We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for streaming realtime charts, analysis tools, and prices.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Icg Enterprise Trust Plc | LSE:ICGT | London | Ordinary Share | GB0003292009 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 6.00 | 0.50% | 1,214.00 | 1,206.00 | 1,210.00 | 1,210.00 | 1,204.00 | 1,208.00 | 45,034 | 16:35:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | 187.81M | 164.53M | 2.4421 | 4.95 | 815.18M |
Hot Features
Premium
TIDMICGT
18 April 2017
ICG ENTERPRISE TRUST PLC
UNAUDITED RESULTS FOR THE
YEARED 31 JANUARY 2017
ICG Enterprise Trust plc ('ICG Enterprise' or 'the Company') presents
its unaudited annual results for the year ended 31 January 2017.
Highlights
-- Share price Total Return1 for the year of 31.6% (2016: 8.2%). The FTSE
All-Share Index Total Return was 20.1% over the same period
-- Net asset value per share Total Return1 for the year of 23.4% (2016:
8.2%), with the net asset value per share at 871.0p (2016: 730.9p)
-- The Portfolio1,2 is valued at GBP594.3m at 31 January 2017 (2016:
GBP428.2m), reflecting strong underlying growth of 21.8% (2016:11.1%),
and favourable foreign exchange movements of 7.1% (2016: 1.0%)
-- 93.7% invested with cash of GBP38.5m or 6.3% of total assets (2016:19.9%),
in line with the Company's objective of becoming more fully invested and
reflecting the benefit of being managed by ICG3
-- GBP20.3m of cash returned to shareholders via an increased dividend of
20.0p (interim and proposed final) and share buy backs
-- After a successful transition to ICG as manager, ICG Enterprise is well
positioned to continue its excellent long term performance
The long term performance(4) of the Company remains strong, with the net
asset value outperforming the FTSE All-Share Index over one, three, five
and ten years
Performance to 31 January 2017 1 year 3 year 5 year 10* year
Net asset value per share 23.4% 38.1% 66.9% 119.4%
Share price 31.6% 35.1% 118.3% 115.2%
FTSE All-Share Index 20.1% 22.6% 57.0% 71.2%
* As the Company changed its year end in 2010, the
ten year figures are for the 121 month period to 31
January 2017.
Mark Fane, Chairman, said
The results for the year ended 31 January 2017 have been excellent and
there has been faster than expected progress against key objectives set
at the time of the change of manager to ICG. The Portfolio performance
has been strong against a backdrop of a challenging and volatile market.
In line with the ongoing succession plans being implemented by the Board,
it is my intention to step down at the AGM on 13 June 2017 after eight
years as Chairman. The Board is proposing that Jeremy Tigue is appointed
Chairman subject to his re-election at the AGM. Jeremy has a wealth of
experience in the investment trust sector and has made an invaluable
contribution to the governance of the Company.
Footnotes
1. Included in this document are Alternative Performance Measures ("APMs").
APMs have been used if considered by the Board and the Manager to be the
most relevant basis for shareholders in assessing the overall performance
of the Company, and for comparing the performance of the Company to its
peers and its previously reported results. The Glossary includes further
details of APMs and reconciliations to IFRS measures, where appropriate.
The rationale for the APMs is discussed in detail in the Manager's
Review. The Glossary includes a reconciliation of the Portfolio to the
most relevant IFRS measure.
2. In the Chairman's Statement, Manager's Review and Supplementary
Information, reference is made to the "Portfolio". This is an APM. The
Portfolio is defined as the aggregate of the investment portfolios of the
Company and of its subsidiary limited partnerships. The rationale for
this APM is discussed in detail in the Manager's Review. The Glossary
includes a reconciliation of the Portfolio to the most relevant IFRS
measure.
3. ICG Alternative Investment Limited, a regulated subsidiary of
Intermediate Capital Group plc, acts as the Manager of the Company.
4. In the Chairman's Statement, Manager's Review and Supplementary
Information, all performance figures are stated on a total return basis
(i.e. including the effect of re-invested dividends).
Foreign exchange rates 31 January 2016 31 July 2016 31 January 2017
Year end Year end Year end
GBP:EUR 1.3109 1.1850 1.1651
GBP:USD 1.4185 1.3229 1.2576
Enquiries
Analyst / Investor enquiries:
Emma Osborne, Portfolio Manager, ICG
+44 (0) 20 3201 1302
Mark Crowther, Investor Relations, ICG
+44 (0) 20 3201 7842
Nikki Edgar, Finance, ICG +44 (0) 20 3201 7700
Disclaimer
This report may contain forward looking statements. These statements
have been made by the Directors in good faith based on the information
available to them up to the time of their approval of this report and
should be treated with caution due to the inherent uncertainties,
including both economic and business risk factors, underlying such
forward looking information.
These written materials are not an offer of securities for sale in the
United States. Securities may not be offered or sold in the United
States absent registration under the US Securities Act of 1933, as
amended, or an exemption therefrom. The issuer has not and does not
intend to register any securities under the US Securities Act of 1933,
as amended, and does not intend to offer any securities to the public in
the United States. No money, securities or other consideration from any
person inside the United States is being solicited and, if sent in
response to the information contained in these written materials, will
not be accepted. This report contains information which, prior to this
announcement was insider information.
Chairman's Statement
The Company has delivered excellent results in its first year under ICG
management
These annual results mark the first anniversary of the change of manager
to ICG(3) . I am pleased to report an excellent set of results for the
year to 31 January 2017 as well as faster than expected progress against
key objectives set at the time of the change of manager. The Company's
core strategy remained unchanged following the move, namely to focus on
investments in established, profitable private companies in developed
markets. In approving the management transition the Board expected the
Company to benefit in four main areas:
-- Access to a wider range of investment opportunities through ICG's global
office network and local private equity manager relationships;
-- Insights and market intelligence from ICG's direct investment teams;
-- Support from ICG's infrastructure and expertise in areas such as finance,
treasury, investor relations and information technology; and
-- Lower costs through a reduction in the headline management fee and no
fees on ICG funds (in addition to no fees on funds managed by Graphite
Capital, the former manager).
As the portfolio manager's report details, each of these factors have
contributed to the strong performance in the year and the integration of
the investment team to ICG has gone smoothly. Considerable progress has
been made against a number of key objectives, in particular to:
-- Become more fully invested;
-- Increase the proportion of the Portfolio1,2 managed directly by ICG; and
-- Increase US exposure.
The Company continues to outperform its benchmark, the FTSE All-Share
Index, over the short, medium and long term. Both the net asset value
per share and share price have outperformed the benchmark on a Total
Return basis over one, three, five and ten years. Indeed, an investment
in the Company on any financial year end date in the last twenty years
would have outperformed the benchmark.
Portfolio
Through a period of economic uncertainty, particularly in the UK, the
Board is encouraged by the performance of the Portfolio with the top 30
underlying companies continuing to generate strong profits, an unbroken
trend since 2008.
As a whole, the Portfolio is considered to be sensibly valued relative
to the public markets. This belief in the value of the Portfolio is
reinforced by the continued uplifts on realised investments. Further
information is provided in the portfolio manager's report and
supplementary information.
Balance sheet
Net assets at 31 January 2017 stood at GBP613m (2016: GBP521m) with year
end cash of GBP39m (2016: GBP104m) representing 6% of total assets, down
from 20% at the start of the year. This reflects the achievement of a
key objective set as part of the change in Manager, namely to become
more fully invested and to manage the balance sheet more efficiently
than in the past. It is not the intention of the Board for the Company
to be geared, other than for short term working capital purposes.
Further, the over-commitment percentage of 26% of net assets (2016: 10%)
remains within conservative parameters.
Distributions
As stated in the interim report, in order to provide shareholders with
greater clarity of the income they can expect from the Company, the
Board anticipates paying a minimum dividend of 20.0p per share each year,
subject to sufficient distributable revenue and capital reserves in
future.
In line with this policy, having paid an interim dividend of 10.0p per
share, the Board is pleased to propose a final dividend of 10.0p per
share. The proposed total dividend represents an increase of 81.8%
compared with the prior year dividend and a yield on the year end share
price of 2.9% (2016: 2.0%). If approved by shareholders at the AGM, the
final dividend of 10.0p per share will be paid on 20 June 2017(5) .
During the year the Company repurchased 982,345 shares at an average
price of 627.0p for a total consideration of GBP6.2m. This improved the
net asset value per share by 2.5%. The Board believes that the shares
offer good value and will continue to repurchase shares on an
opportunistic basis.
F&C savings plans
Since 1984, investors in the F&C savings plans have been able to acquire
shares in ICG Enterprise. Following the change of manager to ICG in
2016, from 1 January 2017, only existing F&C savings plan investors will
be able to acquire shares in the Company through these plans. BMO Global
Asset Management(6) continues to allow existing savings plans to hold
shares in the Company and is committed to the ongoing servicing of the
existing F&C savings plans.
Board Changes
In line with the ongoing succession plans being implemented by the Board,
it is my intention to step down at the AGM on 13 June 2017 after
seventeen years as a non-executive director, including eight years as
Chairman.
The Board is proposing that Jeremy Tigue is appointed Chairman subject
to his re-election at the AGM. Jeremy was appointed to the Board in 2008
and has made an invaluable contribution to the governance of the Company
during his tenure. He has a wealth of experience in the investment
trust sector having managed the Foreign & Colonial Investment Trust
("FCIT") from 1997 to 2014 and is sitting on a number of other
investment trust boards. The FCIT portfolio included a material
allocation to private equity and he, therefore, brings this especially
relevant experience to the Company.
It is also proposed that Peter Dicks steps down as Chairman of the Audit
Committee to be replaced by Andrew Pomfret, subject to his re-election
at the AGM.
Outlook
Markets continue to be buoyant despite the uncertainty surrounding
Brexit and other geopolitical risks, but we expect volatility to
increase. Historically, periods of instability have created some of the
most attractive investment opportunities for private equity. We believe
the asset class will continue to outperform public markets over the
medium to long term because of private equity's patient and active
approach to creating value.
The Company is particularly well placed to adapt to changing market
conditions with its flexible investment strategy and because the
Portfolio continues to deliver strong growth in earnings. The Manager's
focus on partnering with only the most experienced private equity firms,
with strong track records of investing and managing companies through
economic cycles, provides the Board with further confidence. Finally,
the change of Manager to ICG is already delivering material benefits to
shareholders and this is expected to have an even greater impact in the
future.
A personal note
After seventeen years of involvement in the listed private equity sector,
I have experienced numerous ups and downs of market sentiment and
observed both new entrants to and departures from the sector. Since the
financial crisis the sector has endured particular turbulence,
culminating in both Electra and SVG leaving the sector, with some
commentators predicting its demise. Through these cycles ICG Enterprise,
and many of its peers, has delivered superior returns as a result of the
fundamental value created through private equity's active ownership
model and the alignment of interests with portfolio company management.
I firmly believe that listed private equity is an ideal way for private
individuals and institutions to access the private equity market with
the added advantages of daily liquidity and simplified administration.
An investment in the Company on any year end date in the last twenty
years would have outperformed the benchmark. GBP100 invested twenty
years ago would have generated GBP810 at 31 January 2017 compared with
GBP368 for the same amount invested in the FTSE All-Share Index. This
performance has been achieved by investing in funds and in companies
that give us superior returns over the long term. Combined with a
conservative approach to managing our balance sheet during both good and
bad times, the Company has offered access to a diversified portfolio of
private companies while at the same time improving yield. With strong
underlying profit growth within the portfolio companies combined with
the current discount to net asset value, I believe that the opportunity
for continued growth looks compelling.
Mark Fane
18 April 2017
Footnotes
1. Included in this document are Alternative Performance Measures ("APMs").
APMs have been used if considered by the Board and the Manager to be the
most relevant basis for shareholders in assessing the overall performance
of the Company, and for comparing the performance of the Company to its
peers and its previously reported results. The Glossary includes further
details of APMs and reconciliations to IFRS measures, where appropriate.
The rationale for the APMs is discussed in detail in the Manager's
Review. The Glossary includes a reconciliation of the Portfolio to the
most relevant IFRS measure.
2. In the Chairman's Statement, Manager's Review and Supplementary
Information, reference is made to the "Portfolio". This is an APM. The
Portfolio is defined as the aggregate of the investment portfolios of the
Company and of its subsidiary limited partnerships. The rationale for
this APM is discussed in detail in the Manager's Review. The Glossary
includes a reconciliation of the Portfolio to the most relevant IFRS
measure.
3. ICG Alternative Investment Limited, a regulated subsidiary of
Intermediate Capital Group plc, acts as the Manager of the Company.
4. In the Chairman's Statement, Manager's Review and Supplementary
Information, all performance figures are stated on a total return basis
(i.e. including the effect of re-invested dividends).
5. Shares will trade without rights to the final dividend from 1 June 2017
("ex-dividend date"). The last date for registering transfers to receive
the dividend is 2 June 2017 ("record date").
6. In 2014, F&C became part of BMO Global Asset Management, and ultimately
the BMO Financial Group.
Manager's Review of the Portfolio
This is our first annual report since the appointment of ICG as Manager
of the Company and the transfer of the investment team from Graphite
Capital Management LLP ("Graphite Capital"). We have made faster than
expected progress towards realising the benefits of the change within
the first year of moving to ICG.
Notably, new commitments have been made to two ICG managed funds: ICG
Strategic Secondaries Fund II ("ICGSS") and ICG Asia Pacific Fund III.
We believe these funds are highly complementary to our strategy and will
generate attractive returns as well as enabling the Company to access
co-investments from these in-house strategies. Both funds broaden the
Company's geographic scope and increase the proportion of investments on
which shareholders do not pay a management fee.
The move to ICG is also helping to generate secondaries and
co-investments. The Company invested in a US fund restructuring
transaction alongside ICGSS and completed secondary purchases in ICG
Europe V and ICG Europe VI, which supplement existing investments.
These opportunities were available to the Company as a result of the
change in manager.
As well as access to ICG managed investment opportunities, the Company
is benefitting greatly from ICG's insights into private equity managers
and portfolio companies in Europe, US and Asia in our investment
analysis and decision-making for both new funds and direct
co-investments. We are also working with a range of specialist functions
within ICG to provide non-investment related support and enhancements to
the ongoing management of the Company.
Portfolio performance overview
The Portfolio(1) has delivered very strong performance during the year,
rising in value by 28.9% (2016: 12.1%). The Portfolio generated a
valuation gain of 21.8% in local currencies, with currency movements
adding a further 7.1%. This is against a backdrop of challenging market
conditions, including volatility resulting from the UK's vote to leave
the European Union, the US election result and various upcoming
elections across Europe.
Year ended Year ended
GBPm 31 January 2017 31 January 2016
Opening Portfolio** 428.2 431.9
Additions 127.8 64.3
Realisation Proceeds(1) (85.5) (120.3)
Net cash outflow / (inflow) 42.3 (56.0)
Underlying Valuation Movement*(,1) 93.5 48.0
% underlying Portfolio growth 21.8% 11.1%
Currency movement 30.3 4.3
% currency movement 7.1% 1.0%
Closing Portfolio** 594.3 428.2
Other Key Portfolio Metrics
Proceeds as % of opening Portfolio 20% 28%
Number of Full Realisations 40 41
Uplift on exit(1) 24% 22%
New primary fund commitments 117.6 58.6
Outstanding commitments 300.3 253.8
* In this report 94% of the Portfolio is valued using 31 December 2016
(or later) valuations.
** Refer to the Glossary for reconciliation to the portfolio balance
presented in the financial statements
Footnote
1. References to the "Portfolio" include the investment portfolios of both
the Company and its subsidiary partnerships. In the financial statements,
in accordance with IFRS 10 'Consolidated Financial Statements',
"Investments at fair value" are stated net of balances receivable from
subsidiary partnerships and the accrual for the co-investment incentive
scheme. Both the Manager and the Board consider that the Portfolio is the
most relevant basis for shareholders in assessing the overall performance
of the Company as it is consistent with industry practice and therefore
enables comparison with peers as well as with the Company's previously
reported results. A reconciliation of the Portfolio to the financial
statements is set out in the Glossary.
At 31 January 2017 the Portfolio was valued at GBP594.3m. The increase
of GBP166.1m during the year was primarily due to the strong valuation
gains, as well as new investment exceeding realisations for the first
time in six years.
The exposure to ICG managed investments increased during the year, and
further increases are expected over time as the benefits of the change
in manager continue to materialise. One of the features that makes ICG
Enterprise distinctive in the listed private equity sector is the
combination of an in-house directly controlled portfolio combined with a
diversified multi-manager approach, which we believe both reduces risk
and enhances returns.
Realisations
The Portfolio generated proceeds of GBP85.5m which was significantly
lower than the GBP120.3m received in the previous year. However, as the
number of full realisations of 40 was in line with last year, the lower
level of proceeds reflected a smaller average size of disposals rather
than a general slowdown in realisation activity.
Full realisations accounted for GBP45.3m of proceeds received and these
continued to be completed at uplifts to the prior quarter holding values,
averaging 24% in the year. Over the last few years, despite an increase
in valuation multiples across the Portfolio, exits have consistently
achieved uplifts.
The largest realisation in the year was the disposal by Deutsche
Beteiligungs AG ("DBAG") of Spheros, the manufacturer of climate systems
for buses. This generated proceeds of GBP8.9m both from the investment
in DBAG's fund and the direct co-investment made alongside this fund in
2011. The business grew strongly both organically and by acquisition
prior to its sale in March 2016 generating a return of 2.5 times
original cost.
The sale of Micheldever, the distributor and retailer of tyres, was
announced in January 2017 for a return of 3.7 times cost, but did not
complete until February 2017. It therefore remained as the Company's
largest underlying investment at the year end, with a carrying value
equivalent to the GBP35.9m of proceeds which were received in February
2017.
A further GBP40.2m was received from partial realisations. The most
significant element of this was the GBP16.6m of proceeds received from
recapitalisations during the year.
Further details of the ten largest underlying realisations are set out
in the Supplementary Information section.
New investments
A record amount of new investments were completed in the year, with the
total of GBP127.8m almost double the amount invested in the previous
year. Increasing the rate of investment was one of the key objectives of
the change of manager to ICG and it is encouraging that the move has had
such a significant impact within the first year post transition.
Investments managed directly by ICG accounted for a quarter of the total
at GBP31.5m.
All categories of new investment increased although fund drawdowns
showed the steepest increase, more than doubling to GBP94.3m after the
sharp drop of the previous year. The rise partly reflected the addition
of ten new funds in the year which drew down GBP24.0m. The vast majority
of this came from four new funds which had already made a number of
investments that were analysed in detail prior to committing to the
funds. These so-called "late primary" situations suit our investment
approach of investing in funds by applying our bottom-up, underlying
company focused due diligence style and we will continue to target such
opportunities as well as traditional new primary fund investments. Funds
in the Portfolio at the start of the year drew down GBP70.3m, which was
broadly in line with expectations and consistent with a steady pace to
the end of funds' 5 to 6 year investment periods.
Two direct co-investments and three secondary fund purchases were
completed in the year, increasing the amount invested in these
categories to GBP33.5m from GBP17.9m in the previous year. The
secondaries included ICG Europe V and ICG Europe VI as well as a US fund
restructuring alongside ICGSS.
The two largest underlying company investments were the two direct
co-investments: System One (GBP8.9m), a provider of temporary staff in
the US acquired by Thomas H. Lee Partners, and Roompot (GBP7.1m), an
operator of holiday parks in the Netherlands acquired by PAI Partners.
Both companies operate in sectors that we have had experience of
investing in successfully in the past.
In total, ICG managed investments, direct co-investments and secondaries
accounted for 39% of total investments in the year, a figure expected to
increase over time. If the late primaries noted above are also included,
a total of 56% of new investments were in underlying companies that we
were able to analyse prior to investment. This is in contrast to a
typical fund of funds where third party managers make most of the
underlying investment decisions.
Further details of the ten largest underlying new investments are set
out in the Supplementary Information section.
New fund commitments
New primary commitments of GBP117.6m to ten funds were significantly
higher than the GBP58.6m committed to six new funds last year.
Two of the new funds, representing 26% of new commitments, are managed
directly by ICG. A further six funds, totaling 53% of new commitments,
were raised by managers that the Company has invested with successfully
for many years, primarily focusing on European buyouts. The remaining
two new funds feature managers which are new to the Portfolio, both of
which are focused on the US market. One of these, Gridiron Capital III,
was introduced to us through ICG's New York office which provides the
fund investment team with invaluable insights into the US manager
landscape to supplement our own research and analysis.
Further details of new fund commitments are set out in the Supplementary
Information section.
Closing Portfolio
At 31 January 2017, the Portfolio was valued at GBP594.3m (GBP2016:
GBP428.2m) of which ICG directly managed 10.1% while Graphite Capital
investments accounted for 23.7%. Direct co-investments and secondaries
accounted for 38.3% of the closing value, a figure which has increased
significantly from approximately 18% immediately prior to the financial
crisis. This gives us greater control over investments into the
Portfolio than a typical fund investor.
Mid-market and large buyouts accounted for 55.4% and 36.1% respectively
reflecting our focus on these segments which we believe offer the most
attractive balance of return potential and downside protection. Targets
in these segments tend to be more defensive, with market leading
positions and strong management and are therefore better able to weather
economic cycles than smaller companies.
By geography, the Portfolio is almost exclusively focused on developed
private equity markets, principally the UK, continental Europe and the
US. The UK accounted for 40.4% of value, down from 45.1% at the start of
the year. US exposure has increased from 14.1% to 21.1% in line with
one of our objectives at the time of the change in manager. We expect
both of these trends to continue as the benefits of being part of a
global asset manager are further realised.
While the Portfolio is broadly diversified, which reduces risk, we aim
to ensure that many individual investments are large enough to have an
impact on overall performance. The top 30 underlying companies
accounted for 45.9% of the Portfolio and the performance of these
investments is therefore likely to be a key driver of future growth.
The vast majority of companies in the top 30 are those we have selected
to increase exposure to, through direct co-investments and secondary
fund purchases, and that we have a high conviction will outperform.
In the year to December 2016, the revenues and EBITDA of the top 30
companies increased by an average of 8.5% and 14.0% respectively. They
were valued on an average multiple of 9.7 times last twelve months
EBITDA at December 2016, which, while slightly higher than the 9.4 times
at the previous year end, is not unreasonable for the strong growth
being achieved and the generally high quality of earnings.
Events since the year end
Since the year end the Company has made the following new investments:
-- EUR12m commitment to ICG Recovery Fund 2008B, a secondary fund
restructuring;
-- GBP5.0m commitment to Hg Capital 8; and
-- A "late primary" fund investment in Oak Hill Capital IV as well as
acquiring interests in Oak Hill Capital II and III, representing a total
commitment of $22.5m to this established US manager.
As noted earlier, in February 2017 the Company received GBP35.9m from
the completion of the Micheldever sale announced in January 2017.
Outlook
The environment for realisations remains favourable despite some macro
uncertainties. This should underpin future growth in value given the
uplifts that tend to be achieved on sale. Against this backdrop,
investing at reasonable valuations is more challenging, but our strategy
gives us the flexibility to adapt the mix of investments according to
where we see the best relative value and the move to ICG is providing
access to a broader range of opportunities from which to select.
Much recent market commentary has focused on whether it is approaching a
peak. While we do not claim to have the ability to predict the timing of
the next potential downturn, we seek to ensure that the Portfolio is
well positioned to withstand one. This is achieved by focusing on
relatively more defensive companies managed by some of the most
experienced private equity firms and by avoiding emerging markets, new
managers and riskier private equity strategies such as venture capital.
This approach served the Company well in the last downturn, with our
2007 investments generating a return of 1.8 times cost and the Portfolio
consistently generating strong profit growth even in the aftermath of
the financial crisis. It is also worth noting that over the last five
years, the EBITDA valuation multiple of the Company's top 30 companies
has increased from 9 to just under 10 while the EBITDA multiple of the
FTSE All-Share Index has increased from 6.4 to its current level of
12.1. We believe that this valuation differential should provide a
significant cushion in the event of any future public market correction.
With the Portfolio continuing to demonstrate strong profit growth, as
well as degearing, the prospects for further valuation growth remain
positive.
ICG Private Equity Fund Investment Team
18 April 2017
Supplementary information
The 30 largest underlying investments
The table below presents the 30 companies in which ICG Enterprise had
the largest investments by value at 31 January 2017. These investments
may be held directly or through funds, or in some cases in both ways.
The valuations are gross and are shown as a percentage of the total
investment Portfolio.
Year of
Company Manager investment Country Value as a % of Portfolio
1 Micheldever (+^*)
Graphite
Distributor and retailer of tyres Capital 2006 UK 6.3%
2 City & County Healthcare Group
Graphite
Provider of home care services Capital 2013 UK 2.7%
3 Froneri (+^)
Manufacturer and distributor of ice cream products PAI Partners 2013 UK 2.1%
4 Education Personnel (+^)
Provider of temporary staff for the education sector ICG 2014 UK 2.1%
5 nGAGE
Graphite
Provider of recruitment services Capital 2014 UK 2.1%
6 PetSmart (+)
Retailer of pet products and services BC Partners 2015 USA 2.0%
7 Standard Brands (+)
Graphite
Manufacturer of fire lighting products Capital 2001 UK 2.0%
8 Skillsoft (+)
Provider of off-the-shelf e-learning content Charterhouse 2014 USA 1.7%
9 Frontier Medical (+)
Kester
Manufacturer of medical devices Capital 2013 UK 1.6%
10 David Lloyd Leisure (+)
Operator of premium health and fitness clubs TDR Capital 2013 UK 1.6%
11 Visma
Provider of business services Cinven 2014 Norway 1.4%
12 TMF(^)
Provider of management and accounting outsourcing Doughty
services Hanson 2008 Netherlands 1.4%
13 The Laine Pub Company (+)
Graphite
Operator of pubs and bars Capital 2014 UK 1.3%
14 System One (+)
Provider of temporary staff and other associated Thomas H. Lee
services Partners 2016 USA 1.3%
15 Roompot (+)
Operator and developer of holiday parks PAI Partners 2016 Netherlands 1.3%
16 Beck & Politzer
Provider of industrial machinery installation and Graphite
relocation Capital 2016 UK 1.2%
17 CPA Global (+)
Provider of patent and legal services Cinven 2012 UK 1.2%
18 Algeco Scotsman
Supplier and operator of modular buildings TDR Capital 2007 USA 1.2%
19 Cambium
Provider of educational solutions and services ICG 2016 USA 1.2%
20 Quironsalud(^#)
Provider of private healthcare services CVC Capital 2011 Spain 1.2%
21 New World Trading Company
Graphite
Operator of pub and restaurants Capital 2016 UK 1.1%
22 U-POL(^)
Manufacturer and distributor of automotive refinishing Graphite
products Capital 2010 UK 1.0%
23 Formel D
Deutsche
Provider of quality control for automotive services Beteiligungs 2013 Germany 1.0%
24 Swiss Education (+)
Invision
Provider of hospitality training Capital 2015 Switzerland 1.0%
25 ProXES
Deutsche
Manufacturer of food processing machinery Beteiligungs 2013 Germany 0.9%
26 Gerflor(^)
Manufacturer of vinyl flooring ICG 2011 France 0.8%
27 Parques Reunidos(^)
Operator of attraction parks Arle Capital 2007 Spain 0.8%
28 Cognito (+)
Supplier of communications equipment, software and Graphite
services Capital 2002 UK 0.8%
29 Ceridian (+)
Thomas H. Lee
Provider of payment processing services Partners 2007 USA 0.8%
30 InVentiv Health
Thomas H. Lee
Provider of healthcare and pharmaceutical consulting Partners 2010 USA 0.8%
Total of the 30 largest underlying investments 45.9%
+ All or part of this investment is held directly
as a co-investment or other direct investment.
^ All or part of this investment was acquired as part
of a secondary purchase.
* The company received proceeds of GBP35.9m from the
sale of this investment in February 2017.
(#) The company received proceeds of GBP4.9m from
the sale of this investment in February 2017.
Analysis of the 30 largest underlying investments
The tables below analyse the 30 companies in which ICG Enterprise had
the largest investments by value at 31 January 2017. These investments
may be held directly or through funds or, in some cases, in both ways.
30 largest investments - revenue growth
% growth* % by number
<0% 24.1%
0-10% 37.9%
10-20% 24.1%
20-30% 10.3%
Not meaningful 3.6%
30 largest investments - EBITDA growth
% growth** % by number
<0% 20.0%
0-10% 20.0%
10-20% 30.0%
20-30% 10.0%
>30% 10.0%
Not meaningful 10.0%
30 largest investments - enterprise value as a multiple
of EBITDA
Multiple*** % by number
<7.0x 6.7%
7.0-8.0x 3.3%
8.0-9.0x 16.7%
9.0-10.0x 23.3%
10.0-11.0x 23.3%
11.0-12.0x 6.7%
>12.0x 13.3%
Not meaningful 6.7%
30 largest investments - net debt as a multiple of
EBITDA
Multiple**** % by number
<2.0x 16.7%
2.0-3.0x 26.7%
3.0-4.0x 13.3%
4.0-5.0x 6.7%
5.0-6.0x 16.7%
6.0-7.0x 10.0%
>7.0x 3.2%
Not meaningful 6.7%
* Excludes one company where comparatives are not available
** Excludes one company where comparatives are not available as well
as two companies where the EBITDA is not meaningful
*** Excludes two companies where the EBITDA is not meaningful
**** Excludes one company where this metric is not meaningful
The 30 largest fund investments
The 30 largest funds by value at 31 January 2017 are:
Year of Country/ Value Outstanding commitment
Fund commitment region GBPm GBPm
Graphite Capital Partners
1 VIII *
Mid-market
buyouts 2013 UK 51.6 39.8
Graphite Capital Partners VI
2 **
Mid-market
buyouts 2003 UK 30.7 2.1
CVC European Equity Partners
3 V **
Large buyouts 2008 Europe/ USA 24.5 1.3
4 BC European Capital IX **
Large buyouts 2011 Europe/ USA 22.1 2.2
Fifth Cinven
5 Fund
Large buyouts 2012 Europe 17.1 2.7
Thomas H. Lee Parallel Fund
6 VI
Large buyouts 2007 USA 14.4 1.1
7 Deutsche Beteiligungs Fund V
Mid-market
buyouts 2006 Germany 14.2 0.3
Graphite Capital Partners
8 VII ***
Mid-market
buyouts 2007 UK 13.6 4.7
9 PAI Europe V **
Mid-market and
large buyouts 2007 Europe 12.3 1.1
Activa Capital
10 Fund II
Mid-market
buyouts 2007 France 11.3 1.8
ICG Velocity Partners
11 Co-Investor**
Mid-market
buyouts 2016 USA 11.0 2.3
12 ICG Europe V **
Mezzanine and
equity in
mid-market
buyouts 2012 Europe 10.8 1.2
13 CVC Capital Partners VI
Large buyouts 2013 Global 10.7 7.6
14 TDR Capital II
Mid-market and
large buyouts 2006 Europe 10.2 0.8
15 Doughty Hanson & Co V **
Mid-market and
large buyouts 2006 Europe 10.1 6.5
ICG Europe VI
16 **
Mezzanine and
equity in
mid-market
buyouts 2015 Europe 9.7 12.1
17 Bowmark Capital Partners IV
Mid-market
buyouts 2007 UK 9.3 -
18 IK VII
Mid-market
buyouts 2013 Europe 9.3 0.5
19 TDR Capital III
Mid-market and
large buyouts 2013 Europe 9.1 3.0
20 Permira V
Large buyouts 2013 Europe 8.7 0.8
21 One Equity Partners VI
Mid-market
buyouts 2016 USA/ Europe 8.5 3.4
Deutsche Beteiligungs Fund
22 VI
Mid-market
buyouts 2012 Germany 8.1 1.0
Hollyport Secondary
23 Opportunities V
Tail-end
secondary
portfolios 2015 Global 8.1 2.3
24 ICG European Fund 2006 B **
Mid-market
buyouts 2014 Europe 7.2 2.1
25 PAI Europe VI
Mid-market and
large buyouts 2013 Europe 6.9 10.4
ICG Strategic Secondaries
26 Fund II
Secondary fund
restructurings 2016 USA 6.9 14.0
27 Nordic Capital Partners VIII
Mid-market and
large buyouts 2013 Nordic 6.3 3.6
Egeria Private Equity Fund
28 IV
Mid-market
buyouts 2012 Europe 5.7 3.2
29 Bowmark Capital Partners V
Mid-market
buyouts 2013 UK 5.4 5.8
30 Candover 2005 Fund **
Large buyouts 2005 Europe 5.3 0.1
Total of the largest 30 fund investments 379.1 137.8
Percentage of total investment Portfolio 63.8%
* Includes the associated Top Up funds.
** All or part of an interest acquired through a secondary
fund purchase.
Portfolio analysis
Closing Portfolio by value at 31 January 2017
Third party Graphite Capital ICG Total % of investment
GBPm GBPm GBPm GBPm Portfolio
Primary
investments in
funds 263.3 80.1 22.9 366.3 61.7%
Secondary
investments in
funds 45.3 15.8 25.8 86.9 14.6%
Direct and
co-investments 84.5 45.0 11.6 141.1 23.7%
Total Portfolio 393.1 140.9 60.3 594.3 100.0%
% of Portfolio 66.2% 23.7% 10.1% 100.0%
Undrawn
commitments 212.5 46.7 41.1 300.3
Total exposure 605.6 187.6 101.4 894.6
% exposure 67.7% 21.0% 11.3% 100.0%
Portfolio by investment type % of value of underlying investments
Large buyouts 36.1%
Mid-market buyouts 55.4%
Small buyouts 8.5%
Total 100.0%
% of value of
Portfolio by geographic distribution based on location underlying
of company headquarters investments
UK 40.4%
North America 21.1%
Germany 10.8%
France 9.0%
Benelux 5.6%
Scandinavia 5.4%
Spain 2.8%
Other Europe 2.0%
Italy 1.5%
Rest of world 1.4%
Total 100.0%
Total Continental Europe 37.1%
Portfolio by calendar year of % of value of underlying
investment investments
2017 0.2%
2016 18.6%
2015 12.9%
2014 19.3%
2013 16.2%
2012 5.1%
2011 5.2%
2010 4.6%
2009 1.3%
2008 3.4%
2007 3.5%
2006 and before 9.7%
Total 100.0%
Portfolio by sector % of value of underlying investments
Business services 19.1%
Healthcare and education 17.7%
Consumer goods and services 16.1%
Industrials 14.1%
Leisure 11.5%
Automotive supplies 8.5%
Financials 5.3%
Technology and telecommunications 3.5%
Media 3.1%
Chemicals 1.1%
Total 100.0%
Investment activity
Co-investments and
secondary fund Total new
New investments Drawdowns purchases investments
Financial period
ended GBPm GBPm GBPm
31 December 2007 95.2 7.9 103.1
31 December 2008 65.8 12.1 77.9
31 December 2009 21.5 2.5 24.0
31 January 2011 65.6 19.2 84.8
31 January 2012 51.3 29.9 81.2
31 January 2013 48.8 5.2 54.0
31 January 2014 54.2 36.4 90.6
31 January 2015 68.0 57.4 125.4
31 January 2016 46.4 17.9 64.3
31 January 2017 94.3 33.5 127.8
Largest new underlying investments
Cost*
Investment Description Manager Country GBPm
Thomas H
Lee
System One Provider of temporary staff and other associated services Partners USA 8.9
PAI
Roompot Operator and developer of holiday parks Partners Netherlands 7.7
Beck & Provider of industrial machinery installation and Graphite
Pollitzer relocation Capital UK 7.4
New World Graphite
Trading Operator of distinctive pub restaurants Capital UK 6.5
ITN
Networks Operator of television advertising networks ICG USA 4.8
Cambium Provider of educational solutions and services ICG USA 4.2
Southern
Theatres Operator of multiplex stadium seating movie theatres ICG USA 3.7
Infobase
Publishing Provider of educational solutions ICG USA 3.1
Time
Education Provider of specialist education tutoring ICG South Korea 2.1
inVentiv Provider of outsourced services to the healthcare
Health industry Advent USA 2.0
Total of 10 largest new underlying investments 50.4
* Cost of investment is calculated as the Company's
share of the fund's cost of investment plus
any co-investment amounts paid
Realisations*
Financial period ended GBPm % of opening Portfolio
31 December 2007 112.4 54.5%
31 December 2008 25.8 12.9%
31 December 2009 14.0 7.3%
31 January 2011 19.8 8.5%
31 January 2012 92.9 26.0%
31 January 2013 74.2 19.7%
31 January 2014 118.3 28.5%
31 January 2015 142.2 32.8%
31 January 2016 120.3 27.9%
31 January 2017 85.5 20.0%
* Excluding secondary sales of fund interests
Largest underlying realisations
Proceeds
Investment Manager Year of investment Realisation type GBPm
Deutsche
Spheros Beteiligungs 2011 Trade 8.9
David Lloyd Leisure TDR Capital 2013 Recapitalisation 5.0
Swissport PAI Partners 2011 Trade 3.4
Graphite
U-POL Capital 2010 Recapitalisation 3.1
La Maison Bleue Activa 2012 Secondary 3.1
Deustche
Broetje-Automation Beteiligungs 2012 Trade 3.1
Technogym Arle Capital 2008 IPO 3.0
Loungers Piper 2012 Secondary 2.9
Thomas H Lee
inVentiv Health Partners 2010 Partial sale 2.5
Stork Arle Capital 2008 Trade 2.0
Total of 10 largest underlying
realisations 37.0
Commitments analysis
The following tables analyse commitments at 31 January 2017. Original
commitments are translated at 31 January 2017 exchange rates.
Original Outstanding Average
commitment commitment drawdown
GBPm GBPm percentage % of total outstanding commitments
Investment
period not
commenced 12.9 12.9 0.0% 4.3%
Funds in
investment
period 457.0 244.2 46.6% 81.3%
Funds post
investment
period 574.3 43.2 92.5% 14.4%
1,044.2 300.3 71.2% 100.0%
Remaining investment period of commitments % of commitments
Investment period not commenced 4.3%
> 5 years 6.9%
4-5 years 13.9%
3-4 years 22.4%
2-3 years 16.0%
1-2 years 19.5%
<1 year 2.6%
Investment period complete 14.4%
Total 100.0%
Movement in outstanding commitments in the year GBPm
As at 1 February 2016 253.8
New primary commitments 117.6
New commitments relating to co-investments and secondary
purchases 8.3
Drawdowns (94.3)
Currency and other movements 14.9
As at 31 January 2017 300.3
New commitments in the year to 31 January 2017
Fund Strategy Geography GBPm
Primary commitments
ICG Strategic Secondaries Secondary fund
II restructurings USA 18.6
Sixth Cinven Fund Large buyouts Europe 15.5
BC European Capital X Large buyouts Europe/ USA 12.9
ICG Asia Pacific Fund III Mid-market buyouts Asia 12.3
Gridiron Capital III Mid-market buyouts USA 12.2
One Equity Partners VI Mid-market buyouts Europe/ USA 12.0
Advent Global Private
Equity VIII Large buyouts Europe/ USA 11.7
Permira VI Large buyouts Europe 9.0
IK VIII Mid-market buyouts Europe 8.4
Piper Private Equity Fund
VI Small buyouts UK 5.0
Total primary commitments 117.6
Commitments relating to co-investments and secondary
purchases 8.3
Total new commitments 125.9
Currency Exposure
31 January 31 January 31 January 31 January
2017 2017 2016 2016
GBPm % GBPm %
Portfolio*
- Sterling 269.1 45.3% 209.1 48.8%
- Euro 156.5 26.3% 122.8 28.7%
- US dollar 115.4 19.4% 60.9 14.2%
- Other European 41.5 7.0% 33.5 7.8%
- Other 11.8 2.0% 1.9 0.5%
Total 594.3 100.0% 428.2 100.0%
*Currency exposure is calculated by reference to the
location of the underlying Portfolio companies' headquarters.
31 January 31 January 31 January 31 January
2017 2017 2016 2016
GBPm % GBPm %
Outstanding commitments
- Sterling 77.5 25.8% 102.3 40.3%
- Euro 166.2 55.4% 131.2 51.7%
- US dollar 54.5 18.1% 18.4 7.2%
- Other European 2.1 0.7% 1.9 0.8%
Total 300.3 100.0% 253.8 100.0%
Unaudited Results
Income Statement (unaudited)
Year to 31 January 2017 Year to 31 January 2016
Revenue Capital Revenue Capital
return return Total return return Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment
returns
Income, gains
and losses
on
investments 9,892 105,194 115,086 12,100 33,761 45,861
Deposit
interest 242 - 242 309 - 309
Other income 17 - 17 115 - 115
Foreign
exchange
gains and
losses - 2,993 2,993 - 747 747
10,151 108,187 118,338 12,524 34,508 47,032
Expenses
Investment
management
charges 4 (1,552) (4,657) (6,209) (1,509) (4,260) (5,769)
Other
expenses (1,638) (1,145) (2,783) (1,722) (1,123) (2,845)
(3,190) (5,802) (8,992) (3,231) (5,383) (8,614)
Profit before
tax 6,961 102,385 109,346 9,293 29,125 38,418
Taxation 5 (1,184) 787 (397) (1,292) 1,292 -
Profit for
the year 5,777 103,172 108,949 8,001 30,417 38,418
Attributable
to:
Equity
shareholders 5,777 103,172 108,949 8,001 30,417 38,418
Basic and 6 153.43p 53.13p
diluted
earnings per
share
The columns headed 'Total' represent the income statement
for the relevant financial years and the columns headed
'Revenue return' and 'Capital return' are supplementary
information, in line with the Statement of Recommended
practice for investment trusts issued by the Association
of Investment Companies in November 2014. There is
no Other Comprehensive Income.
Balance Sheet (unaudited)
31 January 2017 31 January 2016
Notes GBP'000 GBP'000
Non-current assets
Investments held at fair
value
- Unquoted investments 491,099 356,939
- Quoted investments 364 -
- Subsidiary investments 80,718 57,168
12 572,181 414,107
Current assets
Cash and cash equivalents 38,522 103,831
Receivables 8 2,384 4,038
40,906 107,869
Current liabilities
Payables 9 354 634
Net current assets 40,552 107,235
Total assets less current
liabilities 612,733 521,342
Capital and reserves
Share capital 10 7,292 7,292
Capital redemption reserve 2,112 2,112
Share premium 12,936 12,936
Capital reserve 581,753 484,782
Revenue reserve 8,640 14,220
Total equity 612,733 521,342
Net asset value per share 871.0p 730.9p
(basic and diluted)
Statement of Changes in Equity (unaudited)
Capital Realised Unrealised Total
Share redemption Share capital capital Revenue shareholders'
capital reserve premium reserve reserve reserve equity
Company GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year to 31 January
2017
Opening balance at
1 February 2016 7,292 2,112 12,936 363,325 121,457 14,220 521,342
Profit for the year
and total
comprehensive
income - - - (1,178) 104,350 5,777 108,949
Transfer on
disposal of
investments - - - - - - -
Dividends paid or
approved - - - - - (11,357) (11,357)
Purchase of shares
into treasury - - - (6,201) - - (6,201)
Closing balance at
31 January 2017 7,292 2,112 12,936 355,946 225,807 8,640 612,733
Capital Realised Unrealised Total
Share redemption Share capital capital Revenue shareholders'
Company capital reserve premium reserve reserve reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year to 31 January
2016
Opening balance at
1 February 2015 7,292 2,112 12,936 348,412 115,077 21,035 506,864
Profit for the year
and total
comprehensive
income - - - 2,200 28,217 8,001 38,418
Transfer on
disposal of
investments - - - 21,837 (21,837) - -
Dividends paid or
approved - - - - - (14,816) (14,816)
Purchase of shares
into treasury - - - (9,124) - - (9,124)
Closing balance at
31 January 2016 7,292 2,112 12,936 363,325 121,457 14,220 521,342
Cash Flow Statement (unaudited)
Year to 31 January Year to 31 January
2017 2016
Notes GBP'000 GBP'000
Operating activities
Sale of portfolio
investments 50,338 89,941
Purchase of portfolio
investments (102,621) (56,213)
Interest income
received from
portfolio
investments 7,263 8,951
Dividend income
received from
portfolio
investments 2,629 2,882
Other income received 259 384
Investment management
charges paid (6,143) (5,840)
Other expenses paid (1,380) (1,269)
Net cash (outflow) /
inflow from operating
activities (49,655) 38,836
Financing activities
Bank facility fee (1,089) (1,963)
Purchase of shares
into treasury (6,201) (9,110)
Equity dividends paid 7 (11,357) (14,816)
Net cash outflow from
financing activities (18,647) (25,889)
Net (decrease) /
increase in cash and
cash equivalents (68,302) 12,947
Cash and cash
equivalents at
beginning of year 103,831 90,137
Net (decrease) /
increase in cash and
cash equivalents (68,302) 12,947
Effect of changes in
foreign exchange
rates 2,993 747
Cash and cash
equivalents at end of
year 38,522 103,831
Notes to the Financial Report (unaudited)
1 General information
ICG Enterprise Trust plc (formerly Graphite Enterprise Trust PLC, "the
Company") is registered in England and Wales and domiciled in England.
The registered office is Juxon House, 100 St Paul's Churchyard, London
EC4M 8BU. The Company's objective is to provide shareholders with long
term capital growth through investment in unquoted companies, mostly
through private equity funds but also directly.
During the year ended 31 January 2016, Graphite Capital Management LLP
("Graphite Capital" or "the Former Manager") served as manager of the
Company. On 1 February 2016, the Board appointed ICG Alternative
Investment Limited ("ICG" or "the Manager") as the new manager of the
Company. At the same time, the name of the Company was changed from
Graphite Enterprise Trust PLC to ICG Enterprise Trust plc, and the names
of its subsidiaries Graphite Enterprise Trust Limited Partnership and
Graphite Enterprise Trust (2) Limited Partnership were changed to ICG
Enterprise Trust Limited Partnership and ICG Enterprise Trust (2)
Limited Partnership. In addition to these limited partnerships, ICG
Enterprise Trust Co-investment Limited Partnership was established as a
new subsidiary (together "the Partnerships").
This report was approved for issue by the Board of Directors on 12 April
2017.
2 Unaudited financial report
This financial report does not comprise statutory accounts within the
meaning of section 434 of the Companies Act 2006. Statutory accounts
for the year to 31 January 2016 were approved by the Board of Directors
on 14 April 2016 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was unqualified, did not
contain an emphasis of matter paragraph and did not contain any
statements under section 498(2) or (3) of the Companies Act 2006.
Statutory accounts for the year to 31 January 2017 will be delivered to
the Registrar of Companies following the Company's Annual General
Meeting which will be held at the Stationers' Hall, Ave Maria Lane,
London EC4M 7DD at 2.00pm on 13 June 2017.
3 Basis of preparation
The financial information for the year ended 31 January 2017 has been
prepared in accordance with the Companies Act 2006 as applicable to
companies using International Financial Reporting Standards ("IFRS") and
the Statement of Recommended Practice (the "SORP") provisions currently
in effect issued by the Association of Investment Companies in November
2014.
IFRS comprises standards and interpretations approved by the
International Accounting Standards Board and the IFRS Interpretations
Committee as adopted in the European Union as at 31 January 2017.
These financial statements have been prepared on a going concern basis
and on the historical cost basis of accounting, modified for the
valuation of certain assets at fair value. The principal accounting
policies adopted are set out below. These policies have been applied
consistently throughout the current and prior year.
In order to reflect the activities of an investment trust company,
supplementary information which analyses the income statement between
items of a revenue and capital nature has been presented alongside the
income statement. In analysing total income between capital and revenue
returns, the directors have followed the guidance contained in the SORP.
The following requirements of the SORP have been followed:
-- Capital gains and losses on investments sold and on
investments held arising on the revaluation or disposal of investments
classified as held at fair value through profit or loss should be shown
in the capital column of the income statement.
-- Returns on any share or debt security for a fixed amount
(whether in respect of dividends, interest or otherwise) should be shown
in the revenue column of the income statement.
-- The Board should determine whether the indirect costs of
generating capital gains should also be shown in the capital column of
the income statement. If the Board decides that this should be so, the
management fee should be allocated between revenue and capital in
accordance with the Board's expected long term split of returns, and
other expenses should be charged to capital only to the extent that a
clear connection with the maintenance or enhancement of the value of
investments can be demonstrated.
In accordance with IFRS10 (amended), the Company is deemed to be an
investment entity on the basis that:
(a) it obtains funds from one or more investors for the purpose of
providing investors with investment management services;
(b) it commits to its investors that its business purpose is to invest
funds for both returns from capital appreciation and, investment income;
and
(c) it measures and evaluates the performance of substantially all of
its investments on a fair value basis.
As a result, the Company's subsidiaries are included in unquoted
investments at fair value as the subsidiaries are also deemed to be
investment entities.
Investments
All investments are designated upon initial recognition as held at fair
value through profit or loss (described in this financial report as
investments held at fair value) and are measured at subsequent reporting
dates at fair value. Changes in the value of all investments held at
fair value, which include returns on those investments such as dividends
and interest, are recognised in the income statement and are allocated
to the revenue column or the capital column in accordance with the SORP.
Unquoted Investments
Fair value for unquoted investments is established by using various
valuation techniques.
Funds and co-investments are valued at the underlying investment
manager's valuation where this is consistent with the requirement to use
fair value. Where this is not the case, adjustments are made or
alternative methods are used as appropriate. The most common reason for
adjustments is to take account of events occurring after the date of the
manager's valuation, such as realisations.
The fair value of direct unquoted investments is calculated in
accordance with the 2015 International Private Equity and Venture
Capital Valuation Guidelines. The primary valuation methodology used is
an earnings multiple methodology, with other methodologies used where
they are more appropriate.
Quoted Investments
Quoted investments are held at the last traded bid price on the balance
sheet date. When a purchase or sale is made under contract, the terms of
which require delivery within the timeframe of the relevant market, the
contract is reflected on the trade date.
Associates
Investments which fall within the definition of an associate under IAS
28 (Investments in associates) are accounted for as investments held at
fair value through profit or loss, as permitted by that standard.
The Company holds an interest (including indirectly through its
subsidiaries) of more than 20% in a small number of investments that may
normally be classified as subsidiaries or associates. These investments
are not considered subsidiaries as the Company does not exert control or
significant influence over the activities of these
companies/partnerships, as they are managed by other third parties.
4 Investment Management charges
Year ended 31 January Year ended 31 January
2017 2016
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment
management
charge 1,552 4,657 6,209 1,415 4,244 5,659
Irrecoverable
VAT - - - 94 16 110
1,552 4,657 6,209 1,509 4,260 5,769
Following the appointment of ICG as manager on 1 February 2016, the
management fee charged for managing the Company was reduced to 1.4%
(from 1.5%) of the value of invested assets and 0.5% of outstanding
commitments, in both cases excluding funds managed by Graphite Capital
Management LLP and ICG. No fee is charged on cash or liquid asset
balances. The amounts payable during the year are set out above.
Management charges for 2016 set out in the table above were payable to
Graphite Capital Management LLP, the Former Manager, for managing the
Company. The Former Manager is a related party for the purposes of the
year ended 31 January 2016.
The allocation of the total investment management charges was unchanged
in 2017 with 75% of the total allocated to capital and 25% allocated to
revenue.
The table below sets out the management charges that the Company has
borne in respect of its investments in funds managed by the Former
Manager in periods when the Former Manager was a related party, and
those borne in respect of its investments in funds managed by the
Manager in periods when the Manager was a related party.
Year ended Year ended
31 January 2017 31 January 2016
GBP'000 GBP'000
ICG Europe Fund VI 299 *
ICG Europe Fund V 320 *
ICG European Fund 2006B 94 *
ICG Strategic Secondaries Fund II 185 *
ICG Velocity Partners Co-Investor 115 *
ICG Asia Pacific III 124 *
Graphite Capital Partners VI * (120)
Graphite Capital Partners VII * 86
Graphite Capital Partners VIII * 1,561
1,137 1,527
* not applicable as the manager of this fund was not a related party in
the year
5 Taxation
In both the current and prior years the tax charge was lower than the
standard rate of corporation tax, principally due to the Company's
status as an investment trust, which means that capital gains are not
subject to corporation tax. The standard rate of corporation tax in the
UK changed from 21% to 20% with effect from 1 April 2015. Accordingly
the Company's profits for the year ended 31 January 2017 are taxed at an
effective rate of 20% (2016: 20.17%). The effect of this and other items
affecting the tax charge is shown in note 5(b) below.
Year ended Year ended
31 January 2017 31 January 2016
GBP'000 GBP'000
a) Analysis of charge in the year
Tax charge on items allocated to revenue 787 1,292
Tax credit on items allocated to capital (787) (1,292)
Tax charge on items relating to prior years 397 -
Corporation tax 397 -
b) Factors affecting tax charge for the year
Profit on ordinary activities before tax 109,346 38,418
Profit on ordinary activities multiplied by standard
rate of corporation tax in the UK of 20% (2016: 20.17%) 21,869 7,749
Effect of:
- net investment returns not subject to corporation
tax (21,637) (6,960)
- dividends not subject to corporation tax (526) (133)
- expenses not deductible for tax purposes - 20
- current year management expenses not utilised /
(utilised) 294 (206)
- other deductions - (470)
- overseas tax suffered 397 -
Total tax charge 397 -
The Company has no recognised carried forward excess management expenses
(2016: nil). There are no carried forward deferred tax assets or
liabilities (2016: nil). Due to the Company's status as an investment
trust, and the intention to continue meeting the conditions required to
obtain approval in the foreseeable future, the Company has not provided
deferred tax on any capital gains and losses arising on the revaluation
or disposal of investments. For all investments the tax base is equal to
the carrying amount.
6 Earnings per share
Year ended Year ended
31 January 2017 31 January 2016
Revenue return per ordinary share 8.13p 11.07p
Capital return per ordinary share 145.30p 42.06p
Earnings per ordinary share (basic and
diluted) 153.43p 53.13p
Weighted average number of shares 71,010,218 72,310,909
The earnings per share figures are based on the weighted average numbers
of shares set out above.
7 Dividends
The Board has proposed a final dividend of 10.0p per share in respect of
the year ended 31 January 2017 which, if approved by shareholders, will
be paid on 20 June 2017, to shareholders on the register of members at
the close of business on 2 June 2017.
Year ended Year ended
31 January 2017 31 January 2016
GBP'000 GBP'000
Final in respect of year ended 31 January 2016: 6.0p
(PY: 10.0p) per share 4,280 7,232
Special in respect of year ended 31 January 2016:
0p (PY: 5.5p) per share - 3,977
Interim in respect of year ended 31 January 2017:
10.0p (PY: 5.0p) per share 7,077 3,607
Total 11,357 14,816
8 Receivables - Current
As at 31 January 2017, prepayments and accrued income included GBP0.5m
(2016: GBP1.0m) of unamortised costs in relation to the bank facility.
Of this amount GBP0.3m (2016: GBP0.5m) is expected to be amortised in
less than one year.
31 January 2017 31 January 2016
GBP'000 GBP'000
Prepayments and accrued income 939 1,912
Subsidiary undertakings 1,445 2,126
2,384 4,038
9 Payables - Current
31 January 2017 31 January 2016
GBP'000 GBP'000
Accruals 354 537
Other creditors - 97
354 634
10 Share capital
Authorised Issued and fully paid
Nominal Nominal
Equity share capital Number GBP'000 Number GBP'000
Balance at 31 January 2016 and
31 January 2017 120,000,000 12,000 72,913,000 7,292
All ordinary shares have a nominal value of 10.0p. At 31 January 2017,
72,913,000 shares had been allocated, called up and fully paid. Of this
total, the Company held 2,568,508 shares in treasury (2016: 1,586,163)
leaving 70,344,492 (2016: 71,326,837) shares not held in treasury, all
of which have equal voting rights. The market value of the Company's
ordinary shares at 31 March 1982 was 16p.
11 Financial instruments and risk management
The Company is an investment company as defined by section 833 of the
Companies Act 2006 and conducts its affairs so as to qualify as an
investment trust under the provisions of section 1158 of the Corporation
Tax Act 2010 ("Section 1158"). The Company's objective is to provide
shareholders with long term capital growth through investment in
unquoted companies, mostly through specialist funds but also directly.
Investments in funds have anticipated lives of approximately ten years.
Direct investments are made with an anticipated holding period of
between three and five years. Investment agreements will, however,
usually provide that any loans advanced to investee companies are for a
longer period than this. The agreements will usually provide for
repayments to be made by instalments with provision for full repayment
on sale or flotation.
Financial risk management
The Company's activities expose it to a variety of financial risks:
market risk (comprising currency risk, interest rate risk and price
risk), investment risk, credit risk and liquidity risk. The Company's
overall risk management programme focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the
Company's financial performance. The Manager has overall responsibility
for managing the risks and the framework for monitoring and coordinating
these risks. This is monitored by the Board. The Company's financial
risk management objectives and processes used to manage these risks have
not changed from the previous period and the policies are set out below:
Market risk
(i) Currency risk
The Company's investments are principally in the UK and continental
Europe and are primarily denominated in sterling and in euros. There are
also smaller amounts in US dollars and in other European currencies. The
Company is exposed to currency risk in that movements in the value of
sterling against these foreign currencies will affect the net asset
value and the cash required to fund undrawn commitments. The Board
regularly reviews the level of foreign currency denominated assets and
outstanding commitments in the context of current market conditions and
may decide to buy or sell currency or put in place currency hedging
arrangements.
(ii) Interest rate risk
The fair value of the Company's investments and cash balances are not
directly affected by changes in interest rates.
(iii) Price risk
The risk that the value of a financial instrument will change as a
result of changes to market prices is one that is fundamental to the
Company's objective, which is to provide long term capital growth
through investment in unquoted companies. The investment Portfolio is
continually monitored to ensure an appropriate balance of risk and
reward in order to achieve the Company's objective. No hedging of this
risk is undertaken.
The Company is exposed to the risk of change in value of its private
equity investments. For all investments the market variable is deemed to
be the price itself.
Investment and credit risk
(i) Investment risk
Investment risk is the risk that the financial performance of the
companies in which ICG Enterprise invests either improves or
deteriorates, thereby affecting the value of that investment.
Investments in unquoted companies whether indirectly or directly are by
their nature subject to potential investment losses. The investment
Portfolio is highly diversified.
(ii) Credit risk
The Company's exposure to credit risk arises principally from its
investment in cash deposits. The Company aims to invest the majority of
its liquid Portfolio in assets which have low credit risk. The Company's
policy is to limit exposure to any one investment to 15% of gross
assets. This is regularly monitored by the Manager as a part of its cash
management process.
Cash is held on deposit with three UK banks and totalled GBP38.5m (2016:
GBP103.8m). Of this amount GBP25.1m was deposited at Lloyds Bank
("Lloyds"), which currently has a credit rating of BAA1 from Moody's,
and this represents the maximum exposure to credit risk at the balance
sheet date. No collateral is held by the Company in respect of these
amounts. None of the Company's cash deposits were past due or impaired
at 31 January 2017 (2016: nil).
Liquidity risk
The Company has significant investments in unquoted companies and funds
which are inherently illiquid. The Company also has substantial undrawn
commitments to funds, the great majority of which are likely to be
called over the next five years. The Company aims to manage its affairs
to ensure sufficient cash, other liquid assets and undrawn borrowing
facilities will be available to meet contractual commitments when they
are called and also seeks to have cash generally available to meet other
short term financial needs. All cash and cash equivalents are available
on demand. The Company's liquidity management policy involves projecting
cash flows and considering the level of liquidity necessary to meet
these.
The Company has access to committed bank facilities of a headline
GBP103m, which are structured as parallel sterling and euro facilities
of GBP50m and EUR61.7m (GBP53.0m) respectively. The facilities are
provided jointly by Lloyds and The Royal Bank of Scotland ("RBS"). Of
the total facilities, GBP20m and EUR23.6m will expire in March 2020
after being renewed in March 2017 on the following basis:
-- Upfront Cost: 90bps
-- Non-utilisation fees: 90bps
-- Margin: 300bps
The remaining balance of GBP30m and EUR38.1m will expire in April 2019.
As at 31 January 2017 the Company's financial liabilities amounted to
GBP0.4m of payables (2016: GBP0.6m) which were due in less than one
year.
Capital risk management
The Company's capital is represented by its net assets, which are
managed to achieve the Company's investment objective. The Company
currently has no debt.
The Board can manage the capital structure directly since it has taken
the powers, which it is seeking to renew, to issue and buy-back shares
and it also determines dividend payments. The Company is subject to
externally imposed capital requirements with respect to the obligation
and ability to pay dividends by section 1159 Corporation Tax Act 2010
and by the Companies Act 2006, respectively.
Total equity at 31 January 2017, the composition of which is shown on
the balance sheet was GBP612.7m (2016: GBP521.3m).
12 Fair values estimation
IFRS 7 requires disclosure of fair value measurements of financial
instruments categorised according to the following fair value
measurement hierarchy:
-- Quoted prices (unadjusted) in active markets for identical assets or
liabilities (level 1).
-- Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (level 2).
-- Inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs) (level 3).
The valuation techniques applied to level 1 and level 3 assets are
described in note 3.
The following table presents the assets that are measured at fair value
at 31 January 2017. The Company had no financial liabilities measured at
fair value at that date.
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Investments held at fair value
Unquoted investments - indirect - - 383,068 383,068
Unquoted investments - direct - - 108,031 108,031
Quoted investments - direct 364 - - 364
Subsidiary undertakings - - 80,718 80,718
Total investments held at fair value 364 - 571,817 572,181
The following table presents the assets that are measured at fair value
at 31 January 2016. The Company had no financial liabilities measured at
fair value at that date.
Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Investments held at fair value
Unquoted investments - indirect - - 272,495 272,495
Unquoted investments - direct - - 84,444 84,444
Quoted investments - direct - - - -
Subsidiary undertakings - - 57,168 57,168
Total investments held at fair value - - 414,107 414,107
All unquoted and quoted investments are valued at fair value in
accordance with IFRS 13. The following tables present the changes in
level 3 instruments for the year to 31 January 2017.
Unquoted investments (indirect) at fair value through Unquoted investments (direct) at fair value through Subsidiary
profit or loss profit or loss undertakings Total
31 January 2017 GBP'000 GBP'000 GBP'000 GBP'000
Opening balances 272,495 84,444 57,168 414,107
Additions 94,116 8,365 12,097 114,578
Disposals (49,920) (11,889) - (61,809)
Gains and losses recognised in profit or loss 66,377 27,111 11,453 104,941
Closing balance 383,068 108,031 80,718 571,817
Total gains for the year included in income statement
for assets held at the end of the reporting period 45,734 19,838 11,453 77,025
The following tables present the changes in level 3 instruments for the
year to 31 January 2016.
Unquoted investments (indirect) at fair value through Unquoted investments (direct) at fair value through Subsidiary
profit or loss profit or loss undertakings Total
31 January 2016 GBP'000 GBP'000 GBP'000 GBP'000
Opening balances 289,491 68,339 56,217 414,047
Additions 43,857 8,643 (1,226) 51,274
Disposals (77,790) (6,860) - (84,650)
Gains and losses recognised in profit or loss 16,937 14,322 2,177 33,436
Closing balance 272,495 84,444 57,168 414,107
Total gains for the year included in income statement
for assets held at the end of the reporting period 16,937 14,322 2,177 33,436
13 Related party transactions
Transactions between the Company, Manager and the Former Manager are
disclosed in note 4. Significant transactions between the Company and
its subsidiaries are shown below:
Year ended 31 Year ended 31
January 2017 January 2016
Nature of
Subsidiary transaction GBP'000 GBP'000
ICG Enterprise Increase in
Trust Limited amounts owed to
Partnership subsidiaries 3,338 3,549
Income allocated 248 875
Increase /
ICG Enterprise (decrease) in
Trust (2) Limited amounts owed to
Partnership subsidiaries 1,683 (2,325)
Income allocated 1080 1284
ICG Enterprise Increase in 14,991 -
Trust Co - amounts owed by
Investment subsidiaries
Limited
Partnership
Income allocated 204 -
Amounts owed by subsidiaries represent funding provided by the Company
to its subsidiaries to allow them to make investments. The balances will
be repaid out of proceeds from their portfolios.
Amounts owed by Amounts owed to
subsidiaries subsidiaries
31 31
January 31 January January 31 January
2017 2016 2017 2016
Subsidiary GBP'000 GBP'000 GBP'000 GBP'000
ICG Enterprise Trust Limited Partnership - - 28,709 25,371
ICG Enterprise Trust (2) Limited Partnership 36,939 35,678 2,944 -
ICG Enterprise Trust Co - Investment Limited 14,991 - - -
Partnership
Funds managed by the Company's current and Former Manager:
31 January 2017 31 January 2016
Fair Fair
Original commitment Remaining commitment value Original commitment Remaining commitment value
Fund GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
ICG Europe
Fund VI* 21,457 12,101 9,683 10,763 11,327 48
ICG Europe
Fund V* 13,198 1,191 10,828 7,176 514 7,797
ICG European
Fund 2006B* 19,312 2,065 7,163 16,145 8,937 8,013
ICG Strategic
Secondaries
Fund II** 19,879 14,005 6,873 - - -
ICG Velocity
Partners
Co-Investor** 11,927 2,270 10,994 - - -
ICG Asia
Pacific
III** 11,927 9,510 3,119 - - -
Total 97,700 41,142 48,660 34,084 20,778 15,858
* Euro denominated positions translated to sterling at spot rate on 31
January 2016 and 31 January 2017.
** US dollar denominated positions translated to sterling at spot rate
on 31 January 2016 and 31 January 2017.
At the balance sheet date the Company has fully funded its proportionate
share of all commitments invested due to all ICG managed funds in which
it is invested, including ICG Strategic Secondaries Fund II and ICG
Europe Fund VI.
31 January 2016
Fair
Original commitment Remaining commitment value
Fund GBP'000 GBP'000 GBP'000
Graphite Capital
Partners VIII 80,000 45,009 29,778
Graphite Capital
Partners VIII Top Up
Fund 20,000 11,010 6,547
Graphite Capital
Partners VII 42,800 5,279 10,162
Graphite Capital
Partners VII Top Up
Fund 10,000 1,322 1,679
Graphite Capital
Partners VII Top Up
Fund Plus 6,000 1,042 1,508
Graphite Capital
Partners VI 78,188 2,084 23,845
Graphite Capital
Partners V 15,000 - -
Total 251,988 65,746 73,519
The funds managed by the Former Manager are not considered a related
party from 1 February 2016.
Glossary
Alternative Performance Measures ("APMs") are a term defined by the
European Securities and Markets Authority as "financial measures of
historical or future performance, financial position, or cash flows,
other than a financial measure defined or specified in the applicable
financial reporting framework".
APMs are used in this report if considered by the Board and the Manager
to be the most relevant basis for shareholders in assessing the overall
performance of the Company and for comparing the performance of the
Company to its peers, taking into account industry practice. Definitions
and reconciliations to IFRS measures are provided in the main body of
the report or in this Glossary, where appropriate.
Co-investment incentive scheme accrual represents the estimated value of
interests in the co-investment incentive scheme operated by the Company.
At both 31 January 2017 and 31 January 2016, the accrual was estimated
as the theoretical value of the interests if the Portfolio had been sold
at its carrying value at those dates.
Drawdowns are amounts invested by the Company into funds when called by
underlying managers in respect of an existing commitment.
EBITDA stands for earnings before interest, tax, depreciation and
amortisation, which is a widely used valuation measure in the private
equity industry.
Enterprise value is the aggregate value of a company's entire issued
share capital and net debt.
FTSE All-Share Index Total return is the change in the level of the FTSE
All-Share Index, assuming that dividends are re-invested on the day that
they are paid.
Full realisations are exit events (e.g. trade sale, sale by public
offering, or sale to a financial buyer) following which the residual
exposure to an underlying company is zero or immaterial.
Funds in investment period are those funds which are able to make new
investments under the terms of their fund agreements, usually up to five
years after the initial commitment.
Net asset value per share Total Return is the change in the Company's
net asset value per share, assuming that dividends are re-invested at
the end of the quarter in which the dividend was paid.
Net debt is calculated as the total short term and long term debt in a
business, less cash and cash equivalents.
Overcommitment
In order to achieve full or near full investment, it is usual for
private equity fund investors to make commitments exceeding the amount
of cash immediately available for investment. This is described as
"overcommitment". When determining the appropriate level of
overcommitment, careful consideration needs to be given to the rate at
which commitments might be drawn down, and the rate at which
realisations will generate cash from the existing portfolio to fund new
investment.
Portfolio
Throughout, reference is made to the "Portfolio", which represents the
aggregate of the investment Portfolios of the Company and of its
subsidiary limited partnerships. This is consistent with the commentary
in previous annual and interim reports. The Board and the Manager
consider that this is the most relevant basis for shareholders to assess
the overall performance of the Company and comparison with its peers.
The closest equivalent amount reported on the balance sheet is
"investments at fair value". A reconciliation of these two measures is
presented below.
Balances
Investments receivable
at fair Cash held by from Co-investment
value as subsidiary subsidiary incentive
per balance limited limited scheme
GBPm sheet partnerships partnerships accrual Portfolio
31 January
2017 572.2 - 1.4 20.7 594.3
31 January
2016 414.1 - 2.2 11.9 428.2
Post-crisis investments are defined as those completed in 2009 or later.
Pre-crisis investments are defined as those completed in 2008 or before,
based on the date the original deal was completed, which may differ from
when the Company invested if acquired through a secondary.
Realisation proceeds are amounts received by the Company in respect of
the Portfolio, which may be in the form of capital proceeds or income
such as interest or dividends.
Share price Total Return is the change in the Company's share price,
assuming that dividends are re-invested on the day that they are paid.
Total Return is a performance measure that assumes the notional
re-investment of dividends. This is a measure commonly used by the
listed private equity sector and listed companies in general.
The tables below set out the share price and the net asset value per
share growth figures for periods of one, three, five and ten years to
the balance sheet date, on both an unadjusted basis (i.e. without
dividends re-invested) and on a Total Return basis.
Unadjusted performance in years to 31
January 2017 1 year 3 year 5 year 10 year*
Net asset value per share 19.2% 28.6% 53.0% 91.6%
Share price 28.2% 24.0% 95.7% 81.0%
FTSE All-Share Index 15.7% 10.3% 31.6% 19.8%
Total Return performance in years to 31
January 2017 1 year 3 year 5 year 10 year*
Net asset value per share 23.4% 38.1% 66.9% 119.4%
Share price 31.6% 35.1% 118.3% 115.2%
FTSE All-Share Index 20.1% 22.6% 57.0% 71.2%
* As the Company changed its year end in 2010, the ten year figures are
for the 121 month period to 31 January 2017.
Underlying valuation movement is the change in the valuation of the
Company's Portfolio, before the effect of currency movements.
Undrawn commitments are commitments that have not yet been drawn down
(see definition of drawdowns).
Uplift on exit represents the increase in gross value relative to the
underlying manager's most recent valuation prior to the announcement of
the disposal. Excludes a small number of investments that were public
throughout the life of the investment. May differ from uplift in the
reporting period in certain instances.
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: ICG Enterprise Trust Plc via Globenewswire
http://www.icg-enterprise.co.uk/
(END) Dow Jones Newswires
April 18, 2017 02:01 ET (06:01 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
1 Year Icg Enterprise Chart |
1 Month Icg Enterprise Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
