Interim Management Statement

RNS Number : 4971G

Electra Private Equity PLC

02 February 2010

 



ELECTRA PRIVATE EQUITY PLC

Interim Management Statement for the three month period to 31 December 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 for securities for sale in the United States, Canada, Japan or Australia.

This is an Interim Management Statement issued by Electra Private Equity PLC ("Electra") in accordance with the FSA's Disclosure and Transparency Rule 4.3. This statement relates to the three month period from 1 October 2009 to 31 December 2009.

Sir Brian Williamson, Electra's Chairman said: "The operating environment for many of our portfolio companies continues to be challenging although the diverse and defensive characteristics of our investments mean that the portfolio remains resilient.

"Over the last year Electra's Manager, Electra Partners, started a number of initiatives to enhance the existing portfolio. As announced in my annual statement, Electra provided financial support to Baxi, prior to its agreement to combine with De Dietrich Remeha Group to form BDR Thermea in October 2009 and this led to a significant uplift in value for Electra in the last financial year. More recently, in December 2009 Electra provided £24 million of additional funding to Premier Asset Management for its acquisition of two fund management contracts. This is expected to have significant synergistic benefits for Premier and has the potential for substantial upside for Electra.

"Electra Partners believes that the number of potential sellers is now increasing and this is reflected in the number of investment opportunities it is being shown. Having a stable portfolio means Electra Partners can devote its energies to reviewing these potential investments. With £263 million of investment capacity, Electra is in a good position to take advantage of the opportunities expected in 2010."

1  Resources and Commitments

At 31 December 2009, Electra had cash, liquidity funds and floating rate notes of £243 million and £165 million of borrowings drawn down under its new banking facility. Available investment capacity amounted to £263 million comprising £32 million of net liquid resources together with banking facilities of £185 million and £46 million of net proceeds from the July and December 2009 ZDP share issues. At 31 December 2009 Electra's quoted portfolio was valued at £119 million.  At that date commitments to third party funds, which may be drawn down over the next five years, amounted to £93 million.

2  Unaudited Net Asset Value

The investment portfolio (apart from quoted investments) has not been revalued at 31 December 2009. However, calculated on the basis of the net asset value at 30 September 2009 (adjusted to reflect the purchases and sales of investments, currency movements and bid values in respect of quoted investments), the unaudited net asset value at 31 December 2009 was 1,721p per share compared with 1,720p at 30 September 2009, an increase of 0.1%.

3  Composition of Portfolio

Electra's portfolio consists of investments in companies and other investment vehicles ("the investment portfolio") together with cash, liquidity funds and floating rate notes. The investment portfolio consists primarily of direct investments in unquoted and quoted companies together with investments in funds where investments are held in limited partnerships managed by other private equity managers.

Electra will normally invest in unquoted companies but may invest in quoted companies where Electra wishes to support a management team which operates through a quoted vehicle. Quoted investments may also be held where they arise from previously unquoted investments and continue to generate the returns required. In general these are likely to be sold when resources for new unquoted transactions are required.

Investments in funds are made principally to gain exposure to geographic areas outside the UK and which, because of the relationship with the fund manager, are likely to generate co-investment opportunities for Electra.

	31 Dec 2009**	30 Sept 2009
	£m	£m
Investment Portfolio*
Direct investments	500	474
Funds	79	73
	579	547
Available Investment Capacity	263	281
Investment Portfolio and Available Investment Capacity*	842	828

*     Excludes accrued income on the investment portfolio of £15,673,000 at 31 December 2009 (30 September 2009: £29,450,000)

**    Based on values at 30 September 2009, adjusted as detailed in 2 (Unaudited Net Asset Value) above

At 31 December 2009 Electra held direct investments in 64 companies with an aggregate value of £500 million and investments in 29 funds with an aggregate value of £79 million. The top 10 and 20 direct investments accounted for 60% and 79% respectively of the total direct investments.

4  Top 10 Direct Investments*

	Sector	Value at 30 Sep 09 £'000	Net Purchases /(Sales) £'000	Performance £'000	*** Value at 31 Dec 09 £'000	Cost £'000
BDR Thermea	Consumer Goods (non-cyclical)		56,734	(1,347)	55,387	56,734
Allflex	Agriculture	50,749			50,749	40,482
London & Stamford**	Property Investment	38,016		(2,970)	35,046	30,195
Promontoria	Property Investment	30,385		(905)	29,480	16,479
Premier	Financial Services	3,365	23,561		26,926	56,318
Zensar**	Software & Computing	15,550		6,673	22,223	4,211
Lil-lets	Healthcare	21,149			21,149	21,412
MPS	Agriculture	21,475		(640)	20,835	17,529
Labco	Healthcare	20,346		(606)	19,740	23,709
Nuaire	Building & Construction	19,155			19,155	23,140
		220,190	80,295	205	306,690	290,209

*     Excludes accrued income

**    Quoted investments

***  Valued on the basis of 2 (Unaudited Net Asset Value) as set out above

5  Investments and Realisations

Electra invested a total of £92 million in the three months to 31 December 2009.  Included in this was £56.7 million in respect of BDR Thermea, a further investment of £24 million to fund a bolt-on acquisition by Premier Asset Management and £7 million drawn down under commitments to third party funds.

Realisations totalled £57 million for the three months to 31 December 2009.  This included £41.3 million in respect of Baxi and £13 million from the successful sale of senior debt held in Credit Opportunities, Electra's special purpose vehicle set up to purchase senior debt at a discount.

6  Baxi/BDR Thermea

At 30 September 2009 Electra's interest in Baxi was valued at £41.3 million exclusive of accrued interest of £15.4 million due from Baxi at that date. On 30 October 2009 Electra sold the majority of its interest in Baxi, including accrued interest, and received in exchange securities in BDR Thermea valued at £56.7 million. Apart from currency movements this transaction did not impact on Electra's net asset valuation at 31 December 2009.

7  Share Price Performance

Electra's share price at 31 December 2009 was 1,200p, a decline of 2.0% over the three months while the FTSE All-Share Index increased by 5% over the same period. Over the year to 31 December 2009, Electra's share price increased by 112% while the FTSE All-Share Index increased by 25%.

8  Appointment of non-executive Director

As previously announced, Roger Perkin was appointed non-executive Director of Electra on 24 November 2009 and will assume Chairmanship of the Audit Committee after the AGM being held today.

ENDS

For further information:
Sir Brian Williamson, Chairman, Electra Private Equity PLC	020 7306 3883
Hugh Mumford, Managing Partner, Electra Partners LLP	020 7214 4200
Monique Dumas, Investor Relations Partner, Electra Partners LLP	020 7214 4200
Caroline Villiers, M: Communications	020 7920 2321

This statement aims to give an indication of material events and transactions that have taken place during the period from 1 October 2009 to the date of publication of this statement and their impact on the financial position of Electra Private Equity PLC. These indications reflect the Board's current view. They are subject to a number of risks and uncertainties and could change. Factors which could contribute to such differences include, but are not limited to, general economic and market conditions and specific factors affecting the financial prospects or performance of individual investments within Electra's portfolio.

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.

 

END

 

 

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