Annual Financial Report

RNS Number : 1151T

F&C Private Equity Trust PLC

24 March 2016

 

To: Stock Exchange	For immediate release:
	24 March 2016

F&C Private Equity Trust plc

Preliminary Announcement for the Year to 31 December 2015

 

F&C Private Equity Trust plc today announces its unaudited financial results for the year ended 31 December 2015.

Financial Highlights

·      Share price total return for the year of 16.4 per cent for the Ordinary Shares.

·      Fully diluted NAV total return for the year of 10.7 per cent for the Ordinary Shares. This compares to a total return from the FTSE-All-Share Index for the year of 1.0 per cent.

·      Total dividends of 11.41p per Ordinary Share.

·      Dividend yield of 4.7 per cent based on the year-end share price.

·      Total realisations for the year of £78.9 million, a new record for the Company.

Chairman's Statement

Your Company made excellent progress during the year ended 31 December 2015. Its net assets at the year-end were £216.1 million giving a fully diluted net asset value ('NAV') per Ordinary Share of 295.74p. Taking into account dividends paid during the year which total 11.03p, the NAV total return was 10.7 per cent. This compares to a total return from the FTSE-All-Share Index for the year of 1.0 per cent. The Ordinary Share price total return for the year was 16.4 per cent and the share price at the year-end was 241.75p, representing a discount to the NAV of 18.3 per cent. Frustratingly the share price has weakened since year-end and the current discount to the NAV is 20.5 per cent.

During the year the Company made new investments either through funds or as co-investments, totalling £35.3 million. Realisations and associated income totalled £78.9 million, a new record for the Company. At the year-end the Company had a net cash position of £2.7 million. Outstanding undrawn commitments at the year-end were £56.0 million of which £17.0 million was to funds where the investment period has expired.

The Company's performance fee arrangements contain a hurdle rate, calculated over rolling three year periods, of an IRR of 8.0 per cent per annum. The annual IRR of the NAV for the three year period ended 31 December 2015 was 9.5 per cent and, consequently, a performance fee of £1.34 million is payable to the Manager, F&C Investment Business Limited, in respect of 2015. This is the third consecutive year that a performance fee has been payable, demonstrating consistent performance and providing shareholders with an attractive total return, which includes capital growth and an above average dividend yield.

Dividends

An interim dividend of 5.58p per Ordinary Share was paid on 6 November 2015. In accordance with the Company's stated dividend policy, the Board recommends a final dividend of 5.83p per Ordinary Share, payable on 31 May 2016 to shareholders on the register on 6 May 2016. The total dividend for the year amounts to 11.41p per Ordinary Share equivalent to a dividend yield of 4.7 per cent at the year end.

Financing

As noted above the Company is currently ungeared with cash balances exceeding the term loan element of the £70 million total loan facility. It is the Company's policy to employ moderate levels of gearing to enhance returns to shareholders. The Company has a very well diversified underlying portfolio of investments and this provides a robust platform on which to base borrowings. As the Managers take advantage of new fund, co-investment and secondary opportunities over the coming months, we expect that a moderate level of gearing will be achieved. A considerable proportion of the Company's assets are usually invested in Euro denominated investments and to effect a partial hedge against a major depreciation of the value of the Euro versus sterling we customarily draw our multi-currency borrowing facility in Euros.

Share Buy-backs

At the Company's AGM we regularly ask shareholders for permission to buy back a limited number of shares with application of statutory pre-emption rights. There are occasions where the combination of the availability of shares, the share price discount to NAV and the Company's resources make it worthwhile to do so. These are rare instances and whilst there is always a modest enhancement to NAV from such a transaction, the use of the Company's resources in this way must always be balanced against the longer term returns that could be made deploying that capital into private equity investments. In July 2015 300,000 Ordinary Shares were bought back by the Company and cancelled. The Board reserves the right to make further buy-backs where it is in the interests of shareholders.

Annual General Meeting

The Annual General Meeting will be held at 12 noon on 25 May 2016 at the offices of BMO Global Asset Management (EMEA), Exchange House, Primrose Street, London EC2A 2NY.

Outlook

The Company has been a beneficiary of a strong run of exits during 2015 when many of our investment partners have been able to effect successful realisations for a considerable proportion of their stock of mature companies. In our case realisations and associated income was almost equivalent to 40 per cent of the opening NAV of the Company. A number of supportive factors combined during the year including steady economic growth in most of our investment geographies, good profits growth, a liquid banking sector enabling the provision of buy-out debt, strong fund raising and consequent 'dry powder' for private equity funds  and an IPO market which provided several exit opportunities for portfolio companies. The beginning of 2016 where there has been a focus on the deceleration in economic growth and hence of corporate profits has led to a sell-off in many stockmarkets and this is likely to reduce investors' propensity to deal for at least a period of time. Fortunately private equity investors are innately long term and do not invest on impulse or according to prevailing market fashions and so are not overly influenced by these macro factors. Our private equity investment partners have demonstrated an ability to make excellent returns in a variety of economic conditions. Additionally all private equity portfolios are bespoke in nature with a limited number of very carefully selected companies each with a unique investment thesis. In this respect an investor in private equity should be mindful of the wider market conditions but should understand that private equity aims not to buy the market but to outperform the market through expert selection and the uniquely close alignment of interest between investors and management.

Mark Tennant

Chairman

 

Manager's Review

2015 has provided good evidence of one of private equity's perennial attractions, namely that it tends to outperform the stockmarket by a distinct margin. Private Equity clearly carries higher risk; there is no liquid market in the shares of the companies and these businesses themselves are usually smaller, more focused and less well established than the equivalent quoted companies. These risks are often augmented by the more highly geared capital structures of management buyouts, which is the predominant mode in which private equity is pursued. An investor taking these risks is quite justified in seeking a higher return to compensate. The listed private equity fund of funds structure attempts to capture the outperformance of private equity whilst taking more moderate levels of risk than would the case if investing through a single manager fund. Through a fund of funds the single manager risk is much reduced and risk overall is lowered by a well-diversified portfolio.  Despite this lower risk the best fund of funds deliver long term performance which is on a par with the best single manager funds. In most cases the returns over the long term tend to considerably exceed those from even highly specialised listed equity funds.

Private Equity's strengths lie in the unusually close alignment of interests between company management, the private equity manager and the ultimate investors. Where one succeeds all succeed.  It is also the longest term of all equity asset classes enabling time for the difficult process of company building and associated value creation to occur.

 As a means of financing smaller and medium sized companies private equity is gaining in popularity across Europe and further afield. In particular the mid-market and lower mid-market sector, where companies have enterprise values of below €500 million at the time of investment, offers a very broad range of opportunities with many thousands of companies in this size bracket appraised for investment by a few dozen European specialist private equity fund management houses. A typical private equity portfolio in this tier of the market consists of perhaps eight or ten companies each with a particular niche and a distinct investment thesis. Often these are in sectors or subsectors where there are no equivalent listed companies and hence exposure to some of these business areas can only really be achieved through private equity. In this respect private equity can add a diversification benefit as well as a performance enhancement benefit to an investor's portfolio.

New Investments

Three new fund commitments were made during the year. A further four fund positions were acquired through a secondary purchase and three co-investments were made.

In the UK a commitment of £4.8 million to the mid-market fund RJD Partners III was made. The first investment in this fund is Burgess Marine, a South Coast based marine engineering business.  Burgess is also a co-investment, where we have invested £3 million alongside RJD for 19 per cent of the company.

€5 million was committed to Iberian fund Corpfin IV increasing the fund's exposure to the recovering private equity markets of Spain and Portugal. €4 million has been committed to Italian mid-market fund Aliante 3, which specialises in the food and beverage sectors. The fund already has a partly established portfolio which usefully reduces the 'blind pool' risk. Also in Italy the Company acquired secondary positions in four Italian mid-market funds in one deal. These funds were acquired at an effective discount to NAV of 19 per cent, increasing to 30 per cent with a portfolio revaluation. In aggregate they contain 14 companies and they are 76 per cent drawn. The funds are PM & Partners II, ILP III (managed by J Hirsch & Co), Progressio II and Mid Capital Mezzanine (managed by Emisys Capital). The total consideration was £4.0 million with an additional £1.2 million of undrawn commitment. Secondaries are not easy to source and execute but they are worth pursuing as it is possible to assess the existing portfolio directly and strike an advantageous price, often acquiring at a discount to NAV and with the prospect of benefiting from realisations after a relatively short time. All of these factors tend to improve the chances of a good return.

We have been highly selective in choosing co-investments.  Apart from Burgess Marine, noted above, we invested £1.3 million for a 10.2 per cent stake in Nutrisure, a superfoods company which sells foods such as berries and pulses which are high in antioxidants, phytonutrients, vitamins, minerals, enzymes and amino acids. The main trading brand is Naturya. Lonsdale are the deal leaders. Lastly, we have invested £3.6 million for 7.1 per cent of Collingwood Insurance Group. We are part of a syndicate led by European mid-market house JZI, that has acquired 60 per cent of the company. Collingwood is a specialist UK motor insurer with products tailored for niche markets such as taxis, learner drivers and fleets. It is based in Gibraltar with the call centre and claims processing function in Newcastle. There are a handful of other co-investments at an advanced stage of diligence and we expect that the portfolio will broaden as the year progresses.

Drawdowns

For the year as a whole taking all drawdowns and co-investments together £35.3 million was invested in new companies. The detail of many of the drawdowns earlier in the year has already been reported but the larger drawdowns as well as the notable final quarter investments are described below.

Inflexion have been active with two significant new investments drawn by their 2010 Fund and their 2012 Co-investment fund. £1.4 million was called for luxury holiday company Scott Dunn and £2.2 million for Shimtech, a producer of gap management components for aircraft. Lyceum Capital III called £0.4 million for Briefing Media, an agricultural publisher and events business. Amongst several investments made on the Continent, the larger ones included DBAG VI's £0.4 million invested into Gienanth, a foundry specialising in engine blocks and £0.4 million into Cleanpart, an engineering services provider to the semi-conductor industry. In North America Blue Point Capital III called £0.4 million for Russell Food Equipment, which provides food service equipment and supplies in Canada.

The total drawndown by funds in the final quarter was a modest £3.8 million. A number of the drawdowns were for small follow on acquisitions, but there were some new holdings. Lyceum Capital III called £0.5 million for two investments; TotalMobile, an enterprise mobility software company based in Belfast, which allows workers to enter and receive data in the field and Coryton Advanced Fuels which blends fuels for the aviation and motorsports sectors. In Germany DBAG VI called £0.4 million for Telio, a Hamburg based company which develops, installs and operates communications and media in prisons such as controlled telephone calls for inmates. The Finnish fund Vaaka Partners Buyout II called £0.3 million for Unisports Saltex, a company producing sports arena surfaces and seating equipment and systems. There were several other smaller drawdowns for new investments and follow-ons.

Realisations

The strong trend of exits has continued right up to the year end with a further £22.4 million of distributions, including £2.5 million of income, received during the final quarter. This brings the total realisations for the year to £78.9 million, a new record for the company. The realisation total for 2015 was 44 per cent ahead of 2014, itself a strong year, and the combined exits and associated income totalled almost 40 per cent of the starting NAV of the Company at 1 January 2015.  2015 witnessed a favourable combination of steadily growing economies, improved availability of buy-out debt, a further accumulation of 'dry powder' by buy-out funds, and an IPO market which was periodically accessible. It has been possible for many of our investment partners to move on much of their stock of mature holdings to trade, larger buy-out houses and in some cases to the stockmarket. Since the year-end conditions have been less benign with the global market sell off and subsequent partial rebound leaving a number of European markets several percentage points down for the year to date. This is engendering a less confident business environment and whilst we would still expect healthy realisations during 2016, the total may not be as high.

The realisations have been very well spread by geography and sector. A recap of the highlights illustrates this well.

In the UK the largest exit was the £8.3 million from our co-investment in marine engineering company SMD Hydrovision (2.1x, 11 per cent IRR) which was sold by Inflexion to Chinese buyer CSR ZhouZou. This market leading manufacturer of work class remote operated vehicles (WROVs) was held for seven years, which was longer than planned but during this time its market position improved and this facilitated the exit. We also exited the Stirling Square led co-investment in pallet racking systems company Whittan. This company had a challenging time during the recession with an economically sensitive retail customer base, but after a refinancing the final exit recovered the cost of the investment of £2.7 million.  From the funds there were a number of significant exits. August Equity Partners II sold Funeral Service Partners (FSP) to its own successor Fund III returning £2.3 million (2.4x, 17 per cent IRR). Primary Capital III sold Pacific Direct, a toiletries and hospitality accessories provider, to ADA Cosmetics of Germany returning £1.1 million (3.2x, 17 per cent IRR). Amongst our small portfolio of venture capital funds Pentech II sold cloud based software company Maxymiser to Oracle returning £0.7 million.

In Germany Capvis III sold elevator components company Wittur to Bain Capital returning £1.2 million (3.9x, 38 per cent IRR). In the Benelux, Life Science Partners III distributed £1.7 million from the sale of Prosensa, a pharmaceutical company specialising in RNA modulating therapeutics. Gilde Buyout III sold poultry meat processor Plukon Royale returning £1.2 million (7.8x, 41 per cent IRR) and conveyor belts company Ammeraal Beltech  returning £0.8 million (5.7x, 44 per cent IRR). In France Chequers Capital XV sold Serma, a designer of embedded electronic systems used in severe environments to French PE house Ardian returning £0.5 million (3.1x, 34 per cent IRR) and Cenexi, a contract manufacturer of pharmaceuticals to Cathay Capital returning £0.6 million (4.5x, 24 per cent IRR). Ciclad 4 sold OMIA, a producer of surface treatment lines for the automotive and industrial sectors to Naxicap returning £0.6 million (3.6x, 21 per cent IRR). In Spain N+1 Private Equity II sold security electronics company Teltronic returning £1.6 million (6x, 68 per cent IRR). In the Nordics our FSN led co-investment in Danish house-builder HusCompagniet was sold to Nordic PE house EQT Capital returning £3.9 million (3.8x, 46 per cent IRR). Herkules Private Equity III sold coffee shop chain Espresso House returning £1.4 million (5.7x, 80 per cent IRR). In the USA our longstanding mid-market partners Blue Point Capital II achieved a remarkable exit with the sale of work zone safety services company Area Wide Protection (AWP) to Riverside, returning £2.9 million (11x, 51 per cent IRR).

In the fourth quarter there were a further twelve full realisations of holdings in the funds in which we are invested, a number of other partial realisations and one exit of a co-investment.

Our co-investment in angling equipment and accessories company Fox International, which was led by Next Wave, was sold to private equity group Mayfair Partners, after only 15 months. Net of carried interest and all costs, we received £4.0 million, representing 2.5x and an IRR of 105 per cent. There remains a possibility of further proceeds through a deferred consideration depending on the performance of the new deal.

Our longstanding partners at Inflexion have had an exceptionally successful year with no fewer than eight exits. Two of these were in the final quarter. Holiday company, On the Beach was exited via IPO achieving 3.6x and an 84 per cent IRR. Our share across two funds was £1.3 million. Secondly their TV shopping company Ideal Shopping was sold to Blackstone achieving 2.6x and an IRR of 25 per cent with our share at £1.1 million.

TDR Capital II exited debt collection agency Lowell returning £1.4 million (2.6x, 35 per cent IRR). Piper Private Equity IV, specialists in consumer brands, had two exits returning a combined £1.5 million through the sale of Diet Chef (0.5x) and Rug Co (1.8x).

In the UK we benefited from some significant partial realisations. The largest of these was £3.0 million from flight search engine, Skyscanner, where SEP III has sold down less than a fifth of their holding. The company has also been refinanced. The extraordinary progress of this investment makes it our largest look through investment by some margin at over £15 million. Primary Capital III refinanced stationery chain Paperchase, returning £1.0 million and also refinanced Leisure Pass Group returning £0.7 million. Park Holidays, is performing well and has paid back £0.5 million by way of dividend following a debt refinancing.

Further afield Spanish Fund N+1 Private Equity II sold on street parking company EYSA to Portobello Fund III (also in our portfolio) returning £1.2 million (2.1x, 55 per cent IRR). In Asia AIF Capital Asia III sold pharmaceuticals company Famy with proceeds to us of £0.8 million (3.3x, 22 per cent IRR). GCP Capital Partners Europe II sold Bermuda based insurance company Ironshore to Hong Kong listed company Fosun returning £0.6 million (1.7x, 22 per cent).

Valuation Changes

With the strong exit activity noted above and generally supportive economic conditions, it is not surprising that uplifts have exceeded downgrades in number and quantum this year.

The largest uplift was for venture capital fund SEP III, which was up by £5.3 million. This was largely attributed to the positive developments at Skyscanner, which, as noted above, is now our largest holding on a look through basis. A number of other funds have also done well, in most cases due to a combination of good exits and respectable profits progression for remaining portfolio companies. Inflexion has had an excellent year and our holdings in their 2010 Fund and 2012 Co-investment Fund are up by £2.7 million and £1.8 million respectively. In Continental Europe strong performers included DBAG V (+£2.2 million), N+1 Private Equity II (+£1.7 million) and Procuritas Capital IV (+£1.5 million). In the USA BluePoint Capital II was also up significantly (+£1.7 million).

Amongst our co-investment portfolio significant contributors this year were HusCompagniet (+£1.4 million), French cold sterilisation company Ionisos (+£1.2 million) and SMD Hydrovision (+£0.7 million).

There were some downgrades. A number of the larger individual ones had a common origin in the difficulties being experienced in the Oil Services sector due to the steep decline in the oil price. Candover 2008, which has one holding, oil services company Expro was down by £1.3 million and Candover 2005 was down by £0.7 million for the same reason. Stirling Square Capital Partners II was down by £1.2 million mainly reflecting a reduction in value for SAR, a provider of waste management services to the oil and gas sector. Our co-investment in Norwegian based software company Safran was down by £1.0 million, as its core customer base in the offshore oil sector is decreasing faster than its newer defence related customer base is growing. Lastly, PineBridge New Europe II is down by £0.7 million reflecting more conventional portfolio problems with weak trading of key companies.

Outlook

After a very successful 2015 with many of our investment partners effecting several realisations at good prices, it will be challenging to entirely replicate quite this level of activity in 2016. The year has begun with a much more cautious attitude in the stockmarkets and there have been downgrades of the overall projections of economic growth. How relevant this is to our portfolio remains to be seen. Many of the sectors which have suffered most in the recent sell off are not represented in private equity portfolios and these portfolios themselves are usually not good proxies for the wider market. That said macro-economic factors and unsettling geo-political events do affect business confidence and consumer behaviour. Due to a combination of favourable factors during 2015 the average price of private equity deals increased across all segments and geographies. It remains the case that the midmarket and lower mid-market is cheaper than the larger end of the private equity market and it is in this tier that we continue our search for promising emerging managers, co-investments and secondary opportunities. Private Equity managers have the advantage of only having to deal when they think that pricing is right. They are driven by the quest for absolute returns rather than relative outperformance. Given the breadth of our investment partners and their portfolios there is likely to be a healthy two-way market with many exits and new investments during the year which will serve to harvest returns and sow the seeds of future value growth for shareholders.

Hamish Mair

Investment Manager

F&C Investment Business Limited

 

F&C Private Equity Trust plc

Statement of Comprehensive Income for the

year ended 31 December 2015

	(Unaudited)
	Revenue £'000	Capital £'000	Total £'000
Income
Gains on investments held at fair value	-	17,401	17,401
Exchange gains	-	2,072	2,072
Investment income	7,562	-	7,562
Other income	48	-	48
Total income	7,610	19,473	27,083
Expenditure
Investment management fee - basic fee	(509)	(1,528)	(2,037)
Investment management fee - performance fee	-	(1,342)	(1,342)
Other expenses	(696)	-	(696)
Total expenditure	(1,205)	(2,870)	(4,075)
Profit before finance costs and taxation	6,405	16,603	23,008
Finance costs	(448)	(1,345)	(1,793)
Profit before taxation	5,957	15,258	21,215
Taxation	(931)	931	-
Profit for year/total comprehensive income	5,026	16,189	21,215
Return per Ordinary Share - Basic	6.97p	22.44p	29.41p
Return per Ordinary Share - Fully diluted	6.78p	21.85p	28.63p

 

F&C Private Equity Trust plc

Statement of Comprehensive Income for the

year ended 31 December 2014

	(Audited)
	Revenue £'000	Capital £'000	Total £'000
Income
Gains on investments held at fair value	-	18,588	18,588
Exchange gains	-	572	572
Investment income	3,971	-	3,971
Other income	27	-	27
Total income	3,998	19,160	23,158
Expenditure
Investment management fee - basic fee	(516)	(1,548)	(2,064)
Investment management fee - performance fee	-	(1,085)	(1,085)
Other expenses	(745)	-	(745)
Total expenditure	(1,261)	(2,633)	(3,894)
Profit before finance costs and taxation	2,737	16,527	19,264
Finance costs	(349)	(4,854)	(5,203)
Profit before taxation	2,388	11,673	14,061
Taxation	(441)	441	-
Profit for year/total comprehensive income	1,947	12,114	14,061
Return per Ordinary Share - Basic	2.69p	16.76p	19.45p
Return per Ordinary Share - Fully diluted	2.62p	16.32p	18.94p

F&C Private Equity Trust plc

Balance Sheet

	As at 31 December 2015 (Unaudited)	As at 31 December 2014 (Audited)
	£'000	£'000
Non-current assets
Investments at fair value through profit or loss	215,711	234,414
	215,711	234,414
Current assets
Other receivables	26	2,577
Cash and short-term deposits	24,023	6,946
	24,049	9,523
Current liabilities
Other payables	(2,278)	(18,117)
Net current assets/(liabilities)	21,771	(8,594)
Total assets less current liabilities	237,482	225,820
Non-current liabilities
Interest-bearing bank loan	(21,357)	(22,312)
Net assets	216,125	203,508
Equity
Called-up ordinary share capital	720	723
Special distributable capital reserve	15,040	15,679
Special distributable revenue reserve	31,403	31,403
Capital redemption reserve	1,335	1,335
Capital reserve	158,002	149,769
Revenue reserve	9,625	4,599
Shareholders' funds	216,125	203,508
Net asset value per Ordinary Share - Basic	300.25p	281.55p
Net asset value per Ordinary Share - Fully diluted	295.74p	277.55p

 

F&C Private Equity Trust plc

Statement of Changes in Equity

 

	Share Capital	Special Distributable Capital Reserve	Special Distributable Revenue Reserve	Capital Redemption Reserve	Capital Reserve	Revenue Reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
For the year ended 31 December 2015 (unaudited)
Net assets at 1 January 2015	723	15,679	31,403	1,335	149,769	4,599	203,508
Cancellation of Ordinary Shares Profit for the year/total comprehensive income	(3) -	(639) -	- -	- -	- 16,189	-    5,026	(642) 21,215
Dividends paid	-	-	-	-	(7,956)	-	(7,956)
Net assets at 31 December 2015	720	15,040	31,403	1,335	158,002	9,625	216,125
For the year ended 31 December 2014 (audited)
Net assets at 1 January 2014	723	15,679	31,403	1,335	145,425	2,652	197,217
Profit for the year/total comprehensive income	-	-	-	-	12,114	1,947	14,061
Dividends paid	-	-	-	-	(7,770)	-	(7,770)
Net assets at 31 December 2014	723	15,679	31,403	1,335	149,769	4,599	203,508

 

 

F&C Private Equity Trust plc

Cash Flow Statement

	Year ended 31 December 2015 (Unaudited)	Year ended 31 December 2014 (Audited)
	£000	£000
Operating activities
Profit before taxation	21,215	14,061
Adjustments for: Gains on disposals of investments	(5,965)	(10,539)
Increase in holding gains	(11,436)	(8,049)
Exchange differences	(2,072)	(572)
Interest income	(48)	(27)
Interest received	48	27
Investment income Investment income received	(7,562) 7,840	(3,971) 3,695
Finance costs	1,793	5,203
Decrease in other payables	(309)	(34)
Net cash inflow/(outflow) from operating activities	3,504	(206)
Investing activities
Purchases of investments	(35,271)	(29,114)
Sales of investments	73,655	48,680
Net cash inflow from investing activities	38,384	19,566
Financing activities
Shares bought back (net of costs)	(642)	-
Repayment of bank loans	(14,618)	(7,286)
Draw down of bank loans, net of costs	-	42,461
Amounts paid to subsidiary	-	(45,642)
Interest paid	(1,586)	(980)
Equity dividends paid	(7,956)	(7,770)
Net cash outflow from financing activities	(24,802)	(19,217)
Net increase in cash and cash equivalents	17,086	143
Currency losses	(9)	(206)
Net increase/(decrease) in cash and cash equivalents	17,077	(63)
Opening cash and cash equivalents	6,946	7,009
Closing cash and cash equivalents	24,023	6,946

 

Notes (unaudited)

1.         The unaudited financial results, which were approved by the Board on 23 March 2016, have been prepared in accordance with the Companies Act 2006 and International Financial Reporting Standards ('IFRS') as adopted by the European Union. Where presentation guidance set out in the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ('SORP') issued  by the Association of Investment Companies in November 2014 is consistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP. 

The accounting policies adopted are consistent with those of the previous financial year, except that the following new standards have been adopted in the current year:

·      Annual Improvements to IFRSs 2010-2012 Cycle and 2011-2013 Cycle.  The adoption of these amendments did not have any impact on the current period or any prior period and is not likely to affect future periods.

The following new standards have been issued but are not effective for this accounting period and have not been adopted early:

·    In July 2014, the IASB issued the final version of IFRS 9 'Financial Instruments' which reflects all phases of the financial instruments project and replaces IAS 39 'Financial Instruments: Recognition and Measurements'. The standard introduces new requirements for classification and measurement of financial instruments, a new expected credit loss model for calculating impairment on financial assets, and hedge accounting.  IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted.  Retrospective application is required with some exceptions. The adoption of IFRS 9 is unlikely to have a material effect on the classification and measurement of the Company's financial assets or financial liabilities.

·    IASB has issued 'Annual Improvements to IFRSs 2012-2014 Cycle' which will be effective for annual periods beginning on or after 1 January 2016.  The adoption of these improvements is unlikely to have a material effect on the classification and measurement of the Company's financial position and performance.

·    IASB has issued a new standard for the recognition of revenue, IFRS 15 'Revenue from Contracts with Customers'. This will replace IAS 18 which covers contracts for goods and services.  The new standard is based on the principle that revenue is recognised when control of a good or service transfers to a customer - so the notion of control replaces the existing notion of risks and rewards.  The standard permits a modified retrospective approach for the adoption.  Under this approach entities will recognise transitional adjustments in retained earnings on the date of initial application (eg 1 January 2017), ie without restating the comparative period.  They will only need to apply the new rules to contracts that are not completed as of the date of initial application.  The standard will be effective for annual periods beginning on or after 1 January 2018.  The Company is yet to assess IFRS 15's full impact but it is not currently anticipated that this standard will have any material impact on the Company's financial statements as presented for the current year.

The Company does not consider that the future adoption of any new standards, in the form currently available, will have any material impact on the financial statements as presented.

2.         Returns per Ordinary Share are based on the following weighted average number of shares in issue during the year:

Basic:               72,143,369 (2014: 72,282,273)

Diluted:              74,102,525 (2014: 74,241,429)

The net asset value per Ordinary Share is based on the following number of shares in issue at the year-end:

Basic:               71,982,273 (2014: 72,282,273)

Diluted:             73,941,429 (2014: 74,241,429)

The Company has in issue 1,959,156 warrants to subscribe for Ordinary Shares at an exercise price of 129.94p per Ordinary Share.  These warrants are capable of exercise at any time after 20 September 2009.

3.         The Board has proposed a final dividend of 5.83p per Ordinary Share, payable on 31 May 2016 to those shareholders on the register on 6 May 2016.

4.         This results announcement is based on the Company's unaudited financial statements for the year ended 31 December 2015 which have been prepared in accordance with International Financial Reporting Standards as adopted by the EU ('IFRS').           

5.         This announcement is not the Company's statutory accounts.  The full audited accounts for the year ended 31 December 2014, which were unqualified, have been lodged with the Registrar of Companies.  The statutory accounts for the year to 31 December 2015 (on which the audit report has not been signed) will be delivered to the Registrar of Companies following the Company's Annual General Meeting which will be held at the offices of BMO Global Asset Management (EMEA), Exchange House, Primrose Street, London, EC2A 2NY on 25 May 2016 at 12 noon.

6.         The Annual Report and Accounts for the year will be sent to shareholders and will be available for inspection at the Company's registered office, 80 George Street, Edinburgh EH2 3BU and the Company's website www.fcpet.co.uk

For more information, please contact:

Hamish Mair (Investment Manager)	0131 718 1184
Scott McEllen  (Company Secretary)	0131 718 1137
[e-mail]  / [e-mail]

 

END

 

 

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