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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Intermediate Capital Group Plc | LSE:ICP | London | Ordinary Share | GB00BYT1DJ19 | ORD 26 1/4P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2,124.00 | 2,128.00 | 2,130.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Security Brokers & Dealers | 737.1M | 280.6M | 0.9801 | 21.67 | 6.08B |
TIDMICP Fundraising and capital deployment on track Intermediate Capital Group plc (ICG) announces its first half results for the six months ended 30 September 2016. Operational highlights -- Total AUM up 2% to EUR22.0bn, with EUR1.4bn of new money raised; third party fee earning AUM up 5% to EUR16.5bn -- Fundraising performance in line with expectations, driven by our real estate fund, ICG Longbow Fund IV, reaching its maximum GBP1bn size and strong momentum for our Strategic Secondaries fund -- Strong pipeline of opportunities to continue the growth of our fund management franchise -- Capital deployment on track in a competitive investment market -- Investment Company portfolio performance robust, net impairments at GBP23.8m (H1 2016: GBP18.1m), and unrealised capital gains remaining strong Financial highlights -- Group profit before tax of GBP126.2m (H1 2016: GBP93.9m), driven by a strong period of capital gains. -- Adjusted Group profit before tax1 was GBP133.0m (H1 2016: GBP88.1m) -- Fund Management Company profits up 17% to GBP34.0m (H1 2016: GBP29.0m), with third party fee income up 26% -- Investment Company profit is higher at GBP92.2m (H1 2016: GBP64.9m) -- Interim ordinary dividend up 4.2% to 7.5 pence per share in addition to the GBP200m special dividend paid in August 2016 Commenting on the results, Christophe Evain, CEO, said: 'We have delivered a strong set of results for the first half of FY17. AUM is now at a record EUR22.0bn and both fundraising and capital deployment are on track. There has been strong investment performance across our strategies and we are delighted that our newer, smaller strategies are showing steady momentum. 'ICG now has a more diversified business than at any point in our history. This is built on our expertise in understanding and valuing risks. We are highly experienced in both investing and managing investments in more volatile market conditions and we are well positioned to benefit from opportunities that arise. Current market conditions, not limited to the UK's decision to leave the EU, are creating a positive trend favouring alternative asset classes, and sustained low interest rates are creating greater demand from investors for our funds'. Commenting on the results, Kevin Parry, Chairman, said: 'Following the series of special dividends and the re-gearing of the balance sheet, we are now delivering good returns for our shareholders. The Board has commenced a review to determine a progressive dividend policy that will better link our ordinary dividends to our robust business model.' Financials Unaudited Unaudited Audited 6 months to 6 months to 12 months to 30 September 2016 30 September 2015 31 March 2016 Fund Management GBP34.0m GBP29.0m GBP61.2m Company profit before tax Investment Company GBP92.2m GBP64.9m GBP97.6m profit before tax Adjusted Investment GBP99.0m GBP59.1m GBP114.4m Company profit before tax(1) Adjusted Group profit GBP133.0m GBP88.1m GBP175.6m before tax(1) Group profit before GBP126.2m GBP93.9m GBP158.8m tax Adjusted earnings per 39.8p 22.2p 48.1p share(1) Earnings per share 37.4p 24.2p 41.9p Dividend per share 7.5p 7.2p 23.0p Gearing 1.01x 0.80x 0.70x Net debt GBP965.0m GBP803.7m GBP753.7m Net asset value per GBP3.81 GBP3.71 GBP3.94 share(2) (1) As internally reported and excluding the impact of fair value movements on derivatives (H1 2017: GBP7.6m; FY16: GBP17.3m; H1 2016: GBP3.5m). Internally reported numbers exclude the impact of the consolidation of eleven credit funds following the adoption of IFRS 10. (2)Net asset value per share has reduced as a result of the GBP200m (63.4 pence per share) special dividend paid in August 2016. Assets under management Third party assets under management EUR19,848m EUR17,822m EUR19,312m Investment portfolio EUR2,163m EUR2,362m EUR2,270m Total assets under management EUR22,011m EUR20,184m EUR21,582m Third party fee earning assets under management EUR16,537m EUR14,426m EUR15,757m The following foreign exchange rates have been used. 30 September 2016 30 September 2015 31 March 2016 30 September 2016 30 September 2015 31 March 2016 Average Average Average Period end Period end Period end GBP:EUR 1.2154 1.3854 1.3624 1.1549 1.3544 1.2624 GBP:USD 1.3608 1.5412 1.5016 1.2972 1.5129 1.4374 Enquiries A presentation for investors and analysts will be held at 09:30 GMT today at ICG's offices, Juxon House, 100 St Paul's Churchyard, London, EC4M 8BU. The presentation will also be streamed live at 09:30 GMT and be available on demand from 14:00 GMT at http://www.icgam.com/shareholders/Pages/shareholders.aspx. Analyst / Investor enquiries: Christophe Evain, CEO, ICG +44 (0) 20 3201 7700 Philip Keller, CFO, ICG +44 (0) 20 3201 7700 Ian Stanlake, Investor Relations, ICG +44 (0) 20 3201 7880 Media enquiries: Neil Bennett, Tom Eckersley, Maitland +44 (0) 20 7379 5151 Helen Gustard, Corporate Communications, ICG +44 (0) 20 3201 7760 This Half Year Results statement has been prepared solely to provide additional information to shareholders and meets the relevant requirements of the UK Listing Authority's Disclosure and Transparency Rules. The Half Year Results statement should not be relied on by any other party or for any other purpose. This Half Year Results statement 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 Half Year Results statement contains information which prior to this announcement was insider information. About ICG ICG is a specialist asset manager with over 27 years' history in private debt, credit and equity. Our objective is to generate income and consistently high returns whilst protecting against investment downside. We seek to achieve this through our expertise in investing across the capital structure. We combine flexible capital solutions, local access and insight with an entrepreneurial approach to give us a competitive edge in our markets. We are committed to innovation and pioneering new strategies where we can deliver value to our investors. ICG has EUR22.0bn of assets under management globally (as at 30 September, 2016); we are listed on the London Stock Exchange (ticker symbol: ICP), and regulated in the UK by the Financial Conduct Authority (FCA). Intermediate Capital Group, Inc. is a wholly-owned subsidiary of ICG and is registered as an investment adviser under the U.S. Investment Advisers Act of 1940. Further information is available at: www.icgam.com. Business review This has been another period of delivery against our strategic objectives as we continue to grow our specialist asset manager franchise. The highlights of the first half of the financial year have included: -- Fundraising (inflows) in line with expectations including momentum developed for newer strategies -- Weighted average fee rate unchanged -- Capital deployment on track in a competitive investment market -- Investment Company portfolio performing robustly. Currently little impact from wider macroeconomic uncertainty, with a healthy level of realisations and strong capital gains -- Interim dividend increased to 7.5 pence per share and ongoing capital management sees gearing within target range following GBP200m capital return to shareholders Alternative asset market growing strongly Alternative asset classes are attractive to institutional investors for their enhanced returns and diversification opportunities. The characteristics that have driven the growth in alternative asset classes
in recent years remain unchanged in the first half of the financial year. The increasing wealth of developing nations, combined with ageing populations supports the trend of increasing the absolute size of institutional assets under management. At the same time, bond yields remain low thereby impacting the returns of traditional asset classes. Arguably, the current macroeconomic uncertainty, including but not limited to the UK's decision to leave the European Union in June (Brexit), may prolong and enhance the positive trend in favour of alternative asset classes. The current fundraising environment is inevitably attracting new entrants into the alternative asset market. With increased competition, our established approach of focussing on capital preservation and yield across mid-market transactions in four strategic asset classes and identifying market opportunities to develop differentiated strategies is a competitive advantage. Furthermore, unlike new market entrants, we are increasingly of a size and scale that enables resource constrained investors to access our range of strategies through multi strategy mandates tailored to their individual requirements. Fundraising momentum for newer strategies At EUR1.4bn the pace of fundraising in the first half of the financial year was, as expected and previously indicated, lower than in prior periods. The pace of fundraising for our closed end funds, which represent 97% of our assets under management, is dependent on when our larger funds come to market. We are currently fundraising for our smaller and newer strategies whereas in the prior year fundraising was driven by our larger European funds. The period saw the successful closing of our real estate fund, ICG Longbow Fund IV, at its maximum size of GBP1.0bn, of which GBP146m was raised following the UK's EU referendum. This makes it 33% larger than its predecessor fund and of a similar size to the combined total previously raised for this strategy. The strategy continues to appeal to investors because of its focus on selectively investing into mid market assets across the UK, avoiding City of London office assets and those with cyclical cash flows. Elsewhere, we have made good progress in raising our first Strategic Secondaries fund which is dedicated to the highly complex and structured part of the secondaries market. To date we have raised $347m, of which $180m was raised in the first half of the financial year. As one of our newer strategies, the success of this fund, with fees charged on committed capital, is contributing to our growing fund management profits. We have also seen increased interest in our liquid strategies following the arrival of Zak Summerscale to lead this business in June 2016. We are cautiously optimistic that we will be able to convert investor interest into investor commitments over the coming months, thereby increasing the profitability of this scalable strategy. Capital deployment on track in a competitive investment market Our increasing number of strategies means that we operate in a diversified investment market. However, across all of our strategies we have seen the investment market remain competitive as institutions seek to deploy the increasing amounts of capital raised, combined with the attractiveness of the returns offered by private capital. In this environment, the competitive advantage gained from our local teams, sector specialisms and ability to deploy capital flexibly comes to the fore and has helped us to source attractive deals whilst maintaining our investment discipline. In Asia, the slowdown in China has made us particularly cautious when selecting deals resulting in a slower than planned investment pace. Elsewhere, we are pleased to have maintained the pace of investment across our direct investment funds in the first half of the financial year and have a strong pipeline of investment opportunities for the second half. As a result we are confident that each of our funds will deploy their available capital during their investment period. Investment Company portfolio performing robustly Liquidity in the market has also contributed to a period of healthy realisations from the Investment Company's mezzanine portfolio. Furthermore, as previously indicated, the period saw strong capital gains, in part from the disposal of the Group's remaining investment in AAS Link, and in part due to healthy unrealised gains arising from the period end mark to market review. Whilst we expect the current pace of realisations to continue into the second half of the financial year, the overall level of capital gains recognised in the income statement is likely to be lower. It remains too early to determine the impact, if any, of Brexit on our portfolio. At present the performance of the Investment Company's mezzanine portfolio remains robust, with only a small number of assets underperforming. By number, 75% of our portfolio companies (80% on a weighted average value basis) are recording EBITDA above or at the same level as the previous year, a post 2009 record. Net impairments of GBP23.8m in the first half of the financial year are marginally higher than the comparative period, but remain in line with the long term average of 2.5% of the opening Investment Company portfolio. Interim dividend increased and ongoing capital management The Board recommends an interim dividend of 7.5p, an increase of 4.2% on the prior year interim dividend. The dividend will be paid on 9 January 2017 to shareholders on the register on 2 December 2016. Following approval at the AGM, a special dividend of GBP200m, with an associated share consolidation, was paid in August 2016 resulting in the Board meeting the gearing and return on equity targets set out in May 2014. We continue to actively manage our sources of balance sheet financing to ensure we have access to sufficient cash and debt facilities. During the first half of the financial year, $292m and EUR74m of US private placements were raised with five, eight and 10 year maturities. Following this debt raising, the weighted average life of drawn debt at 30 September was 3.6 years with a weighted average cost of 3.7%. Outlook There remains significant potential to expand our portfolio of strategies and thereby further grow our fund management franchise. Our balance sheet is a facilitator of this organic growth as we use our capital to demonstrate proof of concept and seed new funds. At present we see plenty of opportunities to expand existing strategies into new geographies and add complementary strategies to the portfolio. We will further update the market on these initiatives at the appropriate time. The current pace of fundraising is expected to continue for the remainder of the financial year as we continue raising money for our newer strategies. Our continued ability to access attractive investment opportunities means that some of our more established strategies are investing well and could be back fundraising during the next financial year. ICG now has a more diversified business than at any point in our history. As such, we are well placed to manage, and indeed take advantage of opportunities arising from the attractiveness of the alternative asset market, as well as the uncertainties arising from the UK's vote to leave the European Union. We have a long established, substantial presence in Europe operating through existing subsidiaries and will maintain multiple options for new fund licences to ensure access to EU and non EU clients. However, we do not anticipate the need for any significant organisational change and have no intention of moving our UK operations. Overall, we remain committed to generating strong returns for our shareholders by continuing to focus on return on equity through growth whilst maintaining gearing within our target range of 0.8-1.2x. In light of the ongoing progress to grow and diversify the business, the Board has begun a review of the dividend policy and will provide a further update with the full year results. Finance and operating review The financial statements include the impact of those credit funds and CLOs required to be consolidated under IFRS 10. Internally reported information excludes these items. A reconciliation between the internally reported management information and the financial statements is shown below with more detail in note 3 on page 37. 30 September 30 September 30 September 30 September 30 September 2015 2016 2016 30 September 2016 2015 2015 Restated Internally reported Consolidate structured entities and joint venture Financial statements Internally reported Consolidate structured entities and joint venture Financial statements GBPm GBPm GBPm GBPm GBPm GBPm Income Statement Revenue 264.6 34.3 298.9 203.2 25.5 228.7 Profit before tax 125.4 0.8 126.2 84.6 9.3 93.9 Statement of financial position
Total assets 2,547.7 3,002.5 5,550.2 2,269.4 1,699.8 3,969.2 Total equity and liabilities 2,547.7 3,002.5 5,550.2 2,269.4 1,699.8 3,969.2 The information in this review is presented on an internally reported basis and excludes the impact of these adjustments. Overview The Group's profit before tax for the period was up 48% at GBP125.4m (H1 2016: GBP84.6m), with FMC profit of GBP34.0m and IC profit of GBP91.4m. We continue to make operational progress in developing our fund management franchise, with new strategies contributing to the growth in FMC profit. IC profits are up compared to the first half of the prior year due to a strong period of capital gains. 6 months to 30 September 2016 6 months to 30 September 2015 Income Internally reported unadjusted Fair value charge on derivatives Internally reported adjusted Internally reported unadjusted Fair value charge on derivatives Internally reported adjusted Statement GBPm GBPm GBPm GBPm GBPm GBPm Fund Management Company 34.0 - 34.0 29.0 - 29.0 Investment Company 91.4 7.6 99.0 55.6 3.5 59.1 Profit before tax 125.4 7.6 133.0 84.6 3.5 88.1 Tax (16.6) - (16.6) (11.1) - (11.1) Profit after tax 108.8 7.6 116.4 73.5 3.5 77.0 The adjusted profit of the IC and Group in the above table excludes the impact of the fair value charge on hedging derivatives of GBP7.6m (H1 2016: GBP3.5m). Throughout this review all numbers are presented excluding this adjusting item, unless otherwise stated. The effective tax rate for the period is 12% (H1 2016: 13%). The tax rate is lower than the standard corporation tax rate of 20%. This is principally due to the impact of differences in overseas tax rates where we invest directly into funds which are based offshore. Based on the adjusted profit above, the Group generated an ROE of 20.8% (H1 2016: 12.1%), an increase on prior period reflecting lower shareholder funds following the GBP200m special dividend paid in August and strong capital gains. As expected, capital gains have benefitted from the one off recycling of GBP48.4m of realised gains from reserves, primarily on the disposal of the remainder of AAS Link, and a healthy level of unrealised capital gains arising from the period end mark to market review. The recycling of realised gains from reserves is an accounting treatment for unrealised gains on pre 2011 equity assets recognised in prior years through reserves. As such the ROE for the first half of the financial year should not be seen as indicative of the full year performance and longer term trend. Adjusted earnings per share for the period were 39.8p (H1 2016: 22.2p). Net current assets of GBP403.4m are up from GBP229.8m at 31 March 2016 due to a higher cash balance. In early October, GBP206m of cash was used to settle non current debt liabilities reducing net current assets to 31 March 2016 levels. Fund Management Company In this review we have, for the first time, aligned the presentation of financial information with the four strategic asset classes in which we operate - corporate investments, capital markets, real assets and secondaries - to simplify and enhance the understanding of our financial performance. The principal difference between this classification and that previously adopted is that the Senior Debt Partners strategy falls within the corporate investment asset class whereas all other funds previously reported as credit funds fall within the capital markets asset class. A reconciliation between the two presentations can be found on page 49 of this statement. Assets under management A key measure of the success of our strategy to generate value from our fund management business is our ability to grow assets under management. New AUM (inflows) is our best lead indicator to sustainable future fee streams and therefore increasing sustainable profits. After two years that have benefitted from fundraising our larger European funds, the pace of fundraising has been, as expected and previously indicated, slower with new AUM of EUR1,405m raised in the first half of the financial year. This is due to the funds currently in fundraising being smaller and strategies newer than those of the last two years. In the six month period to 30 September 2016, the net impact of fundraising and realisations saw third party AUM increased 3% to EUR19.8bn. AUM by strategic asset class is detailed below, where all figures are quoted in EURm. Third party AUM by Total strategic Corporate Investments Capital Markets Real Assets Secondaries Third Party AUM asset class EURm EURm EURm EURm EURm At 1 April 2016 10,431 4,637 3,305 939 19,312 Additions 137 761 345 162 1,405 Realisations (442) (81) (10) - (533) FX and other (13) - (300) (23) (336) At 30 September 2016 10,113 5,317 3,340 1,078 19,848 Change % (3%) 15% 1% 15% 3% Corporate Investments Corporate Investments third party funds under management have decreased 3% to EUR10.1bn in the period as new AUM of EUR137m was outstripped by the run off of our older funds. As previously noted, fundraising for our third Asia Pacific fund has been slower than anticipated as alternative asset allocations to the Asian market remain small and the slowdown in growth in China has had a real impact on the region. Since 30 September we have closed the fund below its target size, at EUR615m ($691m), including a $200m commitment from the balance sheet and EUR12m ($13m) of third party money raised during the first half of the financial year. Elsewhere, we raised EUR125m from segregated mandates into our Senior Debt Partners strategy. Capital Markets Capital Markets third party funds under management have increased 15% to EUR5.3bn, with new third party AUM of EUR761m raised in the period, primarily from our CLO programme. During the first half of the financial year we closed two CLOs, one in Europe and one in the US, raising a total EUR772m, including EUR42m committed from the balance sheet. We expect to price further CLOs, market conditions permitting, during the current financial year thereby further increasing the operating leverage of this strategy. Real Assets Real Assets third party funds under management have increased 1% to EUR3.3bn, with new AUM of EUR345m (GBP275m) raised in the period for our UK real estate fund, ICG Longbow Fund IV. The additional money raised in the current year has contributed to the fund reaching its maximum size of GBP1.0bn, including a GBP50m commitment from the balance sheet, making it the second successive UK real estate fund to reach that milestone. Secondaries Secondaries third party funds under management have increased 15% to EUR1.1bn, with new AUM of EUR162m ($183m) raised in the period for our Strategic Secondaries strategy. A further close is expected shortly and there is a good pipeline of investors which would take the Fund to its target size of $1bn, including a $200m commitment from the balance sheet. Fee earning AUM The investment rate for our Senior Debt Partners strategy, our Real Estate funds and our North American Private Debt Fund has a direct impact on FMC income as fees are charged on an invested capital basis. The total amount of third party capital deployed on behalf of the direct investment funds was GBP1.3bn in the period compared to GBP1.4bn in the first half of the last financial year. In addition, our Investment Company invested a total of GBP178m in the period, compared to GBP154m in the comparative period. The direct investment funds are investing as follows: Strategic % invested at % invested at Assets in fund at Deals completed asset class Fund 30 September 2016 31 March 2016 30 September 2016 in period Corporate ICG Europe Investments Fund VI 29% 10% 7 4 North American Corporate Private
Investments Debt Fund 53% 46% 10 3 Senior Debt Corporate Partners Investments II 45% 31% 18 4 Corporate Asia Pacific Investments Fund III 29% 27% 3 0 ICG Longbow Real Estate Real Assets Fund IV 59% 42% 20 3 Strategic Secondaries Secondaries 51% 20% 3 1 % invested is based on third party funds raised at 30 September 2016. The investment pace of our direct investment funds has resulted in fee earning AUM increasing 5% to EUR16.5bn since 1 April 2016 as detailed below. Third party Total fee earning Corporate Investments Capital Markets Real Assets Secondaries Third Party AUM AUM bridge EURm EURm EURm EURm EURm At 1 April 2016 7,891 4,637 2,521 708 15,757 Additions 745 761 275 162 1,943 Realisations (843) (81) (11) - (935) FX and other (13) (1) (228) 14 (228) At 30 September 2016 7,780 5,316 2,557 884 16,537 Fee income Third party fee income of GBP62.9m was 26% higher than the prior year driven by the investment of those funds that charge fees on invested capital, fees from our recently established secondaries business and the CLO issuance programme. Details of movements are shown below: 6 months to 6 months to 30 September 2016 30 September 2015 Change Fee income GBPm GBPm % Corporate Investments 36.0 33.1 9% Capital Markets 11.3 8.4 35% Real Assets 10.5 7.9 33% Secondaries 5.1 0.5 n/a Total third party funds 62.9 49.9 26% IC management fee 9.2 9.1 1% Total 72.1 59.0 22% Corporate investments third party fees include GBP4.1m of performance fees (H1 2016: GBP6.4m) as the realisation of assets from older vintages helped trigger the performance hurdles. Performance fees are an integral recurring part of the fee income profile and profitability stream of the Group. Third party fees are 73% denominated in Euros or US Dollars. However, the impact of the devaluation of Sterling in recent months will only be fully felt in the next financial year when the current hedges roll off. The Group's policy is to hedge non Sterling fee income, to the extent that it is not matched by costs and is predictable. Total fee income included a GBP2.5m FX benefit in the period. The weighted average fee rate, excluding performance fees, across our fee earning AUM at 0.88% is the same as the prior year. Dividend income Dividend income of GBP11.6m (H1 2016: GBP9.3m) reflects the increased number and improved performance of our US CLOs. Operating expenses Operating expenses of the FMC were GBP49.5m (H1 2016: GBP39.1m), including salaries and incentive scheme costs. The devaluation of Sterling has had a more immediate impact on the cost base where 12% of costs are Euro denominated and 16% US dollar denominated. Costs are GBP1.3m higher in the period due to FX. Salaries were GBP19.1m (H1 2016: GBP14.2m) as average headcount increased 15% from 205 to 236. This increase is directly related to investing in our capital markets strategy, the ICG Enterprise Trust team and our operations infrastructure. Other administrative costs have increased to GBP15.9m (H1 2016: GBP13.1m) as a result of increased occupancy and IT costs in the current year and a one off reduction in placement fees recognised in the prior period. The FMC operating margin was 40.7% down from 41.9% in the prior year, reflecting the increased operating costs detailed above. Investment Company Balance sheet investments The balance sheet investment portfolio increased 4% in the period to GBP1,873m at 30 September 2016, as illustrated in the investment portfolio bridge below: Balance Sheet Portfolio Bridge GBPm At 1 April 2016 1,798 New and follow on investments 178 Accrued interest income 40 Realisations (335) Impairments (24) Fair value gains 75 FX and other 141 At 30 September 2016 1,873 Realisations comprise the return of GBP169.2m of principal, the crystallisation of GBP4.5m of rolled up interest and GBP161.5m of realised capital gains. In the period GBP125.8m was invested alongside our corporate investment strategies for new and follow on investments. Of the remaining GBP52.4m, GBP31.4m was invested in CLOs in accordance with regulatory requirements and GBP20.1m in our new strategic secondaries strategy. The Sterling value of the portfolio increased by GBP141.9m due to foreign exchange movements. The portfolio is 48% Euro denominated and 28% US dollar denominated. Sterling denominated assets account only for 14% of the portfolio. The Group minimises foreign exchange impact of non sterling assets through non sterling liabilities and derivative transactions. An analysis of the portfolio by instrument is outlined below: As at As at Balance Sheet 30 September 2016 31 March 2016 Portfolio GBPm % of total GBPm % of total Senior mezzanine and senior debt 416 22% 386 21% Junior mezzanine 201 11% 182 10% Interest bearing equity 119 6% 115 6% Non interest bearing equity 427 23% 531 30% Co-investment portfolio 1,163 62% 1,214 67% Investment in equity funds 143 8% 104 6% Investment in credit funds 264 14% 225 13% Investment in CLOs 177 9% 131 7% Investment in real estate funds 126 7% 124 7% Total balance sheet portfolio 1,873 100% 1,798 100% Current assets held on the balance sheet at 30 September 2016 will be transferred to third party funds once their fundraising is complete. The use of the balance sheet in this way enables our investment teams to continue to source attractive deals whilst a fund is being raised, and in turn facilitates the fundraising as potential investors can see the types of assets they will be investing in. At 30 September 2016, 48% of these assets were held for syndication into our Asia Pacific Fund once fundraising is completed. Investment income Investment income of GBP190.1m represents the total income earned from the balance sheet portfolio in the period, analysed as follows: 6 months to 6 months to 30 September 2016 30 September 2015 Change Investment income GBPm GBPm % Interest income 60.0 71.1 (16%) Dividend and other income 4.6 10.4 (56%) Capital gains 125.5 62.5 101% 190.1 144.0 32% Interest income was below the prior period due to a 6% reduction in the average interest bearing loan book and a GBP5.5m reduction in interest from current assets. Cash interest income has increased to 35% (H1 2016: 32%) of the total as the growing US mezzanine portfolio is weighted towards cash pay interest. Dividend income is received from our real estate and senior debt funds. The prior year included a dividend from our secondaries investment in Diamond Castle. Capital gains were, as expected, strong in the first half of the financial year as the income statement benefited from the recycling of GBP48.4m of capital gains from reserves on realisation of the underlying assets. Of this, GBP26.4m related to the sale of the remaining holding in AAS Link following its IPO in 2015. In addition, the valuation of the portfolio as at 30 September 2016 benefitted from the strength in global stock markets and the improved performance across a large number of portfolio assets over the last six months. Net realised capital gains in the period were GBP161.2m (H1 2016: GBP21.5m), of which GBP106.5m (H1 2016: GBP11.7m) had previously been recognised as unrealised gains in the P&L with the remaining GBP54.7m (H1 2016: GBP9.8m) recognised in the current period. Fair valuing the equity and warrants gave rise to a further GBP65.5m (H1 2016: GBP60.4m) of unrealised gains in the current period. Of this, GBP70.8m (H1 2016: GBP52.7m) is recognised in the income statement and a GBP5.3m unrealised loss in reserves (H1 2016: GBP7.7m unrealised gain).
Interest expense Interest expense of GBP24.4m was GBP1.7m higher than the prior period (H1 2016: GBP22.7m), principally due to the FX impact of interest paid on non Sterling borrowings. Operating expenses Operating expenses of the IC amounted to GBP33.7m (H1 2016: GBP28.0m), of which incentive scheme costs of GBP22.9m (H1 2016: GBP19.1m) were the largest component. The GBP3.8m increase is due to the cost of balance sheet carry increasing following the healthy level of realisations in the period. Other staff and administrative costs were GBP10.8m compared to GBP8.9m in the first half of last year, a GBP1.9m increase. This increase is due to an increase in business development costs, of which the largest component is the amortisation on the ICG Enterprise Trust management contract. Impairments During the period we took asset specific impairments against our weaker assets of GBP23.8m compared to GBP18.1m in the first half of the last financial year, with no write backs in either period. Subject to the impact of macroeconomic uncertainty on the portfolio, current performance would indicate that net impairments for the full year will be broadly in line with our long term average of 2.5% of the opening Investment Company portfolio. Group cash flow, debt and capital position The Group has continued to actively manage its sources of financing, extending debt facilities and lowering pricing where possible. During the first half of the financial year, $292m and EUR74m of US private placements were raised with five, eight and 10 year maturities. Following this debt raising, the weighted average life of total debt at 30 September was 3.6 years with a weighted average cost of 3.7%, in line with 31 March 2016. The balance sheet remains strong, with GBP802.1m of available cash and debt facilities at 30 September 2016. The movement in the Group's unutilised cash and debt facilities during the period is detailed as follows: Headroom bridge GBPm At 1 April 2016 781.3 New bank facilities available 100.0 Bank facilities matured (150.0) New Private Placement notes issued 225.1 Movement in cash 6.4 Movement in drawn debt (217.7) FX and other 57.0 At 30 September 2016 802.1 Total drawn debt at 30 September 2016 was GBP1,290m compared to GBP866m at 31 March 2016, with unencumbered cash of GBP325m compared to GBP112m at 31 March 2016. The Group's gearing calculation excludes GBP206m of drawn credit facilities which were repaid in early October, but were in the process of being settled on 30 September 2016. Cashflow Operating cash inflow for the period of GBP272.7m (H1 2016: GBP21.1m outflow) was higher than the prior period due to a strong period of realisations, including the Group's largest asset Parkeon. 6 months to 6 months to 30 September 2016 30 September 2015 Operating cash flow statement GBPm GBPm Cash in from realisations 302.9 166.4 Cash in from dividends 39.2 24.4 Cash in from fees 70.1 34.0 Cash in from cash interest 25.7 47.2 Total cash inflow 437.9 272.0 Cash interest paid (20.8) (24.5) Cash paid to purchase loans and investments (178.2) (153.9) Cash movement in assets held for syndication 99.6 (37.0) Operating expenses paid (65.8) (77.7) Total cash outflow (165.2) (293.1) Net cash generated from / (used in) operating activities, before taxes 272.7 (21.1) Capital position Shareholders' funds decreased by GBP172.7m to GBP1,068.5m (31 March 2016: GBP1,241.2m) in the period as GBP200m was returned to shareholders by means of a special dividend, in addition to the final ordinary dividend of GBP50m. Total debt to shareholders' funds (gearing) as at 30 September 2016 increased to 1.01x from 0.70x at 31 March 2016. Responsibility Statement We confirm to the best of our knowledge: -- The condensed set of financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting'; -- The interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and -- The interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein). This responsibility statement was approved by the Board of Directors on 14 November 2016 and is signed on its behalf by: Christophe Evain Philip Keller CEO CFO Consolidated Income Statement For the six months ended 30 September 2016 Six months ended Six months ended Year ended 30 September 2016 30 September 2015 31 March 2016 (Unaudited) (Unaudited) (Audited) GBPm GBPm GBPm Finance and dividend income 125.4 89.6 207.3 Gains on investments 113.9 91.0 137.7 Fee and other operating income 59.6 48.1 104.3 Total revenue 298.9 228.7 449.3 Finance costs (69.1) (49.9) (121.9) Impairments (13.3) (9.8) (8.9) Administrative expenses (90.4) (67.9) (141.9) Share of results of joint ventures accounted for using equity method 0.1 (0.2) - Change in deferred consideration estimate - (7.0) (17.8) Profit before tax 126.2 93.9 158.8 Tax charge (16.6) (11.1) (20.2) Profit for the period 109.6 82.8 138.6 Attributable to: Equity holders of the parent 109.3 83.9 138.6 Non controlling interests 0.3 (1.1) - 109.6 82.8 138.6 Earnings per share 37.4p 24.2p 41.9p Diluted earnings per share 37.4p 24.2p 41.9p All activities represent continuing operations. Consolidated Statement of Comprehensive Income For the six months ended 30 September 2016 Six months ended Six months ended Year ended 30 September 2016 30 September 2015 31 March 2016 (Unaudited) (Unaudited) (Audited) GBPm GBPm GBPm Profit for the period 109.6 82.8 138.6 Available for sale assets that will not be reclassified subsequently to profit or loss Reclassification of gains recycled to profit (45.5) (5.0) (18.0) Items that may be reclassified subsequently to profit or loss (Loss)/gain arising in the period on available for sale assets (2.9) 7.3 42.6 Exchange differences on translation of foreign operations 18.2 (0.8) 9.5 (30.2) 1.5 34.1 Tax on items taken directly to or transferred from equity 8.9 (1.0) (2.4) Other comprehensive (expense)/income for the period (21.3) 0.5 31.7
Total comprehensive income for the period 88.3 83.3 170.3 Consolidated Statement of Financial Position 30 September 2016 30 September 2015 31 March 2016 (Unaudited) (Unaudited) (Audited) As at 30 September 2016 GBPm GBPm GBPm Non current assets Intangible assets 22.1 6.1 23.6 Property, plant and equipment 8.1 7.4 8.1 Financial assets: loans, investments and warrants 4,552.1 3,341.9 3,715.9 Deferred tax asset 0.3 0.4 0.4 Derivative financial assets 6.4 13.1 3.3 4,589.0 3,368.9 3,751.3 Current assets Trade and other receivables 158.8 100.2 216.4 Financial assets: loans and investments 150.3 273.6 182.6 Derivative financial assets 48.9 7.2 28.3 Current tax debtor 6.9 1.2 15.1 Cash and cash equivalents 596.3 218.1 182.5 961.2 600.3 624.9 Total assets 5,550.2 3,969.2 4,376.2 Equity and reserves Called up share capital 77.0 77.0 77.0 Share premium account 178.2 677.2 177.6 Capital redemption reserve 5.0 5.0 5.0 Own shares reserve (82.1) (77.0) (77.0) Other reserves 55.7 65.9 95.5 Retained earnings 834.7 419.6 963.1 Equity attributable to owners of the Company 1,068.5 1,167.7 1,241.2 Non controlling interest 0.8 1.0 0.9 Total equity 1,069.3 1,168.7 1,242.1 Non current liabilities Provisions 1.6 2.3 2.0 Financial liabilities 3,997.1 2,502.8 2,674.2 Derivative financial liabilities 48.2 13.2 31.6 Deferred tax liabilities 40.7 41.5 51.0 4,087.6 2,559.8 2,758.8 Current liabilities Provisions 0.7 0.7 0.7 Trade and other payables 263.8 189.3 233.4 Financial liabilities 88.3 38.2 106.6 Current tax creditor 9.3 2.1 5.1 Derivative financial liabilities 31.2 10.4 29.5 393.3 240.7 375.3 Total liabilities 4,480.9 2,800.5 3,134.1 Total equity and liabilities 5,550.2 3,969.2 4,376.2 Consolidated Statement of Cash Flows Six months ended Six months ended Year ended 30 September 2016 30 September 2015 31 March 2016 (Unaudited) (Unaudited) (Audited) For the six months ended 30 September 2016 GBPm GBPm GBPm Operating activities Interest received 82.5 83.1 206.3 Fees received 68.4 31.6 77.9 Dividends received 32.5 16.5 28.4 Interest paid (60.2) (48.1) (95.3) Payments to suppliers and employees (78.9) (78.0) (141.2) Net proceeds/(purchase) from sale of current financial assets 99.6 (37.0) (35.8) Purchase of loans and investments (1,128.5) (686.0) (1,378.3) Recoveries on previously impaired assets - - 1.7 Proceeds from sale of loans and investments - principal 666.9 536.6 1,034.1 Proceeds from sale of loans and investments - gains on investments 161.5 12.2 66.6 Cash used in operations (156.2) (169.1) (235.6) Taxes (paid)/received (4.9) 8.6 (3.9) Net cash used in operating activities (161.1) (160.5) (239.5) Investing activities Purchase of property, plant and equipment (1.4) (2.1) (4.2) Purchase of intangible asset - - (18.3) Purchase of remaining 49% of Longbow Real Estate Capital LLP (41.7) - - Loss of control of subsidiary - (9.2) (9.1) Net cash used in investing activities (43.1) (11.3) (31.6) Financing activities Dividends paid (249.9) (355.5) (378.2) Increase in long term borrowings 1,032.9 415.4 679.1 Repayment of long term borrowings (48.3) (59.8) (183.1) Net cash (outflow)/inflow from derivative contracts (114.8) 25.5 (40.5) Net purchase of own shares (23.6) (27.5) (27.4) Proceeds on issue of shares 0.6 2.9 3.4 Net cash generated from financing activities 596.9 1.0 53.3 Net increase/(decrease) in cash 392.7 (170.8) (217.8) Cash and cash equivalents at beginning of period 182.5 391.9 391.9 Effect of foreign exchange rate changes 21.1 (3.0) 8.4 Net cash and cash equivalents at end of period 596.3 218.1 182.5 Presented on the statement of financial position as: Cash and cash equivalents 596.3 218.1 182.5 Consolidated Statement of Changes in Equity For the six months ended 30 September 2016 Capital Available Share Share redemption Share based for sale Own Retained Total capital premium reserve payments reserve reserve shares earnings Total Non controlling interest equity (Unaudited) GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm Balance at 1 April 2016 77.0 177.6 5.0 43.6 51.9 (77.0) 963.1 1,241.2 0.9 1,242.1 Profit for the period - - - - - - 109.3 109.3 0.3 109.6 Available for sale financial assets - - - - (48.4) - - (48.4) - (48.4) Exchange differences on translation of foreign operations - - - - - - 18.2 18.2 - 18.2 Tax on items taken directly to or transferred from equity - - - - 8.9 - 8.9 - 8.9 Total comprehensive income for the period - - - - (39.5) - 127.5 88.0 0.3 88.3 Movement in control of subsidiary - - - - - - 0.4 0.4 (0.4) - Own shares acquired in the period - - - - - (23.6) - (23.6) - (23.6)
Options/awards exercised - 0.6 - (12.1) - 18.5 (6.4) 0.6 - 0.6 Credit for equity settled share schemes - - - 11.8 - - - 11.8 - 11.8 Dividends paid - - - - - - (249.9) (249.9) - (249.9) Balance at 30 September 2016 77.0 178.2 5.0 43.3 12.4 (82.1) 834.7 1,068.5 0.8 1,069.3 For the six months ended 30 September 2015 Capital Available Share Share redemption Share based for sale Own Retained Total capital premium reserve payments reserve reserve shares earnings Total Non controlling interest equity (Unaudited) GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm Balance at 1 April 2015 80.6 674.3 1.4 45.8 32.5 (162.0) 783.8 1,456.4 2.2 1,458.6 Profit for the period - - - - - - 83.9 83.9 (1.1) 82.8 Available for sale financial assets - - - - 2.3 - - 2.3 - 2.3 Exchange differences on translation of foreign operations - - - - - - (0.7) (0.7) (0.1) (0.8) Tax on items taken directly to or transferred from equity - - - - (1.0) - - (1.0) - (1.0) Total comprehensive income for the period - - - - 1.3 - 83.2 84.5 (1.2) 83.3 Loss of control of subsidiary - - - - - - (14.7) (14.7) - (14.7) Movement in control of subsidiary - - - - - - 10.2 10.2 - 10.2 Own shares acquired in the period - - - - - (24.7) - (24.7) - (24.7) Options/awards exercised - 2.9 - (22.3) - 30.4 (8.1) 2.9 - 2.9 Credit for equity settled share schemes - - - 8.6 - - - 8.6 - 8.6 Cancellation of shares (3.6) - 3.6 - - 79.3 (79.3) - - - Dividends paid - - - - - - (355.5) (355.5) - (355.5) Balance at 30 September 2015 77.0 677.2 5.0 32.1 33.8 (77.0) 419.6 1,167.7 1.0 1,168.7 Consolidated Statement of Changes in Equity For the year ended 31 March 2016 Capital Available Share Share redemption Share based for sale Own Retained Total capital premium reserve payments reserve reserve shares earnings Total Non controlling interest equity (Audited) GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm Balance at 1 April 2015 80.6 674.3 1.4 45.8 32.5 (162.0) 783.8 1,456.4 2.2 1,458.6 Profit for the year - - - - - - 138.6 138.6 - 138.6 Available for sale financial assets - - - - 24.6 - - 24.6 - 24.6 Exchange differences on translation of foreign operations - - - - - - 9.5 9.5 - 9.5 Tax on items taken directly to or transferred from equity - - - 2.8 (5.2) - - (2.4) - (2.4) Total comprehensive income for the year - - - 2.8 19.4 - 148.1 170.3 - 170.3 Loss of control of subsidiary - - - - - - (13.4) (13.4) (1.3) (14.7) Movement in control of subsidiary - - - - - - 10.2 10.2 - 10.2 Own shares acquired in the year - - - - - (24.7) - (24.7) - (24.7) Options/awards exercised - 3.3 - (22.3) - 30.4 (8.1) 3.3 - 3.3 Credit for equity settled share schemes - - - 17.3 - - - 17.3 - 17.3 Reduction in share premium - (500.0) - - - - 500.0 - - - Cancellation of shares (3.6) - 3.6 - - 79.3 (79.3) - - - Dividends paid - - - - - - (378.2) (378.2) - (378.2) Balance at 31 March 2016 77.0 177.6 5.0 43.6 51.9 (77.0) 963.1 1,241.2 0.9 1,242.1 The adjustment of GBP13.4m to retained earnings on loss of control of the subsidiary ICG European Loan Fund in the first half of the prior year relates to the reclassification of liabilities of a consolidated structured entity which had been incorrectly recorded in reserves. The correction of this item has no impact on the income statement in the prior year, or the internally reported numbers in that year. Notes to the Half Year Report For the six months ended 30 September 2016 1. Basis of preparation (i) Basis of preparation The condensed set of financial statements included in this half year financial report have been prepared in accordance with International Accounting Standard (IAS) 34 'Interim Financial Reporting' as adopted by the European Union, and on the basis of the accounting policies and methods of computation set out in the consolidated financial statements of the Group for the year ended 31 March 2016. While the financial information included in this announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs) as adopted by the European Union, this announcement does not itself contain sufficient information to comply with IFRSs. The comparative figures for the financial year ended 31 March 2016 are not the Group's statutory accounts for the financial year. As defined in section 434 of the Companies Act 2006 those accounts have been reported on by the Group's auditors and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters which the auditors 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 consolidated financial statements of the Group as at and for the year ended 31 March 2016 which were prepared under International Financial Reporting Standards as adopted by the EU are available on the Group's website, www.icgam.com. ii) Going concern The Directors have prepared the condensed financial statements on a going concern basis which requires the Directors to have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Directors made this assessment in light of GBP802.1m of cash and unutilised debt facilities, no significant bank facilities maturing within the next 18
months, and after reviewing the Group's latest forecasts for a period of 18 months from the period end. (iii) Related party transactions There have been no material changes to the nature or size of related party transactions since 31 March 2016. Notes to the Half Year Report continued For the six months ended 30 September 2016 1. Financial risk management Six months ended Six months ended Year ended 30 September 2016 30 September 2015 31 March 2016 (Unaudited) (Unaudited) (Audited) Financial assets - non current GBPm GBPm GBPm Loans and receivables held at amortised cost 457.4 571.8 445.4 AFS financial assets held at fair value 93.9 144.0 159.4 Financial assets designated as FVTPL 3,219.6 2,026.0 2,457.2 Associates designated as FVTPL 768.7 578.1 633.0 Investments in equity accounted joint ventures 1.2 0.9 1.1 Derivative financial instruments held at fair value - warrants 11.3 21.1 19.8 4,552.1 3,341.9 3,715.9 Other derivative financial instruments held at fair value 6.4 13.1 3.3 4,558.5 3,355.0 3,719.2 Included within associates designated as FVTPL is GBP618.5m (30 September 2015: GBP447.6m / 31 March 2016: GBP508.3m) relating to the Group's 20% investment in ICG Europe Fund V Limited, ICG North America Private Debt Fund and ICG Asia Pacific Fund III, and 16.67% investment in ICG Europe Fund VI Limited. Included within financial assets designated as FVTPL is GBPnil (30 September 2015: GBP77.9m / 31 March 2016: GBP94.6m) related to the Group's joint venture investments in Via Location and Parkeon, and GBP2,906.7m (30 September 2015: GBP1,753.4m / 31 March 2016: GBP2,092.7m) relating to the structured entities controlled by the Group. Fair value measurements recognised in the statement of financial position The information set out below provides information about how the Group determines fair values of various financial assets and financial liabilities. The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable. -- Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities -- Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) -- Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs) This is followed by a more detailed analysis of the financial instruments which are based on unobservable inputs (Level 3 assets). The subsequent tables provide reconciliations of movement in their fair value during the period split by asset category and by geography. The Group is required to provide disclosures at a more detailed level than by asset category, segregating each asset category by sector or geography. The Group has chosen to present financial instruments by geography as the diverse nature of the Group's assets makes any disclosure of assets by industry less meaningful to the Group's risk profile than geographical factors. Notes to the Half Year Report continued For the six months ended 30 September 2016 2. Financial risk management continued Fair value measurements recognised in the statement of financial position continued Fair value Fair value Fair value as at Relationship as at as at 31 March of 30 September 2016 30 September 2015 2016 unobservable (Unaudited) (Unaudited) (Audited) Fair Significant unobservable inputs to Financial assets / Financial liabilities GBPm GBPm GBPm value hierarchy Valuation techniques and inputs inputs fair value A small number of assets have been listed on various stock exchanges around the world, providing an external Listed portfolio investments 1.2 17.8 62.1 1 basis for valuing the Group's holdings n/a n/a Listed credit fund investments 72.6 59.5 64.2 1 Quoted bid prices in an active market n/a n/a Level 1 assets 73.8 77.3 126.3 Level 2 assets within structured entities controlled The fair value has been determined using independent by the Group 2,856.0 1,704.3 2,048.7 2 broker quotes based on observable inputs n/a n/a Internally modelled valuation based on combination Listed portfolio investments 36.7 - 33.1 2 of market prices and observable inputs n/a n/a The Group uses widely recognised valuation models for determining the fair values of over-the-counter interest rate swaps and forward foreign exchange contracts. The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations. The valuations are market observable, internally calculated and verified to externally sourced Current and non-current derivative assets 55.3 20.3 31.6 2 data and are therefore included within level 2 n/a n/a Level 2 assets 2,948.0 1,724.6 2,113.4 Level 3 investments 220.0 351.2 308.7 3 Earnings based technique. The earnings multiple is The discount applied is generally in a range of 10% The higher derived from a set of comparable listed companies - 40% and exceptionally as high as 69%. A premium the adjusted
or relevant market transaction multiples. has been applied to five assets in the range of 1% multiple, A premium or discount is applied to the earnings multiple - 62%. the higher to adjust for points of difference relating to risk The earnings multiple is generally in the range of the and earnings growth prospects between the comparable 8 - 15 and exceptionally as high as 18 and as low valuation company set and the private company being valued. as 4 Earnings multiples are applied to the maintainable earnings to determine the enterprise value. From this, the value attributable to the Group is calculated based on its holding in the company after making deductions for higher ranking instruments in the capital structure. To determine the value of warrants, the exercise price is deducted from the equity value Notes to the Half Year Report continued For the six months ended 30 September 2016 2. Financial risk management continued Fair value measurements recognised in the statement of financial position continued Restated Fair value Fair value Fair value as at as at as at 31 March 30 September 2016 30 September 2015 2016 (Unaudited) (Unaudited) (Audited) Fair Significant unobservable Financial assets / Financial liabilities GBPm GBPm GBPm value hierarchy Valuation techniques and inputs inputs Relationship of unobservable inputs to fair value Where there are no recent transactions, fair value may be determined from the last market price adjusted for all changes in risks and information since that date. Where a close proxy instrument is quoted in A premium/discount is applied taking into account an active market, then fair value is determined by market comparisons, seniority of debt, credit rating, Illiquid debt investments within structured entities adjusting the proxy value for differences in the risk current debt, interest coupon, maturity of the loan The higher the premium, the higher the valuation. controlled by the Group 49.5 49.1 40.9 3 profile of the instruments and jurisdiction of the loan The higher the discount, the lower the valuation Discounted cash flow at a discount rate of 11%. The following assumptions are applied to each investment's cashflows: 2% annual default rate, 20% annual prepayment The higher the cash flows the higher the fair Investments in unlisted CLOs 37.7 32.3 33.4 3 rate, 70% recovery rate Discounted cash flows value. The Net Asset Value (NAV) of the fund is based on the underlying investments which are held either as FVTPL assets or as loans and receivables initially recognised at fair value and subsequently valued at amortised cost. The NAV is received from the funds' administrator or fund manager. We have reviewed the underlying valuation techniques and consider them The NAV of the underlying fund, typically calculated Investments in unlisted funds 819.8 555.0 678.3 3 to be in line with the Group's under IFRS The higher the NAV, the higher the fair value Level 3 assets 1,127.0 987.6 1,061.3 The fair value of debt securities issued at fair value through profit or loss is dependent upon the fair value of investment securities and derivative financial Level 2 liabilities within structured entities controlled instruments. Any changes in the valuation have a direct by the Group (2,800.7) (1,601.1) (1,913.0) 2 impact on the fair value of debt securities issued n/a n/a The Group uses widely recognised valuation models for determining the fair values of over-the-counter interest rate swaps and forward foreign exchange contracts. The most frequently applied valuation techniques include forward pricing and swap models, using present value
calculations. The valuations are market observable, internally calculated and verified to externally sourced Current and non-current derivative liabilities (79.4) (23.6) (61.1) 2 data and are therefore included within level 2 n/a n/a Level 2 liabilities (2,880.1) (1,624.7) (1,974.1) Notes to the Half Year Report continued For the six months ended 30 September 2016 2. Financial risk management continued Fair value measurements recognised in the statement of financial position continued As at 30 September 2016 Level 1 Level 2 Level 3 Total (Unaudited) GBPm GBPm GBPm GBPm Financial assets held at fair value Designated as FVTPL - US - 1,856.3 199.4 2,055.7 - UK 72.8 163.1 701.8 937.7 - France 1.0 228.5 101.0 330.5 - Germany - 174.3 5.0 179.3 - Netherlands - 122.1 2.0 124.1 - Other - 311.7 49.3 361.0 73.8 2,856.0 1,058.5 3,988.3 Derivative financial instruments - warrants - Germany - - 6.4 6.4 - France - - 4.9 4.9 - - 11.3 11.3 AFS financial assets - US - 36.7 1.8 38.5 - France - - 32.6 32.6 - UK - - 18.0 18.0 - Italy - - 2.7 2.7 - Other - - 2.1 2.1 - 36.7 57.2 93.9 Other derivative financial instruments - 55.3 - 55.3 73.8 2,948.0 1,127.0 4,148.8 Financial liabilities at FVTPL - Structured entities controlled by the Group - 2,800.7 - 2,800.7 Other derivative financial instruments - 79.4 - 79.4 - 2,880.1 - 2,880.1 Notes to the Half Year Report continued For the six months ended 30 September 2016 2. Financial risk management continued Fair value measurements recognised in the statement of financial position continued As at 30 September 2015 Level 1 Level 2 Level 3 Total (Unaudited) GBPm GBPm GBPm GBPm Financial assets held at fair value Designated as FVTPL - US - 1,057.1 57.2 1,114.3 - UK 59.5 113.1 578.7 751.3 - France - 122.3 141.1 263.4 - Germany - 110.5 4.1 114.6 - Netherlands - 102.6 4.0 106.6 - Other - 198.7 55.2 253.9 59.5 1,704.3 840.3 2,604.1 Derivative financial instruments - warrants - UK - - 10.0 10.0 - France - - 5.9 5.9 - Germany - - 5.2 5.2 - - 21.1 21.1 AFS financial assets - Australia - - 47.3 47.3 - France - - 42.2 42.2 - US 11.2 - 13.7 24.9 - UK - - 22.5 22.5 - Other 6.6 - 0.5 7.1 17.8 - 126.2 144.0 Other derivative financial instruments - 20.3 - 20.3 77.3 1,724.6 987.6 2,789.5 Financial liabilities at FVTPL - Structured entities controlled by the Group - 1,601.1 - 1,601.1 Other derivative financial instruments - 23.6 - 23.6 - 1,624.7 - 1,624.7 Notes to the Half Year Report continued For the six months ended 30 September 2016 2. Financial risk management continued Fair value measurements recognised in the statement of financial position continued As at 31 March 2016 Level 1 Level 2 Level 3 Total (Audited) GBPm GBPm GBPm GBPm Financial assets held at fair value Designated as FVTPL - US - 1,368.9 147.7 1,516.6 - UK 67.3 98.2 592.6 758.1 - France - 137.0 168.3 305.3 - Germany - 119.2 3.3 122.5 - Netherlands - 95.3 2.1 97.4 - Other 11.9 230.1 48.3 290.3 79.2 2,048.7 962.3 3,090.2 Derivative financial instruments - warrants - France - - 12.3 12.3 - Germany - - 7.5 7.5 - - 19.8 19.8 AFS financial assets held at fair value - Australia 40.7 - 4.5 45.2 - France - - 42.3 42.3 - US - 33.1 14.1 47.2 - UK - - 18.1 18.1 - Other 6.4 - 0.2 6.6 47.1 33.1 79.2 159.4 Other derivative financial instruments - 31.6 - 31.6 126.3 2,113.4 1,061.3 3,301.0 Financial liabilities at FVTPL - Structured entities controlled by the Group - 1,913.0 - 1,913.0 Other derivative financial instruments - 61.1 - 61.1 - 1,974.1 - 1,974.1 Notes to the Half Year Report continued For the six months ended 30 September 2016 2. Financial risk management continued Reconciliation of Level 3 fair value measurements of financial assets The tables detail the movements in financial assets valued using the Level 3 basis of measurement in aggregate and geographically by asset category. Within the income statement, realised gains and fair value movements are included within gains on investments and foreign exchange is included within finance costs. For the six months ended 30 September 2016 Financial assets at AFS FVTPL Derivative financial instruments - warrants assets Total (Unaudited) GBPm GBPm GBPm GBPm At 1 April 2016 962.3 19.8 79.2 1,061.3 Total gains or losses in the income statement - Realised gains (5.2) (10.3) (12.4) (27.9) - Fair value gains 72.2 0.3 - 72.5 - Foreign exchange 73.8 1.5 5.7 81.0 Total gains or losses in other comprehensive income - Unrealised losses - - (0.9) (0.9) Purchases 129.1 - 0.2 129.3 Realisations (173.1) - (14.6) (187.7) Transfer between assets (0.6) - - (0.6) At 30 September 2016 1,058.5 11.3 57.2 1,127.0 For the six months ended 30 September 2015 Financial assets at Derivative financial instruments AFS FVTPL - warrants assets Total (Unaudited) GBPm GBPm GBPm GBPm At 1 April 2015 679.8 13.8 117.1 810.7 Total gains or losses in the income
statement - Realised gains (1.7) (0.3) (2.0) (4.0) - Fair value gains 48.0 7.4 - 55.4 - Foreign exchange 10.1 0.2 (2.7) 7.6 Total gains or losses in other comprehensive income - Unrealised gains - - 20.7 20.7 Purchases 129.9 - 0.1 130.0 Realisations (31.5) - (7.0) (38.5) Transfer between assets 2.0 - - 2.0 Transfers between levels 3.7 - - 3.7 At 30 September 2015 840.3 21.1 126.2 987.6 Notes to the Half Year Report continued For the six months ended 30 September 2016 2. Financial risk management continued Reconciliation of Level 3 fair value measurements of financial assets continued For the year ended 31 March 2016 Financial assets at Derivative financial instruments AFS FVTPL - warrants assets Total (Audited) GBPm GBPm GBPm GBPm At 1 April 2015 679.8 13.8 117.1 810.7 Total gains or losses in the income statement - Realised gains (22.4) (10.0) (0.9) (33.3) - Fair value gains 89.6 15.0 - 104.6 - Foreign exchange 49.2 1.0 1.9 52.1 Total gains or losses in other comprehensive income - Unrealised gains - - 23.8 23.8 Purchases 192.3 - 0.4 192.7 Realisations (69.5) - (19.3) (88.8) Transfer between assets 61.8 - - 61.8 Transfer between levels (18.5) - (43.8) (62.3) At 31 March 2016 962.3 19.8 79.2 1,061.3 Notes to the Half Year Report continued For the six months ended 30 September 2016 1. Financial risk management continued Reconciliation of Level 3 fair value movements by geography For the six months ended 30 September 2016 (Unaudited) US UK France Singapore Australia Other Total Financial assets at FVTPL GBPm GBPm GBPm GBPm GBPm GBPm GBPm At 1 April 2016 147.7 592.6 168.3 10.5 12.8 30.4 962.3 Total gains or losses in the income statement - Realised gains - (4.1) - - - (1.1) (5.2) - Fair value gains/(losses) 12.5 39.9 18.8 1.1 1.4 (1.5) 72.2 - Foreign exchange 18.0 43.2 7.0 1.4 1.4 2.8 73.8 Purchases 35.5 87.6 0.2 0.5 - 5.3 129.1 Realisations (13.7) (57.4) (93.3) (0.2) - (8.5) (173.1) Transfer between assets (0.6) - - - - - (0.6) At 30 September 2016 199.4 701.8 101.0 13.3 15.6 27.4 1,058.5 (Unaudited) France Germany Total Derivative financial instruments - warrants GBPm GBPm GBPm At 1 April 2016 12.3 7.5 19.8 Total gains or losses in the income statement - Realised gains (10.3) - (10.3) - Fair value gains 2.1 (1.8) 0.3 - Foreign exchange 0.8 0.7 1.5 At 30 September 2016 4.9 6.4 11.3 (Unaudited) France US UK Other Total AFS assets GBPm GBPm GBPm GBPm GBPm At 1 April 2016 42.3 14.1 18.1 4.7 79.2 Total gains or losses in the income statement - Realised gains (3.9) (8.5) - - (12.4) - Foreign exchange 3.5 0.4 1.3 0.5 5.7 Total gains or losses in other comprehensive income - Unrealised gains/(losses) 1.0 (0.7) (0.8) (0.4) (0.9) Purchases - - 0.2 - 0.2 Realisations (10.3) (3.5) (0.8) - (14.6) At 30 September 2016 32.6 1.8 18.0 4.8 57.2 Notes to the Half Year Report continued For the six months ended 30 September 2016 2. Financial risk management continued Reconciliation of Level 3 fair value movements by geography continued For the six months ended 30 September 2015 (Unaudited) US UK France Germany Netherlands Other Total Financial assets at FVTPL GBPm GBPm GBPm GBPm GBPm GBPm GBPm At 1 April 2015 37.9 464.3 120.2 6.7 7.4 43.3 679.8 Total gains or losses in the income statement - Realised gains - (1.3) - - (0.4) - (1.7) - Fair value gains/(losses) 4.0 22.3 20.3 (0.1) (0.1) 1.6 48.0 - Foreign exchange (0.6) 11.9 2.2 (0.2) (0.2) (3.0) 10.1 Purchases 2.4 113.6 1.4 1.5 0.2 10.8 129.9 Realisations (2.0) (20.4) (2.2) (3.8) (2.9) (0.2) (31.5) Transfer between assets 16.6 (14.6) - - - - 2.0 Transfer between levels (1.1) 2.9 (0.8) - - 2.7 3.7 At 30 September 2015 57.2 578.7 141.1 4.1 4.0 55.2 840.3 (Unaudited) UK France Germany Total Derivative financial instruments - warrants GBPm GBPm GBPm GBPm At 1 April 2015 4.8 5.4 3.6 13.8 Total gains or losses in the income statement - Realised gains - (0.3) - (0.3) - Fair value gains 5.2 0.7 1.5 7.4 - Foreign exchange - 0.1 0.1 0.2 At 30 September 2015 10.0 5.9 5.2 21.1 (Unaudited) Australia France US UK Other Total AFS assets GBPm GBPm GBPm GBPm GBPm GBPm At 1 April 2015 38.9 37.8 12.5 25.9 2.0 117.1 Total gains or losses in the income statement - Realised gains - (0.1) - (1.9) - (2.0) - Foreign exchange (3.6) 0.8 (0.2) 0.2 0.1 (2.7) Total gains or losses in other comprehensive income - Unrealised gains/(losses) 12.0 4.6 1.4 4.3 (1.6) 20.7 Purchases - - - 0.1 - 0.1 Realisations - (0.9) - (6.1) - (7.0) At 30 September 2015 47.3 42.2 13.7 22.5 0.5 126.2 Notes to the Half Year Report continued For the six months ended 30 September 2016 2. Financial risk management continued Reconciliation of Level 3 fair value movements by geography continued For the year ended 31 March 2016 (Audited) US UK France Singapore Australia Other Total Financial assets at FVTPL GBPm GBPm GBPm GBPm GBPm GBPm GBPm At 1 April 2015 37.9 464.3 120.2 2.4 24.2 30.8 679.8 Total gains or losses in the income statement - Realised gains - (15.7) - - - (6.7) (22.4) - Fair value gains 18.5 36.6 29.8 1.6 2.3 0.8 89.6 - Foreign exchange 1.4 34.0 13.6 0.1 (0.7) 0.8 49.2 Purchases 30.6 132.3 11.3 6.4 - 11.7 192.3 Realisations (9.6) (44.3) (2.9) - - (12.7) (69.5) Transfer between assets 70.7 (14.6) - - - 5.7 61.8 Transfer between levels (1.8) - (3.7) - (13.0) - (18.5) At 31 March 2016 147.7 592.6 168.3 10.5 12.8 30.4 962.3 (Audited) France UK Germany Total Derivative financial instruments - warrants GBPm GBPm GBPm GBPm At 1 April 2015 5.4 4.8 3.6 13.8 Total gains or losses in the income statement - Realised gains - (10.0) - (10.0) - Fair value gains 6.4 5.2 3.4 15.0 - Foreign exchange 0.5 - 0.5 1.0 At 31 March 2016 12.3 - 7.5 19.8 (Audited) France Australia US UK Other Total AFS assets GBPm GBPm GBPm GBPm GBPm GBPm At 1 April 2015 37.8 38.9 12.5 25.9 2.0 117.1 Total gains or losses in the income statement - Realised gains (0.9) - - - - (0.9) - Foreign exchange 3.3 (3.5) 0.5 1.5 0.1 1.9 Total gains or losses in other comprehensive income
- Unrealised gains/(losses) 10.0 12.9 1.1 1.7 (1.9) 23.8 Purchases - - - 0.4 - 0.4 Realisations (7.9) - - (11.4) - (19.3) Transfer between levels - (43.8) - - - (43.8) At 31 March 2016 42.3 4.5 14.1 18.1 0.2 79.2 Notes to the Half Year Report continued For the six months ended 30 September 2016 2. Financial risk management continued Fair value sensitivity analysis The following table shows the sensitivity of fair values grouped in Level 3 to adjusted earnings multiples in the valuation models, for a selection of the largest financial assets. It is assumed that the multiple was changed by 10% while all the other variables were held constant. 30 September 2016 Value +10% -10% (Unaudited) GBPm GBPm GBPm Investments designated as FVTPL 1,058.5 1,162.6 910.8 Derivative financial instruments held at fair value - warrants 11.3 13.0 9.6 AFS financial assets held at fair value 57.2 63.5 50.8 1,127.0 1,239.1 971.2 30 September 2015 Value +10% -10% (Unaudited) GBPm GBPm GBPm Investments designated as FVTPL 840.3 973.4 677.6 Derivative financial instruments held at fair value - warrants 21.1 25.9 16.3 AFS financial assets held at fair value 126.2 150.2 102.2 987.6 1,149.5 796.1 31 March 2016 Value +10% -10% (Audited) GBPm GBPm GBPm Investments designated as FVTPL 962.3 1,071.5 820.3 Derivative financial instruments held at fair value - warrants 19.8 25.2 14.3 AFS financial assets held at fair value 79.2 86.3 72.2 1,061.3 1,183.0 906.8 Notes to the Half Year Report continued For the six months ended 30 September 2016 2. Financial risk management continued Derivatives The Group utilises the following derivative instruments for economic hedging purposes: 30 September 2016 (Unaudited) Fair values Contract of underlying principal amount Asset Liability Foreign exchange contracts GBPm GBPm GBPm Forward foreign exchange contracts 1,126.9 6.7 (22.8) Cross currency swaps 499.0 46.7 (56.6) Interest rate swaps 20.0 1.9 - Balance at 30 September 2016 1,645.9 55.3 (79.4) Included in derivative financial instruments is accrued interest on swaps of GBP2.1m. 30 September 2015 (Unaudited) Fair values Contract of underlying principal amount Asset Liability Foreign exchange contracts GBPm GBPm GBPm Forward foreign exchange contracts 1,066.3 2.8 (13.2) Cross currency swaps 490.1 15.0 (10.4) Interest rate swaps 20.0 2.5 - Balance at 30 September 2015 1,576.4 20.3 (23.6) Included in derivative financial instruments is accrued interest on swaps of GBP1.8m. 31 March 2016 (Audited) Fair values Contract of underlying principal amount Asset Liability Foreign exchange contracts GBPm GBPm GBPm Forward foreign exchange contracts 1,172.8 5.6 (24.6) Cross currency swaps 456.5 23.8 (36.5) Interest rate swaps 20.0 2.2 - Balance at 31 March 2016 1,649.3 31.6 (61.1) Included in derivative financial instruments is accrued interest on swaps of GBP1.9m. Notes to the Half Year Report continued For the six months ended 30 September 2016 2. Financial risk management continued Capital management The primary objectives of the Group's capital management are to ensure that the Group complies with externally imposed capital requirements by the Financial Conduct Authority (FCA) and that the Group maximises the return to Shareholders through the optimisation of the debt and equity balance. The Group's strategy has remained unchanged from the year ended 31 March 2016. The capital structure comprises debts, which includes borrowings disclosed in note 24 of the audited Group Financial Statements for the year ended 31 March 2016, cash and cash equivalents, and capital and reserves of the Parent Company, comprising called up share capital, reserves and retained earnings as disclosed in the Consolidated Statement of Changes in Equity. The Group has complied with the imposed minimum capital throughout the year. The full Pillar 3 disclosures are available on the Company's website www.icgam.com. Credit Risk - Impairments Six months ended Six months ended Year ended 30 September 2016 30 September 2015 31 March 2016 (Unaudited) (Unaudited) (Audited) GBPm GBPm GBPm Balance at 1 April 196.9 306.0 306.0 Charged to income statement 13.3 9.8 12.3 Recovery of previously impaired assets - - (3.4) Assets written off in year (83.4) (48.9) (138.8) Foreign exchange 18.3 4.4 20.8 Balance at 30 September / 31 March 145.1 271.3 196.9 The carrying amount of financial assets represents the Directors' assessment of the maximum credit risk exposure of the Group at the balance sheet date. Impairment losses taken during the period reflect the decline in recoverability on individual assets, either as a result of company specific or of general macroeconomic conditions. The Directors believe that credit risk as a result of the concentration of significant counterparties is low as there is no individual counterparty comprising more than 10% of the Group's total exposure. The Group's largest individual exposure as at 30 September 2016 was GBP95.3m to Gerflor (30 September 2015: GBP91.3m to Parkeon / 31 March 2016: GBP110.1m to Parkeon). Notes to the Half Year Report continued For the six months ended 30 September 2016 1. Business segments For management purposes, the Group is currently organised into the Fund Management Company (FMC) and the Investment Company (IC). Segment information about these businesses is presented below as reviewed by the Executive Committee. The Group reports the profit of the FMC separately from the profits generated by the IC. The FMC is defined as the operating unit and as such incurs the majority of the Group's costs, including the cost of the investment network, i.e. the Investment Executives and the local offices, as well as the cost of most support functions, primarily information technology, human resources and marketing. In the current period external fee income has been shown by strategic asset class and interest income and interest expense have been shown separately whereas previously these were disclosed as net interest income. The prior periods have been restated to reflect these changes. The IC is charged a management fee of 1% of the carrying value of the average investment portfolio by the FMC and this is shown below as fee income. The costs of finance, treasury, and portfolio administration teams and the costs related to being a listed entity are allocated to the IC. The remuneration of the Managing Directors is allocated equally to the FMC and the IC. Six months ended Real Total 30 September 2016 Corporate Investments Capital Markets Assets Secondaries FMC IC Total (Unaudited) GBPm GBPm GBPm GBPm GBPm GBPm GBPm External fee income 36.0 11.3 10.5 5.1 62.9 - 62.9 Inter-segmental fee 6.4 1.1 0.9 0.8 9.2 (9.2) - Fund management fee income 42.4 12.4 11.4 5.9 72.1 (9.2) 62.9 Other operating income - 2.3 2.3 Gains on investments - 125.5 125.5 Interest income - 60.0 60.0
Dividend income 11.6 2.3 13.9 Total revenue 83.7 180.9 264.6 Interest expense (0.2) (24.4) (24.6) Net fair value loss on derivatives - (7.6) (7.6) Impairment - (23.8) (23.8) Staff costs (19.1) (5.6) (24.7) Incentive scheme costs (14.5) (22.9) (37.4) Other administrative expenses (15.9) (5.2) (21.1) Profit before tax 34.0 91.4 125.4 Notes to the Half Year Report continued For the six months ended 30 September 2016 3. Business segments continued Six months ended Real Total 30 September 2015 Corporate Investments Capital Markets Assets Secondaries FMC IC Total (Unaudited) GBPm GBPm GBPm GBPm GBPm GBPm GBPm External fee income 33.1 8.4 7.9 0.5 49.9 - 49.9 Inter-segmental fee 6.9 1.0 0.7 0.5 9.1 (9.1) - Fund management fee income 40.0 9.4 8.6 1.0 59.0 (9.1) 49.9 Other operating income - 2.3 2.3 Gains on investments - 62.5 62.5 Interest income - 71.1 71.1 Dividend income 9.3 8.1 17.4 Total revenue 68.3 134.9 203.2 Interest expense (0.2) (22.7) (22.9) Net fair value loss on derivatives - (3.5) (3.5) Impairment - (18.1) (18.1) Staff costs (14.2) (4.0) (18.2) Incentive scheme costs (11.8) (19.1) (30.9) Other administrative expenses (13.1) (4.9) (18.0) Change in deferred consideration - (7.0) (7.0) Profit before tax 29.0 55.6 84.6 Real Total Year ended 31 March 2016 Corporate Investments Capital Markets Assets Secondaries FMC IC Total (Audited) GBPm GBPm GBPm GBPm GBPm GBPm GBPm External fee income 70.0 17.7 19.1 2.1 108.9 - 108.9 Inter-segmental fee 13.5 2.0 1.7 1.2 18.4 (18.4) - Fund management fee income 83.5 19.7 20.8 3.3 127.3 (18.4) 108.9 Other operating income - 5.0 5.0 Gains on investments - 128.6 128.6 Interest income - 126.0 126.0 Dividend income 19.3 16.4 35.7 Total revenue 146.6 257.6 404.2 Interest expense (0.4) (45.9) (46.3) Net fair value loss on derivatives - (17.3) (17.3) Impairment - (39.4) (39.4) Staff costs (30.4) (8.8) (39.2) Incentive scheme costs (24.5) (39.7) (64.2) Other administrative expenses (30.1) (9.4) (39.5) Profit before tax 61.2 97.1 158.3 Notes to the Half Year Report continued For the six months ended 30 September 2016 3. Business segments continued Reconciliation of financial statements reported to the executive committee to the IFRS financial statements Included in the table below are statutory adjustments made to the Investment Company for the following: -- For internal reporting purposes the interest earned and impairments charged on assets where we co-invest in funds (ICG Europe Fund V, ICG Europe Fund VI, ICG North America Private Debt Fund, ICG Asia Pacific Fund III) is presented within interest income/impairments whereas under IFRS it is included within the value of the investment -- The structured entities controlled by the Group are presented as fair value investments for internal reporting purposes, whereas the statutory financial statements present these entities on a fully consolidated basis -- Other adjustments principally relate to the joint venture investment in Nomura ICG KK which is presented internally on a proportional consolidation basis, whereas it is equity accounted under IFRS Consolidated Income Statement Six months ended 30 September 2016 Internally reported Reclass of interest and impairments to gains Consolidated structured entities Other adjustments Total adjustments Financial Statements (Unaudited) GBPm GBPm GBPm GBPm GBPm GBPm Fund management fee income 62.9 - (6.9) (0.4) (7.3) 55.6 Other operating income 2.3 - 1.7 - 1.7 4.0 Gains on investments 125.5 (13.0) 1.7 (0.3) (11.6) 113.9 Interest income 60.0 2.5 59.9 - 62.4 122.4 Dividend income 13.9 - (10.9) - (10.9) 3.0 Total revenue 264.6 (10.5) 45.5 (0.7) 34.3 298.9 Share of results of joint ventures accounted for using equity method - - - 0.1 0.1 0.1 Interest expense (24.6) - (40.0) - (40.0) (64.6) Net fair value loss on derivatives (7.6) - 3.1 - 3.1 (4.5) Impairment (23.8) 10.5 - - 10.5 (13.3) Staff costs (24.7) - - 1.0 1.0 (23.7) Incentive scheme costs (37.4) - - - - (37.4) Other administrative expenses (21.1) - (7.5) (0.7) (8.2) (29.3)
Profit before tax 125.4 - 1.1 (0.3) 0.8 126.2 Notes to the Half Year Report continued For the six months ended 30 September 2016 3. Business segments continued Consolidated Income Statement continued Six months ended 30 September 2015 Internally reported Reclass of interest to gains Consolidated structured entities Deferred dividend income Other adjustments Total adjustments Financial Statements (Unaudited) GBPm GBPm GBPm GBPm GBPm GBPm GBPm Fund management fee income 49.9 - (4.3) - (0.3) (4.6) 45.3 Other operating income 2.3 - 0.5 - - 0.5 2.8 Gains on investments 62.5 3.1 25.6 - (0.2) 28.5 91.0 Interest income 71.1 (11.4) 16.4 (4.4) - 0.6 71.7 Dividend income 17.4 - (8.0) 8.5 - 0.5 17.9 Total revenue 203.2 (8.3) 30.2 4.1 (0.5) 25.5 228.7 Share of results of joint ventures accounted for using equity method - - - - (0.2) (0.2) (0.2) Interest expense (22.9) (18.0) - - (18.0) (40.9) Net fair value loss on derivatives (3.5) - (5.5) - - (5.5) (9.0) Impairment (18.1) 8.3 - - - 8.3 (9.8) Staff costs (18.2) - - - 0.2 0.2 (18.0) Incentive scheme costs (30.9) - - - - - (30.9) Other administrative expenses (18.0) - (1.2) - 0.2 (1.0) (19.0) Change in deferred consideration (7.0) - - - - - (7.0) Profit before tax 84.6 - 5.5 4.1 (0.3) 9.3 93.9 Notes to the Half Year Report continued For the six months ended 30 September 2016 3. Business segments continued Consolidated Income Statement continued Year ended 31 March 2016 Internally reported Reclass of interest to gains Consolidated structured entities Longbow deferred consideration EBT settlement Other adjustments Total adjustments Financial statements (Audited) GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm Fund management fee income 108.9 - (9.9) - - (0.7) (10.6) 98.3 Other operating income 5.0 - 1.0 - - - 1.0 6.0 Gains on investments 128.6 (6.0) 15.5 - - (0.4) 9.1 137.7 Interest income 126.0 (24.5) 87.4 - - - 62.9 188.9 Dividend income 35.7 - (17.3) - - - (17.3) 18.4 Total revenue 404.2 (30.5) 76.7 - - (1.1) 45.1 449.3 Interest expense (46.3) - (57.3) - - - (57.3) (103.6) Net fair value (loss)/gain on derivatives (17.3) - (1.0) - - - (1.0) (18.3) Impairment (39.4) 30.5 - - - - 30.5 (8.9) Staff costs (39.2) - - - - 0.4 0.4 (38.8) Incentive scheme costs (64.2) - - - - - - (64.2) Other administrative expenses (39.5) - (2.2) - 2.3 0.5 0.6 (38.9) Change in deferred consideration estimate - - - (17.8) - - (17.8) (17.8) Profit before tax 158.3 - 16.2 (17.8) 2.3 (0.2) 0.5 158.8 On 1 October 2014, the Group acquired the remaining 49% of Longbow Real Estate Capital LLP, giving it 100% of the equity of the UK real estate debt specialist. The final deferred consideration amount was calculated at 31 March 2016 as GBP41.7m following the outstanding success of this business, resulting in a GBP17.8m increase to the original estimate. This was recognised through the income statement. Notes to the Half Year Report continued For the six months ended 30 September 2016 3. Business segments continued Consolidated Statement of Financial Position 30 September 2016 Internally reported Reclass of interest to gains Consolidated structured entities Other adjustments Total adjustments Financial Statements (Unaudited) GBPm GBPm GBPm GBPm GBPm GBPm Non current financial assets 1,873.0 (0.4) 2,678.3 1.2 2,679.1 4,552.1 Other non current assets 32.2 - 4.7 - 4.7 36.9 Cash 325.7 - 272.5 (1.9) 270.6 596.3 Current financial assets 150.3 - - - - 150.3 Other current assets 166.5 0.4 48.8 (1.1) 48.1 214.6 Total assets 2,547.7 - 3,004.3 (1.8) 3,002.5 5,550.2 Non current financial
liabilities 1,196.5 - 2,800.6 - 2,800.6 3,997.1 Other non current liabilities 90.5 - - - - 90.5 Current financial liabilities 88.3 - - - - 88.3 Other current liabilities 150.8 - 155.7 (1.5) 154.2 305.0 Total liabilities 1,526.1 - 2,956.3 (1.5) 2,954.8 4,480.9 Equity 1,021.6 - 48.0 (0.3) 47.7 1,069.3 Total equity and liabilities 2,547.7 - 3,004.3 (1.8) 3,002.5 5,550.2 30 September 2015 Internally reported Reclass of interest to gains Consolidated structured entities Deferred dividend income Other adjustments Total adjustments Financial Statements (Unaudited) GBPm GBPm GBPm GBPm GBPm GBPm GBPm Non current financial assets 1,744.1 0.6 1,596.4 - 0.8 1,597.8 3,341.9 Other non current assets 26.1 - 0.9 - - 0.9 27.0 Cash 135.3 - 83.9 - (1.1) 82.8 218.1 Current financial assets 273.6 - - - - - 273.6 Other current assets 90.3 (0.6) 20.2 - (1.3) 18.3 108.6 Total assets 2,269.4 - 1,701.4 - (1.6) 1,699.8 3,969.2 Non current financial liabilities 901.7 - 1,601.1 - - 1,601.1 2,502.8 Other non current liabilities 57.7 - (0.7) - - (0.7) 57.0 Current financial liabilities 38.2 - - - - - 38.2 Other current liabilities 135.5 - 72.8 (4.1) (1.7) 67.0 202.5 Total liabilities 1,133.1 - 1,673.2 (4.1) (1.7) 1,667.4 2,800.5 Equity 1,136.3 - 28.2 4.1 0.1 32.4 1,168.7 Total equity and liabilities 2,269.4 - 1,701.4 - (1.6) 1,699.8 3,969.2 Notes to the Half Year Report continued For the six months ended 30 September 2016 1. Business segments continued Consolidated Statement of Financial Position continued 31 March 2016 Internally reported Reclass of interest to gains Consolidated structured entities Longbow deferred consideration EBT Settlement Other adjustments Total adjustments Financial Statements (Audited) GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm Non current financial assets 1,798.0 (2.9) 1,919.7 - - 1.1 1,917.9 3,715.9 Other non current assets 34.1 - 1.3 - - - 1.3 35.4 Cash 112.7 - 72.2 - - (2.4) 69.8 182.5 Current financial assets 182.6 - - - - - - 182.6 Other current assets 202.8 2.9 55.1 - - (1.0) 57.0 259.8 Total assets 2,330.2 - 2,048.3 - - (2.3) 2,046.0 4,376.2 Non current financial liabilities 761.2 - 1,913.0 - - - 1,913.0 2,674.2 Other non current liabilities 84.6 - - - - - - 84.6 Current financial liabilities 106.6 - - - - - - 106.6 Other current liabilities 161.7 - 93.8 17.8 (2.3) (2.3) 107.0 268.7 Total liabilities 1,114.1 - 2,006.8 17.8 (2.3) (2.3) 2,020.0 3,134.1 Equity 1,216.1 - 41.5 (17.8) 2.3 - 26.0 1,242.1 Total equity and liabilities 2,330.2 - 2,048.3 - - (2.3) 2,046.0 4,376.2 Notes to the Half Year Report continued For the six months ended 30 September 2016 3. Business segments continued Consolidated Statement of Cash flows 30 September 2016 Internally reported Consolidated structured entities Other adjustments Financial Statements (Unaudited) GBPm GBPm GBPm GBPm Interest, fees and dividends received 135.0 48.4 - 183.4 Interest paid (20.8) (39.4) - (60.2) Net purchase of current financial assets 99.6 - - 99.6 Purchase of loans and investments (178.2) (950.3) - (1,128.5) Cash in from realisations 302.9 525.5 - 828.4 Other operating expenses (70.7) (14.0) 0.9 (83.8) Net cash generated from/(used in) operating activities 267.8 (429.8) 0.9 (161.1) Net cash used in investing activities (43.1) - - (43.1) Dividends paid (249.9) - - (249.9) Increase in long-term borrowings 363.6 621.0 - 984.6 Net cash flow from derivatives (113.6) (1.2) - (114.8) Purchase of own shares (23.6) - - (23.6) Proceeds on issue of shares 0.6 - - 0.6 Net cash (used in)/ from financing activities (22.9) 619.8 - 596.9
Net increase in cash 201.8 190.0 0.9 392.7 Cash and cash equivalent at beginning of period 112.7 72.2 (2.4) 182.5 FX impact on cash 11.2 10.3 (0.4) 21.1 Cash and cash equivalent at end of period 325.7 272.5 (1.9) 596.3 Notes to the Half Year Report continued For the six months ended 30 September 2016 3. Business segments continued Consolidated Statement of Cash flows continued Other 30 September 2015 Internally reported Consolidated structured entities adjustments Financial Statements (Unaudited) GBPm GBPm GBPm GBPm Interest, fees and dividends received 105.6 25.7 (0.1) 131.2 Interest paid (24.5) (23.6) - (48.1) Net purchase of current financial assets (37.0) - - (37.0) Purchase of loans and investments (153.9) (532.1) - (686.0) Cash in from realisations 166.4 382.4 - 548.8 Other operating expenses (69.1) (1.0) 0.7 (69.4) Net cash (used in)/generated from operating activities (12.5) (148.6) 0.6 (160.5) Net cash used in investing activities (2.1) (9.2) - (11.3) Dividends paid (355.5) - - (355.5) Increase in long-term borrowings 230.4 125.2 - 355.6 Net cash flow from derivatives 23.8 1.7 - 25.5 Purchase of own shares (27.5) - - (27.5) Proceeds on issue of shares 2.9 - - 2.9 Net cash (used in)/ from financing activities (125.9) 126.9 - 1.0 Net (decrease)/ increase in cash (140.5) (30.9) 0.6 (170.8) Cash and cash equivalent at beginning of period 278.5 115.3 (1.9) 391.9 FX impact on cash (2.7) (0.5) 0.2 (3.0) Cash and cash equivalent at end of period 135.3 83.9 (1.1) 218.1 Notes to the Half Year Report continued For the six months ended 30 September 2016 3. Business segments continued Consolidated Statement of Cash flows continued Internally Other 31 March 2016 reported Consolidated structured entities adjustments Financial Statements (Audited) GBPm GBPm GBPm GBPm Interest, fees and dividends received 256.3 58.8 (2.5) 312.6 Interest paid (47.0) (48.3) - (95.3) Net purchase of current financial assets (35.8) - - (35.8) Purchase of loans and investments (247.1) (1,131.2) - (1,378.3) Cash in from realisations 394.3 708.1 - 1,102.4 Other operating expenses (144.2) (2.3) 1.4 (145.1) Net cash generated from/(used in) operating activities 176.5 (414.9) (1.1) (239.5) Net cash used in investing activities (22.5) (9.1) - (31.6) Dividends paid (378.2) - - (378.2) Increase in long-term borrowings 131.1 364.9 - 496.0 Net cash flow from derivatives (52.5) 12.0 - (40.5) Purchase of own shares (27.4) - - (27.4) Proceeds on issue of shares 3.4 - - 3.4 Net cash (used in)/from financing activities (323.6) 376.9 - 53.3 Net decrease in cash (169.6) (47.1) (1.1) (217.8) Cash and cash equivalent at beginning of period 278.5 115.3 (1.9) 391.9 FX impact on cash 3.8 4.0 0.6 8.4 Cash and cash equivalent at end of period 112.7 72.2 (2.4) 182.5 1. Earnings per share Six months ended Six months ended Year ended 30 September 2016 30 September 2015 31 March 2016 (Unaudited) (Unaudited) (Audited) GBPm GBPm GBPm Earnings for the purposes of basic and diluted earnings per share being net profit attributable to the equity holders of the parent 109.3 83.9 138.6 Number of shares Weighted average number of ordinary shares for the purposes of basic earnings per share 292,200,567 346,159,885 330,685,568 Effect of dilutive potential ordinary share options 22,510 50,356 42,077 Weighted average number of ordinary shares for the purposes of diluted earnings per share 292,223,077 346,210,241 330,727,645 Earnings per share 37.4p 24.2p 41.9p Diluted earnings per share 37.4p 24.2p 41.9p Notes to the Half Year Report continued For the six months ended 30 September 2016 1. Earnings per share continued Reconciliation of total number of shares allotted, called up and in issue Number of shares in Total number of shares allotted, called up and in own share issue reserve As at 1 April 2016 330,310,239 15,010,728 Purchased - 3,611,309 Options/awards exercised 120,681 (3,587,843) 330,430,920 15,034,194 Share consolidation (36,714,547) (1,670,466) 293,716,373 13,363,728 Purchased 4,000 - As at 30 September 2016 293,720,373 13,363,728 On 1 August 2016, the Company undertook a share consolidation issuing eight new ordinary shares at 26 and a quater pence each for each holding of nine existing ordinary shares of 23 and a third pence each, reducing shares in issue to 293,716,373. As at 30 September 2015 the total number of shares allotted, called up and in issue was 330,211,149, of which 15,010,728 were held in the own shares reserve. 1. Dividends The Board has approved an interim dividend of 7.5p per share (H1 2016: 7.2p). 1. Gains and losses arising on investments 2. Gains and losses arising on AFS financial assets recognised in other comprehensive income Six months ended Six months ended Year ended 30 September 2016 30 September 2015 31 March 2016 (Unaudited) (Unaudited) (Audited) GBPm GBPm GBPm Realised gains on ordinary shares recycled to profit (48.4) (5.0) (19.8) Impairments of AFS financial assets recycled to profit 2.9 - 1.8 Net gains recycled to profit (45.5) (5.0) (18.0)
Gains and losses arising on AFS financial assets - Fair value movement on equity instruments (4.5) 8.5 38.4 - Fair value movement on other assets (0.8) (0.8) 1.4 Foreign exchange 2.4 (0.4) 2.8 (Losses)/gains arising in the AFS reserve in the period (2.9) 7.3 42.6 Net movement in the AFS reserve in the period (48.4) 2.3 24.6 Notes to the Half Year Report continued For the six months ended 30 September 2016 1. Gains and losses arising on investments continued 2. Gains and losses on investments recognised in the income statement Six months ended Six months ended Year ended 30 September 2016 30 September 2015 31 March 2016 (Unaudited) (Unaudited) (Audited) GBPm GBPm GBPm Realised gains on warrants - 0.3 0.3 Realised gains/(losses) on assets designated as FVTPL 6.7 0.2 (1.0) Realised gains in structured entities controlled by the Group 0.8 20.7 5.7 Realised gains on AFS financial assets recycled from AFS reserves 48.4 5.0 19.8 Realised (losses)/gains on other assets (0.4) 0.7 2.1 55.5 26.9 26.9 Unrealised gains and losses on assets designated as FVTPL: - On equity instruments excluding those held within structured entities controlled by the Group 52.8 43.4 95.9 - On warrants 1.1 8.5 17.1 - In structured entities controlled by the Group 66.9 (15.7) (81.8) 120.8 36.2 31.2 Unrealised gains and losses on liabilities designated as FVTPL: - In structured entities controlled by the Group (65.4) 23.6 70.9 Realised gains and losses on liabilities designated as FVTPL: - In structured entities controlled by the Group 3.0 4.3 8.8 Fair value movements on FVTPL financial assets 113.9 91.0 137.8 Realised losses on amortised cost assets - - (0.1) Gains on investments 113.9 91.0 137.7 Notes to the Half Year Report continued For the six months ended 30 September 2016 1. Tax expense Six months ended Six months ended Year ended 30 September 2016 30 September 2015 31 March 2016 Analysis of tax on (Unaudited) (Unaudited) (Audited) ordinary activities GBPm GBPm GBPm Current tax: Corporate tax 18.1 4.6 3.1 Prior year adjustment - other - (0.5) 2.8 18.1 4.1 5.9 Deferred tax: Current period (1.5) 8.2 16.4 Prior year adjustment - (1.2) (2.1) (1.5) 7.0 14.3 Tax charge on profit on ordinary activities 16.6 11.1 20.2 The Group's effective tax rate is lower than the standard rate of UK corporation tax of 20%. This reflects the mix of the Group's balance sheet investment returns in the year being weighted towards non UK sourced dividend income and capital gains rather than interest income. As dividend income is exempt from UK corporation tax it has the impact of reducing the Group's effective tax rate. 1. Financial liabilities Financial liabilities have increased by GBP1,304.6m in the period since 31 March 2016 of which GBP887.6m relates to structured entities controlled by the Group. Of the remaining GBP417.0m, GBP216.5m is the result of the Group establishing new private placements with maturities of between five and ten years, with the balance principally due to the impact of FX on foreign currency denominated financial liabilities. The fair value of financial liabilities is GBP4,085.4m (30 September 2015: GBP2,541.0m / 31 March 2016: GBP2,780.8m), determined where applicable with reference to their published market price. 1. Subsidiaries, associates and joint ventures The following changes are of note to the Group's subsidiaries during the period: 1. The Group holds 55.6% of the equity in US CLO 2016-1, a structured entity which was raised in the period and consolidated from September 2016 2. The Group holds 53.2% of the equity in St Paul's CLO VI, a structured entity which was raised in the period and consolidated from June 2016 3. The Group retains control of ICG High Yield Bond Fund although it has increased its ownership interest to 96.2% The following changes are of note to the Group's associates during the period: 1. The Group retains significant interest of ICG Total Credit Fund although it has reduced its ownership interest to 36.3% There were no other changes in the Group's ownership interests in associates. Independent Review Report to Intermediate Capital Group plc We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2016 which comprises the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated statement of cash flows and related notes 1 to 9. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union. Our responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Scope of review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2016 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. Deloitte LLP Chartered Accountants and Statutory Auditor London, United Kingdom 15 November 2016 Reporting by strategic asset class
External fee income and AUM are presented by strategic asset class. This differs from the previous presentation principally in the treatment of the Senior Debt Partners strategy which falls within the corporate investments asset class but along with the capital markets funds were previously reported within credit funds. Six months ended Six months ended Six months ended (Unaudited) 30 September 2016 31 March 2016 30 September 2015 AUM AUM AUM (EURm) Fees (GBPm) (EURm) Fees (GBPm) (EURm) Fees (GBPm) Corporate Investments Management Fee Income - Mezzanine 5,738 26.1 6,008 25.4 6,205 22.7 Performance Fee Income - Mezzanine - 3.6 - 3.3 - 6.4 Management Fee Income - Senior Debt Partners 4,375 5.8 4,423 5.6 4,253 4.0 Performance Fee Income - Senior Debt Partners - 0.5 - 2.6 - - 10,113 36.0 10,431 36.9 10,458 33.1 IC co-investment - Mezzanine 1,342 5.9 1,611 6.2 1,777 6.5 IC co-investment - Senior Debt Partners 37 0.2 41 0.2 45 0.1 IC co-investment - Australian Senior Loans 81 0.3 81 0.2 78 0.3 Total 11,573 42.4 12,164 43.5 12,358 40.0 Capital Markets CLOs 4,681 9.7 4,015 8.3 3,860 7.1 Managed Accounts and Pooled Funds 636 1.5 622 1.0 546 1.2 Performance Fee Income - 0.1 - - - 0.1 5,317 11.3 4,637 9.3 4,406 8.4 IC co-investment 391 1.1 249 1.0 269 1.0 Total 5,708 12.4 4,886 10.3 4,675 9.4 Real Assets Management Fee Income 3,340 10.5 3,305 9.5 2,825 7.9 Performance Fee Income - - - 1.7 - - 3,340 10.5 3,305 11.2 2,825 7.9 IC co-investment 146 0.9 157 1.0 147 0.7 Total 3,486 11.4 3,462 12.2 2,972 8.6 Secondaries Management Fee Income 1,078 4.8 939 1.6 133 0.5 Performance Fee Income - 0.3 - - - - 1,078 5.1 939 1.6 133 0.5 IC co-investment 166 0.8 131 0.7 46 0.5 Total 1,244 5.9 1,070 2.3 179 1.0 Total External 19,848 62.9 19,312 59.0 17,822 49.9 Total IC co-investment 2,163 9.2 2,270 9.3 2,362 9.1 Total 22,011 72.1 21,582 68.3 20,184 59.0 Glossary Term Short Definition form Adjusted Adjusted Adjusted profit after tax divided by the weighted earnings per EPS average number of ordinary shares. share Adjusted Profit after tax (annualised when reporting a six profit after month period's results), adjusted for fair value movements tax on derivatives, changes to the estimate of Longbow deferred consideration and the impact of the settlement of the employee benefit trust. Adjusted Adjusted Adjusted profit after tax divided by average shareholders' return on ROE funds for the period. equity AIFMD The EU Alternative Investment Fund Managers Directive. Assets under AUM Value of all funds and assets managed by the FMC. management During the investment period third party (external) AUM is measured on the basis of committed capital. Once outside the investment period third party AUM is measured on the basis of cost of investment. AUM is presented in Euros, with non Euro denominated at the period end closing rate. Cash core CCI Profit before tax excluding fair value movement on income derivatives, capital gains, impairments and unrealised rolled up interest. Catch up fees Fees not previously recognised as either the fund commitment had not been contractually agreed or the income was otherwise uncertain. Closed end A fund where the amount of investable capital is fixed. fund Co-investment Co-invest A direct investment made alongside or in a fund taking a pro-rata share of all instruments. Collateralised CDO Investment grade security backed by a pool of non Debt mortgage based bonds, loans and other assets. Obligation Collateralised CLO CLO is a type of CDO, which is backed by a portfolio Loan of loans. Obligation Close A stage in fundraising whereby a fund is able to release or draw down the capital contractually committed at that date. Direct Funds which invest in self-originated transactions investment for which there is a low volume, inactive secondary funds market. EBITDA Earnings before interest, tax, depreciation and amortisation. Employee EBT Special purpose vehicle used to purchase ICG plc shares Benefit Trust which are used to satisfy share options and awards granted under the Group's employee share schemes. Financial FCA Regulates conduct by both retail and wholesale financial Conduct service firms in provision of services to consumers. Authority Financial FRC UK's independent regulator responsible for promoting Reporting high quality corporate governance and reporting. Council Fund FMC The Group's fund management business, which sources Management and manages investments on behalf of the IC and third Company party funds. Gearing Gross borrowings divided by shareholders' funds. HMRC HM Revenue & Customs, the UK tax authority. IAS International Accounting Standards. IFRS International Financial Reporting Standards as adopted by the European Union. Illiquid Asset classes which are not actively traded. assets Internal ICAAP The ICAAP allows companies to assess the level of Capital capital that adequately supports all relevant current Adequacy and future risks in their business. Assessment Process Investment IC The investment business of ICG plc. It co-invests Company alongside third party funds. Internal Rate IRR The annualised return received by an investor in a of Return fund. It is calculated from cash drawn from and returned to the investor together with the residual value of the asset. Key Man Certain funds have designated Key Men. The departure of a Key Man without adequate replacement triggers a contractual right for investors to cancel their commitments. Key KPI A business metric used to evaluate factors that are performance crucial to the success of an organisation. indicator Key risk KRI A measure used to indicate how risky an activity is. indicator It is an indicator of the possibility of future adverse impact. Liquid assets Asset classes with an active, established market in which assets may be readily bought and sold. Open ended A fund which remains open to new commitments and where fund an investor's commitment may be redeemed with appropriate notice. Operating Total fee income less operating expenses divided by margin total fee income. Payment in PIK Also known as rolled up interest. PIK is the interest kind accruing on a loan until maturity or refinancing, without any cash flows until that time. Performance Share of profits that the fund manager is due once fees it has returned the cost of investment and agreed preferred return to investors. Realisation The return of invested capital in the form of principal, rolled up interest and/or capital gain. Profit margin Profit divided by total income. Proforma Adjusted profit after tax divided by average shareholders'
return on funds for the period, assuming any special dividends equity were paid at the beginning of the reporting period. Return on ROA Returns divided by the average IC investment portfolio. assets Returns comprise interest and dividend income, plus net gains on investments, less impairments. Return on ROE Profit after tax (annualised when reporting a six equity month period's results) divided by average shareholders' funds for the period. Securitisation A form of financial structuring whereby a pool of assets is used as security (collateral) for the issue of new financial instruments. Senior debt Senior debt ranks above mezzanine and equity. Total AUM The aggregate of the third party external AUM and the Investment Company's balance sheet. UK Corporate The Code Sets out standards of good practice in relation to Governance board leadership and effectiveness, remuneration, Code accountability and relations with shareholders. UNPRI UN Principles for Responsible Investing. Weighted An average in which each quantity to be averaged is average assigned a weight. These weightings determine the relative importance of each quantity on the average. Company Information Timetable Ex-dividend date 1 December 2016 Record date for interim dividend 2 December 2016 Last date for dividend reinvestment election 14 December 2016 Payment of interim dividend 9 January 2017 Trading update 31 January 2017 Full year results announcement 25 May 2017 Stockbrokers Auditor JPMorgan Cazenove Deloitte LLP 25 Bank Street Chartered Accountants and Statutory Auditor Canary Wharf 2 New Street Square London London E14 5JP EC4A 3BZ Numis Securities Limited Registrars The London Stock Exchange Building Computershare Investor Services PLC 10 Paternoster Square PO Box 92 London The Pavilions EC4M 7LT Bridgwater Road Bankers Bristol Lloyds TSB plc BS99 7NH 25 Gresham Street Company Registration Number London 02234775 EC2V 7HN The Royal Bank of Scotland plc 135 Bishopsgate London EC2M 3UR Registered office Juxon House 100 St Paul's Churchyard London EC4M 8BU Website The Company's website address is www.icgam.com. Copies of the Annual and Interim Reports and other information about the Company are available on this site. 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: Intermediate Capital Group plc via Globenewswire http://www.icgplc.com/
(END) Dow Jones Newswires
November 15, 2016 02:00 ET (07:00 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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