Apax Global Alpha Limited 2017 Interim Results Highlights (1705O)

TIDMAPAX

RNS Number : 1705O

Apax Global Alpha Limited

17 August 2017

(LSE: APAX)

Apax Global Alpha Limited

Unaudited interim results for the half-year ended 30 June 2017

For further information regarding the announcement of AGA's 2017 interim results, including the details for today's analyst and investor webcast at 9.30am (UK time), please visit www.apaxglobalalpha.com

Key highlights

-- Negative Total NAV Return of 0.7% significantly impacted by the euro strengthening by 8%(6) against the US dollar, positive 4.2% on a constant currency basis.

-- Adjusted NAV decreased by EUR30.6m to EUR908.1m, impacted by the dividend payment of EUR23.8m in respect of 2016 and adverse FX movements

-- Adjusted NAV per share of EUR1.85 (GBP1.62), compared to EUR1.91 (GBP1.63), at 31 December 2016.

-- First semi-annual dividend in respect of 2017 declared of 4.24 pence per share, equivalent to 2.5% of euro NAV at 30 June 2017 of EUR23.0m will be paid on 15 September 2017

-- AGA was 84% invested and had a cash balance of EUR149.1m reflecting significant Derived Equity realisations prior to period end

-- Following the second lock-up release, AGA's free float has increased above 50% making it eligible for inclusion in the FTSE UK Indices Series

Performance highlights

-- On a constant currency basis, the Invested Portfolio contributed 5.6% to Total NAV Return; of which Private Equity contributed 1.7%, Derived Debt 0.3% and Derived Equity 3.6%

   --      Private Equity delivered a negative 1.1% Total Return, 3.3% on a constant currency basis 

-- Derived Debt Investments delivered a negative Total Return of 3.7%, 2.2% on a constant currency basis

-- Derived Equity Investments delivered a Total Return of 18.3%, 22.7% on a constant currency basis

Adjusted NAV movements

 
                            Private Equity        Derived      Cash   Other    Total 
                                      EURm    Investments      EURm    EURm     EURm 
                                                     EURm 
 Adjusted NAV at 
  31 December 2016                   494.1          406.2      33.9     4.5    938.7 
 + Investments                        14.2          117.4   (131.1)   (0.5)        - 
 - Divestments                      (50.1)        (216.3)     270.7   (4.3)        - 
 + Interest and dividend 
  income                                 -              -      16.4   (1.2)     15.2 
 +/- Unrealised FV 
  movement                            15.9            2.4         -       -     18.3 
 +/- Realised FV 
  movement                               -           19.7         -       -     19.7 
 +/- FX losses                      (21.2)         (21.2)     (3.3)       -   (45.7) 
 +/- Costs and others                    -              -     (7.1)     0.4    (6.7) 
 - Dividends paid                        -              -    (23.8)       -   (23.8) 
 +/- Performance 
  fee reserve                          0.1          (1.1)     (6.6)       -    (7.6) 
 Adjusted NAV at 
  30 June 2017                       453.0          307.1     149.1   (1.1)    908.1 
 

Investment highlights

-- Private Equity exposure increased to 59% and Derived Investments decreased to 41% of Invested Portfolio due to Derived Equity realisations occurring shortly before period end

-- Sector exposure spread across all Apax Partners' focus industries. Tech & Telco was the most heavily weighted sector, accounting for 37% of the invested portfolio

-- Geographic bias towards North America, representing 48% of the invested portfolio reflecting continuing attractive opportunities in the US

   --      AGA committed $50m to Apax Digital Fund during the period 

Invested portfolio analysis

 
Asset class            EURm   EURm     %     % 
Private Equity        457.6          59% 
====================  =====  =====  ====  ==== 
 
  *    AMI                     7.7          1% 
====================  =====  =====  ====  ==== 
 
  *    AEVI                    2.0          0% 
====================  =====  =====  ====  ==== 
 
  *    AE VII                 60.1          8% 
====================  =====  =====  ====  ==== 
 
  *    AVIII                 381.4         49% 
====================  =====  =====  ====  ==== 
 
  *    AIX                     6.4          1% 
====================  =====  =====  ====  ==== 
Derived Investments   314.8          41% 
====================  =====  =====  ====  ==== 
 
  *    Debt                  195.3         25% 
====================  =====  =====  ====  ==== 
 
  *    Equities              119.5         16% 
====================  =====  =====  ====  ==== 
Total                 772.4  772.4  100%  100% 
====================  =====  =====  ====  ==== 
 
   --      Private Equity portfolio highlights 

o Apax Funds returned EUR50.1m to AGA and EUR14.2m was called from AGA by the Apax Funds

o Unrealised gains were EUR15.9m largely due to robust operational performance and higher valuation multiples which were offset by adverse FX movements of EUR21.2m

o Apax IX acquired three new investments Guotai Junan Securities, Kepro and Unilabs as well as announcing a further three. AMI announced two deals, closing one of them; Ten Petroleum during the period

o Apax VIII fully exited two investments Chola and Garda; Apax Europe VII and Apax Europe VI fully exited Ascential and Capio

o Aggregate Gross IRR generated on fully exited investments was 10.2%(7)

   --      Derived Investments portfolio highlights 

o AGA fully exited four debt investments and eight equity investments. Including proceeds from partial realisations, EUR216.3m was realised

o Unrealised gains of EUR2.4m driven by significant uplift in share prices of Derived Equity Investments, realised gains of EUR19.7m driven by six debt positions generating EUR2.1m and eight equity positions generating EUR17.6m in realised gains. Interest income on the Derived Debt portfolio generated EUR14.9m, with FX losses of EUR21.2m dampening returns

o AGA completed three new investments in debt and one add-on investment, and four new investments and five add-on investments in equity, amounting to EUR117.4m

o Aggregate Gross IRR generated on fully exited investments was 26.8%

Commenting on the results, Tim Breedon CBE, Chairman of Apax Global Alpha, said:

"AGA's portfolio continues to demonstrate strong fundamentals. Due to FX headwinds, the headline performance was weak however the outlook is positive as AGA's Investment Adviser continues to realise value in a relatively young portfolio and is finding investment opportunities against a challenging market back drop."

For more information, the Company's 2017 Interim Report and presentation are available to view at: www.apaxglobalalpha.com

Contact details

 
 Investor enquiries                   Media enquiries                   Company Secretary 
 Sarah Wojcik                         Andrew Kenny                      Jacques Colley 
 Telephone: [phone]       Telephone: [phone]   Telephone: [phone] 
 Email: [e-mail]         Email: [e-mail]      Email: [e-mail] 
 
 
 

Notes

1. Note that references in this announcement to Apax Global Alpha Limited have been abbreviated to "AGA" or "the Company". References to Apax Partners LLP have been abbreviated to "Apax Partners" or "the Investment Adviser"

2. Please be advised that this announcement may contain inside information as stipulated under the Market Abuse Regulations (EU) NO. 596/2014 ("MAR")

3. This announcement is not for release, publication or distribution, directly or indirectly, in whole or in part, into or within the United States or to "US persons" (as defined in Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act")) or into or within Australia, Canada, South Africa or Japan. Recipients of this announcement in jurisdictions outside the UK should inform themselves about and observe any applicable legal requirements in their jurisdictions. In particular, the distribution of the announcement may be restricted by law in certain jurisdictions.

4. The information presented herein is not an offer for sale within the United States of any equity shares or other securities of Apax Global Alpha Limited ("AGA"). AGA has not been and will not be registered under the US Investment Company Act of 1940, as amended (the "Investment Company Act"). In addition, AGA's shares (the "Shares") have not been and will not be registered under the Securities Act or any other applicable law of the United States. Consequently, the Shares may not be offered or sold or otherwise transferred within the United States, or to, or for the account or benefit of, US Persons, except pursuant to an exemption from the registration requirements of the Securities Act and under circumstances which will not require AGA to register under the Investment Company Act. No public offering of the Shares is being made in the United States

5. This announcement may include forward-looking statements. The words "expect", "anticipate", "intends", "plan", "estimate", "aim", "forecast", "project" and similar expressions (or their negative) identify certain of these forward-looking statements. These forward-looking statements are statements regarding AGA's intentions, beliefs or current expectations concerning, among other things, AGA's results of operations, financial condition, liquidity, prospects, growth and strategies. The forward-looking statements in this presentation are based on numerous assumptions regarding AGA's present and future business strategies and the environment in which AGA will operate in the future. Forward-looking statements involve inherent known and unknown risks, uncertainties and contingencies because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance or achievements of AGA to be materially different from those expressed or implied

by such forward looking statements. Many of these risks and uncertainties relate to factors that are beyond AGA's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of regulators and other factors such as AGA's ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which AGA operates or in economic or technological trends or conditions. Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance. AGA expressly disclaims any obligation or undertaking to release any updates or revisions to these forward-looking statements to reflect any change in AGA's expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based after the date of this announcement, or to update or to keep current any other information contained in this announcement. Accordingly, undue reliance should not be placed on the forward-looking statements, which speak only as of the date of this announcement

   6.     Source: Bloomberg 

7. Gross IRRs represent return to the Apax Funds as at 30 June 2017, including unrealised value and total realised proceeds. Calculated since the initial purchase date of the investment

About Apax Global Alpha Limited

AGA is a Guernsey registered closed-ended collective investment scheme incorporated as a non-cellular company that listed on the London Stock Exchange on 15 June 2015. It is regulated by the Guernsey Financial Services Commission.

AGA's objective is to provide shareholders with capital appreciation from its investment portfolio and regular dividends. The Company is targeting an annualised Total Return, across economic cycles, of 12-15% (net of fees and expenses) including a dividend yield of 5% of Net Asset Value (NAV).

The investment policy of the Company is to make private equity investments in Apax Funds and Derived Investments which are investments in equities and debt derived from the insights gained via Apax Partners' Private Equity activities. The Company's portfolio is expected to be allocated in approximately equal proportions between Private Equity and Derived Investments, although the investment mix will fluctuate over time due to market conditions, investment opportunities, cash flow requirements, the dividend policy and other factors.

Further information regarding the Company and its publications are available on the Company's website at www.apaxglobalalpha.com

About Apax Partners LLP

Apax Partners is a leading global private equity advisory firm. It operates globally and has more than 30 years of investing experience. Apax Partners has advised funds that total over EUR40 billion in aggregate as at 30 June 2017*. Funds advised by Apax Partners invest in companies across four global sectors of Tech & Telco, Services, Healthcare and Consumer. These funds provide long--term equity financing to build and strengthen world--class companies. For further information about Apax Partners, please visit www.apax.com.

Apax Partners is authorised and regulated by the Financial Conduct Authority in the UK.

* Funds raised since 1981, commitments converted from fund currency to EUR at FX rates as at June 2017

This information is provided by RNS

The company news service from the London Stock Exchange

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August 17, 2017 02:00 ET (06:00 GMT)