Candover Investments Preliminary Statement

 
TIDMCDI 
 
24th February 2017 
 
 
Candover* Investments plc 
Preliminary unaudited results for the year ended 31st December 2016 
 
  * NAV per share of 163p at 31st December 2016 representing a 10% increase 
    (15p) over the second half, but a 33% decrease (80p) compared to the prior 
    year (31st December 2015:  243p) 
 
  * Aggregate losses on disposals and portfolio valuation declines were GBP13.7 
    million (63p) 
 
  * Sterling weakness relative to the Euro benefitted NAV by 26p per share 
 
  * Proceeds from realisations during the year were GBP30.1 million, with a 
    further GBP16.7 million of realisations announced post year end 
 
  * Net debt decreased to GBP13.7 million at year end (2015: GBP33.2 million) 
    reflecting realisation proceeds, offset by accrued financing costs together 
    with an adverse foreign currency movement of GBP2.5 million 
 
 
Malcolm Fallen, Chief Executive Officer, said: 
 
"Following the portfolio realisations in 2016 and in the first months of this 
year, we have entered a new phase. For the first time since 2007, the Company 
is no longer indebted. The timing of the disposal of the Parques investment, 
the pay down of our current debt facilities and the potential distribution of 
value to shareholders are the key matters under consideration. In addition, we 
are exploring whether Candover's accumulated tax losses represent a future 
realisable asset. Over the coming months, we will ensure this next phase of the 
run-off is completed in a timely and efficient way." 
 
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] 
 
Chairman's statement 
 
The first half of 2016 was a period of greater realisation activity, albeit in 
volatile markets, that generated significant cash inflows for the Company 
totalling approximately GBP30 million. Following this, the Board concluded in 
June that an early partial repayment of the Company's debt was in shareholders' 
interest given the structure and cost of the debt facility. 
 
Over the year, the valuation of our retained investment portfolio reduced by 
4.7% which, together with the loss on asset disposals and financing costs, led 
to a 33% reduction in NAV per share to 163p. The loss on asset disposals 
reflected the impact of the partial realisation by Arle, our third party 
investment manager, of Parques Reunidos ("Parques") and Technogym S.p.A. 
("Technogym"), by way of Initial Public Offerings ("IPO") in late April, which 
both occurred below their 31st December 2015 valuations. 
 
Candover's remaining indirect interests in both Parques and Technogym were 
subject to lock up periods which expired in late October and early November 
2016 respectively. Both companies had differing fortunes following their IPOs; 
through to the year end the share price of Parques declined by 1.5% from the 
IPO price, whilst the share price of Technogym increased by 36.4%.  Following 
the end of the year, Arle then completed both the realisation of the remaining 
shares in Technogym and a further block of Parques shares was sold, leaving 
Candover's indirect interest at approximately 2.5%. 
 
The profile of Candover following these post year end realisations is quite 
different to that at the start of 2016. The portfolio is no longer a private 
equity portfolio with over 90% of the portfolio value, after adjusting for the 
post year end disposals, being listed shares in Parques. In addition, the 
realisation proceeds received post year end means that Candover now has net 
cash, rather than net debt, for the first time since 2007. 
 
Furthermore, the impending termination of the Candover Funds, and ensuing 
voluntary liquidation of Arle at the end of the first quarter of 2017, will 
result in Candover being able to self-manage the final run-off of its 
portfolio. In particular, it is anticipated that when the Candover 2005 Fund 
terminates, our indirect interest in Parques will be exchanged for a direct 
interest in its listed shares. 
 
The Board has, over the course of the second half of 2016, been giving thought 
to the options that the Company faces after the end of the first quarter. In 
particular, the timing of the disposal of the Parques investment, the pay down 
of our current debt facilities and the potential distribution of value to 
shareholders are key matters under consideration along with the cost of 
managing through this phase of the run-off process. In addition, Candover has 
accumulated substantial income tax losses and we are exploring whether this, in 
any way, constitutes a future realisable asset. 
 
The Board is not recommending a dividend payment. 
 
The Board continues to be committed to the highest standards of corporate 
governance. However, given the significant change in our overall position, we 
have concluded that a Board of two members, rather than four, is sufficient to 
complete this phase of the run-off. Whilst it is our intention to adhere to as 
much of the governance requirements as is practical, we will simplify our 
approach wherever possible to reduce costs. 
 
It is, therefore, the current intention that both Jan Oosterveld and I will not 
be seeking re-election at this year's AGM. 
 
Richard Stone 
Chairman 
24th February 2017 
 
 
CEO's report 
 
When Candover announced in late 2010 that it would no longer make new 
investments but instead go in to run off, we set our strategy to achieve a 
return of cash to shareholders over time. To support the delivery of this 
strategy, our focus has been twofold:  first, to ensure that the Company 
remained financially stable; and second, to actively review and monitor the 
performance of Arle, our investment manager, as it set out to maximise and 
realise the value of the portfolio. 
 
Net asset value 
The Company's net assets per share of 163p at 31st December 2016 decreased 33% 
over the prior year (243p) reflecting the impact of the partial realisation of 
Parques and Technogym occurring below their valuations at the start of the year 
together with the impact of debt financing costs. 
 
During the first half of the year, NAV declined 95p per share split between 
losses on financial instruments in the portfolio (86p), overall favourable 
currency movements (16p), the impact of financing costs (20p) and operating 
costs (5p). During the second half, NAV increased by 15p per share with gains 
on financial instruments in the portfolio (23p) together with favourable 
foreign currency movements (10p) offset by financing costs (13p) and operating 
costs (5p). 
 
The retained portfolio's aggregate value decreased by GBP10.4 million, on a 
constant currency basis, which reflects principally a write down in the value 
of Parques of GBP12.3 million offset by a GBP2.0 million increase in the valuation 
of Technogym. The impact of foreign currency movements had a positive impact of 
GBP8.1 million on the portfolio valuation, reflecting the weakness of Sterling 
relative to the Euro. 
 
During 2016, Candover's recurring administrative expenses reduced by 40%, 
helping to minimise the adverse impact of costs on NAV performance. Finance 
costs increased following the refinancing of the US PP Notes in August 2015. 
The rise reflects the higher interest charge associated with the new loan 
facility. The movements are set out in Table 1 of the Financial review. 
 
Net debt and funding facilities 
Net debt during the year decreased by GBP19.5 million to GBP13.7 million at 31st 
December 2016 (31st December 2015: GBP33.2 million). This comprised gross cash 
balances of GBP21.3 million and gross debt of GBP35.0 million, including accrued 
interest charges. 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. 
 
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. 
 
Following the year end, further realisations generated proceeds of 
approximately GBP16.7million, resulting in Candover, on a pro-forma basis, 
holding a net cash balance of approximately GBP2.3 million. 
 
Realisation activity 
In late April 2016, Candover announced the partial realisation by Arle of its 
investments in Parques  and Technogym, following the IPOs 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 1.5% up to 31st December 2016. The retained interest in Parques 
represented 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 36.4% up to 31st December 
2016. The retained interest in Technogym represented approximately 0.89% of its 
share capital. 
 

Following the respective IPOs, both shareholdings were subject to lock ups of 
180 days from the date when shares commenced trading. These lock ups expired 
before the year end. 
 
Subsequent to the year end, Candover announced on 5th January 2017 a further 
partial realisation of its investment in Parques disposing of 26% of its 
interest in Parques for cash proceeds of approximately EUR9.9 million (GBP8.4 
million). The remaining interest in Parques is valued at EUR30.4 million (GBP25.9 
million) at the closing price of Parques on 4th January 2017 and is subject to 
a new 90 day lock up. Candover's interest in Parques was valued at GBP35.3 
million at 31st December 2016. Candover retains an interest in Parques of 
approximately 2.5%. 
 
Candover also announced on 10th January 2017 the realisation of its remaining 
investment in Technogym for cash proceeds of approximately EUR9.5 million (GBP8.2 
million). Candover's interest in Technogym was valued at GBP8.2 million at 31st 
December 2016. 
 
Foreign currency 
Candover's foreign currency exposure was simplified at the time of its 
refinancing in August 2015.  The debt facilities are denominated in Euros which 
partly offsets the portfolio assets and cash balances which are Euro 
denominated. 
 
Management of the Candover Funds 
The Limited Partners of the Candover 2005 Fund agreed in August 2014 to extend 
the original ten-year term of the Fund until March 2017 to enable Arle to 
complete the realisation of the portfolio. In the light of the forthcoming 
termination of the 2005 Fund, Arle have confirmed that they intend to undertake 
a solvent, members' voluntary liquidation of Arle, which will trigger the 
termination of the Candover 2008 Fund at the same time. 
 
As a result of the termination of the Funds, Candover will no longer be 
required to have its co-investments managed alongside the Funds. Given the 
small number of remaining interests, with the significant majority of their 
value being the listed interest in Parques, Candover intends to self-manage the 
final run off of its portfolio. 
 
Outlook 
The profile of Candover following the realisations announced post year end is 
quite different to that at the start of 2016. The portfolio is no longer a 
private equity portfolio, with over 90% of the portfolio value after adjusting 
for the post year end disposals, being listed shares in Parques. In addition, 
the realisation proceeds received post year end means Candover now has net 
cash, rather than net debt, for the first time since 2007. 
 
Furthermore, the impending termination of the Candover Funds, and ensuing 
voluntary liquidation of Arle at the end of the first quarter of 2017 will 
result in Candover being able to self-manage its remaining portfolio. 
 
Over the coming months, we will ensure this phase of the run-off is completed 
in a timely and efficient way. In particular, the focus will be on the timing 
and options to achieve the disposal of the Parques investment, the pay down of 
our current debt facilities and the potential distribution of value to 
shareholders along with the cost of managing through this phase of the run-off 
process. 
 
Malcolm Fallen 
Chief Executive Officer 
24th February 2017 
 
 
Financial review 
 
Net asset value per share 
Net asset value per share after exceptional non-recurring costs was 163p, 
representing a full year decrease of 33% since 31st December 2015 (243p) and an 
increase of 10% since 30th June 2016 (148p). 
 
The decrease of 80p per share was split between the loss on disposal of 
investments (-15p), a decrease in constant currency investment values (-48p), 
overall favourable currency movements (26p), and the impact of ongoing costs 
(-43p). These costs comprised loan note interest, our investment manager's fee 
and general administration costs. 
 
Table 1 
 
                                                               GBPm  p/share 
 
Net asset value at 31st December 2015                        53.2      243 
 
Loss on financial instruments and other income1            (13.7)     (63) 
 
Recurring administrative expenses                           (2.1)     (10) 
 
Finance costs recurring                                     (7.4)     (33) 
 
Currency impact: 
 
- Unrealised investments                                      8.1       37 
 
- Re-translation of cash and cash equivalents                 3.5       16 
 
- Translation of loan                                       (6.0)     (27) 
 
Net asset value at 31st December 2016 as reported            35.6      163 
 
1   Stated before favourable currency impact of GBP8.1 million 
 
Investments 
The valuation of investments, including carried interest and accrued loan note 
interest, was GBP46.7 million at 31st December 2016 (31st December 2015: GBP82.6 
million). Valuations decreased for the year by GBP10.4 million, before currency 
effects and after adjusting for disposals, representing a decrease of 21% on 
the value of these investments over their 31st December 2015 value. The overall 
decrease of 5% in the value of the portfolio was GBP2.3 million which included GBP 
8.1 million of favourable foreign currency movements reflecting the weakening 
of Sterling relative to the Euro and the US Dollar. 
 
Table 2 
 
                                                                     GBPm 
 
Investments at 31st December 2015                                  82.6 
 
Disposals at valuation                                           (33.6) 
 
Additions at cost                                                     - 
 
Investments adjusted for additions and disposals                   49.0 
 
Revaluation of investments: 
 
- Valuation movements before currency impact                     (10.4) 
 
- Currency impact on unrealised investments                         8.1 
 
Investments at 31st December 2016                                  46.7 
 
Net debt 
Candover's net debt decreased from GBP33.2 million at 31st December 2015 to GBP13.7 
million at 31st December 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 
 
Net debt                                  31st December  31st December 
                                          2016           2015 
                                          GBPm             GBPm 
 
Loans and borrowings                                34.7           39.4 
 
Deferred costs                                       0.3            0.3 
 
Value of loan/bonds                                 35.0           39.7 
 
Cash                                              (21.3)          (6.5) 
 
Net debt                                            13.7           33.2 
 
Profit before and after tax 
Net revenue loss before tax and exceptional non-recurring gains and losses from 
operations for the year was a loss of GBP15.5 million compared to a profit of GBP 
0.6 million in the prior year. 
 
Including capital costs of GBP4.1 million (2015: GBP4.1 million), total 
administrative and finance costs in the year were GBP9.5 million (2015: GBP9.9 
million), which included GBP0.8 million (2015: GBP1.8 million) of management fees 
paid to Arle, linked to the value of investments managed, and GBP7.4 million of 
financing costs (2015: GBP6.4 million). 
 
There was no exceptional non-recurring gain or loss in the year (2015: loss GBP 
5.1 million). 
 
Reported net revenue loss after taxation was GBP15.5 million compared to GBP6.6 
million loss in the prior year. 
 
 
Manager's portfolio review 
 
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. 
 
Termination of the Candover Funds 
Contractually the Candover 2005 Fund is due to terminate on 31st March 2017. 
As a result, and recognising that Arle and the Candover Funds have been in 
wind-down for a number of years, Arle has informed investors in the Candover 
Funds that it intends to enter a solvent voluntary liquidation at or around 
that date, with the Candover 2008 Fund also being terminated on 31st March 
2017. 
 
This will allow an orderly wind up of the Candover Funds.  Discussions have 
taken place with the Advisory Boards of the Candover Funds, together with their 
legal and financial advisers, and the Financial Conduct Authority. 
 
Plans for Remaining Investments 
Arle intends to realise the investment in Hilding Anders pre-31st March 2017, 
and then post the termination of the Candover Funds return cash to investors 
and distribute in specie the residual interests in Expro International 
("Expro") and Parques. 
 
Over the past year, Arle has partially realised its investment in Parques, via 
an initial IPO in Spain and a subsequent placing of additional shares.  The 
remaining equity stake in Parques is subject to a lock-up until early April 
2017.  It is therefore proposed that these shares will be distributed directly 
to investors, in specie, in early April. 
 
In respect of the Funds' investment in Expro, a new holding vehicle will be 
created and managed by Arle to ensure continuity under Expro's banking 
arrangements.  The current interests in Expro will be transferred to this 
holding vehicle prior to 31st March 2017.  Investors will then become 
shareholders in the new holding vehicle for Expro.  This vehicle will be the 
entity reporting on Expro and will enable Arle to materially reduce the 
complexity of the holding structure of the investment.  The Expro investment 
remains subject to lock-up until June 2020, although earlier sale opportunities 
may be considered and pursued. 
 
The purpose of these steps is to enable an orderly wind-up of the Candover 
Funds and related investment vehicles, as well as to reduce on-going costs post 
the termination period.  Once the Parques and Expro interests are distributed, 
there will be no remaining assets in the Candover Funds, such that those funds 

can be fully liquidated, and investors will no longer hold any interests 
through the Candover Funds. 
 
2016 Portfolio Overview 
In 2016, the Candover Funds' portfolio continued to be readied for exit by 
optimising the operational and financial performance of its residual companies. 
 At the year end, the portfolio comprised Parques Technogym, Expro and Hilding 
Anders. 
 
During the twelve month period to 31st December 2016, Arle successfully 
launched the public listings of two investee companies.  In April 2016, Parques 
was listed in Spain and Technogym was listed in Italy.  In both IPOs, Arle 
retained an equity stake with a lock-in period of 180 days. 
 
During the year, Arle also undertook a capital restructuring of Expro and a 
sale was agreed to exchange the equity in Hilding Anders for a more liquid 
interest in a debt instrument.  This transaction is expected to complete, 
subject to the customary competition clearances, in Q1 2017. 
 
In early 2017, Arle sold its remaining equity stake in Technogym via an 
accelerated share placing in Italy and placed a further 10% of the share 
capital in Parques. 
 
The overall valuation of the Candover Funds' portfolio on 31st December 2016 
was EUR555 million, compared to EUR485 million in June 2016 and EUR1,229 million on 
31st December 2015 with realisation proceeds in the first half of the year of EUR 
489 million. 
 
Realisations 
The IPO of Parques generated cash proceeds of GBP2.7 million for Candover with a 
valuation of the residual listed shares as at 31st December 2016 of GBP35.3 
million. This gave a combined value of GBP38.0 million compared to the value at 
31st December 2015 of GBP43.4 million. 
 
The IPO of Technogym generated cash proceeds of GBP13.1 million for Candover with 
a valuation of the residual listed shares as at 31st December 2016 of GBP8.2 
million. This gave a combined value of GBP21.3 million compared to the value at 
31st December 2015 of GBP22.5 million. 
 
Post year end, the sale of further shares in Parques and the disposal of Arle's 
residual stake in Technogym, generated cash proceeds for Candover of circa GBP8.4 
million and GBP8.3 million respectively. 
 
Portfolio composition 
The residual portfolio is almost entirely based in Western Europe. Whilst Spain 
represented 75.6% of the investments by value, the portfolio companies 
themselves are well diversified in the regions in which they trade. The 
portfolio was exposed mostly to the services and industrial sector. 
 
Portfolio valuation review 
The Candover Funds' portfolio valuation decreased by 15.0% year-on-year with 
the decrease in value of Candover's co?investments in the portfolio of GBP6.6 
million (30.0 pence per share) representing a 12.3% reduction on its value at 
the start of 2016, after adjusting for additions and disposals. 
 
Table 1 shows the valuation movement by reference to each portfolio company. 
 
Table 1 
 
              Residual   Valuation Additions Valuation    Valuation Valuation Valuation 
                 cost1     at 31st       and  movement     movement   at 31st  movement 
                          December disposals excluding attributable  December 
Portfolio                     2015                 FX2       to FX2      2016 pence per 
company             GBPm          GBPm        GBPm        GBPm           GBPm        GBPm     share 
 
Parques           30.3        43.4     (2.6)    (12.3)          6.8      35.3    (25.0) 
Reunidos 
 
Technogym 3        8.3        22.5    (13.1)     (2.1)          0.9       8.2     (5.0) 
 
Expro             94.4         0.5       0.0       0.0          0.1       0.6       0.0 
International 
 
Hilding           24.3         1.5       0.0     (0.1)          0.2       1.6       1.0 
Anders 
 
Stork              5.0        14.1    (13.7)     (0.1)          0.0       0.3       0.0 
 
Total            162.3        82.0    (29.4)    (14.6)          8.0      46.0    (30.0) 
investments 
 
Other4            18.1         0.6       0.0     (0.0)          0.1       0.7       0.0 
 
Other            180.4        82.6    (29.4)    (14.6)          8.1      46.7    (30.0) 
investments 
 
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 GBP 
13.1 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 GBP2.1 million in the 
period (excluding FX).  From an accounting perspective this movement was 
treated as a realised loss on IPO of the investment of GBP3.9 million with a 
subsequent uplift in the investment retained from the date of the IPO to 31st 
December 2016 of GBP2.0 m 
4   Represents other co-investments 
 
The portfolio 
 
1  Parques Reunidos 
 
Industry sector:                                              Services 
 
Geography:                                                       Spain 
 
Date of investment:                                         March 2007 
 
Residual cost of investment GBPm:                                   30.3 
 
Directors' valuation GBPm:                                          35.3 
 
Change over prior valuation GBPm:                                  (5.5) 
 
Effective equity interest (fully                                  3.4% 
diluted): 
 
% of Candover's net assets:                                      99.2% 
 
Basis of valuation:                                       Listed price 
 
Dividends received GBPm:                                               - 
 
Year end:                                               September 2016 
 
Sales:                                                           EUR584m 
 
Earnings1:                                                       EUR188m 
 
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 as part of 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 per share, a discount of 23% to the valuation at 31st December 2015. 
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 was subject to a lock-up period of 180 
days. 
 
In January 2017, Arle announced a 10% placement of shares in Parques at EUR14.20 
per share through an accelerated book building exercise.  This represented a 
6.9% discount to the prior day's closing price.  The placement was launched 
following a positive trading performance which had been reported in its 
financial results.  Post the sale, Arle retains circa 23 million shares 
representing 25.1% of the company's share capital, a reduction of 26% since 
IPO.  This will be subject to a 90 day lock-up. 
 
On 8th February 2017, Parques reported a first quarter revenue increase of 7.2% 
(12.4% like-for-like) to EUR70.5m compared to the prior year and a 45% 
improvement in EBITDA (86% like-for-like).  Strategic initiatives to extend the 
season with off-season events during Q1 delivered positive results.  In 
particular, Christmas and Halloween campaigns in the parks resulted in a 14% 
uplift in sales compared to the prior year. 
 
In Q1 2016/17, Parques delivered positive trading results in all its markets. 
However Spain was a key contributor with revenues reaching EUR22.2m, a 15.9% 
like-for-like increase compared to the prior year.  Revenue in the rest of 
Europe grew by 14% on a like-for-like basis. The United States recorded 
positive results, with a like-for-like growth of 1.6% and an increase in 
pre-sales of 25%. 
 
On 31st December 2016, the Candover Funds' residual stake in the listed shares, 
which is held via an intermediate holding company, was valued at EUR415 million. 
Candover's valuation reduced by GBP12.3 million, before positive currency 
movements of GBP6.8 million (total: -25p per share). 
 
Company website 
www.parquesreunidos.com 
 
2 Technogym 
 
Industry sector:                                           Industrials 
 
Geography:                                                       Italy 
 
Date of investment:                                        August 2008 
 
Residual cost of investment GBPm:                                    8.3 
 
Directors' valuation GBPm:                                           8.2 
 
Change over prior valuation GBPm:                                  (1.2) 
 
Effective equity interest (fully                                  1.1% 
diluted): 
 
% of Candover's net assets:                                      23.0% 
 
Basis of valuation:                                       Listed price 
 
Dividends received GBPm:                                               - 
 
Year end:                                                December 2015 
 
Sales:                                                           EUR512m 
 
Earnings1:                                                        EUR87m 
 
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 four specific market segments: 
Fitness Clubs; Hospitality & Residential; Health, Corporate & Public; 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. 
at EUR3.25 per share, a discount of 19% to 31st December 2015 valuation, 
resulting in a market capitalisation of EUR650 million.  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. 
 
Technogym's shares performed strongly during the second half of the year and on 
4th August 2016, the company reported strong maiden results for the six months 
to 30th June 2016.  Technogym reported 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 EUR35.2 million in the first half of 2016. At constant 
exchange rates, this was a 30.1% rise. 
 
At the start of 2017, the shares reached a record high post IPO and a share 
placement was launched on 9th January 2017, facilitating the sale of Arle's 
remaining shareholding in the business, through an accelerated book building 
offer.  The placement, corresponding to 11.25% of the company's share capital 
was priced at EUR4.45 per share, a 1.3% premium to the prior month volume 
weighted average price and a 37% premium to the April 2016 IPO price.  Demand 
for the shares was in excess of three times the offer size. 
 
On 31st December 2016, the Candover Funds' residual stake in the listed shares, 
which is held via an intermediate holding company, was valued at EUR96.9 million. 
Candover's interests in Technogym was valued at the year-end at GBP8.2 million, a 
decrease of GBP2.1 million, before positive foreign currency movements of GBP0.9 
million (total: -5p per share). 
 
The full exit from Arle's investment in Technogym generated cash proceeds of GBP 
8.2 million for Candover which is in line with the December valuation. 
 
Company website 
www.technogym.com 
 
3 Hilding Anders 
 
Industry sector:                                           Industrials 
 
Geography:                                                      Sweden 
 
Date of investment:                                      December 2006 
 
Residual cost of investment GBPm:                                   24.3 
 
Directors' valuation GBPm:                                           1.6 
 
Change over prior valuation GBPm:                                    0.2 
 
Effective equity interest (fully                                  4.3% 
diluted): 
 
% of Candover's net assets:                                       4.5% 
 
Basis of valuation:                               Multiple of earnings 
 
Dividends received GBPm:                                               - 
 
Year end:                                                December 2015 
 
Sales:                                                       SEK8,578m 
 
Earnings1:                                                   SEK1,196m 
 
Founded in 1939, Hilding Anders has grown to become the leading bed 
manufacturer in Europe, Russia and Asia. The company has 9,500 employees at 23 
sites across 19 countries, and sells products in 65 local markets, generating 
revenues of EUR917 million in 2015. 
 
In 2016, Hilding Anders delivered 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. 
 
On 29th November 2016, an agreement was made to sell Arle's equity interests in 
Hilding Anders to KKR in return for a more liquid debt instrument, subject to 
regulatory clearances. 
 
Candover's valuation was written down by GBP0.1 million, before positive exchange 
movements of GBP0.2 million. 
 
Company website 
www.hildinganders.com 
 
4. Expro International 
 
Industry sector:                                                Energy 
 
Geography:                                                          UK 
 
Date of investment:                                          July 2008 
 
Residual cost of investment GBPm:                                   94.4 
 
Directors' valuation GBPm:                                           0.6 
 
Change over prior valuation GBPm:                                    0.1 
 
Effective equity interest (fully                                  0.3% 
diluted): 
 
% of Candover's net assets:                                       1.7% 
 
Basis of valuation:                               Multiple of earnings 
 
Dividends received GBPm:                                               - 
 
Year end:                                                   March 2016 
 
Sales:                                                         US$915m 
 
Earnings1:                                                     US$228m 
 
Expro is a leading oilfield services provider specialising in well flow 
management. The company provides services and products that measure, improve, 
control and process flow from high-value oil and gas wells, from exploration 
and appraisal through to mature field production optimisation and enhancement. 
 
Expro's vision is to be the market leader in well flow management, using the 
industry's best people, to deliver the highest standards of safety, quality and 
personalised customer service. Expro's 40 years of experience and innovation 
empowers the company to offer tailor-made solutions for customers across the 
energy sector, including multinational oil majors, as well as state-owned 
national oil companies. With over 4,500 employees across 50 countries, Expro 
offers a global service solution. 
 
On 25th October 2016, it was announced that an agreement had been reached 
between Expro's shareholders and lenders representing approximately 98% of the 
borrowings under its Mezzanine Facility Agreement ("Consenting Lenders") to 
implement a capital restructuring.  This restructuring eliminated virtually all 
of the company's Mezzanine Facility (approximately $784m of $800m). 
 
Consenting Lenders exchanged their entire outstanding principal and accrued PIK 
interest for equity in Expro International Group Holdings Ltd, Expro's ultimate 
parent company.  This significantly reduced the Company's leverage, removed all 
of the financial maintenance covenants under the Mezzanine Facility and will 
save approximately $40m annually in cash interest.  Under the Credit Agreement, 
the exchange did not result in a change of control. 
 
The successful restructuring of Expro's capital provides a strong foundation 
from which to grow the Company as it positions itself for the next upturn in 
the oil and gas industry. 
 
Expro's strategy remains on course and the business will continue to focus on 
its strengths of investing in differentiated technology and delivering the 
highest standards of safety, technology and service quality to our customers. 
 
Candover's valuation was unchanged with a positive foreign exchange movement of 
GBP0.1 million. 
 
Company website 
www.exprogroup.com 
 
Arle Capital Partners Limited 
24th February 2017 
 
Note: 
1        Earnings figures are taken from the portfolio company's most recent 
audited accounts or financial statements filed with regulatory bodies. The 
figures shown are the total earnings on ordinary activities before exceptional 
items, depreciation, goodwill amortisation, interest and tax for the period 
 
 
The portfolio 
Analysis by value at 31st December 2016 (representing 100% of the Arle managed 
portfolio) 
 
By valuation method                   By sector 
 
1.  Listed price 95%                  1.  Services 77% 
 
2.  Multiple of earnings 5%           2.  Industrials 22% 
 
                                      3.  Energy & Natural Resources 1% 
 
By region                             By age 
 
1.  Spain 77%                         1.  Greater than 5 years 100% 
 
2.  Italy 18% 
 
3.  Nordic 4% 
 
4.  United Kingdom 1% 
 
 
Group statement of comprehensive income 
for the year ended 31st December 2016 
 
                                           Unaudited                  Audited 
                                           Year to 31st December 2016 Year to 31st December 
                                                                      2015 
 
                                     Notes Revenue Capital  Total1    Revenue Capital Total1 
                                           GBPm      GBPm       GBPm        GBPm      GBPm      GBPm 
 
Gains/(losses) on financial 
instruments 
 
Realised (loss)/gain                             -    (3.4)     (3.4)       -     0.6     0.6 
 
Unrealised (loss)/gain                      (10.3)     11.4       1.1       -  (54.4)  (54.4) 
 
Total                                       (10.3)      8.0     (2.3)       -  (53.8)  (53.8) 
 
Revenue/(expense) 
 
Investment and other income                    0.2        -       0.2     6.4       -     6.4 
 
Total                                          0.2        -       0.2     6.4       -     6.4 
 
Recurring administrative expenses            (1.7)    (0.4)     (2.1)   (2.6)   (0.9)   (3.5) 
 
Exceptional non-recurring costs        2         -        -         -   (5.1)       -   (5.1) 
 
(Loss)/gain before finance costs and        (11.8)      7.6     (4.2)   (1.3)  (54.7)  (56.0) 
taxation 
 
Finance costs                                (3.7)    (3.7)     (7.4)   (3.2)   (3.2)   (6.4) 
 
Exchange movements on borrowings                 -    (6.0)     (6.0)       -   (1.5)   (1.5) 
 
Loss before taxation                        (15.5)    (2.1)    (17.6)   (4.5)  (59.4)  (63.9) 
 
Analysed between: 
 
(Loss)/profit  before exceptional           (15.5)    (2.1)    (17.6)     0.6  (59.4)  (58.8) 

non-recurring costs 
 
Exceptional non-recurring costs                  -        -         -   (5.1)       -   (5.1) 
 
Taxation                                         -        -         -   (2.1)       -   (2.1) 
 
Loss after taxation                         (15.5)    (2.1)    (17.6)   (6.6)  (59.4)  (66.0) 
 
Total comprehensive loss                    (15.5)    (2.1)    (17.6)   (6.6)  (59.4)  (66.0) 
 
 Loss per ordinary share: 
 
Total loss per share - basic and             (70p)    (10p)     (80p)   (30p)  (272p)  (302p) 
diluted 
 
1  The total column represents the Group statement of comprehensive income 
under IFRS 
i  All of the gain/(loss) for the year and the total comprehensive income/ 
(loss) for the year are attributable to the owners of the Company 
ii  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 
 
 
Group statement of changes in equity 
for the year ended 31st  December 2016 
 
Unaudited                    Called  Share   Other    Capital   Capital    Revenue Total 
                             up      premium reserves reserves  reserves - reserve Equity 
                             share   account          -realised unrealised 
                             capital GBPm      GBPm       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              -       -        -         -          -   (5.2)   (5.2) 
 
Unrealised gain/(loss) on          -       -        -         -       11.4  (10.3)     1.1 
financial instruments 
 
Realised (loss)/gain on            -       -        -   (114.3)      110.9       -   (3.4) 
financial instruments 
 
Exchange movements on              -       -        -         -      (6.0)       -   (6.0) 
borrowing 
 
Costs net of tax                   -       -        -     (4.1)          -       -   (4.1) 
 
(Loss)/profit after tax            -       -        -   (118.4)      116.3  (15.5)  (17.6) 
 
Total comprehensive income         -       -        -   (118.4)      116.3  (15.5)  (17.6) 
 
Balance at 31st December         5.5     1.2    (0.1)     191.5    (136.1)  (26.4)    35.6 
2016 
 
 
 
Audited                      Called  Share   Other    Capital   Capital    Revenue Total 
                             up      premium reserves reserves  reserves - reserve Equity 
                             share   account          -realised unrealised 
                             capital GBPm      GBPm       GBPm        GBPm         GBPm      GBPm 
                             GBPm 
 
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 income         -       -        -     (0.5)     (58.9)   (6.6)  (66.0) 
 
Balance at 31st December         5.5     1.2    (0.1)     309.9    (252.4)  (10.9)    53.2 
2015 
 
 
Group statement of financial position 
at 31st December 2016 
 
                                  Unaudited             Audited 
                                  31st December 2016    31st December 2015 
 
                                  GBPm         GBPm         GBPm        GBPm 
 
Non-current assets 
 
Financial investments designated 
at fair value through profit and 
loss 
 
Portfolio companies                     46.0                 82.0 
 
Other financial investments              0.7                  0.6 
 
                                                   46.7               82.6 
 
Trade and other receivables                         2.4                3.5 
 
Current assets 
 
Current tax asset                          -                  0.2 
 
Cash and cash equivalents               21.3                  6.5 
 
                                                   21.3                6.7 
 
Current liabilities 
 
Other payables                         (0.1)                (0.2) 
 
                                                  (0.1)              (0.2) 
 
Net current assets                                 21.2                6.5 
 
Total assets less current                          70.3               92.6 
liabilities 
 
Non-current liabilities 
 
Loans and borrowings                             (34.7)             (39.4) 
 
Net assets                                         35.6               53.2 
 
Equity attributable to equity 
holders 
 
Called up share capital                             5.5                5.5 
 
Share premium account                               1.2                1.2 
 
Other reserves                                    (0.1)              (0.1) 
 
Capital reserve - realised                        191.5              309.9 
 
Capital reserve - unrealised                    (136.1)            (252.4) 
 
Revenue reserve                                  (26.4)             (10.9) 
 
Total equity                                       35.6               53.2 
 
Net asset value per share 
 
Basic                                              163p               243p 
 
Diluted                                            163p               243p 
 
 
Group cash flow statement 
for the year ended 31st December 2016 
 
                                  Unaudited           Audited 
                                  Year to 31st        Year to 31st 
                                  December 2016       December 2015 
 
                                  GBPm        GBPm        GBPm        GBPm 
 
Cash flows from operating 
activities 
 
Cash flow from operations                       (0.6)               (4.1) 
 
Interest paid                                   (2.4)               (2.3) 
 
Tax received                                        -                   - 
 
Net cash outflow from operating                 (3.0)               (6.4) 
activities 
 
Cash flows from investing 
activities 
 
Purchase of financial investments         -               (2.3) 
 
Sale of financial investments          30.1                 8.2 
 
Net cash inflow from investing                   30.1                 5.9 
activities 
 
Cash flows from financing 
activities 
 
Loan notes repaid                         -              (54.0) 
 
Loan facility (repaid)/utilised      (15.8)                35.0 
 
Net cash outflow from financing                (15.8)              (19.0) 
activities 
 
Increase/(decrease) in cash and                  11.3              (19.5) 
cash equivalents 
 
Opening cash and cash equivalents                 6.5                26.6 
 
Effect of exchange rates and                      3.5               (0.6) 
revaluation on cash and cash 
equivalents 
 
Closing cash and cash equivalents                21.3                 6.5 
 
 
Notes to the financial statements 
 
Note 1 
The preliminary results for the year ended 31st December 2016 are unaudited. 
The financial information included in this statement does not constitute the 
Group's statutory accounts within the meaning of Section 434 of the Companies 
Act 2006. Statutory accounts for the year ended 31st 
December 2016 will be finalised on the basis of the financial information 
presented by the Directors in this preliminary announcement and will be 
delivered to the Registrar of Companies in due course. 
 
The information given as comparative figures for the year ended 31st December 
2015 does not constitute the Company's statutory accounts for those financial 
periods. Statutory accounts for the year ended 31st December 2015, prepared in 
accordance with International Financial Reporting Standards as adopted by the 
European Union, have been reported on by the Company's auditors and delivered 
to the Registrar of Companies. The report of the auditors was unqualified and 
did not contain a statement under Section 498 (2) or (3) of Companies Act 2006. 
 
Note 2 
Exceptional non-recurring losses for the Group. 
 
There were no exceptional non-recurring gain or loss for the group in the year 
(2015: loss GBP5.1 million). 
 
 
 
END 
 

(END) Dow Jones Newswires

February 24, 2017 02:00 ET (07:00 GMT)