Half Year Results

RNS Number : 1432S

Electra Private Equity PLC

13 May 2009

 



ELECTRA PRIVATE EQUITY PLC

Announcement of Unaudited Half Year Results for the six months ended 31 March 2009

The information contained in this announcement is restricted and is not for release, publication, or distribution, directly or indirectly, in or into the United States, Canada, Japan or Australia. The information in these materials does not constitute an offer of securities for sale in the United States, Canada, Japan or Australia.

• £62 million invested during the period (last six months - £54 million). Realisations amounted to £18 million (last six months - £94 million)

• Net liquid resources at 31 March 2009 of £74 million and £250 million of banking facilities.

• Net asset value of 1,512p per share at 31 March 2009, a decline of 16.1% over the six months to 31 March 2009. In the same period the FTSE All-Share Index fell by 20.1%

• Unaudited net asset value of 1,553p per share at 30 April 2009

• Return on equity of 11.5% on an annualised basis for the five years to 31 March 2009

Commenting on the Half Year Results, Sir Brian Williamson, Chairman, said: 

'This set of results is in line with our expectations: valuations were affected by more difficult trading conditions and the decline in multiples of comparable quoted stocks.

The operating environment for many portfolio companies is tough with pressure on working capital and some withdrawal of trade credit. For the present, the priority for Electra's manager, Electra Partners, is to protect the existing portfolio, if necessary with additional funding. In the short term, until valuation uncertainties diminish, new investment will remain at a low level. Realisations are also expected to remain low until banking conditions stabilise.

Electra is well placed. It has easily manageable levels of commitments, a portfolio with good defensive characteristics and modest levels of debt in the underlying companies. Net liquid resources, together with agreed banking facilities, give Electra in excess of £300 million of capacity to take advantage of investment opportunities and deliver future value to shareholders.'

For further information:

Sir Brian Williamson, Chairman, Electra Private Equity PLC	020 7306 3883
Hugh Mumford, Managing Partner, Electra Partners LLP	020 7214 4200
Nick Miles, M: Communications	020 7153 1535

Net Asset Value Per Share

	31 March 2009	30 September 2008	30 April 2009
Net asset value per share	1,512p	1,801p	1,553p
Decrease since 30 September 2008	(16.1%)
Decrease since 1 April 2008	(20.9%)
Decrease in FTSE All-Share Index since 30 September 2008	(20.1%)
Decrease in FTSE All-Share Index since 1 April 2008	(32.2%)

Return on Equity comprises 'Total Profit on Ordinary Activities after Taxation' divided by opening 'Total Equity Shareholders' Funds' calculated on an annualised basis (as these terms are used in the Report and Accounts of Electra for the year ended 30 September 2008).

The unaudited net asset value per share at 30 April 2009 was calculated on the basis of the net asset value at 31 March 2009 adjusted to reflect the purchases and sales of investments, currency movements and bid values on that day in respect of listed investments.

The figures and financial information in respect of the year ended 30 September 2008 have been delivered to the Registrar of Companies and included the Auditors' Report which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

CHAIRMAN'S STATEMENT

Overview

The operating environment for many of the portfolio companies is tough with pressure on working capital and some withdrawal of trade credit. For the present, the priority for Electra's manager, Electra Partners, is to protect the existing portfolio, if necessary with additional funding. In the short term, until valuation uncertainties diminish, new investment will remain at a low level. Realisations are also expected to remain low until banking conditions stabilise.

Electra ended the six months with low levels of investment commitments and at 31 March 2009 had available net liquid resources of £74 million and £250 million of facilities.

Results

As anticipated in the Interim Management Statement made in February 2009, valuations of unquoted investments have been affected by more difficult trading conditions and by the decline in multiples of comparable quoted stocks. At 31 March 2009 the net asset value per share was 1,512p compared with 1,801p at 30 September 2008, a decline of 16.1%.

To set this performance in context, net asset value per share over the 12 month period to 
31 March 2009 declined by 20.9% while the FTSE All-Share Index fell by 32.2%.

Looking back over the five years to 31 March 2009, net asset value per share - inclusive of special dividends - increased by 86.8% and Electra achieved a return on equity of 11.5% on an annualised basis.

Investments over the six months to 31 March 2009 totalled £62 million, compared with £54 million in the previous half year. £20 million was invested in MPS, a manufacturer of abattoir machinery, through the acquisition of a secondary position in the Frankfurt-based Steadfast Capital I Fund. A further £14 million was invested in a fund established to invest in stressed debt opportunities. The balance of £28 million comprised further investment in portfolio companies and drawdowns under commitments to third party investment funds. Realisations amounted to £18 million compared with £94 million in the previous six months.

Resources and Commitments

At 31 March 2009 Electra had cash, money market funds and floating rate notes of £279 million together with a multi-currency revolving credit facility of £250 million, of which £205 million had been drawn down. Commitments to third party funds, which may be drawn down over the next five years, amounted to £109 million. Although Electra's existing multi-currency facility of £250 million is not due for renewal until September 2010, discussions to extend the term of this facility are in train.

Buyback of Shares for Cancellation

During the six months to 31 March 2009 Electra repurchased for cancellation 257,000 shares for a total cost of £2.08 million. The shares were acquired at a discount of 46% to the net asset value per share of 1,512p at 31 March 2009. 

Outlook

Electra is well placed. It has easily manageable levels of commitments, a portfolio with good defensive characteristics and modest levels of debt in the underlying companies. Net liquid resources, together with agreed banking facilities, give Electra in excess of £300 million of capacity to take advantage of investment opportunities and deliver future value to shareholders.

Sir Brian Williamson

12 May 2009

Chairman

THE PORTFOLIO

Electra's portfolio consists of an investment portfolio together with net liquid resources. Net liquid resources comprise cash, money market funds and floating rate notes less bank loans. The investment portfolio consists of direct investments and investments through third party private equity funds. An overall analysis is given below.

	*At 31 March 2009	*At 30 September 2008
	£m	£m
Investment Portfolio
Direct Investments	391	403
Funds	79	102
	470	505
Net Liquid Resources	74	159
Investment Portfolio and Net Liquid Resources	544	664

* Excludes accrued income on the investment portfolio and floating rate notes of £8,591,000 (September 2008: £9,034,000).

At 31 March 2009 Electra had direct investments in 59 companies with an aggregate value of 
£391 million and investments in 34 private equity funds with an aggregate value of £79 million. The top ten and twenty direct investments accounted for 59% and 75% respectively of the total direct investments.

Geographically, 87% of the investment portfolio was situated in the UK or Continental Europe, 10% was based in the USA and 3% in Asia.

INVESTMENT PORTFOLIO ANALYSIS

In the six months to 31 March 2009, Electra's net asset value per share fell from 1,801p at the beginning of the period to 1,512p, a decline of 16.1%. Over the 12 months to 31 March 2009, the decline has amounted to 20.9%. In the absence of any substantial level of realisations, the reduction in value of the investment portfolio reflected, for the main part, a decline in value of comparable stock market companies, as under international accounting standards the stock market is used as a benchmark for the valuation of unlisted companies. Valuations are thus related to current market prices despite the fact that Electra is a long-term holder of unlisted portfolio companies. Throughout the 2008 calendar year, the underlying trading of the majority of portfolio companies remained above the prior year. In the first three months of 2009 however, the trading performance of a number of these companies has been behind budget as the operating environment becomes increasingly difficult. 

During the six month period Electra has continued to maintain a cautious approach to new investment in view of the unstable economic conditions and investments have been relatively few. This policy has now been in place for the last 18 months with investment levels falling to less than half those of 2007. The major impact of the current issues facing the UK economy has, however, been the effect on the level of realisations from the portfolio which in the six months to 31 March 2009 fell by 81% compared to the corresponding period of the previous year. 

Over the six month period the investment portfolio declined from £505 million to £470 million, increasing by net investment of £44 million but declining by £79 million as a result of the net diminution in value of investments in the portfolio.

Six months to 31 March	2009	2008
	£m	£m
Opening portfolio	505	620
Investments	62	60
Realisations	(18)	(98)
Net capital decrease	(79)	(14)
Closing portfolio *	470	568

*  As at 31 March 2009 excludes accrued income on the investment portfolio of £8,199,000 
(2008: £10,497,000) and excludes investments in money market funds and FRNs of £248,895,000 (2008: £251,987,000).

Prospects

The problems in the UK economy have meant that the six months to 31 March 2009 have seen little activity in relation to new investment or realisations. In addition, the decline in the stock market has led to a further fall in the value of Electra's investment portfolio. Our current emphasis remains on identifying opportunities to add to or merge with existing investments rather than to acquire new portfolio companies. Through these means, the financial position of existing investments can be strengthened so as to provide greater protection in the event that economic conditions are slow to improve. Electra's balance sheet remains strong with a high level of liquid resources, a modest and easily manageable level of commitments and a relatively low level of debt in the underlying portfolio investments. While in the short term the current lack of visibility in respect of earnings is impeding investment, in the medium term the prospects for new investment remain encouraging. With a flexible investment mandate and strong liquid resources Electra is well placed to benefit from this prospective improvement in the investment environment.

INVESTMENT PORTFOLIO REVIEW

Investments

In the six-month period investments totalled £62 million compared to £60 million in the corresponding period of the previous year. Investment has thus continued at a low level for the past 18 months reflecting the rapid deterioration in the UK economy and the change in circumstances affecting the UK banking sector. Given the difficulties in forecasting the level of future earnings, Electra has restricted its investment activities to specific sectors where potential investments either offer exceptional value or where future returns are relatively identifiable. These sectors include secondary positions in private equity funds and also the purchase of senior debt where the debt is selling at a significant discount despite the relatively sound position of the underlying company.

New investments included the purchase of a secondary interest in the Steadfast Capital I Fund, whose manager is based in Germany. This investment amounted in total to £30 million and was made at a discount to the manager's valuation. The most significant individual investment included in the purchase was MPS, a world leader in the manufacture and distribution of slaughter house equipment. This investment represented 54% of the total purchase price and is considered to have strong growth prospects as well as good defensive qualities. Electra also invested £14 million in a special purpose fund, Credit Opportunities, for the purpose of acquiring a portfolio of senior debt positions in various private equity-backed companies. In total Electra has committed £30 million to this fund and so far has purchased interests in 10 underlying debt positions.

Realisations

Realisations during the six month period were restricted to £18 million compared to 

£98 million in the corresponding six months of the previous year . The sale of e-Telecare in the Philippines realised £7.4 million and the sale of a secondary position in France realised a further 
£7.6 million. Realisations from other private equity funds were also much reduced with receipts to Electra falling to £2.0 million in the six month period. Given the current conditions in the banking market, realisations from Electra's investment portfolio are unlikely to be significant in the short term, although interest continues to be shown by trade buyers in a number of Electra's investments. 

Performance

During the six months to 31 March 2009 the valuation of Electra's investment portfolio was reduced by £137 million which represented 27% of the opening portfolio. These reductions were offset by 
£58 million of currency appreciation giving rise to an overall reduction of £79 million. Before currency appreciation, the value of direct unlisted investments was reduced by 26%, the value of listed investments declined by 41% and private equity funds were reduced in aggregate by 27%.

In arriving at the valuation of the direct unlisted investments, the reductions in value amounted to a net £80 million made up of increases of £12 million offset by decreases of £92 million. The increases related partially to reinstatement of value in respect of investments previously written off. The remaining direct unlisted companies in the portfolio were written down primarily to reflect the decline in stock market levels or the reduction in property yields. The main exception to this related to Electra's investment in Vasanta which was written down by £28 million amounting to 95% of the previous carrying value and Baxi, where the investment was written down by £6 million. In the case of Vasanta, the removal of credit insurance led to a significant increase in the company's debt levels with a corresponding decrease in the equity value of the investment. In the case of Baxi the reduction in the value of the investment was due to an increase in pension liability. The main change in the listed portfolio related to Candover where the share price fell from £20 at 30 September 2008 to 82p at 31 March 2009, reducing the value of the investment by £18 million.

Electra Partners LLP

12 May 2009

Consolidated Income Statement (unaudited)

Note	For the six months ended 31 March	Revenue £'000	Capital £'000	2009 Total £'000	Revenue £'000	Capital £'000	2008 Total £'000
	Net (losses)/gains on investments	10,269	(87,205)	(76,936)	17,881	(16,339)	1,542
	Losses on revaluation of foreign currencies	-	(17,810)	(17,810)	-	(10,043)	(10,043)
		10,269	(105,015)	(94,746)	17,881	(26,382)	(8,501)
	Other income	825	-	825	1,312	1,708	3,020
	Incentive schemes	-	807	807	-	(3,499)	(3,499)
	Priority profit share	(5,945)	-	(5,945)	(6,994)	-	(6,994)
	Other expenses	(4,035)	-	(4,035)	(7,792)	-	(7,792)
	Net Loss before Finance Costs and Taxation	1,114	(104,208)	(103,094)	4,407	(28,173)	(23,766)
	Finance costs	(3,168)	-	(3,168)	(4,270)	-	(4,270)
	Loss on Ordinary Activities before Taxation	(2,054)	(104,208)	(106,262)	137	(28,173)	(28,036)
	Taxation Credit/(Expenses)	(1,224)	12,442	11,218	(2,253)	-	(2,253)
	Loss on Ordinary Activities after Taxation	(3,278)	(91,766)	(95,044)	(2,116)	(28,173)	(30,289)
	Attributable to Equity Shareholders	(3,278)	(91,766)	(95,044)	(2,116)	(28,173)	(30,289)
4	Basic and Diluted Earnings per Ordinary Share	(9.25)p	(259.02)p	(268.27)p	(5.75)p	(76.61)p	(82.36)p

The Total column of this statement represents the Group's Income Statement prepared in accordance with International Financial Reporting Standards adopted by the European Union ('IFRS'). The supplementary Revenue and Capital columns are both prepared under guidance published by the Association of Investment Companies.

The amounts dealt with in the Consolidated Income Statement are all derived from continuing activities.

		2009	2008
Number of Ordinary Shares in issue at 31 March		35,338,687	35,595,687
3	Special Dividends Paid Total paid (£'000) Per share	- -			9,149 25p

Consolidated Statement of Changes in Equity (unaudited)

Note	For the six months ended 31 March	2009 £'000	2008 £'000
6	Total equity at 1 October	640,949	745,506
6	Loss after taxation	(95,044)	(30,289)
6	Special dividend *	-	(9,149)
6	Exchange differences arising on consolidation	(9,595)	222
6	Repurchase of own shares	(2,119)	(26,492)
	Total Equity at 31 March	534,191	679,798

* No special dividend was paid during the period (2008: 25p). Share buy-backs and cancellations during the six months to 31 March 2009 were 7,000 on 26 November 2008 and 250,000 on 
2 December 2008 (2008: 50,000 ordinary shares on 23 November 2007, 160,000 ordinary shares on 27 November 2007, 200,000 ordinary shares on 5 December 2007, 92,000 ordinary shares on 6 December 2007, 55,000 ordinary shares on 14 December 2007, 100,000 ordinary shares on 
22 January 2008 and 1,000,000 ordinary shares on 17 March 2008).

Consolidated Balance Sheet (unaudited)

Note		As at 31 March 2009		As at 30 Sept 2008		As at 31 March 2008
		£'000	£'000	£'000	£'000	£'000	£'000
	Non-Current Assets
	Investments held at fair value:
	Unlisted and listed		478,133		514,249		578,357
	Other investments		249,744		276,467		251,987
			727,877		790,716		830,344
	Current Assets
	Trade and other receivables	2,365		3,043		2,587
	Cash and cash equivalents	30,505		43,791		62,508
		32,870		46,834		65,095
	Current Liabilities
	Trade and other payables	7,056		8,424		7,749
	Net Current Assets		25,814		38,410		57,346
	Total Assets less Current Liabilities		753,691		829,126		887,690
	Bank loans	205,240		158,870		170,278
	Deferred tax	12		12,317		12,549
	Provision for liabilities and charges	14,248		16,990		25,065
	Non-current Liabilities		219,500		188,177		207,892
	Net Assets		534,191		640,949		679,798
	Capital and Reserves
5	Called-up share capital		8,835		8,899		8,899
6	Share premium	24,147		24,147		24,147
6	Capital redemption reserve	34,440		34,376		34,376
6	Translation reserve	(8,561)		1,034		819
6	Realised capital profits	855,581		834,672		784,137
6	Unrealised capital losses	(388,866)		(274,072)		(187,415)
6	Revenue reserves	8,615		11,893		14,835
			525,356		632,050		670,899
	Total Equity Shareholders' Funds		534,191		640,949		679,798
	Net asset value per Ordinary Share		1,511.63p		1,800.64p		1,909.78p
	Ordinary Shares in issue		35,338,687		35,595,687		35,595,687

 Consolidated Cash Flow Statement (unaudited)

For the six months ended 31 March	£'000	2009 £'000	£'000	2008 £'000
Operating Activities
Purchases of investments	(181,400)		(265,994)
Amounts paid under incentive schemes	(1,934)		(17,736)
Sales of investments	163,210		364,275
Dividends and distributions received	1,071		1,737
Other investment income received	8,827		13,083
Interest income received	676		1,164
Other income received	148		148
Expenses paid	(7,540)		(9,657)
Taxation paid	(1,427)		(1,087)
Net Cash (Outflow)/Inflow from Operating Activities		(18,369)		85,933
Financing Activities Bank loans drawn Bank loans repaid Repurchase of own shares Finance costs Dividend paid Other finance costs	206,846 (198,262) (2,119) (2,973) - (195)		27,972 (27,783) (26,492) (4,096) (9,149) (174)
Net Cash Inflow/(Outflow) from Financing Activities		3,297		(39,722)
Changes in cash and cash equivalents		(15,072)		46,211
Cash and cash equivalents at 1 October		43,791		16,948
Translation difference		1,786		(651)
Cash and Cash Equivalents at 31 March		30,505		62,508

NOTES TO THE ACCOUNTS

1. Basis of Accounting

The Half Year Report is unaudited and does not constitute financial statements within the meaning of Section 434 of the Companies Act 2006.

The statutory accounts for 2008, which were prepared in accordance with International Financial Reporting Standards, as endorsed by the European Union ('IFRS') and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS, have been delivered to the Registrar of Companies. The Auditor's opinion on those accounts was unqualified and did not contain a statement made under Section 498(2) or Section 498(3) of the Companies Act 2006. The financial information comprises the Consolidated Balance Sheets as at 31 March 2009, 
30 September 2008 and 31 March 2008 and for the periods ended 31 March 2009 and 
31 March 2008, the related Consolidated Statement of Income, Consolidated Statement of Changes in Equity, Consolidated Cashflow Statement and the related notes hereinafter referred to as 'financial information'.

The financial information has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and the principal accounting policies set out in the Annual Report for the year ended 30 September 2008 which is available on the Company's website (www.electraequity.com). The financial statements are prepared in accordance with IAS 34.

2. Segmental Analysis

For the six months ended 31 March		2009			2008
	UK & Continental Europe £'000	Americas £'000	Far East £'000	Total £'000	UK & Continental Europe £'000	Americas £'000	Far East £'000	Total £'000
Net (Losses)/Gains on Investments
Realised and unrealised
capital losses on investments	(81,023)	5,285	(11,467)	(87,205)	8,577	(8,346)	(16,570)	(16,339)
Portfolio investment income	9,703	18	548	10,269	17,857	24	-	17,881
	(71,320)	5,303	(10,919)	(76,936)	26,434	(8,322)	(16,570)	1,542
Realised and unrealised capital
loss on foreign currency	(21,110)	5,626	(2,326)	(17,810)	(16,781)	6,738	-	(10,043)
	(92,430)	10,929	(13,245)	(94,746)	9,653	(1,584)	(16,570)	(8,501)
Other income				825				3,020
Incentive schemes				807				(3,499)
Priority profit share				(5,945)				(6,994)
Other expenses				(4,035)				(7,792)
Net Loss before Finance Costs and Taxation				(103,094)				(23,766)
Finance costs				(3,168)				(4,270)
Loss on Ordinary Activities before Taxation				(106,262)				(28,036)

Geographical segments are considered to be the primary reporting segment. The secondary reporting segment is the Group's activity as an investment trust company. This activity is the Group's single business segment.

3. Dividends

For the six months ended 31 March			2009 £'000			2008 £'000
Dividends paid in the period Dividends paid per share			- -			9,149 25p

4. Earnings per Share

For the six months ended 31 March			2009 p			2008 p
Revenue return per ordinary share Capital return per ordinary share Earnings per ordinary share (basic and diluted)			(9.25) (259.02) (268.27)			(5.75) (76.61) (82.36)

The calculation of revenue return per share is based on the revenue loss attributable to shareholders of £3,278,000 (2008: loss of £2,116,000) on a weighted average number of 35,427,413 
(2008: 36,775,299) ordinary shares of 25p each in issue. The calculation of capital return per ordinary share is based on the capital loss attributable to ordinary shareholders of £91,764,000 (2008: loss of £28,173,000) on a weighted average number of 35,427,413 (2008: 36,775,299) ordinary shares of 25p each in issue. There were no potentially dilutive shares in issue in either year.

5. Share Capital

As at 31 March			2009 £'000			2008 £'000
Allotted, called up and fully paid 35,338,687 (2008: 35,595,687)    ordinary shares of 25p each Unissued 164,661,313 (2008: 164,404,313) ordinary shares of 25p each			8,835 41,165			8,899 41,101
Authorised 200,000,000 ordinary shares of 25p each			50,000			50,000

During the six months ended 31 March 2009 the Company purchased from shareholders and cancelled 257,000 ordinary shares of 25p each at prices between £8.51 and £8.08 per share. The cost of acquiring 257,000 ordinary shares of 25p each including expenses of £10,000 amounted to £2,119,000.

6. Capital and Reserves

For the six months ended 31 March 2009

					Realised capital profits/ (losses)
			Capital redemp-tion reserve	Translation reserve		Unrealised capital losses	Revenue reserve	Total shareholders' Funds
	Called-up share capital	Share premium
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Opening balance at 1 October 2008	8,899	24,147	34,376	1,034	834,672	(274,072)	11,893	640,949
Net revenue transferred to reserves	-	-	-	-	-	-	(3,278)	(3,278)
Net profits on realisation of investments during the year	-	-	-	-	1,310	-	-	1,310
Net capital losses on non-current assets	-	-	-	-	-	(88,514)	-	(88,514)
Incentive schemes	-	-	-	-	-	807	-	807
Gains and losses on foreign currencies	-	-	-	-	2,113	(19,923)	-	(17,810)
Movement on tax provision	-	-	-	-	12,441	-	-	12,441
Exchange differences arising on consolidation	-	-	-	(9,595)	-	-	-	(9,595)
Repurchase of own shares	(64)	-	64	-	(2,119)	-	-	(2,119)
Unrealised net appreciation/(depreciation) at 1 October 2008 on investments sold during the period	-	-	-	-	7,164	(7,164)	-	-
At 31 March 2009	8,835	24,147	34,440	(8,561)	855,581	(388,866)	8,615	534,191

For the six months ended 31 March 2008

					Realised capital profits/ (losses)	Unrealised capital (losses)/ profits
	Called-up share capital	Share premium	Capital redemption reserve	Translation reserve				Total shareholders' Funds
							Revenue reserve
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Opening balance at 1 October 2007	9,313	24,147	33,962	597	792,960	(141,573)	26,100	745,506
Net revenue transferred to reserves	-	-	-	-	-	-	(2,116)	(2,116)
Dividend payment	-	-	-	-	-	-	(9,149)	(9,149)
Net capital gains on non-current assets	-	-	-	-	2,694	(19,033)	-	(16,339)
Incentive schemes	-	-	-	-	-	(3,499)	-	(3,499)
Gains and losses on foreign currencies	-	-	-	-	10,754	(19,089)	-	(8,335)
Exchange differences arising on consolidation	-	-	-	222	-	-	-	222
Repurchase of own shares	(414)	-	414	-	(26,492)	-	-	(26,492)
Unrealised net (depreciation)/appreciation at 1 October 2007 on investments sold during the period	-	-	-	-	4,221	(4,221)	-	-
At 31 March 2008	8,899	24,147	34,376	819	784,137	(187,415)	14,835	679,798

7. Related Party Transactions

Certain members of Electra Partners (the 'participants') are entitled under various limited partnership agreements to benefit from carried interest and co-investment arrangements. Under these schemes the participants invest in every new investment made by the Company up to 31 March 2006. In return the participants receive a percentage of the total capital and revenue profits made on each investment. The participants do not receive any profits until the Company has received back its initial investment. During the six months ended 31 March 2009 the participants received £1,364,000 
(31 March 2008: £14,322,000) and are entitled to receive £nil (31 March 2008: £11,135,000) under these schemes and had unrealised gains of £6,546,000 (31 March 2008: £13,388,000). The participants are entitled to a percentage of the incremental value of unlisted investments held at 
31 March 1995, subject to the Company having received in total proceeds equal to the valuation of those investments as at 31 March 1995 and a preferred return. During the six months ended 
31 March 2009 the participants received £nil (31 March 2008: £nil) under the scheme and had unrealised gains of £982,000 (31 March 2008: £999,000).

Following approval at the Extraordinary General Meeting held on 12 October 2006 the participants entered two new schemes. The participants are entitled to receive a percentage of the incremental value of certain investments held at 31 March 2006 following the Company receiving total proceeds equal to the operating value and a preferred return, after deduction of related priority profit share ('PPS'). During the six months ended 31 March 2009 the participants received £570,000 
(31 March 2008: £3,414,000) and had unrealised gains of £6,720,000 (31 March 2008: £9,894,000) under this scheme. The second scheme entered into under the new arrangements requires the participants to invest in every new investment made by the Company since 1 April 2006. On a pooled basis participants receive a percentage of the total capital and revenue profits once the Company has received back its initial investment, a preferred return and a related priority profit share. During the six months ended 31 March 2009 the participants received £nil (31 March 2008: £nil) and had unrealised gains of £nil (31 March 2008: £784,000).

Members of Electra Partners, the Manager, are entitled to incentives based on the performance of investments in Electra. Under the arrangements relating to the management of the listed portfolio, certain executives of Electra Partners will receive bonuses over a one year period if the listed portfolio outperforms a composite index. 

No Directors of Electra participate in the above schemes.

During the year ended 30 September 2007 Electra Partners exercised its option to cancel all PPS reductions by paying Electra the equivalent of the net present value of the remaining expected PPS reductions. An amount of £1.1 million will be payable over the period to October 2009. The amount was approved by a qualified independent third party.

Net sales of investments from Electra Investments Limited to Electra amounted to £nil for the six months ended 31 March 2009 (31 March 2008: £14,608,000). Net loans advanced by Electra Investments Limited to Electra were £8,436,000 (31 March 2008: loans advanced by Electra Investments Limited to Electra of £38,705,000). Interest of £966,000 (31 March 2008: £1,199,000) was paid on the outstanding balance.

Net loans for working capital and/or to clear intercompany balances were made from Albion (Electra) for £1,151,000 (31 March 2008: to Albion (Electra) £28,000) to Electra Property Inc for £757,000 
(31 March 2008: to Electra Property Inc for £56,000), to Electra Holdings Inc for £582,000 
(2008: £41,000).

Half Year Management Report

Current and Future Development

A review of the main features of the six months to 31 March 2009 is contained in the Chairman's Statement, the Investment Portfolio Analysis and the Investment Portfolio Review.

Performance

A detailed review of performance during the six months to 31 March 2009 is contained in the Investment Portfolio Analysis and Investment Portfolio Review.

Risk Management

As the Company is focused on investment in private equity assets, Electra Partners aims to limit the risk attaching to the portfolio as a whole by careful selection of investments and by the spread of holdings in terms of age, geographic split and investment portfolio composition in accordance with the Company's Objectives and Investment Policy.

The principal risks faced by the Company are Market Price Risk, Credit Risk, Interest Rate Risk, Liquidity Risk and Foreign Currency Risk as set out in Note 16 in the Notes to the Accounts of the Company's Annual Report 2008. In addition the Company is also focused on Macroeconomic risks, Long-term strategic risk, Government policy and regulation risk, Investment risks and Operational risk as set out in the Report of the Directors of the Company's Annual Report 2008. This Half Year Management Report also refers, where appropriate, to specific risks and uncertainties for the remaining six months of the financial year and these should be viewed in conjunction with the risks disclosed above.

Responsibility Statement

The Directors confirm to the best of their knowledge that:

a) the condensed set of financial statements have been prepared in accordance with IAS 34 as adopted by the European Union; and 

b) the Half Year Management Report includes a fair review of the information required by the FSA's Disclosure and Transparency Rules (4.2.7R and 4.2.8R).

By order of the Board of Directors

Sir Brian Williamson, Chairman

12 May 2009  

No information contained in this announcement shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction.

This announcement is not an offer to sell or a solicitation of any offer to buy any securities of Electra Private Equity PLC (the 'Company', and such securities, the 'Securities') in the United States or any other jurisdiction. The Company is not registered under the U.S. Investment Company Act of 1940, as amended (the 'Investment Company Act'), and holders of any Securities will not be entitled to the benefits of the Investment Company Act. The Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the 'Securities Act'), and may not be reoffered, resold or transferred in the United States or to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the Securities Act) unless registered under the Securities Act or an exemption from such registration is available. Copies of this announcement are not being, and should not be, distributed or sent into the United States. No public offering of Securities is being made in the United States. If for any reason in the future an offering of the Securities is made, such offering will be made by means of a prospectus that may be obtained from the Company and will contain all relevant information about the Company, its management and its financial statements.  

Copies of the Half Year Report will be sent to shareholders shortly and will thereafter be available from the Company's registered office. Copies of this announcement will be available on the Company's website (www.electraequity.com) by the end of May 2009.

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