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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Dunedin Enterprise Investment Trust Plc | LSE:DNE | London | Ordinary Share | GB0005776561 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -1.00 | -0.21% | 481.00 | 472.00 | 490.00 | 7,937 | 16:35:09 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Finance Services | 1.52M | 1.25M | 0.0950 | 50.74 | 63.32M |
From May 2019 to May 2024
TIDMDNE
RNS Number : 5831I
Dunedin Enterprise Inv Trust PLC
31 August 2016
For release 31 August 2016
Dunedin Enterprise Investment Trust PLC
Half year ended 30 June 2016
Dunedin Enterprise Investment Trust PLC, the private equity investment trust which specialises in investing in UK mid-market buyouts, announces its results for the half year ended 30 June 2016.
Financial Highlights:
-- Net asset value per share at 30 June 2016 of 475.7p (505.8p at 31/12/15), after 16p dividend -- Share price at 30 June 2016 of 310p (321.5p at 31/12/15) -- Net asset value total return of -2.9% in the six months to 30 June 2016 -- In May 2016 shareholders approved a managed wind-down of the Company -- Realisations of GBP25.7m in the half year -- New investments of GBP22.6m in the half year -- Interim dividend of 16p per share paid on 18 May 2016
Comparative Total Return Performance (%)
Hot Features
Premium
FTSE
Small
Net asset Cap
value (ex Inv
Periods to 30 (per Share Cos)
June 2016 share)* price Index
--------------- ---------- ------- ---------
Six months -2.9 1.3 -4.6
One year -2.9 3.1 -3.7
Three years -4.5 -17.7 30.9
Five years 2.2 1.9 69.8
Ten years 22.2 4.9 60.7
(*) - taken from 30 April for ten years
For further information please contact:
Graeme Murray Corinna Osbourne Dunedin LLP Equity Dynamics Limited 0131 225 6699 07825 326 440 0131 718 2310 corinna@equitydynamics.co.uk 07813 138367
Chairman's Statement
The net asset value per share at 30 June 2016 was 475.7p, compared with 505.8p at 31 December 2015. This reduction is partly attributable to the payment of a dividend of 16p on 18 May 2016. Taking account of this, in the half year to 30 June 2016, the Company's net asset value total return was -2.9%, compared with -4.6% for the FTSE Small Cap index.
During the six months to 30 June 2016 the share price decreased by 3.6% from 321.5p to 310p. After allowing for the 16p dividend paid in May, this equates to a total return in the half year of +1.3%. The share price discount to net asset value at 30 June 2016 was 34.8% compared with 36.4% at 31 December 2015.
A total of GBP25.7m was realised in the half year with GBP22.6m being invested.
Wind-down
In May 2016 shareholders approved a managed wind-down of the Company to take place over a period of time. The circular sent to shareholders in April set out the rationale for this course of action and the recommendation of the Directors in favour of this route. This followed a review of the Company's investment strategy and consultations with its major shareholders.
The underlying aim of the wind-down is to maximise value for shareholders. The Company's new investment objective is to conduct an orderly realisation of its relatively illiquid assets, to be effected in a manner that seeks to achieve a balance between maximising the value of its assets and progressively returning cash to shareholders.
The majority (or some 73%) of the Company's investments comprise its commitments as a limited partner to funds managed by Dunedin LLP, the manager of our portfolio. The timing of realisations from these funds, as well as further drawdowns, is controlled by Dunedin LLP. In addition, there are some investments in other funds managed by parties other than Dunedin LLP, which make up about 20% of the portfolio.
In the circular sent to shareholders we stated that the Board may seek to sell all or part of the Company's interests in a fund, together with any uncalled commitment, prior to the end of the fund's life, if it believes that this will maximise value for shareholders and is in the best interests of shareholders as a whole. In order to make this judgement the Board will review closely and regularly with Dunedin LLP and the managers of the other fund investments the prospects for, and the valuations of, the underlying investments.
Commitments & Liquidity
The Company had outstanding commitments to limited partnership funds of GBP37.6m at 30 June 2016. This consists of GBP34.1m to Dunedin managed funds and GBP3.5m to European funds. Assuming these funds are held to maturity, it is expected that approximately GBP20m of this total commitment will be drawn over the remaining life of the funds.
As at 30 June 2016 the Company held cash of GBP0.6m. The Company has a revolving credit facility with Lloyds of GBP20m of which GBP1m was drawn at 30 June 2016. This facility is available to 31 May 2018. The net cash position of the Company at 30 June 2016 is therefore overdrawn by GBP0.4m.
The Board and the Manager remain satisfied with the balance between cash resources and outstanding commitments given the expected rate of new investment and potential realisations of existing investments.
The current forecast timing for realisations and new investments suggests it is unlikely that there will be further distributions of capital to shareholders in the short term.
Brexit
The UK's vote to leave the European Union has created a considerable amount of uncertainty in both the public and private markets.
In the short term, there may be a reduced level of M&A activity in the UK, resulting in a slower pace of investment and fewer realisations.
It is too early to assess the impact of the EU referendum on the performance of the underlying portfolio companies. The internationalisation of portfolio companies has been a key focus for the Manager in recent years. Portfolio companies which export to the US and Europe are currently experiencing the benefits of the recent exchange rate movement which make their products more competitive in these markets.
Portfolio
The portfolio has again had a period of mixed, and in some cases disappointing, performance during the half year. Strong trading at Kee Safety, Blackrock and U-POL has been offset by continued underperformance at Pyroguard, EV, RED and Formaplex.
The valuations of the two European funds have benefited from exchange rate movements and also good trading performance from portfolio companies.
Dividend
An interim dividend of 16p per share was paid to shareholders on 18 May 2016 amounting to GBP3.3m. This followed the partial realisation of CitySprint in February 2016 and the receipt of GBP3.3m of loan interest.
Accounting Policy
It is no longer appropriate to prepare the financial statements on a going concern basis, as the new corporate strategy is expected to lead ultimately to the liquidation of the Company. No adjustments were necessary to the investment valuations or other assets and liabilities included in the financial statements as a consequence of the change in the basis of preparation.
Shareholders
There has been a significant change in the shareholder base of the Company since the last year end. Legal & General has been a substantial shareholder since 1986. In 2013 it announced its intention to wind down its private equity operations and subsequently sold its shareholding during the half year.
Their shares have been acquired by a number of existing as well as new shareholders, who we welcome to the register.
Duncan Budge
31 August 2016
Manager's Review
Results for the six months to 30 June 2016
In the six months to 30 June 2016, Dunedin Enterprise's net asset value per share total return was -2.9%, after taking account of dividends paid. This compares with a decrease in the FTSE Small Cap Index (ex Inv. Cos) over the same period of 4.6%.
In the six months to 30 June 2016 Dunedin Enterprise invested a total of GBP22.6m and realised GBP25.7m from investments.
Net asset and cash movements in the half year to 30 June 2016
The movement in net asset value is summarised in the table below:-
GBP'm
Net asset value at 31 December 2015 104.4
Unrealised value increases 8.8
Unrealised value decreases (10.1)
Realised loss over opening valuation (*1) (4.4)
Dividends paid to shareholders (3.3)
Other movements 2.8
Net asset value at 30 June 2016 98.2
(*1) - includes management fees paid to Dunedin managed funds of GBP1.1m and excludes GBP3.3m loan interest received on the partial realisation of CitySprint which was included in the 31 December 2015 valuation
Cash movements in the half year to 30 June 2016 can be summarised as follows:-
GBP'm
Cash & near cash balances at 31 December 2015 (4.1)
Investments made (22.6)
Investments realised 25.7
Dividends paid to shareholders (3.3)
Operating activities 3.9
Cash & near cash balances at 30 June 2016 (0.4)
Portfolio composition and movements
Dunedin Enterprise holds investments in unquoted companies through:-
-- Dunedin managed funds (including direct investments), and -- Third party managed funds.
The portfolio movements can be analysed as shown in the table below:-
Valuation Additions Disposals Realised Unrealised Valuation
in half in half
at 31-12-15 year year movement movement at 30-6-16
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
-------------------- ----------- --------- --------- --------- ---------- ----------
Dunedin managed 93.1 19.6 (23.4) (4.4)(*2) (4.9) 80.0
Third party managed 16.3 3.0 (2.3) - 3.6 20.6
-------------------- ----------- --------- --------- --------- ---------- ----------
109.4 22.6 (25.7) (4.4) (1.3) 100.6
-------------------- ----------- --------- --------- --------- ---------- ----------
(*2) - includes management fees paid to Dunedin managed funds of GBP1.1m and excludes GBP3.3m loan interest received on the partial realisation of CitySprint which was included in the 31 December 2015 valuation
New investment activity
In February 2016 an investment of GBP7.0m was made in Alpha Financial Markets ("Alpha"). Alpha is a global market leader in providing specialist consultancy services to blue chip asset and wealth managers and their third party administrators. Alpha has over 200 consultants deployed across six major financial centres working on behalf of more than 130 top asset and wealth management clients. Alpha currently advises three quarters of the top 50 global asset managers.
In May 2016 an investment of GBP4.2m was made in Kingsbridge Risk Solutions ("Kingsbridge"). Kingsbridge is the UK's market leading provider of insurance services that are tailored to meet the needs of contractors, freelancers and independent professionals. Kingsbridge covers the broadest range of industry sectors in its market, including aerospace, banking and finance, rail, automotive, nuclear, oil and gas and information technology.
An investment of GBP7.3m was made in CitySprint Newco as discussed below.
During the half year Innova/5 invested a total of GBP3.0m. In February GBP1.2m was invested in Trimo a leading Central and Eastern European provider of high quality building products. In addition, GBP0.8m was invested in PeP a leading Polish payment services provider and GBP0.4m in Netsprint an internet advertising business.
Realisations
In February 2016 the investment in CitySprint was partially realised in a sale to LDC. On completion Dunedin Enterprise received proceeds totalling GBP26.1m of which GBP22.8m was capital and GBP3.3m was loan interest. A total of GBP7.3m has been rolled into a CitySprint Newco alongside LDC, resulting in net cash proceeds received of GBP18.8m by Dunedin Enterprise. Dunedin Enterprise retains a 5% interest in the Newco. The overall return to Dunedin Enterprise was 2.75 times the original investment of GBP9.8m over five years.
During the half year there were redemptions of loan stock at Blackrock (GBP0.3m) and RED (GBP0.3m).
One of the two European funds, Innova/5, realised GBP2.2m. This included GBP0.9m from the sale of Provus, the Romanian credit card processing and financial services company, generating a multiple of 2.2 times original cost. Marmite, the manufacturer of sanitary ware was also realised, generating proceeds of GBP0.7m and a multiple of 1.6 times original cost.
Unrealised movements in valuations
Unrealised movements in portfolio company valuations in the half year amounted to a decrease of GBP1.3m. There were valuation uplifts at two of the more recent Dunedin managed investments, Kee Safety (GBP1.8m) and Blackrock (GBP1.5m) as well as at U-POL (GBP1.3m). There were reductions in value at Formaplex (GBP3.6m), Pyroguard (GBP2.1m), EV (GBP1.7m) and RED (GBP1.7m).
There was a strong performance within the two European funds with increased valuations at both Realza (GBP2.1m) and Innova/5 (GBP1.2m).
Kee Safety, the provider of collective fall protection systems, has continued to show strong international growth particularly in the Middle East and the US. The company has also continued its strategy of acquisitions in the UK which has contributed significantly to growth. Blackrock, the provider of independent expert witnesses for large construction projects, has experienced a strong demand for its services. This has led to the company increasing the number of fee earning staff and achieving higher utilisation rates. Around 80% of Blackrock's revenue is non-UK with the Middle East contributing strongly. Trading continues to improve at U-POL, the manufacturer of automotive refinish products, where beneficial exchange rate movements, re-branding and product rationalisation are leading to an improved trading performance. The multiple applied to the valuation of U-POL has been increased from 7.8 to 8.3 times, reflecting the improved performance.
The maintainable earnings of Formaplex, the provider of tooling and lightweight component solutions to the automotive industry, have been impacted by delays and a reduced level of contract wins in the Tooling division. The valuation of Pyroguard, the manufacturer of fire resistant glass, has been impacted by production difficulties experienced at its French factory last year combined with increased competition and margin pressure across its product range, leading to a reduction in its maintainable earnings. EV, the provider of video technology to the oil and gas industry, has continued to experience difficult trading conditions following the dramatic fall in the price of oil in 2015. EV along with the Company's other oil & gas related investment, Premier, may require additional funding in the future. The maintainable earnings of RED, the provider of SAP software experts, have been impacted by the continued underperformance of its permanent staff division.
Exchange rate movements have benefitted the valuation of the European funds. Realza and Innova/5, by GBP1.4m and GBP0.9m respectively. Within the Realza portfolio there has been a strong contribution from GTT, the Spanish tax services provider, and Dolz, the manufacturer of automotive pumps. The contribution from Innova/5 has been spread across its portfolio of investments.
The average earnings multiple applied to the valuation of the Dunedin managed portfolio was 8.5x EBITDA (31 December 2015: 8.4x) or 9.8x EBITA (31 December 2015: 9.8x). These multiples are applied to the maintainable earnings of portfolio companies. Within the Dunedin managed portfolio, the weighted average gearing of the companies was 2.3x EBITDA (31 December 2015: 2.3x) or 2.6x EBITA (31 December 2015: 2.6x).
The portfolio continues to be valued in accordance with the International Private Equity Venture Capital valuation guidelines (www.privateequityvaluation.com).
Dunedin LLP
31 August 2016
Ten Largest Investments
(both held directly and via Dunedin managed funds) by value at 30 June 2016
Approx. Percentage
Cost
percentage of Directors of net
of equity investment valuation assets
Company name % GBP'000 GBP'000 %
---------------- ---------- ---------- --------- ----------
Hawksford 17.8 5,637 12,986 13.2
---------------- ---------- ---------- --------- ----------
Realza * 8.9 8,832 11,827 12.0
---------------- ---------- ---------- --------- ----------
Kee Safety 7.2 6,275 11,302 11.5
---------------- ---------- ---------- --------- ----------
Weldex 15.1 9,505 9,611 9.8
---------------- ---------- ---------- --------- ----------
Innova /5 * 3.9 7,669 8,245 8.4
---------------- ---------- ---------- --------- ----------
CitySprint 5.2 7,308 7,635 7.8
---------------- ---------- ---------- --------- ----------
Blackrock 7.8 4,558 7,004 7.1
---------------- ---------- ---------- --------- ----------
Alpha 10.0 6,988 6,988 7.1
---------------- ---------- ---------- --------- ----------
U-POL 5.0 5,657 6,543 6.7
---------------- ---------- ---------- --------- ----------
CGI (Pyroguard) 41.7 9,450 4,405 4.5
---------------- ---------- ---------- --------- ----------
71,879 86,546 88.1
---------------- ---------- ---------- --------- ----------
* - European fund investments
Top ten investments (held via funds and direct investments)
Percentage of equity held Hawksford
17.8% Hawksford is a leading
Cost of Investment GBP5.6m international provider
Directors' valuation GBP13.0m of corporate, private
Percentage of net assets client and funds services.
13.2% The business offers a
comprehensive range of
services to, and solutions
for trusts, companies,
foundations, partnerships,
family offices and investment
funds.
In the last four years
the company has completed
the acquisitions of Key
Trust Company Limited,
Trustcorp Jersey Limited,
the funds business of
Standard Bank Dubai and
Janus Corporate Solutions.
These acquisitions have
further enhanced Hawksford's
market leading-position
through additional high
quality people and clients.
The focus of the business
remains on providing excellent
service and increasing
client choice by growing
the international footprint.
=============================== =================================
Percentage of equity held Realza Capital
8.9% Realza Capital is a Spanish
Cost of Investment GBP8.8m private equity fund making
Directors' valuation GBP11.8m investments in Spain and
Percentage of net assets Portugal. The fund is
12.0% limited to investing 15%
of commitments in Portugal.
Dunedin Enterprise's investment
is held via Dunedin Fund
of Funds LP.
The fund invests in companies
with leading market positions
and attractive growth
prospects either through
organic growth or through
merger & acquisition activity.
Realza seeks to invest
in companies with an enterprise
value normally ranging
from EUR20m to EUR100m.
The fund's typical equity
investment ranges from
EUR10m to EUR25m.
=============================== =================================
Percentage of equity held Kee Safety
7.2% Kee Safety is a UK-headquartered,
Cost of Investment GBP6.3m global market-leading
Directors' valuation GBP11.3m provider of collective
Percentage of net assets fall protection, safety
11.5% systems and solutions.
The business has 271 employees
spread across the UK,
USA, Canada, Germany,
France, Poland, Dubai,
China and India and sells
its products in more than
50 countries.
Its core patent protected
product range includes
modular barrier systems,
guardrails, access platforms,
safety gates and specialist
fixings. The business
has multiple routes to
market through an international
direct sales force, direct
to OEM, online and through
the distributor channel.
Kee Safety's customers
range from multi-national
corporations to major
contractors, distributors
and installers.
=============================== ===================================
Percentage of equity held Weldex
15.1% Weldex was established
Cost of Investment GBP9.5m in 1979 and has grown
Directors' valuation GBP9.6m into the UK's largest
Percentage of net assets crawler crane hire company.
9.8% The company employs over
100 staff and operates
nationwide and overseas
from its headquarters
in Inverness and its depot
at Alfreton. The company
provides its customers
with an established team
of fully accredited operators,
site managers and service
engineers and also supplies
associated lifting equipment
including wheeled cranes,
forklifts, lorry loaders
and trailers.
Weldex serves the offshore
wind, oil and gas and
commercial construction
markets. Its cranes, including
two of the largest in
the UK, have been used
in a number of significant
construction projects
including Heathrow Terminal
5, the iconic arch at
the new Wembley Stadium,
the 2012 Olympic site
and Crossrail. More recent
projects include erecting
a Mitsubishi wind turbine
at the offshore test facility
at Hunterston, North Ayrshire
and refurbishing the blast
furnace at the Tata steel
works in Scunthorpe.
Percentage of equity held Innova/5
3.9% Innova/5 is EUR380.8m
Cost of Investment GBP7.7m private equity fund based
Directors' valuation GBP8.2m in Warsaw which makes
Percentage of net assets investments in Central
8.4% Eastern Europe. Dunedin
Enterprise's investment
is held via Dunedin Fund
of Funds LP.
The fund invests in mid-market
buyouts in businesses
with an enterprise value
of between EUR50m and
EUR125m. Its investment
focus is Financial Services;
Technology, Media, & Telecommunications
(TMT); Business Services;
Construction; Energy;
and Industrial & Automotive.
Percentage of equity held CitySprint
5.2% CitySprint is the UK's
Cost of Investment GBP7.3m largest national time-critical
Directors' valuation GBP7.6m and same day distribution
Percentage of net assets network. It benefits from
7.8% an asset-light business
model with over 3,000
self-employed couriers,
making the business both
highly flexible and scalable.
It operates from 40 service
centres in the UK and
can deliver to over 87%
of mainland UK population
within 60 minutes. It
handles over ten million
critical same day deliveries
a year.
CitySprint offers a range
of services including
SameDay Courier, UK Overnight
and International courier
services, as well as more
complex logistics services.
It services a number of
different sectors, including
healthcare, online retail
fulfilment and parts fulfilment
such as outsourced supply
chain services for engineering
and servicing companies.
CitySprint now has the
UK's largest same day
healthcare courier network.
============================== =========================================
Percentage of equity held Blackrock
7.8% Blackrock is a professional
Cost of Investment GBP4.6m services firm that provides
Directors' valuation GBP7.0m independent expert witness
Percentage of net assets and construction consulting
7.1% services for large, international
construction projects.
The company has developed
a growing practice in
independently assessing
the precise reasons for,
and cost involved in,
disputes. These skills
are in short supply in
Europe, the Middle East
and Asia.
Blackrock serves a growing
global construction market
and cases of litigation
are increasing within
the sector.
Percentage of equity held Alpha
10.0% Alpha is a market leading
Cost of Investment GBP7.0m provider of specialist
Directors' valuation GBP7.0m consultancy services to
Percentage of net assets blue chip asset managers
7.1% and their third-party
administrators internationally.
It has a strong niche
with a breadth of high
quality consultants regarded
as subject matter experts
by their clients. Consultants
undertake projects that
either provide subject
matter expertise, process
expertise or team capacity
for complex projects or
initiatives. It is established
in the UK and France and
is expanding in the US,
Netherlands and Luxembourg.
Alpha serves an increasingly
complex asset management
industry that is facing
the combined challenge
of regulatory, cost and
operational pressures.
Percentage of equity held U-POL
5.0% U-POL is a leading independent
Cost of Investment GBP5.7m manufacturer of automotive
Directors' valuation GBP6.5m refinish products including
Percentage of net assets body fillers, coatings,
6.7% aerosols, polishing compounds
and consumables. Included
in the product range is
RAPTOR(TM), a tough protective
coating product which
can be used over a multitude
of surfaces. Sales of
RAPTOR(TM) continue to
grow steadily and the
business is exploring
opportunities to sell
this product into adjacent
sectors.
From its UK manufacturing
base in Wellingborough,
U-POL exports a range
of products to 120 countries
worldwide. The company
has a strong market position
in the UK and a growing
position in other large
markets such as the USA,
the Far East, the Middle
East, Africa and Russia.
Its growth strategy is
to continue expanding
in both developed and
emerging markets.
============================== =================================
Percentage of equity held C.G.I. (Pyroguard)
41.7% Since Dunedin Enterprise
Cost of Investment GBP9.5m first invested in CGI
Directors' valuation GBP4.4m the company has been through
Percentage of net assets two refinancings, allowing
4.5% Dunedin Enterprise to
realise a total of GBP13.2m
in capital and income
to date. The cost shown
here is the accounting
valuation at the last
re-gearing versus the
total cash investment
of GBP3.8m.
CGI, trading under the
Pyroguard brand, is a
leading designer, manufacturer
and supplier of specialist
fire resistant glass.
The company serves the
construction markets in
the UK, Ireland, France,
Holland, Scandinavia,
Eastern Europe and the
Middle East. Significant
recent projects completed
by CGI include the installation
of fire resistant glass
at Here East (the multipurpose
redevelopment of the former
2012 Olympic site), the
Biomedicum medical facility
in Stockholm, the Paris
Expo redevelopment project
and Zaanstad Prison in
the Netherlands.
============================== =================================
Overview of portfolio
Fund Analysis
30 June 2016
%
--------------------- -------------
Direct 8
Dunedin Buyout Fund
I -
Dunedin Buyout Fund
II 37
Dunedin Buyout Fund
III 31
Equity Harvest Fund
(Dunedin managed) 4
Third party managed 20
Analysed by valuation method
30 June 2016
%
---------------------- -------------
Cost/written
down 15
Earnings - provision 12
Earnings - uplift 62
Assets basis 11
Analysed by geographic location
30 June 2016
%
---------------- -------------
UK 80
Rest of Europe 20
Cash -
Analysed by sector
30 June 2016
%
--------------------- -------------
Automotive 4
Construction and
building materials 6
Consumer products
& services 4
Financial services 21
Healthcare 5
Industrials 23
Support services 35
Technology, media
& telecoms 2
Analysed by age of investment
30 June 2016
%
----------- -------------
<1 year 14
1-3 years 28
3-5 years 9
>5 years 49
Consolidated Income Statement (unaudited)
for the six months ended 30 June 2016
Six months ended Six months ended Year ended
30 June 2016 30 June 2015 31 December 2015
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Investment income 3,655 - 3,655 98 - 98 196 - 196
Gain / (loss) on
investments - (5,708) (5,708) - 76 76 - 853 853
-------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total Income 3,655 (5,708) (2,053) 98 76 174 196 853 1,049
Expenses
Investment management
fees (53) (158) (211) (51) (153) (204) (95) (285) (380)
Other expenses (349) - (349) (254) - (254) (599) - (599)
-------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit / (loss) before
finance costs and tax 3,253 (5,866) (2,613) (207) (77) (284) (498) 568 70
Finance costs (79) (237) (316) (62) (187) (249) (130) (388) (518)
-------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit / (loss) before
tax 3,174 (6,103) (2,929) (269) (264) (533) (628) 180 (448)
Taxation (527) 527 - - - - - - -
-------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit / (loss) for the
period 2,647 (5,576) (2,929) (269) (264) (533) (628) 180 (448)
-------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Earnings per ordinary
share (basic & diluted) 12.8p (27.0)p (14.2)p (1.3)p (1.3)p (2.6)p (3.0)p 0.8p (2.2)p
The Total column of this statement represents the Income Statement of the Group, prepared in accordance with International Financial Reporting Standards as adopted by the EU. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies.
All income is attributable to the equity shareholders of Dunedin Enterprise Investment Trust PLC.
Consolidated Statement of Changes in Equity (unaudited)
for the six months ended 30 June 2016
Six months ended 30 June 2016
Capital Capital Capital Special Total
Share redemption Reserve reserve Distributable Revenue retained Total
capital reserve realised - Reserve account earnings equity
GBP'000 GBP'000 GBP'000 unrealised GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
At 31 December
2015 5,161 2,765 38,639 4,957 47,600 5,305 96,501 104,427
Profit/(loss)
for the half
year - - 12,024 (17,600) - 2,647 (2,929) (2,929)
Dividends
paid - - - - - (3,303) (3,303) (3,303)
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
At 30 June
2016 5,161 2,765 50,663 (12,643) 47,600 4,649 90,269 98,195
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
Six months ended 30 June 2015
Capital Capital Capital Special Total
Share redemption Reserve reserve Distributable Revenue retained Total
capital reserve realised - Reserve account earnings equity
GBP'000 GBP'000 GBP'000 unrealised GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
At 31 December
2014 5,217 2,709 47,552 (3,436) 47,600 6,914 98,630 106,556
Profit/(loss)
for the half
year - - (6,750) 6,486 - (269) (533) (533)
Purchase and
cancellation
of shares (56) 56 (700) - - - (700) (700)
Dividends
paid - - - - - (981) (981) (981)
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
At 30 June
2015 5,161 2,765 40,102 3,050 47,600 5,664 96,416 104,342
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
Year ended 31 December 2015
Capital Capital Capital Special Total
Share redemption Reserve reserve Distributable Revenue retained Total
capital reserve realised - Reserve account earnings equity
GBP'000 GBP'000 GBP'000 unrealised GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
At 31 December
2014 5,217 2,709 47,552 (3,436) 47,600 6,914 98,630 106,556
Profit/(loss)
for the year - - (8,213) 8,393 - (628) (448) (448)
Purchase and
cancellation
of shares (56) 56 (700) - - - (700) (700)
Dividends
paid - - - - - (981) (981) (981)
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
At 31 December
2015 5,161 2,765 38,639 4,957 47,600 5,305 96,501 104,427
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
Consolidated Balance Sheet (unaudited)
As at 30 June 2016
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
------------------------------- --------- --------- ------------
Non-current assets
Investments held at fair
value 100,551 105,061 109,374
Current assets
Other receivables 117 209 167
Cash and cash equivalents 617 396 573
------------------------------- --------- --------- ------------
734 605 740
Total assets 101,285 105,666 110,114
Current liabilities
Other liabilities (2,090) (1,324) (987)
Loan facility (1,000) - (4,700)
Net assets 98,195 104,342 104,427
------------------------------- --------- --------- ------------
Capital and reserves
Share capital 5,161 5,161 5,161
Capital redemption reserve 2,765 2,765 2,765
Capital reserve - realised 50,663 40,102 38,639
Capital reserve - unrealised (12,643) 3,050 4,957
Special distributable reserve 47,600 47,600 47,600
Revenue reserve 4,649 5,664 5,305
------------------------------- --------- --------- ------------
Total equity 98,195 104,342 104,427
------------------------------- --------- --------- ------------
Net asset value per ordinary
share (basic and diluted) 475.7p 505.4p 505.8p
Consolidated Cash Flow Statement (unaudited)
for the six months ended 30 June 2016
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
-------------------------------------- --------- --------- ------------
Operating activities
Loss before tax (2,929) (533) (448)
Adjustments for:
(Gain) / loss on investments 5,708 (76) (853)
Interest paid 316 249 518
Decrease in debtors 50 60 102
Increase / (decrease) in creditors 1,103 514 177
Net cash inflow from operating
activities 4,248 214 (504)
Servicing of finance
Interest paid (316) (249) (518)
Investing activities
Purchase of investments (22,635) (10,636) (14,513)
Purchase of 'AAA' rated money
market funds (5,002) (6,707) (6,707)
Sale of investments 25,747 3,045 3,286
Sale of 'AAA' rated money
market funds 5,000 7,750 7,840
-------------------------------------- --------- --------- ------------
Net cash inflow / (outflow)
from investing activities 3,110 (6,548) (10,094)
Taxation
Tax - - -
Financing activities
Revolving credit facility
drawn 1,000 - 4,700
Revolving credit facility (4,700) - -
repaid
Purchase of ordinary shares - (700) (700)
Dividends paid (3,303) (981) (981)
-------------------------------------- --------- --------- ------------
Net cash (outflow) from financing
activities (7,003) (1,681) 3,019
Effect of exchange rate fluctuations
on cash held 5 (66) (56)
-------------------------------------- --------- --------- ------------
Net increase / (decrease)
in cash and cash equivalents 44 (8,330) (8,153)
-------------------------------------- --------- --------- ------------
Cash and cash equivalents
at the start of the period 573 8,726 8,726
Net increase / (decrease)
in cash and cash equivalents 44 (8,330) (8,153)
Cash and cash equivalents
at the end of the period 617 396 573
-------------------------------------- --------- --------- ------------
Responsibility statement of the Directors
in respect of the half-yearly financial report
We confirm that to the best of our knowledge:
- the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and gives a true and fair view of the assets, liabilities, financial position and profit of the Company
- the interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
By Order of the Board
Duncan Budge
Chairman
31 August 2016
Notes to the Accounts
1. Unaudited Interim Report
The comparative financial information contained in this report for the year ended 31 December 2015 does not constitute the Company's statutory accounts but is derived from those accounts. Statutory accounts for the year ended 31 December 2015 have been delivered to the Registrar of Companies. The auditor has reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The financial statements for the six months ended 30 June 2015 and 30 June 2016 have not been audited.
2. Basis of Preparation
These condensed consolidated set of financial statements for the six months ended 30 June 2016 have been prepared in accordance with the Disclosure Rules and Transparency Rules of the Financial Conduct Authority (FCA) and IAS 34 Interim Financial Reporting as adopted by the European Union (EU). They do not include all the information required by International Financial Reporting Standards (IFRS) in full annual financial statements and should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2015.
The Association of Investment Companies ('AIC') issued a revised Statement of Recommended Practice for the Financial Statements of Investment Trust Companies and Venture Capital Trusts in November 2014 ('SORP') applicable to accounting periods commencing on or after 1 January 2015. Where presentational guidance set out in the SORP 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.
In previous years the financial statements have been prepared on a going concern basis. However in May 2016 shareholders approved a change in the investment policy of the Company. The Company's new investment objective is to conduct an orderly realisation of its relatively illiquid assets, to be effected in a manner that seeks to achieve a balance between maximising the value of its assets and progressively returning cash to shareholders. As it is likely this process, which is expected to have a duration of several years, will ultimately lead to the liquidation of the Company, these financial statements have not been prepared on a going concern basis. No adjustments were necessary to the investment valuations or other assets and liabilities included in the financial statement as a consequence of the change in the basis of preparation.
3. Dividends
Six months Six months
to to Year to
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Dividends paid in the period 3,303 981 981
========== ========== ============
4. Investments
All investments are designated fair value through profit or loss at initial recognition, therefore all gains and losses that arise on investments are designated at fair value through profit or loss. Given the nature of the Company's investments the fair value gains recognised in these financial statements are not considered to be readily convertible to cash in full at the balance sheet date and therefore the movement in these fair values are treated as unrealised.
Fair value hierarchy
The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:
-- Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.
-- Level 2: Valuation techniques based on observable inputs, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.
-- Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.
The table below analyses financial instruments, measured at fair value at the end of the reporting period, by the level in the fair value hierarchy into which the fair value measurement is categorised:
At 30 June
2016
GBP'000
Level 1
'AAA' rated money market funds OEICS 7
Level 2 -
Level 3
Unlisted investments 100,544
------------
100,551
------------
The Group recognises transfers between the levels of the fair value hierarchy as of the end of the reporting period during which the transfer occurred. There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the six months ended 30 June 2016.
Level 3 fair values
Details of the determination of Level 3 fair value measurements and the movements in Level 3 fair values during the six months ended 30 June 2016 are set out below:-
Level 3
GBP'000
Book cost at 31 December 2015 104,412
Unrealised appreciation 4,957
--------------------------------------- --------
Valuation at 31 December 2015 109,369
Purchases at cost 22,635
Sales - proceeds (25,747)
Sales - realised (losses) against cost 11,887
Increase in unrealised appreciation (17,600)
--------------------------------------- --------
Valuation at 30 June 2016 100,544
--------------------------------------- --------
Book cost at 30 June 2016 113,187
Closing unrealised (depreciation) (12,643)
--------------------------------------- --------
Valuation of investments
Unquoted investments are fair valued by the Directors in accordance with the following rules, which are consistent with the International Private Equity and Venture Capital Valuation Guidelines:
-- Investments are only valued at cost for a limited period after the date of acquisition, otherwise investments are valued on one of the other basis detailed below. Generally the earnings multiple basis of valuation will be used.
-- When valuing on an earnings basis, the maintainable earnings of a company are multiplied by an appropriate multiple.
-- An investment may be valued by reference to the value of its net assets. This is appropriate for businesses whose value derives mainly from the underlying value of its assets rather than its earnings.
-- When investments have obtained an exit (either by listing or trade sale) after the valuation date but before finalisation of the relevant accounts (interim or final), the valuation is based on the exit valuation.
-- Accrued interest on loans to portfolio companies is included in valuations where there is an expectation that the interest will be received.
IFRS 13 requires disclosure, by class of financial instrument, if the effect of changing one or more inputs to reasonably possible alternative assumptions would result in a significant change to the fair value measurement. The information used in determination of the fair value of Level 3 investments is chosen with reference to the specific underlying circumstances and position of the investee company. On that basis the Board believe that the impact of changing one or more of the inputs to reasonably possible alternative assumptions would not change the fair value significantly.
The Directors consider the carrying value of financial instruments in the financial statements to represent their fair value.
5. Statement of Principal Risks and Uncertainties
The Directors believe that the principal risks and uncertainties faced by the Company include investment and strategic, liquidity, cash drag, people and loss of investment trust status risks. These risks and other risks, and the way in which they are managed, are described in more detail under the heading "Principal Risks, Risk Management and Regulatory Environment" in the Strategic Report Review in the Company's Annual Report and Accounts for the year ended 31 December 2015. The Company's principal risks and uncertainties have not changed materially since the date of that report other than in relation to Brexit as discussed in the Chairman's Statement. These principal risks and uncertainties are not expected to change materially for the remaining six months of the Company's financial year.
6. Earnings per share
Six months Six months
to to Year to
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Revenue return per ordinary share (p) 12.8 (1.3) (3.0)
Capital return per ordinary share (p) (27.0) (1.3) 0.8
Earnings per ordinary share (p) (14.2) (2.6) (2.2)
Weighted average number of shares 20,644,062 20,858,639 20,750,515
The earnings per share figures are based on the weighted average numbers of shares set out above. Earnings per share is based on the revenue profit in the period as shown in the consolidated income statement.
7. Contingent assets
Discussions are ongoing with HMRC regarding the payment of interest on a compound basis relating to the reclaim of VAT on management fees. The amount and timing of any recovery remains uncertain and accordingly no amount has been provided for in the financial statements.
8. Related party transactions
There have been no material changes to the related party transactions described in the last annual report.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR XFLFXQVFFBBL
(END) Dow Jones Newswires
August 31, 2016 09:15 ET (13:15 GMT)
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