funds in the period	5,005	311	(101)
Opening net funds	7,599	7,700	7,700
	________	________	________
Closing net funds	12,604	8,011	7,599
	________	________	________
Represented by:
Cash and short term deposits	12,604	8,011	7,599
	________	________	________

Notes:

1.         Standard Life European Private Equity Trust PLC is an investment company managed by SL Capital Partners LLP the ordinary shares of which are admitted to listing by the UK Listing Authority and to trading on the London Stock Exchange. It seeks to conduct its affairs so as to continue to qualify as an investment trust under section 842 of the Income and Corporation Taxes Act 1988. The Board is wholly independent of the Manager and Standard Life PLC.

 

2.         Accounting policies

(a)   Basis of preparation and going concern - The financial statements have been prepared under the historical cost convention as modified to include the revaluation of investments and in accordance with applicable UK Accounting Standards and with the Statement of Recommended Practice ‘Financial Statements of Investment Trust Companies’ (issued January 2003 and revised in December 2005). They have also been prepared on the assumption that approval as an investment trust will continue to be granted. The financial statements have been prepared on a going concern basis.

 

The financial statements, and the net asset value per share figures, have been prepared in accordance with UK Generally Accepted Accounting Principles (‘UK GAAP’). The Directors consider the Company's functional currency to be Sterling, as the Company is registered in Scotland, the Company's shareholders are predominantly based in the UK an the Company is subject to the UK's regulatory environment.

 

(b)   Revenue, expenses and finance cost - Dividends from quoted investments are included in revenue by reference to the date on which the price is marked ex-dividend. Interest on quoted investments and other interest receivable are dealt with on an accruals basis. Income from unquoted investments is included when the right to receipt is established. All expenses are accounted for on an accruals basis. Expenses are charged through the Revenue Account, except as follows: (i) transaction costs incurred on the purchase and disposal of investments are recognised as a capital item in the Income Statement; and (ii) the Company charges 90% of the investment management fees and finance costs to capital, in accordance with the Board's expected long-term split of returns between capital gains and income from the Company's investment portfolio.      

 

(c)  Investments – Investments have been designated upon initial recognition as fair value through the profit or loss. Investments are recognised as at the date of commitment to the fund and removed when the fund is wound up. Subsequent to initial recognition, investments are valued at fair value as detailed below. Gains and losses arising from changes in fair value are included in net profit or loss for the period as a capital item in the Income Statement and are ultimately recognised in the unrealised reserve.

 

Unquoted - Unquoted investments are stated at the Directors' estimate of fair value and follow the recommendations of the EVCA and BVCA. This is normally the latest valuation placed on a fund by its manager, adjusted if necessary for cashflows between the Company and the fund occurring between the fund manager's valuation date and the Company's balance sheet date. The valuation policies used by the manager in undertaking that valuation will generally be in line with the recommendations of the joint publication from the BVCA and the EVCA, 'International Private Equity and Venture Capital Valuation Guidelines' ('the Guidelines'). 

 

However, the valuation adopted by the Company may depart from the valuation prepared by the manager of the fund if, in the opinion of the Company's Manager, an upward adjustment is not fair. A downward adjustment may also be made if the Company's Manager receives relevant information which has not been notified to it by the manager of the fund or if the Company's Manager forms a more cautious view than that held by the manager of the fund.

 

The Income Statement reflects the total capital gains, both realised and unrealized,while note 5 to the financial statements splits out the realised and unrealised gains. Due to the valuation of the private equity fund interests held by the Company being performed at the fund level, and not at the underlying investment level, and net realised gains only being recognised following transactions advised by the underlying fund manager, the amounts which are accounted for in the movement in unrealised appreciation/depreciation on unquoted investments relate to the difference between the book cost and valuation of the fund investments.

 

Quoted - Quoted investments are valued at bid prices, discounted, where applicable, to recognise any restriction on sale.

 

(d)       Dividends payable – Interim and final dividends are recognised in the period in which they are paid.

 

(e)       Realised capital reserve – Gains or losses on investments realised in the year that have been recognised in the Income Statement are transferred to the realised capital reserve. In addition, any prior unrealised gains or losses on such investments are transferred from the unrealised capital reserve to the realised capital reserve on disposal of the investment.

 

(f)        Unrealised capital reserve - Increases and decreases in the fair value of investments are recognised in the Income Statement and are then transferred to the unrealised capital reserve.

 

(g)       Deferred taxation – Deferred taxation is recognised in respect of all temporary differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more or a right to pay less tax in future have occurred at the balance sheet date measured on an undiscounted basis and based on enacted tax rates. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying temporary differences can be deducted. Temporary differences are differences arising between the Company’s taxable profits and its results as stated in the accounts which are capable of reversal in one or more subsequent periods.

 

Due to the Company’s status as an investment trust company, and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments. 

 

h)        Overseas currencies – Overseas assets and liabilities are translated at the exchange rates prevailing at the Company’s balance sheet date. Gains or losses on the translation of investments held at the period/year end are accounted for through the unrealised capital reserve. Gains or losses on the translation of overseas currency balances held at the period/year end are accounted for through the realised capital reserve.

 

                   Rates of exchange to sterling were:

	As at	As at	As at
	31 March 2008	31 March 2007	30 September 2007
Euro	1.2543	1.4735	1.4326
US dollar	1.9875	1.9614	2.0374

Transactions in overseas currencies are translated at the exchange rate prevailing on the date of the transaction.

3.    Income

	Six months ended	Six months ended	Year  ended
	31 March 2008	31 March  2007	30 September  2007
	£'000	£'000	£'000
Income from unquoted investments	1,023	4,996	8,174
Interest from AAA rated money market funds	963	1,126	2,497
Deposit interest	36	62	108
Other income	-	2	2
	__________	__________	__________
Total income	2,022	6,186	10,781
	__________	__________	__________

4.    Return per ordinary share

	Six months ended 31 March 2008		Six months ended 31 March 2007		Year to 30 September 2007
	p	£'000	p	£'000	p	£'000
The return per ordinary share is based on the following figures:
Revenue return	0.69p	1,099	2.52p	4,006	4.38p	6,974
Capital return	27.08p	43,303	23.07p	36,723	57.80p	92,085
	______	_________	______	________	______	________
Total return	27.77p	44,402	25.59p	40,729	62.18p	99,059
	______	_________	______	________	______	________
Weighted average number of ordinary shares in issue		159,879,944		159,150,000		159,321,366
The fully diluted return per ordinary share is based on
the following figures:
Revenue return (fully diluted)	0.68p	1,099	2.48p	4,006	4.31p	6,974
Capital return (fully diluted)	26.70p	43,303	22.74p	36,723	56.85p	92,085
	______	_________	______	________	______	________
Total return (fully diluted)	27.38p	44,402	25.22p	40,729	61.16p	99,059
	______	_________	______	________	______	________

The fully diluted returns have been calculated on the basis set out in Financial Reporting Standard 14 'Earnings per share' ('FRS 14'). For the six months ended 31 March 2008 this is based on 162,155,851 shares, comprising the weighted average 159,879,944 ordinary shares and 2,275,907 founder A shares capable of conversion. For the six months ended 31 March 2007 this is based on 161,500,261 shares, comprising the weighted average 159,150,000 ordinary shares and 2,350,261 founder A shares capable of conversion. For the year ended 30 September 2007 this is based on 161,974,327 shares, comprising the weighted average 159,321,366 ordinary shares and 2,652,961 founder A shares capable of conversion.

5.     Fixed Asset Investments

	'AAA' money			31 March 2007	30 September 2007
	market funds	Unquoted	Total	Total	Total
Fair value through profit or loss:	£000	£000	£000	£000	£000
Opening market value	56,645	322,633	379,278	283,675	283,675
Opening unrealised appreciation	(472)	(27,435)	(27,907)	(22,185)	(22,185)
	___________	_________	_________	_________	_________
Opening book cost	56,173	295,198	351,371	261,490	261,490
Movements in the year:
Additions at cost	22,620	73,264	95,884	114,187	266,564
Disposals of investments	(65,461)	(41,697)	(107,158)	(114,614)	(265,055)
	___________	_________	_________	_________	_________
	13,332	326,765	340,097	261,063	262,999
Realised gains on investments	1,745	29,310	31,055	33,928	88,372
	___________	_________	_________	_________	_________
Closing book cost	15,077	356,075	371,152	294,991	351,371
Closing unrealised appreciation	778	40,284	41,062	25,853	27,907
	___________	_________	_________	_________	_________
Closing market value	15,855	396,359	412,214	320,844	379,278
	___________	_________	_________	_________	_________
Transaction costs
			Six months ended	Six months ended	Year ended
			31 March 2008	31 March 2007	30 September 2007
			£'000	£'000	£'000
The following transaction costs were incurred during the period:
Purchases in respect of new unquoted fund investments			5	39	49
			_________	_________	_________

6.     Net asset value per ordinary share

	As at	As at	As at
	31 March 2008	31 March 2007	30 September 2007
Basic:
Equity shareholders' funds	£424,572,000	£326,676,000	£385,672,000
Number of ordinary shares in issue	159,922,567	159,150,000	159,822,567
Net Asset value per ordinary share	265.5p	205.3p	241.3p
Diluted:
Equity shareholders' funds	£428,654,412	£331,530,979	£389,854,412
Number of ordinary shares in issue	164,004,979	164,004,979	164,004,979
Net Asset value per ordinary share	261.4p	202.1p	237.7p

    The net asset value per ordinary share and ordinary shareholders' funds are calculated in accordance with the Company's articles.  

7.         The financial information for the six months ended 31 March 2008 and 31 March 2007 comprises non-statutory accounts within the meaning of Section 240 of the Companies Act 1985. The financial information for the year ended 30 September 2007 has been extracted from published accounts that have been delivered to the Registrar of Companies and on which the report of the auditors was unqualified. The interim accounts have been prepared on the same basis as the annual accounts.

 

         The auditors have reviewed the financial information for the six months ended 31 March 2008 in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity’ issued by the Auditing Practices Board.

                                                                   

8.         There is no interim dividend for the six months ended 31 March 2008. Shareholders are reminded that the objective of the Company is long term capital appreciation.

 

9.         The ultimate parent undertaking is Standard Life PLC. The accounts of the ultimate parent undertaking are the only group accounts incorporating the accounts of the Company.   Standard Life PLC and the Company have entered into a relationship agreement which provides that, for so long as Standard Life PLC and its associates exercise, or control the exercise of 30% or more of the voting rights of the Company, Standard Life PLC will not seek to nominate to the Board directors who are not independent of Standard Life PLC and will not take, in its capacity as a beneficial holder of any ordinary shares, any action which would be detrimental to the general body of shareholders. For this purpose any action which has the support or recommendation of a majority of the Directors shall be deemed not to be detrimental. Copies of the accounts of the ultimate parent undertaking can be obtained at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH.    With effect from 1 October 2007, the Manager of the Company became SL Capital Partners LLP.

10.    Reconciliation of movements in shareholders' funds 

For the period ended 31 March 2008

				Capital	Capital	Capital
	Share	Share	Special	redemption	reserve	reserve	Revenue
	capital	premium	reserve	reserve	- realised	- unrealised	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 September 2007	354	78,440	79,148	2	189,597	27,907	10,259	385,707
Total recognised gains	-	-	-	-	30,148	13,155	1,099	44,402
Conversion of founder A shares		95						95
Dividends paid	-	-	-	-	-	-	(5,597)	(5,597)
	_____	_______	_______	_______	_______	_______	_______	_______
Balance at 31 March 2008	354	78,535	79,148	2	219,745	41,062	5,761	424,607
	_____	_______	_______	_______	_______	_______	_______	_______

For the period ended 31 March 2007

				Capital	Capital	Capital
	Share	Share	Special	redemption	reserve	reserve	Revenue
	capital	premium	reserve	reserve	- realised	- unrealised	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 September 2007	354	77,775	79,148	1	103,234	22,185	7,105	289,802
Total recognised gains	-	-	-	-	33,055	3,668	4,006	40,729
Dividends paid	-	-	-	-	-	-	(3,820)	(3,820)
	_____	_______	_______	_______	_______	_______	_______	_______
Balance at 31 March 2008	354	77,775	79,148	1	136,289	25,853	7,291	326,711
	_____	_______	_______	_______	_______	_______	_______	_______

For the year ended 30 September 2007

				Capital	Capital	Capital
	Share	Share	Special	redemption	reserve	reserve	Revenue
	capital	premium	reserve	reserve	- realised	- unrealised	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 September 2006	354	77,775	79,148	1	103,234	22,185	7,105	289,802
Total recognised gains	-	-	-	-	86,363	5,722	6,974	99,059
Conversion of founder A shares	-	665	-	1	-	-	-	666
Dividends paid	-	-	-	-	-	-	(3,820)	(3,820)
	_____	_______	_______	_______	_______	_______	_______	_______
Balance at 30 September 2007	354	78,440	79,148	2	189,597	27,907	10,259	385,707
	_____	_______	_______	_______	_______	_______	_______	_______

11.    The half yearly financial report is available on the Manager's

          website, http://privateequity.standardlifeinvestments.com. The interim report and accounts will be posted to shareholders in

          June 2008 and copies will be available from the Manager - SL Capital Partners LLP, 1 George Street, Edinburgh EH2 2LL.

for Standard Life European Private Equity Trust PLC,

Aberdeen Asset Management PLC, SECRETARY

END

 

END

 

 

IR SEFFDUSASELI