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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Bmo Private Equity Trust Plc | LSE:BPET | London | Ordinary Share | GB0030738271 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 438.00 | 438.00 | 444.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
TIDMBPET
RNS Number : 2602I
BMO Private Equity Trust PLC
23 November 2018
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23 November 2018
BMO Private Equity Trust PLC
Quarterly results for the three months to 30 September 2018 (unaudited)
-- Share price total return for the three months of 1.9 per cent for the Ordinary Shares -- Quarterly dividend of 3.58p per Ordinary Share
Introduction
As at the 30 September 2018, the net assets of the Company were GBP272.4 million, giving a Net Asset Value ('NAV') per share of 368.45p and a total return over the quarter of 4.4%. For the first nine months of the year, the NAV total return was 6.3%. At 30 September the Company had net debt of GBP3.3 million. Outstanding undrawn commitments were GBP132.0 million with approximately GBP16 million of these to funds where the investment period has expired and where we would expect only a small proportion to be drawn.
The next quarterly dividend of 3.58p will be paid on 31 January 2019 to shareholders on the register on 11 January 2019. The ex-dividend date is 10 January 2019.
New Investments
There was one new fund commitment during the quarter, another just after the quarter end and one co-investment just after the quarter end.
$5 million was committed to MVM V, a transatlantic healthcare private equity fund that aims to make significant capital gains by investing in 'value-priced special situations' predominantly in the US and Europe. This firm has been well known to us for several years including through their leadership of our co-investment in Ambio.
After the quarter end the company made a $3.75 million co-investment in AccuVein, an MVM led investment. AccuVein makes a vein illumination device which makes it easier for doctors and nurses to find veins for injections. The device uses near infra-red technology and significantly improves the success rate in locating veins for patients where this is problematic, for example those with higher levels of fat. The company already has sales of $30 million and is set to grow further in its initial US market and further afield.
After the quarter end EUR6 million was committed to Corpfin Capital Fund V, a Spain focused mid-market buyout fund. We have previously invested with Corpfin in some of their earlier funds and they are one of the longest established buyout houses in Spain.
Our pre-existing portfolio of funds have been active building portfolios with several notable new holdings being established over the quarter. The total of drawdowns from funds and add-ons for co-investments during the quarter was GBP11.1 million bringing the total invested for the first nine months of the year to GBP51.6 million.
The new holdings are typically diverse by sector and geography.
In the UK Agilitas called GBP0.8 million for investment in Hydro International, a wastewater treatment business. Piper Private Equity invested GBP0.5 million in Bloom & Wild, an online flower gifting brand. Apposite Healthcare Fund II called GBP0.3 million for Medical Imaging Partnership for its acquisition of Prime Health, a Surrey based medical imaging company which specialises in sports medicine. August Equity IV was active calling GBP0.8 million for three investments; BAB (technology enabled compliance), Dental Partners (third largest dental group in the UK) and Fosters (low cost funeral directors). Ashtead, the Buckthorn led oil services co-investment, called GBP0.4 million to buyout some vendor loan notes at a discount.
In south east Europe our TRG led co-investment Pet Centar called an additional GBP1.3 million to fund the acquisitions of two leading pet care businesses in the region - Animax (Romania) and Mr Pet (Slovenia). In the Netherlands Volpi called GBP1.4 million for investment in Cyclomedia, a B2B information business providing geospatial data to government authorities in Europe and the USA. In Spain Corpfin called GBP0.6 million for Dimoldura (residential interior doors). In the Nordic region Procuritas VI called GBP0.3 million for Netcontrol, a Finland based developer of automation products and systems used in controlling electricity networks. Its products are in demand reflecting the move towards distributed renewable energy generation.
In the US our investment partners have also been active. Our co-investment in Sigma, which manufactures components for low voltage electrical products, has called an additional GBP0.7 million to fund an add on acquisition and a new manufacturing plant. Blue Point Capital Partners has invested GBP0.9 million in aggregate from its funds II and IV for YS Garments, an apparel manufacturer, based in Gardena, California which specialises in T shirts, tank tops, hoodies and jackets, mainly for the promotional market.
Realisations
The robust flow of exits continues and in the third quarter the proceeds from realisations and income amounted to GBP31.5 million, giving a total for the first nine months of the year of GBP61.4 million. This is 18% ahead of the aggregate realisations by this point last year.
The largest realisation, by some way, was the exit by MVM of 75% of our co-investment in pharmaceutical ingredient company Ambio. GBP17.4 million came in when Carlyle Group took over leadership of the deal. We retain 25% of our holding which is valued at GBP5.7 million. When we invested in October 2014 Ambio had revenues of $16.3 million and EBITDA of $3.1 million. During the four year holding period these have grown to $52.9m and $16.7m respectively. At the Carlyle exit valuation this investment has so far returned 5.0x cost with an IRR of 52%.
Another truly excellent result was achieved during the quarter by our US based investment partner Blue Point Capital with their spectacular exit of Selmet, a manufacturer of complex titanium investment castings serving the aerospace and defence industries. Selmet was sold in August to Cleveland based Consolidated Precision Products Corp. During the nearly seven year holding period EBITDA grew fivefold and the total return was 17x cost with an IRR of 55%. Our share of this was GBP4.0 million. Blue Point Capital II also exited steel couplings manufacturer Alco returning GBP0.7 million (1.5x cost, 7% IRR).
In Italy ILP III, a fund acquired with other Italian assets in a secondary transaction just over three years ago, exited the leading travel company Alpitour returning GBP1.9 million. We also co-invested in Alpitour when the company undertook a funding round in July 2016 and for this part of the investment we received GBP1.2 million which is 2.0x cost and an IRR of 37%. Also in Italy, the secondary position which we acquired in NEM Imprese III has started to pay off handsomely with three exits each of them at stronger IRRs than originally modelled. The combined proceeds were GBP1.3 million.
There were several other notable realisations. Inflexion Partnership Capital I sold digital billboard company Outdoor Plus to Global Radio returning GBP0.4 million (2.0x, 47% IRR). August Equity III sold farm and production animal veterinary group Origin to Vet Partners, another August investee company. This returned GBP0.4 million (1.6x cost). Vet Partners was itself sold on soon afterwards to BC Partners. Argan Capital completed the take private of Polish fire and security equipment company AAT from the Warsaw Stock Exchange. It was then acquired by an Argan managed SPV returning GBP0.4 million which represents 2.5x cost and an IRR of 11% for the main Argan Fund. In Germany Chequers Capital XVI sold DFG, the largest intensive care provider in Germany to Advent International returning GBP0.4 million (2.0x cost, 14.1% IRR).
Valuation Changes
The largest valuation change was the GBP5.8 million uplift associated with the previously announced partial realisation of Ambio. There were a number of other transaction based uplifts. Chequers Capital XVI has agreed to sell Italian manufacturer of linear motion components and systems Rollon to US listed company Timken and the exit valuation gives a GBP0.5 million uplift. Swiss based chemicals company Schaetti has merged with Dakota giving a valuation uplift of GBP0.8 million. Ashtead the Aberdeen based oil services company, which has recently merged with competitor Forum Subsea Rentals, has been trading well and is uplifted by GBP1.8 million. In the US Graycliff has successfully refinanced North American Logistics Group leading to an uplift of GBP0.5 million. In France Astorg VI has uplifted Autoform, its software company servicing the automotive industry, reflecting strong trading and this increases the valuation of our holding by GBP0.4 million.
Babington, the provider of apprenticeships and other training courses, has, in common with the rest of the industry, seen some erosion of profitability as the new levy based system settles down. The valuation is down by GBP1.4 million to reflect what is expected to be a temporary dip in profitability.
Financing
At the end of the quarter the company had just GBP3.3 million of net debt. This effectively leaves almost all of the GBP70 million borrowing facility comprising term loan and revolving credit facility available to fund any investments which are not covered by realisations. This provides the company with considerable scope to take advantage of opportunities to acquire secondary positions and co-investments as well as funding the ongoing drawdowns from our fund portfolio. The impact of currency movements this quarter has been small with the slight weakening of sterling having contributed approximately 0.5% to the valuation uplift.
Outlook
Just under half of the portfolio by value is invested in the UK. This is the broadest and deepest private equity market in Europe and in most years it is the single largest national market by value and number of deals. The balance of our portfolio is invested largely in Continental Europe with the exception of an enduring and very useful proportion invested in North America and a smaller case by case involvement in selected global funds. As the UK negotiates its exit from the EU and while the precise terms of this are being finalised and ratified the companies in our portfolio are to differing degrees adopting strategies to adjust to the post Brexit world. Prudence requires that investment decisions should be based on a worst case scenario even if that is undesirable and unlikely. Apart from a brief hiatus immediately after the 2016 referendum there has been a 'business as usual' attitude prevailing amongst the private equity market participants in the UK and Europe. The most recent data on the price of private equity deals in Europe suggests that after a steady rise over a number of years there is some sign of flattening in the price of new deals. The relatively lower prices in the mid-market and the lesser use of debt in the capital structure of buyouts remain as distinctive and attractive features of this tier. There is no doubt that economic growth in the UK has been constrained in the run up to Brexit and Continental Europe after years of lagging behind the UK has recently seen slightly higher growth rates, although this varies by country and region. The use of Private Equity as a means of financing the growth of smaller and medium sized companies is increasing steadily across Europe and this coupled with a supportive economic background and the vast number of enterprises which could usefully adopt private equity underpins strong and diverse dealflow. The performance of our portfolio for the year to date provides confidence of further progress for shareholders in the remainder of the year.
Hamish Mair
Investment Manager
BMO Investment Business Limited
BMO PRIVATE EQUITY TRUST PLC
Statement of Comprehensive Income for the
nine months ended 30 September 2018 (unaudited)
Revenue Capital Total
GBP'000 GBP'000 GBP'000
---------------------------------------------- --------- --------- ---------
Income
Gains on investments held at fair value - 20,913 20,913
Exchange gains - 216 216
Investment income 944 - 944
Other income 49 - 49
---------------------------------------------- --------- --------- ---------
Total income 993 21,129 22,122
---------------------------------------------- --------- --------- ---------
Expenditure
Investment management fee - basic fee (486) (1,457) (1,943)
Investment management fee - performance
fee - (2,123) (2,123)
Other expenses (582) - (582)
---------------------------------------------- --------- --------- ---------
Total expenditure (1,068) (3,580) (4,648)
---------------------------------------------- --------- --------- ---------
(Loss)/profit before finance costs and
taxation (75) 17,549 17,474
Finance costs (320) (958) (1,278)
---------------------------------------------- --------- --------- ---------
(Loss)/profit before taxation (395) 16,591 16,196
Taxation - - -
(Loss)/profit for period/total comprehensive
income (395) 16,591 16,196
Return per Ordinary Share (0.53)p 22.44p 21.91p
BMO PRIVATE EQUITY TRUST PLC
Statement of Comprehensive Income for the
nine months ended 30 September 2017 (unaudited)
Revenue Capital Total
GBP'000 GBP'000 GBP'000
---------------------------------------------- --------- --------- ---------
Income
Gains on investments held at fair value - 17,889 17,889
Exchange losses - (802) (802)
Investment income 1,001 - 1,001
Other income 33 - 33
---------------------------------------------- --------- --------- ---------
Total income 1,034 17,087 18,121
---------------------------------------------- --------- --------- ---------
Expenditure
Investment management fee - basic fee (479) (1,438) (1,917)
Investment management fee - performance
fee - (2,175) (2,175)
Other expenses (562) - (562)
---------------------------------------------- --------- --------- ---------
Total expenditure (1,041) (3,613) (4,654)
---------------------------------------------- --------- --------- ---------
(Loss)/profit before finance costs and
taxation (7) 13,474 13,467
Finance costs (321) (964) (1,285)
---------------------------------------------- --------- --------- ---------
(Loss)/profit before taxation (328) 12,510 12,182
Taxation - - -
(Loss)/profit for period/total comprehensive
income (328) 12,510 12,182
Return per Ordinary Share (0.44)p 16.92p 16.48p
BMO PRIVATE EQUITY TRUST PLC
Statement of Comprehensive Income for the
year ended 31 December 2017 (audited)
Revenue Capital Total
GBP'000 GBP'000 GBP'000
-------------------------------------------- --------- --------- ---------
Income
Gains on investments held at fair value - 21,216 21,216
Exchange losses - (1,019) (1,019)
Investment income 1,422 - 1,422
Other income 51 - 51
-------------------------------------------- --------- --------- ---------
Total income 1,473 20,197 21,670
-------------------------------------------- --------- --------- ---------
Expenditure
Investment management fee - basic fee (641) (1,922) (2,563)
Investment management fee - performance
fee - (2,037) (2,037)
Other expenses (830) - (830)
-------------------------------------------- --------- --------- ---------
Total expenditure (1,471) (3,959) (5,430)
-------------------------------------------- --------- --------- ---------
Profit before finance costs and taxation 2 16,238 16,240
Finance costs (428) (1,283) (1,711)
-------------------------------------------- --------- --------- ---------
(Loss)/profit before taxation (426) 14,955 14,529
Taxation - - -
(Loss)/profit for year/total comprehensive
income (426) 14,955 14,529
Return per Ordinary Share (0.58)p 20.23p 19.65p
BMO PRIVATE EQUITY TRUST PLC
Balance Sheet
As at 30 As at 30 As at 31 December
September September 2017
2018 2017
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
--------------------------------------- ------------ ------------ ------------------
Non-current assets
Investments at fair value through
profit or loss 278,914 254,423 266,536
--------------------------------------- ------------ ------------ ------------------
Current assets
Other receivables 23 166 232
Cash and cash equivalents 23,239 41,592 26,765
--------------------------------------- ------------ ------------ ------------------
23,262 41,758 26,997
Current liabilities
Other payables (3,179) (3,210) (3,081)
Net current assets 20,083 38,548 23,916
--------------------------------------- ------------ ------------ ------------------
Total assets less current liabilities 298,997 292,971 290,452
Non-current liabilities
Interest-bearing bank loan (26,561) (26,057) (26,308)
Net assets 272,436 266,914 264,144 --------------------------------------- ------------ ------------ ------------------ Equity Called-up ordinary share capital 739 739 739 Share premium account 2,527 2,527 2,527 Special distributable capital reserve 15,040 15,040 15,040 Special distributable revenue reserve 31,403 31,403 31,403 Capital redemption reserve 1,335 1,335 1,335 Capital reserve 221,787 215,456 213,100 Revenue reserve (395) 414 - Shareholders' funds 272,436 266,914 264,144 --------------------------------------- ------------ ------------ ------------------ Net asset value per Ordinary Share 368.45p 360.98p 357.23p
BMO PRIVATE EQUITY TRUST PLC
Reconciliation of Movements in Shareholders' Funds
Nine months Nine months Year ended
ended 30 September ended 30 31 December
2018 September 2017
2017
(unaudited) (unaudited) (audited)
------------------------------ -------------------- ------------ -------------
GBP'000 GBP'000 GBP'000
Opening shareholders' funds 264,144 259,523 259,523
Profit for the period/total
comprehensive income 16,196 12,182 14,529
Dividends paid (7,904) (4,791) (9,908)
------------------------------ -------------------- ------------ -------------
Closing shareholders' funds 272,436 266,914 264,144
------------------------------ -------------------- ------------ -------------
Notes (unaudited)
1. The unaudited quarterly results have been prepared on the basis of the accounting policies set out in the statutory accounts of the Company for the year ended 31 December 2017.
2. Investment management fee:
Nine months ended Nine months ended Year ended 31 December
30 September 2018 30 September 2017 2017
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Investment
management
fee - basic fee 486 1,457 1,943 479 1,438 1,917 641 1,922 2,563
Investment
management
fee - performance
fee - 2,123 2,123 - 2,175 2,175 - 2,037 2,037
------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
486 3,580 4,066 479 3,613 4,092 641 3,959 4,600
------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
3. Finance costs:
Nine months ended Nine months ended Year ended 31 December
30 September 2018 30 September 2017 2017
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
Interest payable
on bank loans 320 958 1,278 321 964 1,285 428 1,283 1,711
4. The return per Ordinary Share is based on a net profit on ordinary activities after taxation of GBP16,196,000 (30 September 2017 - GBP12,182,000; 31 December 2017 - profit of GBP14,529,000) and on 73,941,429 (30 September 2017 - 73,941,429; 31 December 2017 - 73,941,429) shares, being the weighted average number of Ordinary Shares in issue during the period.
5. The net asset value per Ordinary Share is based on net assets at the period end of GBP272,436,000, (30 September 2017 - GBP266,914,000; 31 December 2017 - GBP264,144,000) and on 73,941,429 (30 September 2017 - 73,941,429; 31 December 2017 - 73,941,429) shares, being the number of Ordinary Shares in issue at the period end.
6. The financial information for the nine months ended 30 September 2018, which has not been audited or reviewed by the Company's auditor, comprises non-statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2017, on which the auditor issued an unqualified report, have been lodged with the Registrar of Companies. The quarterly report is available on the Company's website www.bmoprivateequitytrust.com
Legal Entity Identifier: 2138009FW98WZFCGRN66
For more information, please contact:
Hamish Mair (Investment Manager) 0131 718 1184 Scott McEllen (Company Secretary) 0131 718 1137 hamish.mair@bmogam.com / scott.mcellen@bmogam.com
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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