Candover Investments Interim results for the half year ended 30th June 2016

 
TIDMCDI 
 
24th August 2016 
 
Candover Investments plc 
Interim results for the half year ended 30th June 2016 
 
  * Net assets per share of 148p (31st December 2015: 243p) a 39.1% decrease 
    over the six months to 30th June 2016. 
 
  * Realisations completed in the period included the realisation of the 
    balance of Stork BV announced in December 2015 together with the partial 
    realisation of Parques and Technogym following their IPOs. Proceeds in the 
    period totalled GBP30.1 million. 
 
  * Candover's* retained investment portfolio decreased in value by GBP9.7 
    million, a decrease of 19.8% since the year end.Constant currency 
    valuations decreased by GBP15.4 million offset by favourable currency 
    movements on investments of GBP5.7 million as a result of the weakness of 
    Sterling relative to the Euro. 
 
  * The decrease in the retained portfolio valuation reflected the impact of 
    the reduced IPO valuations of Parques and Technogym. This was compounded by 
    the post IPO share price weakness of Parques offset by recovery in the 
    performance of Technogym's share price. 
 
  * Net debt decreased to GBP10.2 million at 30th June 2016 (31st December 2015: 
    GBP33.2 million) reflecting the benefit of realisation proceeds offset by 
    operating and accrued financing costs together with adverse foreign 
    currency effects. 
 
Malcolm Fallen, Chief Executive Officer, said: 
 
"Our balance sheet is much improved following the first half realisations 
leaving the business better placed to weather any uncertainty over the 
foreseeable future. Until we can establish a route to secure liquidity from the 
shares held in Parques and Technogym, our NAV will be driven by the performance 
of both these businesses and their respective share price performance." 
 
 
Ends. 
 
 
* Candover means Candover Investments plc and/or one or more of its 
subsidiaries 
 
 
For further information, please contact: 
 
Candover Investments plc 
Malcolm Fallen, CEO     [phone] 
 
 
 
Business and financial review 
 
Overview 
 
Net assets per share decreased by 39.1% or 95p per share during the six months 
to 30th June 2016 to 148p (31st December 2015: 243p). NAV growth is dependent 
upon the valuation of the portfolio managed by Arle Capital Partners Limited 
("Arle") increasing, thereby offsetting the costs of running the business. 
 
In late April, Candover announced the partial realisation by Arle of its 
investments in Parques Reunidos ("Parques") and Technogym S.p.A ("Technogym"), 
following the initial public offering ("IPO") of Parques in Spain and Technogym 
in Italy. In the IPO of Parques, Candover sold 7.7% of its interest in Parques 
for net cash proceeds of EUR3.5 million with the remaining interest in Parques 
valued at EUR42.1 million at the IPO price.  Dealings in the shares of Parques 
commenced on 29th April 2016, following which the share price declined by 15.8% 
up to 30th June. The retained interest in Parques represents approximately 3.3% 
of its share capital. 
 
In the IPO of Technogym, Candover sold 71.9% of its interest in Technogym for 
net cash proceeds of EUR17.3 million, after the exercise of the greenshoe 
option.  Candover's remaining interest in Technogym was valued at EUR7.3 million 
at the IPO price. Dealings in the shares of Technogym commenced on 3rd May 
2016, following which the share price increased by 21.7% up to 30th June. The 
retained interest in Technogym represents approximately 0.89% of its share 
capital. 
 
Following the respective IPOs, both shareholdings are subject to lock ups of 
180 days from the date that shares commenced trading. 
 
The retained portfolio's aggregate value decreased by GBP15.4 million, on a 
constant currency basis, which reflects a write down in the value of Parques of 
GBP16.5 million offset by a GBP1.1 million increase in the valuation of Technogym. 
The impact of foreign currency movements increased the valuation of the 
portfolio by GBP5.7 million, reflecting the weakness of Sterling relative to the 
Euro. 
 
Candover's net debt decreased to GBP10.2 million during the first six months, 
compared to GBP33.2 million at the year end. This comprised gross cash balances 
of GBP20.6 million and gross debt of GBP30.8 million. The decrease in net debt 
reflected the receipt of aggregate realisation proceeds of GBP30.1 million from 
the Parques and Technogym IPOs together with proceeds from completion of the 
sale of the balance of Stork BV. This was offset by accrued interest charges, 
operating expenses and adverse foreign currency movements totalling GBP7.1 
million. 
 
In May 2016, the Company announced that the Board had concluded that, given 
both the length of the lock up period and the structure of Candover's debt 
arrangements, the best use of cash balances was to make an initial repayment of 
debt rather than make a distribution to shareholders as permitted by the debt 
facility. This decision reflected the fact that under the terms of the debt 
facility a prepayment of up to EUR19.4 million is allowed, subject to the lender 
receiving a minimum return of 1.15x on the principal repaid. If this payment 
had been delayed until after 12th August 2016, the minimum return would have 
increased to 1.4x principal, diluting net assets by GBP3.85 million. The 
repayment was completed in late June. 
 
Net asset value per share 
 
Net assets per share decreased by 39.1% from 243p to 148p over the six months 
to 30th June 2016. The decrease of 95p per share was split between losses on 
financial instruments in the portfolio investments (86p), overall favourable 
currency movements (16p), and the impact of on-going business costs (25p).  In 
the first half, these costs comprised accrued financing costs, the investment 
manager's fee and general administration costs. 
 
Table 1 
 
                                                               GBPm  p/share 
 
Net asset value at 31st  December 2015  as reported      53.2     243 
 
Loss on financial instruments and other income1          (18.9)   (86) 
 
Recurring administrative expenses                        (1.2)    (5) 
 
Finance costs                                            (4.4)    (20) 
 
Currency impact: 
 
- Unrealised investments                                 5.7      26 
 
- Retranslation of cash and cash equivalents             2.6      12 
 
- Translation of loan                                    (4.7)    (22) 
 
Net asset value at 30th June 2016  as reported           32.3     148 
 
1 Stated before favourable currency impact of GBP5.7 million 
 
Investments 
 
The valuation of investments at 30th June 2016, including accrued loan note 
interest, was GBP39.3 million. Valuations of the retained portfolio decreased for 
the period by GBP15.4 million, before currency effects, representing a decrease 
of 31.4% in the value of these investments over their 31st December 2015 value. 
The overall decrease in the valuation of the portfolio in the period was GBP9.7 
million representing a decrease of 19.8% which included GBP5.7 million of 
favourable foreign currency movements. 
 
Table 2 
 
                                                              GBPm 
 
Investments at 31st December 2015                             82.6 
 
Disposals at valuation                                        (33.6) 
 
Investments adjusted for additions and disposals              49.0 
 
Revaluation of investments: 
 
- Valuation movements before currency impact                  (15.4) 
 
- Currency impact on unrealised investments                   5.7 
 
Investments at 30th June 2016                                 39.3 
 
Net debt position 
 
Candover's net debt decreased from GBP33.2 million as at 31st December 2015 to GBP 
10.2 million as at 30th June 2016. This reflects the cash inflow from 
realisations offset by the impact of interest accrued on borrowings, operating 
expenses and adverse foreign currency movements in the period. 
 
Table 3 
 
                                          30th June      31st December 
                                          2016           2015 
                                          GBPm             GBPm 
 
Loans and borrowings                      30.4           39.4 
 
Deferred costs                            0.4            0.3 
 
Value of loan                             30.8           39.7 
 
Cash                                      (20.6)         (6.5) 
 
Net debt                                  10.2           33.2 
 
Profit before and after tax 
 
Net revenue loss before tax and exceptional non-recurring costs for the period 
was GBP3.0 million compared to a profit of GBP2.3 million in the comparable period. 
 
Including capital costs of GBP2.5 million (2015: GBP1.8 million), total 
administrative and finance costs in the period were GBP5.6 million (2015: GBP4.2 
million).  This included GBP0.6 million (2015: GBP1.1 million) of management fees 
payable to Arle, linked to the value of investments managed, and GBP4.4 million 
of financing costs (2015: GBP2.4 million) which increased following the 
refinancing completed in August 2015. 
 
There was no exceptional non-recurring gain in the period (2015: gain GBP0.3 
million). 
 
Board 
 
There were no changes to the Board during the period. 
 
Dividend 
 
The Board is not recommending a dividend payment, but the payments of dividends 
in the future will be reviewed in the context of our focus on delivering a 
progressive return of cash to shareholders over time. 
 
Outlook 
 
Our balance sheet is much improved following the first half realisations 
leaving the business better placed to weather any uncertainty over the 
foreseeable future. Until we can establish a route to secure liquidity from the 
shares held in Parques and Technogym, our NAV will be driven by the performance 
of both these businesses and their respective share price performance. 
 
The Board believes that it is prudent to await the expiry of the lock up 
periods for Parques and Technogym before making any future decisions on 
returning value to shareholders. 
 
 
 
Manager's report 
 

Arle Capital Partners Limited 
 
Introduction 
 
Arle is the private equity asset manager of the Candover 2005 Fund and Candover 
2008 Fund (together 'the Candover Funds' or 'Funds'), as well as special 
purpose vehicles. 
 
Portfolio Overview 
 
The Candover Funds' portfolio has continued to make steady progress in 
optimising the operational and financial performance of its residual portfolio 
companies in readiness for exit. During the first six months of the year, Arle 
announced two partial realisations with the successful flotations of Parques 
Reunidos ("Parques") in Spain and Technogym in Italy.  This leaves two 
companies in the portfolio yet to be realised: Expro International ("Expro") 
and Hilding Anders. 
 
As a result of the pricing of the two partial exits during the period and the 
subsequent movement in their listed share price, the overall valuation of the 
Candover Funds' unrealised portfolio contracted by 20.7%.  Individual company 
valuations for Expro and Hilding Anders remained constant from December 2015. 
 
Parques Reunidos 
 
Parques is a leading global operator of regional leisure parks and one of the 
three truly global leisure park operators.  It operates a well-diversified 
portfolio of 57 different attraction parks, animal parks, water parks, family 
entertainment centres and other attractions which attract approximately 20 
million visitors each year. 
 
On 29th April 2016, Arle announced a partial exit of the investment, with the 
IPO of Parques on the Madrid, Barcelona, Bilbao and Valencia stock exchanges 
and on the Automated Quotation System or Mercado Continuo of the Spanish Stock 
Exchanges at EUR15.50, a discount of 23% to 31st  December 2015 valuation. 
 
Net proceeds from the IPO of EUR35.0 million were raised through a sale of 7.7% 
of the Candover Fund's investment. On listing, an interest of 33.9% of the 
ordinary share capital was retained and is subject to a lock-up period of 180 
days. On 30th June 2016, the Candover Fund's residual stake in the listed 
shares, which is held via an intermediate holding company, was valued at EUR356.0 
million. 
 
Parques published Q3 results on 29th July 2016 and reported a 0.2% rise in 
aggregate revenue to June to EUR248.1 million compared to the same period in the 
previous year.  It generated an aggregate EBITDA of EUR10.0 million which was a 
fall of EUR3.5 million compared to the same period in the prior year. The 
aggregate results to June correspond with the low season of the business and 
most of the revenue is generated during the fourth quarter due to the holiday 
period. 
 
The company achieved solid results during the first and second quarters of the 
year growing revenue on a like-for-like basis by 3.8% and 17.0% respectively, 
which were offset by a decrease in revenue of 7.7% experienced during the third 
quarter of the year, which was affected by adverse weather conditions. 
 
In July, the Group announced the agreement of a 10 year management contract 
with Sun Group to manage a theme park and a water park located in Halong Bay, 
Vietnam.  In addition, throughout the year, a number of agreements were reached 
to develop five new leisure spaces within shopping centres: two in Madrid, one 
in London, one in Lisbon and one in Murcia. With these agreements Parques is 
now present in 14 countries, including the 2 new markets of Vietnam and 
Portugal. 
 
The valuation was written down by GBP16.5 million from 31 December 2015 to 
reflect the listed share price of EUR13.05 at 30th June 2016, before positive 
currency movements of GBP4.8 million (total: -54p per share). 
 
Technogym 
 
Technogym is a world leading supplier of technology and design-driven products 
and services in the Wellness and Fitness industry.  Founded in 1983, Technogym 
provides a complete range of cardio, strength and functional equipment 
alongside a cloud-based digital platform enabling consumers to connect with 
their personal wellness experience anywhere, both on Technogym equipment and 
via mobile apps on any device. Technogym targets 4 specific market segments: 
Fitness Clubs; Hospitality & Residential; Health, Corporate & Public (HCP); and 
Consumer. 
 
At the end of April 2016, Arle announced the IPO of Technogym on the Mercato 
Telematico Azionario (MTA), organised and managed by the Borsa Italiana S.p.A. 
 
Demand for the IPO was four times oversubscribed and the final share price 
settled at EUR3.25 per share, a discount of 19% to 31st December 2015 valuation, 
resulting in a market capitalisation of EUR650 million.  At 30th June 2016, the 
share price was EUR3.95 with the stock trading well above the listing price. 
 
Gross proceeds of EUR186.9 million were raised by Arle by listing 25% of 
Technogym's share capital and a further 3.75% from the greenshoe option. 
 
A 15% stake was retained by Arle but this reduced to 11.25% after the greenshoe 
option was fully utilised.  Arle entered a lock-up period of 180 days from the 
start date of trading on 3rd May 2016. 
 
Technogym issued maiden results for the six months to 30th June 2016 on 4th 
August, reporting double digit revenue growth of 10.5% to EUR250 million compared 
to the same period in 2015.  Excluding the foreign exchange impact, revenue 
growth was 12.4%.  EBITDA growth was also strong with a 22.9% improvement to EUR 
35.2 million in the first half of 2016.  At constant exchange rates, this was a 
30.1% rise. 
 
Technogym has also been the official and exclusive supplier of fitness 
equipment to the Rio 2016 Olympic Games.  This was the sixth Olympic games as 
official supplier of equipment and gyms for the competing athletes. 
 
The valuation was marked GBP2.9 million lower than at 31st December 2015, before 
positive foreign currency movements of GBP0.6 million (total: -10p per share). 
 
Hilding Anders 
 
Hilding Anders, the leading European manufacturer of beds and mattresses, 
showed a good trading performance in Europe and Asia while Russia's performance 
was below plan driven by more difficult market conditions. As planned, in Q2 
2016 the business successfully exercised a call option to increase its stake in 
the Russian subsidiary. 
 
Hilding Anders also successfully extended the maturities of its debt facilities 
by 2.5 years in an Amend & Extend process, providing the business with 
flexibility and time to execute on the European cost initiative programme, and 
to capitalise on the Asian and Russian growth. 
 
The valuation was written down by GBP0.1 million against 31st December 2015 
before positive foreign exchange movements of GBP0.2 million (total: nil p per 
share). 
 
Expro International 
 
Expro, the international oilfield services company, reported annual results to 
31st March 2016 with headline revenue of $909.1 million, down 30%, and adjusted 
operating profit of $223.5 million, down 32% compared to the fiscal year ending 
31st March 2015. 
 
These results reflected a challenging energy market, led by reduced commodity 
prices, which have seen lower activity levels across the business. To minimise 
the impact, Expro has proactively managed its cost base, reducing operating 
expenses to deliver stable adjusted EBITDA margins (compared to the previous 
fiscal year). 
 
Through its long-term relationships with customers, Expro announced a number of 
key contract wins during the financial year, with Statoil, Tullow and, more 
recently, Apache. 
 
Despite the industry downturn, Expro outperformed most of its peers in terms of 
EBITDA margin, and revenue and margin decline rates. Management continues to 
work hard to adjust the business in line with market conditions, while 
maintaining the highest levels of safety and service quality and including a 
strong focus on efficiency. 
 
Expro's Middle East and North Africa region revenue is up compared to the prior 
fiscal year, and activity in the Gulf of Mexico has been remarkably resilient 
alongside strong results from its market-leading subsea completion business. 
Emerging technology product lines, including Meters and Wireless Well 
Solutions, have also performed well. 
 
While the past year has undoubtedly been challenging for the industry, Expro 
continues to work closely with its customers, leaving the business well 
positioned for the cycle upside. 
 
The valuation was held flat against 31st  December 2015, benefiting from 
positive foreign currency movement of GBP0.1 million (total: nil p per share). 
 
Realisations 
 
There were two partial realisations during the period with the flotations of 
Parques and Technogym.  Proceeds were received in the period following 
completion of the disposal of Stork which was agreed in December 2015. 
 
Valuations 
 
The investments are largely based in Western Europe and operate in the 
services, industrial and energy sectors.  The co-investments managed by Arle on 
behalf of Candover are shown below. 
 
 
Portfolio valuations 
 
              Residual   Valuation Additions Valuation    Valuation Valuation Valuation 
                 cost1     at 31st       and  movement     movement   at 30th  movement 
                          December disposals excluding attributable June 2016 pence per 
Portfolio                     2015                 FX2       to FX2        GBPm    share2 
company             GBPm          GBPm        GBPm        GBPm           GBPm 
 
Parques           30.6        43.4     (2.6)    (16.5)          4.8      29.1      (54) 
Reunidos 
 
Technogym3        10.3        22.5    (13.1)     (2.9)          0.6       7.1      (10) 
 
Hilding           24.3         1.5         -     (0.1)          0.2       1.6         - 
Anders 
 
Expro             94.4         0.5         -         -          0.1       0.6         - 
International 
 
Stork Group        5.0        14.1    (13.7)     (0.1)            -       0.3         - 
 
Alma              15.3           -         -         -            -         -         - 
 
All              179.9        82.0    (29.4)    (19.6)          5.7      38.7      (64) 
investments 
 
Other             67.6         0.6         -         -            -       0.6         - 
investments4 
 

Total            247.5        82.6    (29.4)    (19.6)          5.7      39.3      (64) 
 
1  Residual cost is original cost less realisations to date 
 
2  Compared to the valuation at 31st December 2015 or acquisition date, if 
later 
 
3   During the period a partial realisation of Technogym generated proceeds of 
GBP13.1 million.  Taking into account the discount to the year-end valuation on 
IPO and subsequent upward movement in the value of the investment retained, the 
overall value of the investment in Technogym decreased by GBP2.9 million in the 
period (excluding FX).  From an accounting perspective this movement was 
treated as a realised loss on IPO of the investment of GBP4.0 million with a 
subsequent uplift in the investment retained from the date of the IPO to 30th 
June 2016 of GBP1.1m 
 
4  Represents other co-investments 
 
Outlook 
 
During the remainder of 2016, Arle will continue to focus on optimising 
performance across the portfolio, ensuring that the remaining investments in 
the Funds can be realised at the appropriate time. 
 
Arle Capital Partners Limited 
 
23rd August 2016 
 
Candover portfolio at 30th June 2016 
 
Analysis by value 
 
By valuation method                   By sector 
 
1.   Function of listed share price   1.   Services 75.2% 
     93.5% 
 
2.   Multiple of earnings 5.7%        2.   Industrial 23.2% 
 
3.   Disposal proceeds 0.8%           3.   Energy 1.6% 
 
By region                             By age 
 
1.   Spain 75.2%                      1.   Greater than 5 years 100% 
 
2.   Italy 18.3% 
 
3.   Nordic 4.1% 
 
4.   United Kingdom 1.6% 
 
5.   Benelux 0.8% 
 
Portfolio investments 
 
                                                      Movement  Effective 
                                 Residual               from      equity      % of 
                      Date of    cost of   Directors' 31st Dec   interest  Candover's Basis of 
Investment           investment investment valuation    20151     (fully   net assets valuation 
                                    GBPm         GBPm        GBPm      diluted) 
 
                                                                                      Function 
Parques Reunidos       Mar-07      30.6       29.1     (11.7)      3.3        90.1    of listed 
Operator of                                                                             share 
attraction parks                                                                        price 
 
 
                                                                                      Function 
Technogym              Aug-08      10.3       7.1       (2.3)      0.9        22.0    of listed 
Premium fitness                                                                         share 
equipment and                                                                           price 
wellness products 
 
 
 
Hilding Anders         Dec-06      24.3       1.6        0.1       4.3        5.0     Multiple 
Bed and mattress                                                                         of 
manufacturer                                                                          earnings 
 
 
 
Expro International    Jul-08      94.4       0.6        0.1       4.7        1.9     Multiple 
Oilfield services                                                                        of 
                                                                                      earnings 
 
 
Stork Group            Jan-08      5.0        0.3       (0.1)      N/A        0.9     Proceeds 
Engineering 
conglomerate 
 
 
 
Alma Consulting        Dec-07      15.3        -          -        4.9         -      Multiple 
Group                                                                                    of 
Cost consultancy                                                                      earnings 
 
 
1 Adjusted for additions and disposals in the period 
 
Principal risks and uncertainties 
 
Details of the principal risks and uncertainties facing the Group were set out 
in the Risk review on pages 6 to 8 of the 2015 Report and Accounts, a copy of 
which is available on our website (www.candoverinvestments.com). 
 
The principal risks and uncertainties identified in the 2015 Report and 
Accounts, and the policies and procedures for minimising these risks and 
uncertainties, remain unchanged and each of them has the potential to affect 
the Group's results during the remainder of 2016. Our views on the current 
market conditions are reflected in the Business and financial review and the 
Manager's report. 
 
Statement of Directors' responsibilities 
 
The Directors of Candover Investments plc confirm that, to the best of their 
knowledge, the condensed set of financial statements in this interim report 
have been prepared in accordance with International Accounting Standard 34 
'Interim Financial Reporting' as adopted by the EU, and give a fair view of the 
assets, liabilities, financial position and profit or loss of Candover 
Investments plc, and the undertakings included in the consolidation as a whole, 
and that the Manager's report includes a fair review of the information 
required by DTR 4.2.7R and DTR 4.2.8R. 
 
By order of the Board 
 
Ipes (UK) Limited 
Company Secretary 
23rd August 2016 
 
 
 
Independent review report to the members of 
Candover Investments plc 
 
Introduction 
 
We have been engaged by the Company to review the condensed set of financial 
statements in the half-yearly financial report of Candover Investments plc for 
the six months ended 30th June 2016 which comprises the Group statement of 
comprehensive income, the Group statement of changes in equity, the Group 
statement of financial position, the Group statement of cash flows and the 
related explanatory notes. We have read the other information contained in the 
half-yearly financial report which comprises only the Business and financial 
review, the Manager's report, the Candover portfolio, the Principal risks and 
uncertainties and the Statement of directors' responsibilities 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's members, 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 review work has been 
undertaken so that we might state to the Company's members 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 and the Company's members as a 
body for our review work, for this report, or for the conclusion 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 2, the annual financial statements of the Group are 
prepared in accordance with International Financial Reporting Standards 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 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 enquiries, 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 30th June 2016 is not prepared, in 
all material respects, in accordance with International Accounting Standard 34, 
'Interim Financial Reporting', as adopted by the European Union and the 
Disclosure and Transparency Rules of the United Kingdom's Financial Conduct 
Authority. 
 
Grant Thornton UK LLP 
Statutory Auditor, Chartered Accountants 
London 
23rd August 2016 
 
 
 
Group statement of comprehensive income 
 
for the period ended 30th June 2016 
 
GBP million                        Six months to 30th     Six months to 30th Year to 31st  December 
                                          June 2016              June 2015                   2015 
 
                             Revenue Capital  Total Revenue Capital  Total Revenue Capital  Total 
 
                                   Unaudited              unaudited               audited 
 
(Loss)/gain on financial 
instruments 
at fair value through profit 
and loss 
 
Realised (losses)/gains            -   (3.4)  (3.4)       -     0.2    0.2       -     0.6    0.6 
 
Unrealised (losses)/gains          -   (7.3)  (7.3)       -  (38.4) (38.4)       -  (54.4) (54.4) 
 
                                   -  (10.7) (10.7)       -  (38.2) (38.2)       -  (53.8) (53.8) 
 
Revenue 
 

Investment and other income      0.1       -    0.1     4.7       -    4.7     6.4       -    6.4 
 
Recurring administrative       (0.9)   (0.3)  (1.2)   (1.2)   (0.6)  (1.8)   (2.6)   (0.9)  (3.5) 
expenses 
 
Exceptional non-recurring          -       -      -     0.3       -    0.3   (5.1)       -  (5.1) 
gains/(losses) 
 
(Loss)/profit before finance   (0.8)  (11.0) (11.8)     3.8  (38.8) (35.0)   (1.3)  (54.7) (56.0) 
costs and taxation 
 
Finance costs                  (2.2)   (2.2)  (4.4)   (1.2)   (1.2)  (2.4)   (3.2)   (3.2)  (6.4) 
 
Exchange movements on              -   (4.7)  (4.7)       -     0.7    0.7       -   (1.5)  (1.5) 
borrowings 
 
(Loss)/profit before           (3.0)  (17.9) (20.9)     2.6  (39.3) (36.7)   (4.5)  (59.4) (63.9) 
taxation 
 
Analysed between: 
 
(Loss)/profit before           (3.0)  (17.9) (20.9)     2.3  (39.3) (37.0)     0.6  (59.4) (58.8) 
exceptional non-recurring 
costs 
 
Exceptional non-recurring          -       -      -     0.3       -    0.3   (5.1)       -  (5.1) 
gains/(losses) 
 
Taxation                           -       -      -   (1.6)       -  (1.6)   (2.1)       -  (2.1) 
 
(Loss)/profit after taxation   (3.0)  (17.9) (20.9)     1.0  (39.3) (38.3)   (6.6)  (59.4) (66.0) 
 
Total comprehensive income     (3.0)  (17.9) (20.9)     1.0  (39.3) (38.3)   (6.6)  (59.4) (66.0) 
 
Earnings per ordinary share: 
 
Total earnings per share       (13p)   (82p)  (95p)      5p  (180p) (175p)   (30p)  (272p) (302p) 
- basic and diluted 
 
Dividends paid (GBP millions)        -       -      -       -       -      -       -       -      - 
 
The total column represents the Group statement of comprehensive income under 
IFRS. The supplementary revenue and capital columns are presented for 
information purposes as recommended by the Statement of Recommended Practice 
issued by the Association of Investment Companies and updated in November 2014 
 
All of the loss for the period and the total comprehensive income for the 
period are attributable to the owners of the Company 
 
No interim dividend is proposed 
 
 
 
Group statement of changes in equity 
for the period ended 30th June 2016 
 
Unaudited                       Called    Share    Other  Capital    Capital Revenue  Total 
                                    up  premium reserves reserves reserves - reserve equity 
                                 share  account                 - unrealised 
                               capital       GBPm       GBPm realised         GBPm      GBPm     GBPm 
                                    GBPm                         GBPm 
 
Balance at 1st January 2016        5.5      1.2    (0.1)    309.9    (252.4)  (10.9)   53.2 
 
Net revenue after tax                -        -        -        -          -   (3.0)  (3.0) 
 
Unrealised loss on financial         -        -        -        -      (7.3)       -  (7.3) 
instruments 
 
Realised (loss)/gain on              -        -        -   (27.9)       24.5       -  (3.4) 
financial instruments 
 
Exchange movements on                -        -        -        -      (4.7)       -  (4.7) 
borrowing 
 
Costs net of tax                     -        -        -    (2.5)          -       -  (2.5) 
 
Profit/(loss) after tax              -        -        -   (30.4)       12.5   (3.0) (20.9) 
 
Total comprehensive income           -        -        -   (30.4)       12.5   (3.0) (20.9) 
 
Balance at 30th June 2016          5.5      1.2    (0.1)    279.5    (239.9)  (13.9)   32.3 
 
Unaudited 
 
Balance at 1st January 2015        5.5      1.2    (0.1)    310.4    (193.5)   (4.3)  119.2 
 
Net revenue after tax                -        -        -        -          -     1.0    1.0 
 
Unrealised loss on financial         -        -        -        -     (38.4)       - (38.4) 
instruments 
 
Realised gain/(loss) on              -        -        -      0.2          -       -    0.2 
financial instruments 
 
Exchange movements on                -        -        -        -        0.7       -    0.7 
borrowing 
 
Costs net of tax                     -        -        -    (1.8)          -       -  (1.8) 
 
Profit/(loss) after tax              -        -        -    (1.6)     (37.7)     1.0 (38.3) 
 
Total comprehensive income           -        -        -    (1.6)     (37.7)     1.0 (38.3) 
 
Balance at 30th June 2015          5.5      1.2    (0.1)    308.8    (231.2)   (3.3)   80.9 
 
Audited 
 
Balance at 1st January 2015        5.5      1.2    (0.1)    310.4    (193.5)   (4.3)  119.2 
 
Net revenue after tax                -        -        -        -          -   (6.6)  (6.6) 
 
Unrealised loss on financial         -        -        -        -     (54.4)       - (54.4) 
instruments 
 
Realised gain/loss on                -        -        -      3.6      (3.0)       -    0.6 
financial instruments 
 
Exchange movements on                -        -        -        -      (1.5)       -  (1.5) 
borrowing 
 
Costs net of tax                     -        -        -    (4.1)          -       -  (4.1) 
 
Loss after tax                       -        -        -    (0.5)     (58.9)   (6.6) (66.0) 
 
Total comprehensive loss             -        -        -    (0.5)     (58.9)   (6.6) (66.0) 
 
Balance at 31st December 2015      5.5      1.2    (0.1)    309.9    (252.4)  (10.9)   53.2 
 
 
 
Group statement of financial position 
at 30th June 2016 
 
GBP million                             Notes 30th June 2016  30th June 2015   31st December 
                                               unaudited       unaudited         2015 
                                                                                audited 
 
Non-current assets 
 
Financial investments designated at 
fair value through profit and loss 
 
Investee companies                        5    38.7           102.4            82.0 
 
Other financial investments               5     0.6             0.6             0.6 
 
                                                       39.3           103.0            82.6 
 
Trade and other receivables                     3.2             9.3                     3.5 
 
Deferred tax asset                                -             0.5                       - 
 
                                                        3.2           112.8            86.1 
 
Current assets 
 
Trade and other receivables                     0.1             0.1               - 
 
Current tax asset                               0.1             0.1             0.2 
 
Cash and cash equivalents                      20.6            20.8             6.5 
 
                                                       20.8            21.0             6.7 
 
Current liabilities 
 
Trade and other payables                      (0.6)           (0.2)           (0.2) 
 
Provisions                                        -           (0.1)               - 
 
Loans and borrowings                              -          (52.6)               - 
 
                                                      (0.6)          (52.9)           (0.2) 
 
Net current assets/(liabilities)                       20.2          (31.9)             6.5 
 
Total assets less current                              62.7            80.9            92.6 
liabilities 
 
Non-current liabilities 
 
Loans and borrowings                                 (30.4)               -          (39.4) 
 
Net assets                                             32.3            80.9            53.2 
 
Equity attributable to equity 
holders 
 
Called up share capital                                 5.5             5.5             5.5 
 
Share premium account                                   1.2             1.2             1.2 
 
Other reserves                                        (0.1)           (0.1)           (0.1) 
 
Capital reserve - realised                            279.5           308.8           309.9 
 
Capital reserve - unrealised                        (239.9)         (231.2)         (252.4) 
 
Revenue reserve                                      (13.9)           (3.3)          (10.9) 
 
Total equity                                           32.3            80.9            53.2 
 
Net asset value per share 
 
Basic                                                  148p            370p            243p 
 
Diluted                                                148p            370p            243p 
 
 
 
 
Group cash flow statement 
for the period ended 30th June 2016 
 
GBP million                             Notes  Six months to   Six months to      Year to 
                                            30th June 2016  30th June 2015   31st December 
                                               unaudited       unaudited         2015 
                                                                                audited 
 
Cash flows from operating activities 
 
Cash flow from operations                 4           (0.4)           (3.0)           (4.1) 
 
Interest paid                                         (2.4)           (1.9)           (2.3) 
 
Net cash outflow from operating                       (2.8)           (4.9)           (6.4) 
activities 
 
Cash flows from investing activities 
 
Purchase of financial investments                 -           (1.9)           (2.3) 
 
Sale of financial investments                  30.1             1.7             8.2 
 
Net cash inflow/(outflow) from                         30.1           (0.2)             5.9 
investing activities 
 
Cash flows from financing activities 
 
Loan notes issued                                 -               -          (54.0) 
 
Loan facility utilised                            -               -            35.0 
 
Loan facility repaid                         (15.8)               -               - 
 
Net cash outflow from financing                      (15.8)               -          (19.0) 
activities 
 
Increase/(decrease) in cash and cash                   11.5           (5.1)          (19.5) 
equivalents 
 
Opening cash and cash equivalents                       6.5            26.6            26.6 
 

Effect of exchange rates and                            2.6           (0.7)           (0.6) 
revaluation on cash and cash 
equivalents 
 
Closing cash and cash equivalents                      20.6            20.8 
                                                                                      6.5 
 
 
 
 
Notes to the financial statements 
for the period ended 30th June 2016 
 
Note 1 General information 
 
Candover Investments plc is a private equity investment trust listed on the 
London Stock Exchange, registered and incorporated in England and Wales. The 
consolidated financial statements, which are made up to the Statement of 
financial position date, incorporate the Financial statements of Candover 
Investments plc and Candover Services Limited, its wholly owned subsidiary. 
 
This condensed consolidated half-year financial information does not comprise 
statutory accounts within the meaning of Section 434 of the Companies Act 2006. 
Statutory accounts for the year ended 31st December 2015 were approved on 23rd 
March 2016. Those accounts, which contained an unqualified audit report under 
Section 498 of the Companies Act 2006 and which did not make any statements 
under Section 498 of the Companies Act 2006, have been delivered to the 
Registrar of Companies in accordance with Section 441 of the Companies Act 
2006. 
 
Note 2 Basis of preparation 
 
The condensed interim consolidated financial statements ("the interim financial 
statements") incorporate the Financial statements for the six months ended 30th 
June 2016 and are presented in sterling which is the functional currency of the 
parent company. The accounting policies and presentation used in the 
preparation of this report are consistent with the consolidated financial 
statements for the year ended 31st December 2015. They have been prepared in 
accordance with IAS 34 'Interim Financial Reporting' (IAS 34). They do not 
include all of the information required in annual financial statements in 
accordance with International Financial Reporting Standards ("IFRS"), and 
should be read in conjunction with the consolidated financial statements for 
the year ended 31st December 2015. 
 
Under the UK Corporate Governance Code dated September 2014 and applicable 
regulations and guidance, including the FRC's 'Going Concern and Liquidity 
Risk: Guidance for Directors of UK Companies 2009', the Directors are required 
to satisfy themselves that it is reasonable to presume that the Company is a 
going concern. Candover's business activities, together with the factors likely 
to affect its future development, performance and position, are set out in the 
Business and financial review and the Manager's report on pages 2 to 8. The 
financial position of Candover, its cash flows, liquidity position and 
borrowing facilities are described in the Financial review on pages 2 to 4. The 
Directors have a reasonable expectation that Candover and the Group have 
adequate resources to continue as a going concern for the foreseeable future. 
For these reasons, they continue to adopt the going concern basis in preparing 
the interim financial statements as at 30th June 2016. 
 
Note 3 Estimates 
 
When preparing the interim financial statements, management undertakes a number 
of judgements, estimates and assumptions about recognition and measurement of 
assets, liabilities, income and expenses. The actual results may differ from 
the judgements, estimates and assumptions made by management, and will seldom 
equal the estimated results. The judgements, estimates and assumptions applied 
in the interim financial statements, including the key sources of estimation 
uncertainty, were consistent with those applied in the Group's last annual 
financial statements for the year ended 31st December 2015. 
 
Note 4 Reconciliation of operating income to net cash flow from operating 
activities 
 
GBP million                     Six months to     Six months to           Year to 
                             30th June 2016    30th June 2015     31st December 
                                  unaudited         unaudited              2015 
                                                                        audited 
 
Total income                            0.1               4.7               6.4 
 
Administrative expenses               (1.2)             (1.8)             (3.5) 
 
Operating profit                      (1.1)               2.9               2.9 
 
Decrease/(Increase) in                  0.3             (5.6)               6.7 
trade and other 
receivables1 
 
Increase/(decrease) in                  0.4             (0.3)             (0.3) 
trade and other payables 
 
Net cash outflow from                 (0.4)             (3.0)             (4.1) 
operating activities 
 
1 Includes accrued portfolio income recognised within Financial investments 
shown under Non-current assets on the Group statement of financial position. 
 
Note 5 Financial investments designated at fair value through profit and loss 
 
GBP million                     Six months to     Six months to           Year to 
                             30th June 2016    30th June 2015     31st December 
                                  unaudited         unaudited              2015 
                                                                        audited 
 
Opening valuation                      82.6             135.6             135.6 
 
Disposals at valuation               (33.6)             (1.7)             (8.2) 
 
Additions at cost                         -               1.9               2.3 
 
Valuation movements                   (9.7)            (32.8)            (47.1) 
 
Closing valuation                      39.3             103.0              82.6 
 
Note 6 Fair value hierarchy measurements and disclosures 
 
IFRS 13 requires a company to classify fair value measurements using a fair 
value hierarchy that reflects the significance of the inputs used in making the 
measurements. The fair value hierarchy has the following levels: 
 
 
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or 
liabilities. 
 
Level 2 - Inputs other than quoted prices included within level 1 that are 
observable for the asset or liability, either directly (that is, as prices) or 
indirectly (that is, derived from prices including interest rates, yield 
curves, volatilities, prepayment speeds, credit risks and default rates) or 
other marker corroborated inputs. 
 
 
Level 3 - Inputs for the asset or liability that are not based on observable 
market data (that is, unobservable inputs). 
 
The table below sets out fair value hierarchy under the IFRS 7 fair value 
disclosures and IFRS 13 fair value measurement: 
 
                                        Six months to 30th June 2016 
                                                  unaudited 
 
Group                              Level 1       Level 2   Level 3       Total 
                                        GBPm            GBPm        GBPm          GBPm 
 
Continuing equity investments            -             -      39.3        39.3 
 
Cash equivalents1                     20.6             -         -        20.6 
 
Total                                 20.6             -      39.3        59.9 
 
                                        Six months to 30th June 2015 
                                                  unaudited 
 
Group                              Level 1       Level 2   Level 3       Total 
                                        GBPm            GBPm        GBPm          GBPm 
 
Continuing equity investments            -             -     103.0       103.0 
 
Cash equivalents1                     20.8             -         -        20.8 
 
Total                                 20.8             -     103.0       123.8 
 
                                         Year to 31st December 2015 
                                                   audited 
 
Group                              Level 1       Level 2   Level 3       Total 
                                        GBPm            GBPm        GBPm          GBPm 
 
Continuing equity investments            -             -      82.6        82.6 
 
Cash equivalents1                      6.5             -         -         6.5 
 
Total                                  6.5             -      82.6        89.1 
 
1These are short-dated listed fixed income securities and money market 
instruments which meet the definition of cash and cash equivalents 
 
There have been no transfers between levels since the year end 31st December 
2015 despite the IPO of Technogym and Parques. Whilst Candover's interests in 
both entities are driven by their respective share prices, they are held via an 
unquoted intermediate company, with lock-up arrangements in force for their 
retained interests. 
 
Valuations prepared by the investment manager are initially prepared by its 
finance department using comparable multiples sourced from an independent third 
party and financial results provided by the portfolio companies. The valuations 
for Technogym and Parques are now based on a function of the share price of the 
individual investments due to the nature of the investment held. These are then 
passed to the relevant investment executive for review and comment, in 
particular with respect to the sustainability of earnings and level of 
underlying debt; the comparables; and any adjustments to be made thereto for 
points of difference. Any changes to earnings basis or comparables used in a 
valuation, compared to the prior valuation, must be approved by the senior 
management of the investment manager. These valuations are then subject to 
review, challenge and approval by the senior management of the investment 
manager, who at the same time will discuss the underlying trading and outlook, 
both internal and external, of the portfolio company. The valuations are 
included in the financial statements of both Candover and the Candover Funds, 
which are audited by separate independent auditors. 
 
Valuations are based on earning multiples as derived from comparable listed 

companies. Level 3 
 
investments are sensitive to assumptions made when ascertaining fair value as 
described in the valuation policy above. Using an alternative assumption could 
have a significant impact on the fair value of Level 3 investments. A 
reasonable assumption could be to value the portfolio companies using the 
average market multiple of comparable listed companies, rather than the 
specific approach adopted. This would result in an unadjusted valuation of GBP 
41.9 million which is 9% higher than the current valuation. The multiples of 
the comparable basket of companies range from 9.2x to 9.9x with adjustments 
made to reflect the relative size and trading diversity between portfolio 
companies and listed comparable companies of +0% to -25% (June 2015: +39% to 
-37%, December 2015: +1% to -41%). These adjustments have an aggregate negative 
impact of GBP3.2 million giving a valuation of GBP38.7 million of portfolio 
companies as at 30th June 2016. 
 
Note 7 Related party transactions 
 
The nature of the Company's interest in the Candover 2005 and 2008 Funds is 
disclosed in note 9 on page 64 of the 2015 Report and Accounts. 
 
As at 30th June 2016, Candover's investments as a Special Limited Partner in 
the Candover 2005 Fund were valued at GBP0.4 million (31st December 2015:  GBP0.4 
million). 
 
Note 8 Outstanding commitments 
 
At 30th June 2016, the Company had no outstanding co-investment commitments. 
 
Note 9 Operating segments 
 
Candover's operating segments are being reported based on the financial 
information provided to the Chief Executive Officer of Candover. Co-investment 
activity is presented on the Group statement of comprehensive income in 
accordance with the Statement of Recommended Practice. Income arising from 
co-investment is reported under 'revenue', and capital gains and losses within 
'capital'. The Group's material non-current assets are the portfolio companies 
of the co-investment segment. These are assessed geographically in the 
Manager's portfolio review on page 9. There have been no changes from prior 
periods in measurement methods used to determine operating segments during the 
six month period to 30th June 2016. 
 
 
 
END 
 

(END) Dow Jones Newswires

August 24, 2016 02:00 ET (06:00 GMT)