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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 480.00 | 464.00 | 496.00 | 464.00 | 464.00 | 464.00 | 1,485 | 16:35:07 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Finance Services | 1.52M | 1.25M | 0.0950 | 48.84 | 60.95M |
From Apr 2019 to Apr 2024
TIDMDNE
RNS Number : 3335P
Dunedin Enterprise Inv Trust PLC
31 August 2017
For release 31 August 2017
Dunedin Enterprise Investment Trust PLC
Half year ended 30 June 2017
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 2017.
Financial Highlights:
-- Net asset value per share at 30 June 2017: 515.0p (503.3p at 31/12/16), after 17.5p dividend -- Share price at 30 June 2017: 350.5p (306p at 31/12/16) -- Net asset value total return: 5.9% in the six months to 30 June 2017 -- Realisations: GBP12.5m in the half year -- Realisation of Blackrock in August 2017 -- New investments of GBP8.5m in the half year -- Dividend of 17.5p per share paid on 18 May 2017
Comparative Total Return Performance (%)
Hot Features
Premium
FTSE
Small
Net asset Cap
value (ex Inv
Periods to 30 (per Share Cos)
June 2017 share)* price Index
--------------- ---------- ------- ---------
Six months 5.9 20.1 8.8
One year 12.0 18.6 28.4
Three years 9.9 -7.3 34.1
Five years 2.4 27.9 132.9
Ten years 23.1 3.9 71.6
(*) - taken from 30 April for ten years
For further information please contact:
Graeme Murray Dunedin LLP 0131 225 6699 0131 718 2310 07813 138367
Chairman's Statement
In the half year to 30 June 2017 your Company's net asset value per share increased from 503.3p to 515.0p. After allowing for a final dividend of 17.5p paid in May 2017, the total return to shareholders was 5.9% (in terms of net asset value).
Following the half year end, on 4 August 2017 we announced the successful realisation of Blackrock, the provider of independent expert witnesses to dispute and litigation resolution in the construction sector. Total proceeds from the sale amounted to GBP12.8m which, including distributions received in the half year, represents an uplift of GBP2.9m over the valuation of GBP10.0m at 31 December 2016. The original cost of the investment was GBP4.9m and, over its life, a total of GBP13.9m has been received by Dunedin Enterprise, representing a 2.8 times return and an IRR of 60%.
The share price of 350.5p at 30 June 2017 represents a discount of 31.9% to the net asset value of 515.0p per share.
Portfolio
In the half year there were three realisations and one new investment.
An investment of GBP7.3m was made in Forensic Risk Alliance, an international consultancy business which provides forensic accounting, data analytics and e-discovery expertise to help businesses manage risk in an increasingly regulated global environment.
We successfully realised our investment in Steeper, a world leading manufacturer and supplier of prosthetic limbs, in February 2017. Total proceeds received over the life of the investment amounted to GBP10.4m. The overall return to Dunedin Enterprise from the investment was 1.9 times the original investment of GBP5.6m.
There were two realisations achieved from within the European funds. Realza realised GTT, the provider of tax management services to local public entities in Spain, generating GBP3.6m and a return of 3.2 times original cost. A further GBP0.8m was received from Innova/5 being the balance of proceeds from the sale of Wirtualna Polska, the internet portal business. Overall this business generated a return of 2.7 times original cost.
The trading performance of our portfolio companies has generally improved in the half year. Unrealised value increases of GBP9.0m were partially offset by value decreases of GBP2.1m. Valuation uplifts were achieved at Blackrock, Alpha, Kee Safety and Kingsbridge. In the case of Blackrock the valuation at 30 June 2017 reflects the proceeds received in August. The valuation of the other businesses has benefitted from a combination of good organic growth and additional earnings delivered from acquisitions.
The most significant valuation reductions in the half year to 30 June 2017 were at Formaplex and CitySprint. Further details are provided in the Manager's Review.
Commitments & Liquidity
The Company had outstanding commitments to limited partnership funds of GBP28.5m at 30 June 2017. This consisted of GBP26.3m to Dunedin managed funds and GBP2.2m to the European funds. However, assuming these funds are held to maturity, it is estimated that only some GBP13m of this total outstanding commitment will be drawn over the remaining life of the funds.
During the half year the limited partners of Dunedin Buyout Fund III voted to extend its investment period by six months to May 2018. The outstanding commitment to that fund at 30 June 2016 was GBP19.3m.
The majority of the Company's assets are held by way of limited partnership interests in Dunedin's funds, one of which is still actively investing. Consequently, while it remains a limited partner, the Company is obliged, as are other investors in those funds, to follow its commitment by funding future capital calls made by that fund.
Following the realisation of Blackrock, the Company holds cash and cash equivalents of GBP16.4m. In light of the remaining outstanding commitments to limited partnership funds noted above it is not the current intention of the Board to make a capital distribution to shareholders until there are further realisations from the portfolio.
The Company has a revolving credit facility with Lloyds Bank of GBP20m which was undrawn at 30 June 2017 and is available until 31 May 2018. The Board will keep under review the requirement to retain a credit facility depending upon the timing of further realisations from the portfolio.
Dividends
A final dividend of 17.5p per share was paid to shareholders in May 2017 amounting to GBP3.6m.
Outlook
The Board remains committed to maximising shareholder value through an orderly wind-down process. We shall continue to pursue this either by judicious and timely sales of our fund interests on the secondary market or by continuing to hold these interests if this is likely to provide better returns to shareholders.
We are encouraged that the pricing of realisations of quality businesses and fund interests remains buoyant, and by the general improvement in the trading performance of a number of our portfolio companies.
Duncan Budge
30 August 2017
Manager's Review
Results for the six months to 30 June 2017
In the six months to 30 June 2017, Dunedin Enterprise's net asset value per share total return was 5.9%, after taking account of dividends paid. This compares with an increase in the FTSE Small Cap Index (ex Inv. Cos) over the same period of 8.8%.
In the six months to 30 June 2017 Dunedin Enterprise invested a total of GBP8.5m and realised GBP12.5m from investments.
Net asset and cash movements in the half year to 30 June 2017
The movement in net asset value is summarised in the table below: -
GBP'm
Net asset value at 31 December 2016 103.9
Unrealised value increases 9.0
Unrealised value decreases (2.1)
Realised loss over opening valuation (*) (3.1)
Dividends paid to shareholders (3.6)
Other movements 2.2
Net asset value at 30 June 2017 106.3
(*) - excludes income receipts from the sale of Steeper amounting to GBP2.7m and includes drawdowns totalling GBP0.8m made in the half year by Dunedin managed funds for management fees and operating expenses
Cash movements in the half year to 30 June 2017 can be summarised as follows:-
GBP'm
Cash & near cash balances at 31 December 2016 1.1
Investments made (19.1)
Investments realised 24.1
Dividends paid to shareholders (3.6)
Operating activities 1.4
Cash & near cash balances at 30 June 2017 3.9
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 31-12-16 year year movement movement at 30-6-17
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
--------------------- ----------- --------- --------- -------- ---------- ----------
Dunedin managed 81.5 8.2 (7.9) (3.4)(*) 6.1 84.5
Third party managed 22.3 0.3 (4.6) 0.3 0.8 19.1
--------------------- ----------- --------- --------- -------- ---------- ----------
Investment portfolio 103.8 8.5 (12.5) (3.1) 6.9 103.6
AAA rated money
market funds 1.0 10.6 (11.6) - - -
--------------------- ----------- --------- --------- -------- ---------- ----------
Total 104.8 19.1 (24.1) (3.1) 6.9 103.6
--------------------- ----------- --------- --------- -------- ---------- ----------
(*) - excludes income receipts from the sale of Steeper amounting to GBP2.7m and includes drawdowns totalling GBP0.8m made in the half year by Dunedin managed funds for management fees and operating expenses
New investment activity
In March 2017, the Company made an investment of GBP7.3m through Dunedin Buyout Fund III in Forensic Risk Alliance ("FRA"). FRA is an international consultancy business that provides forensic accounting, data analytics and e-discovery expertise to help businesses manage risk in an increasingly regulated global environment. FRA works on some of the largest and most complex regulatory investigations globally. Its clients are typically blue-chip multi-national corporates seeking advice to help navigate regulatory scrutiny, effect compliant cross border data transfer and manage risk.
A further GBP1.2m was drawn down by Dunedin and third party managed funds to meet management fees and ongoing expenses.
Realisations
In February 2017, Steeper, the leading supplier of rehabilitation services including prosthetic, orthotic and electronic assistive devices and services, was realised. Total proceeds from the investment amounted to capital of GBP7.7m and income of GBP2.7m. The overall return to Dunedin Enterprise was 1.9 times the original investment of GBP5.6m.
One of the two European funds, Realza, realised GBP3.6m during the half year from the sale of GTT, the provider of tax management services to local public entities in Spain. Overall this investment has generated a return of 3.2 times original cost. A further GBP0.8m was received from Innova/5 being the balance of proceeds from the sale of Wirtualna Polska, the internet portal business. Overall this investment has generated a return of 2.7 times original cost.
On 4 August 2017, Blackrock, the provider of independent expert witnesses for large construction projects, was realised. Total proceeds from the sale amounted to GBP12.8m and, when taken together with capital and income received in the half year of GBP0.1m, the total of GBP12.9m represents an uplift of GBP2.9m when compared to the valuation of GBP10.0m at 31 December 2016. The original cost of the investment was GBP4.9m and over the life of the investment a total of GBP13.9m was received by Dunedin Enterprise representing a 2.8 times return and an IRR of 60%.
Unrealised movements in valuations
Unrealised movements in portfolio company valuations in the half year amounted to an increase of GBP9.0m. There were valuation uplifts at Blackrock (GBP2.9m), Alpha (GBP1.9m), Kee Safety (GBP1.8m), and Kingsbridge (GBP1.1m).
Blackrock has been valued at the proceeds received in August 2017 as noted above. This has generated an uplift of GBP2.9m when compared to the valuation at 31 December 2016.
Alpha, the provider of specialist consultancy services to asset and wealth managers and their third party adminstrators, has shown strong organic growth with several blue-chip client wins in the half year. This has led to an 18% increase in maintainable EBITDA and enabled Alpha to be valued above cost. The pipeline of opportunities in all key business locations has strengthened significantly during the half year.
Kee Safety, the provider of collective fall protection systems, has grown during the half year both through organic growth and an ongoing programme of acquisitions leading to an 18% increase in maintainable EBITDA. There have now been twelve acquisitions made by Kee Safety since the buyout in November 2013 with a recent large acquisition bedding in well within the group. The order book at Kee Safety is strong.
Kingsbridge, the provider of insurance services to contractors, freelancers and independent professionals, has also performed strongly in the half year with an increase in maintainable EBITDA of 24%. New business and renewals targets have both been met during the half year.
There were also increases in the valuation of the two European funds of GBP0.8m stated after operating costs of GBP0.2m.
There were reductions in value at Formaplex (GBP1.1m) and CitySprint (GBP0.7m).
The maintainable EBITDA of Formaplex, the designer and manufacturer of injection-moulded tooling, composite tooling and lightweight components for the automotive industry, has reduced by 14% in the half year. Formaplex has been impacted by higher costs related to the move to the new Voyager Park facility, higher than budgeted sub-contract costs and a delay to contracts with a major customer.
CitySprint, the same-day courier which was largely realised in 2016, has experienced a softening in the market with a negative economic outlook being driven by uncertainty around Britain's exit from the European Union and increased competition from other providers. The maintainable EBITDA of CitySprint has decreased by 4% in the half year.
The average earnings multiple applied to the valuation of the Dunedin managed portfolio was 8.5x EBITDA (31 December 2016: 8.6x) or 10.0x EBITA (31 December 2016: 10.2x). These multiples are applied to the maintainable earnings of portfolio companies. Within the Dunedin managed portfolio, the weighted average gearing of the companies was 3.3x EBITDA (31 December 2016: 3.3x) or 3.9x EBITA (31 December 2016: 3.8x).
The portfolio continues to be valued in accordance with the International Private Equity Venture Capital valuation guidelines (www.privateequityvaluation.com).
Dunedin LLP
30 August 2017
Ten Largest Investments
(both held directly and via Dunedin managed funds) by value at 30 June 2017
Approx. Percentage
Cost
percentage of Directors of net
of equity investment valuation assets
Company name % GBP'000 GBP'000 %
------------- ---------- ---------- --------- ----------
Blackrock 7.8 4,087 12,672 11.9
Kee Safety 7.2 5,151 11,628 10.9
Hawksford 17.8 5,637 10,502 9.9
Weldex 15.1 9,505 9,611 9.0
Innova /5 * 3.9 9,595 9,364 8.8
Realza * 8.9 8,740 9,319 8.8
Alpha 11.5 8,066 9,007 8.5
FRA 6.5 7,309 7,309 6.9
CitySprint 5.2 7,308 7,308 6.9
Kingsbridge 12.7 4,114 5,471 5.1
------------- ---------- ---------- --------- ----------
69,512 92,191 86.7
------------- ---------- ---------- --------- ----------
* - European fund investments
Top ten investments (held via funds and direct investments)
Percentage of equity held Blackrock
7.8% Blackrock is a professional
Cost of Investment GBP4.1m services firm that provides
Directors' valuation GBP12.7m independent expert witness
Percentage of net assets and construction consulting
11.9% services for large, international
construction and engineering
projects. Blackrock serves
a growing global construction
market and cases of litigation
are increasing within
the sector.
Blackrock has significant
sales in Europe, the Middle
East, Asia, South America
and Africa. In recognition
of its outstanding growth
in overseas sales, Blackrock
PM received The Queen's
Award for Enterprise in
the "International Trade
Category" in 2017 and
was also ranked at No
36 in the eighth annual
Sunday Times HSBC International
Track 200 this year. Since
Dunedin's investment in
March 2015, Blackrock
has grown by almost 300%.
Blackrock was realised
on 4 August 2017.
=============================== ===================================
Percentage of equity held Kee Safety
7.2% Kee Safety is a global
Cost of Investment GBP5.2m market leading provider
Directors' valuation GBP11.6m of collective fall protection
Percentage of net assets safety systems and solutions.
10.9% Its operations are spread
across the UK, USA, Canada,
Europe, Middle East and
Far East and it has sales
in more than 60 countries.
Since Dunedin's investment
the business has made
eleven acquisitions, all
of which have been successfully
integrated and which have
helped to build out Kee
Safety's international
footprint.
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 Hawksford
17.8% Hawksford is a leading
Cost of Investment GBP5.6m international provider
Directors' valuation GBP10.5m of corporate, private
Percentage of net assets client and funds services.
9.9% The business offers a
comprehensive range of
services to, and solutions
for trusts, companies,
foundations, partnerships,
family offices and investment
funds.
To date Hawksford has
completed five major acquisitions
in Jersey, the Middle
East and the Far East
and further extended the
company's global reach
in the Far East by opening
an office in Hong Kong
in 2015. 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 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.
9.0% 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 & gas, commercial
construction and infrastructure
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 GBP9.6m private equity fund based
Directors' valuation GBP9.4m in Warsaw which makes
Percentage of net assets investments in Central
8.8% 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 Realza Capital
8.9% Realza Capital is a Spanish
Cost of Investment GBP8.7m private equity fund making
Directors' valuation GBP9.3m investments in Spain and
Percentage of net assets Portugal. The fund is
8.8% 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 Alpha
11.5% Alpha is a market leading
Cost of Investment GBP8.1m provider of specialist
Directors' valuation GBP9.0m consultancy services to
Percentage of net assets blue chip asset managers
8.5% 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. Alpha serves
an increasingly complex
asset management industry
that is facing the combined
challenge of regulatory,
cost and operational pressures.
Alpha has over 200 consultants
deployed across seven
major financial centres
(London, Paris, New York,
Boston, Singapore, The
Hague & Luxembourg), 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.
============================== ===================================
Percentage of equity held FRA FRA is an international
6.5% consultancy business that
Cost of Investment GBP7.3m provides forensic accounting,
Directors' valuation GBP7.3m data analytics and e-discovery
Percentage of net assets expertise to help businesses
6.9% respond to major regulatory
investigations in an increasingly
regulated global environment.
FRA works on some of the
largest and most complex
regulatory investigations
globally. Its clients
are typically blue-chip
multinational corporates
seeking advice to help
navigate regulatory scrutiny,
effect compliant cross
border data transfer and
manage risk. It has offices
in London, Providence
(Rhode Island), Paris
and Washington DC. It
also runs data centres
near each office location
as well as in Montreal
and Zurich.
============================== ===================================
Percentage of equity held CitySprint
5.2% CitySprint is the UK's
Cost of Investment GBP7.3m largest national time-critical
Directors' valuation GBP7.3m and same day distribution
Percentage of net assets network. It benefits from
6.9% 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
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.
During the period of Dunedin's
investment, CitySprint
has completed 29 acquisitions.
CitySprint now has the
UK's largest same day
healthcare courier network.
============================== ===================================
Percentage of equity held Kingsbridge
12.7% Kingsbridge is a market
Cost of Investment GBP4.1m leading FCA regulated
Directors' valuation GBP5.5m specialist insurance intermediary
Percentage of net assets which operates through
5.1% two core divisions; a
contractor insurance division
Kingsbridge Contractor
Insurance "KCI" and a
corporate brokerage division
Kingsbridge Insurance
Brokers ("KIB").
Working alongside its
strong partner network,
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.
Kingsbridge is forecast
to continue to grow the
market as insurance becomes
more of a standard requirement
for both contractors and
corporates alike. This
growth will come through
expansion into new occupations
and through the introduction
of new products that are
tailored for the contractor
market.
============================== ===================================
Overview of portfolio
Fund Analysis
30 June 2017
%
------------------------------ -------------
Direct 5
Dunedin Buyout Fund I -
Dunedin Buyout Fund II 31
Dunedin Buyout Fund III 44
Equity Harvest Fund (Dunedin
managed) 2
Third party managed 18
Analysed by valuation method
30 June 2017
%
---------------------- -------------
Cost/written
down 25
Earnings - provision 9
Earnings - uplift 44
Assets basis 10
Exit value 12
Analysed by geographic location
30 June 2017
%
---------------- -------------
UK 82
Rest of Europe 18
Analysed by sector
30 June 2017
%
--------------------- -------------
Automotive 4
Construction and
building materials 6
Consumer products
& services 4
Financial services 15
Healthcare 1
Industrials 18
Support services 49
Technology, media
& telecoms 3
Analysed by age of investment
30 June 2017
%
----------- -------------
<1 year 7
1-3 years 40
3-5 years 16
>5 years 37
Income Statement (unaudited)
for the six months ended 30 June 2017
Re-stated
Six months ended Six months ended Year ended
30 June 2017 30 June 2016 31 December 2016
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 2,687 - 2,687 3,647 - 3,647 8,126 - 8,126
Gain / (loss) on
investments - 3,858 3,858 - (5,854) (5,854) - (4,115) (4,115)
-------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total Income 2,687 3,858 6,545 3,647 (5,854) (2,207) 8,126 (4,115) 4,011
Expenses
Investment management
fees (15) (44) (59) (17) (50) (67) (30) (91) (121) Other expenses (230) (47) (277) (338) - (338) (604) - (604) -------------------------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Profit / (loss) before finance costs and tax 2,442 3,767 6,209 3,292 (5,904) (2,612) 7,492 (4,206) 3,286 Finance costs (47) (141) (188) (79) (238) (317) (127) (382) (509) -------------------------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Profit / (loss) before tax 2,395 3,626 6,021 3,213 (6,142) (2,929) 7,365 (4,588) 2,777 Taxation (167) 167 - (527) 527 - (449) 449 - -------------------------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Profit / (loss) for the period 2,228 3,793 6,021 2,686 (5,615) (2,929) 6,916 (4,139) 2,777 -------------------------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Earnings per ordinary share (basic & diluted) 10.8p 18.4p 29.2p 13.0p (27.2)p (14.2)p 33.5p (20.0)p 13.5p
The Total column of this statement represents the Income Statement of the Company, 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.
Statement of Changes in Equity (unaudited)
for the six months ended 30 June 2017
Six months ended 30 June 2017
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
2016 5,161 2,765 49,204 (9,580) 47,600 8,751 95,975 103,901
Profit/(loss)
for the half
year - - 4,472 (679) - 2,228 6,021 6,021
Dividends
paid - - - - - (3,613) (3,613) (3,613)
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
At 30 June
2017 5,161 2,765 53,676 (10,259) 47,600 7,366 98,363 106,309
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
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 38,492 5,271 47,600 5,138 96,501 104,427
Profit/(loss)
for the half
year - - 12,077 (17,692) - 2,686 (2,929) (2,929)
Dividends
paid - - - - - (3,303) (3,303) (3,303)
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
At 30 June
2016 5,161 2,765 50,569 (12,421) 47,600 4,521 90,269 98,195
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
Year ended 31 December 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 38,492 5,271 47,600 5,138 96,501 104,427
Profit/(loss)
for the year - - 10,712 (14,851) - 6,916 2,777 2,777
Dividends
paid - - - - - (3,303) (3,303) (3,303)
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
At 31 December
2016 5,161 2,765 49,204 (9,580) 47,600 8,751 95,975 103,901
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
Balance Sheet (unaudited)
As at 30 June 2017
Re-stated
30 June 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
------------------------------- ---------- ---------- --------------
Non-current assets
Investments held at fair
value 103,621 100,675 104,816
Current assets
Other receivables 66 117 105
Cash and cash equivalents 3,904 494 90
------------------------------- ---------- ---------- --------------
3,970 611 195
Total assets 107,591 101,286 105,011
Current liabilities
Other liabilities (1,282) (2,091) (1,110)
Loan facility - (1,000) -
Net assets 106,309 98,195 103,901
------------------------------- ---------- ---------- --------------
Capital and reserves
Share capital 5,161 5,161 5,161
Capital redemption reserve 2,765 2,765 2,765
Capital reserve - realised 53,676 50,569 49,204
Capital reserve - unrealised (10,259) (12,421) (9,580)
Special distributable reserve 47,600 47,600 47,600
Revenue reserve 7,366 4,521 8,751
------------------------------- ---------- ---------- --------------
Total equity 106,309 98,195 103,901
------------------------------- ---------- ---------- --------------
Net asset value per ordinary
share (basic and diluted) 515.0p 475.7p 503.3p
Cash Flow Statement (unaudited)
for the six months ended 30 June 2017
Re-stated
30 June 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
-------------------------------------- ---------- ---------- --------------
Operating activities
Profit / (loss) before tax 6,021 (2,929) 2,777
Adjustments for:
(Gain) / loss on investments (3,858) 5,854 4,115
Interest paid 188 317 509
Decrease in debtors 39 50 62
Increase in creditors 171 1,107 126
Net cash from operating activities 2,561 4,399 7,589
Cash flows from investing
activities
Purchase of investments (8,223) (19,619) (22,392)
Drawn from subsidiary (291) (2,130) (2,777)
Purchase of 'AAA' rated money
market funds (10,604) (5,002) (6,003)
Sale of investments 7,960 23,459 25,165
Distribution from subsidiary 4,606 1,194 1,504
Sale of 'AAA' rated money
market funds 11,606 5,000 5,000
-------------------------------------- ---------- ---------- --------------
Net cash used in investing
activities 5,054 2,902 497 Cash flows from financing activities Dividends paid (3,613) (3,303) (3,303) Interest paid (188) (317) (509) Repayment of loan facility - (3,700) (4,700) Net cash used in financing activities (3,801) (7,320) (8,512) Net increase / (decrease) in cash and cash equivalents 3,814 (19) (426) Cash and cash equivalents at the start of the period 90 511 511 Effect of exchange rate fluctuations on cash held - 2 5 -------------------------------------- ---------- ---------- -------------- Cash and cash equivalents at the end of the period 3,904 494 90 -------------------------------------- ---------- ---------- --------------
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
- the interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure Guidance 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 Guidance 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
30 August 2017
Notes to the Accounts
1. Unaudited Interim Report
The comparative financial information contained in this report for the year ended 31 December 2016 does not constitute the Company's statutory accounts but is derived from those accounts. Statutory accounts for the year ended 31 December 2016 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 2016 and 30 June 2017 have not been audited.
2. Basis of Preparation
These condensed set of financial statements for the six months ended 30 June 2017 have been prepared in accordance with the Disclosure Guidance 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 2016.
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 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.
Items have been "Re-stated" in this Interim Report to reflect that the financial statements are no longer prepared on a consolidated basis but instead with subsidiaries carried at fair value.
3. Dividends
Six months Six months
to to Year to
30 June 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
Dividends paid in the period 3,613 3,303 3,303
========== ========== ============
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 Company 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 At At
30 June 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
Level 1
'AAA' rated money market funds
OEICs 6 7 1
Level 2 - - -
Level 3
Unlisted investments 103,615 100,668 103,808
-------- -------- ------------
103,621 100,675 103,809
======== ======== ============
The Company 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 2017.
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 2017 are set out below:-
Level 3
GBP'000
Book cost at 31 December 2016 113,388
Unrealised (depreciation) (9,580)
--------------------------------------- --------
Valuation at 31 December 2016 103,808
Purchases at cost 8,514
Sales - proceeds (12,566)
Sales - realised (losses) against cost 4,538
Increase in unrealised appreciation (679)
--------------------------------------- --------
Valuation at 30 June 2017 103,615
--------------------------------------- --------
Book cost at 30 June 2017 113,874
Closing unrealised (depreciation) (10,259)
--------------------------------------- --------
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 104,157
Unrealised appreciation 5,271
--------------------------------------- --------
Valuation at 31 December 2015 109,428
Purchases at cost 21,749
Sales - proceeds (24,653)
Sales - realised (losses) against cost 11,836
Increase in unrealised appreciation (17,692)
--------------------------------------- --------
Valuation at 30 June 2016 100,668
--------------------------------------- --------
Book cost at 30 June 2016 113,089
Closing unrealised (depreciation) (12,421)
--------------------------------------- --------
Details of the determination of Level 3 fair value measurements and the movements in Level 3 fair values during the year ended 31 December 2016 are set out below:-
Level 3
GBP'000
Book cost at 31 December 2015 104,157
Unrealised appreciation 5,271
--------------------------------------- --------
Valuation at 31 December 2015 109,428
Purchases at cost 25,169
Sales - proceeds (26,669)
Sales - realised (losses) against cost 10,731
Increase in unrealised appreciation (14,851)
--------------------------------------- --------
Valuation at 31 December 2016 103,808
--------------------------------------- --------
Book cost at 31 December 2016 113,388
Closing unrealised (depreciation) (9,580)
--------------------------------------- --------
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 2016. 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
2017 2016 2016
GBP'000 GBP'000 GBP'000
Revenue return per ordinary share (p) 10.8 13.0 33.5
Capital return per ordinary share (p) 18.4 (27.2) (20.0)
Earnings per ordinary share (p) 29.2 (14.2) 13.5
Weighted average number of shares 20,644,062 20,644,062 20,644,062
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 LLFSVTLIIVID
(END) Dow Jones Newswires
August 31, 2017 02:00 ET (06:00 GMT)
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