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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Dunedin Enterprise Investment Trust Plc | LSE:DNE | London | Ordinary Share | GB0005776561 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 484.00 | 468.00 | 500.00 | 6,177 | 16:29:55 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Finance Services | 1.52M | 1.25M | 0.0950 | 50.95 | 63.58M |
From Apr 2019 to Apr 2024
TIDMDNE
RNS Number : 2499C
Dunedin Enterprise Inv Trust PLC
28 September 2018
For release 28 September 2018
Dunedin Enterprise Investment Trust PLC
Half year ended 30 June 2018
Dunedin Enterprise Investment Trust PLC, the private equity investment trust which specialises in investing in UK mid-market buyouts, announces its results for the half year ended 30 June 2018.
Financial Highlights:
-- Net asset value per share at 30 June 2018: 447.5p (489.2p at 31/12/17), after 5.5p dividend and 50p return of capital
-- Share price at 30 June 2018: 386p (396.5p at 31/12/17) -- Net asset value total return: 2.8% in the six months to 30 June 2018 -- Share price total return: 15.9% in the six months to 30 June 2018 -- Realisations: GBP2.6m in the half year -- New investments: GBP10.0m in the half year -- Pyroguard realised in September 2018 generating proceeds of GBP9.3m -- Further GBP10.3m to be returned via B shares in October 2018
Comparative Total Return Performance (%)
Hot Features
Premium
FTSE FTSE All-Share
Small Cap (ex Inv
Net asset (ex Inv Cos)
Periods to 30 June value (per Cos) Index
2018 share) Share price Index
-------------------- ------------ ------------ ----------- ---------------
Six months 2.8 15.9 0.1 1.6
One year 20.4 67.5 6.4 9.0
Three years 31.0 104.7 31.6 31.2
Five years 28.7 63.4 78.7 51.9
Ten years 47.8 124.8 174.6 110.1
For further information please contact:
Graeme Murray Dunedin LLP 0131 225 6699 0131 718 2310 07813 138367
Chairman's Statement
In the half year to 30 June 2018 your Company's net asset value per share decreased from 489.2p to 447.5p. After allowing for the return of capital in February 2018 of 50p per share and a final dividend for 2017 of 5.5p paid in May 2018, the total return to shareholders was 2.8%, in terms of net asset value, and 15.9% in terms of share price.
The share price of 386p at 30 June 2018 represents a discount of 13.7% to the net asset value of 447.5p per share.
Following the half year end, on 27 September 2018 the successful realisation of Pyroguard, the specialist fire resistant glass manufacturer, was completed. Total proceeds from the sale amounted to GBP9.3m which represents an uplift of GBP0.4m over the valuation of GBP8.9m at 31 March 2018. The original cost of the investment was GBP3.8m and, over its life, a total of GBP22.5m has been received by Dunedin Enterprise, representing a 5.9 times return and an IRR of 35%.
Portfolio
During the half year one new investment was made and following the half year end one realisation was achieved.
An investment of GBP6.4m was made in GPS, the global payments processor which supports a number of digital banks, challenger banks, fintechs and financial institutions. GPS is a market leader in issuer processing, enabling next generation payment technology.
Deferred proceeds were received from the realisation of Steeper and there was a recapitalisation of Dolz which is held within the Realza portfolio.
As noted above, Pyroguard was successfully realised in September 2018.
The trading performance of our portfolio companies has generally improved in the half year. Unrealised value increases of GBP7.8m were partially offset by value decreases of GBP4.9m. Valuation uplifts were achieved at Red, FRA, Pyroguard and Realza. In the case of Pyroguard the valuation at 30 June 2018 reflects the proceeds received in September. The valuation of the other businesses benefitted from good organic growth.
The most significant valuation reduction in the half year to 30 June 2018 was at Formaplex. Further details are provided in the Manager's Review.
Commitments & Liquidity
The Company had outstanding commitments to limited partnership funds of GBP42.2m at 30 June 2018 which was reduced to GBP35.5m following a drawdown in July 2018 by Dunedin Buyout Fund III LP ("DBFIII") for the investment in GPS. The outstanding commitment position following this drawdown consisted of GBP33.3m to Dunedin managed funds and GBP2.2m to the European funds. Assuming these funds are held to maturity, it is estimated that only some GBP23m of this total outstanding commitment will be drawn over the remaining life of the funds.
The majority of the Company's assets are held by way of limited partnership interests in Dunedin's funds, one of which is still actively investing. Although DBFIII's investment period ceases on 7 November 2018 the fund may make a new investment after that date provided the transaction was already at an advanced stage.
The Company has a revolving credit facility with Lloyds Bank of GBP10m which was undrawn at 30 June 2018 and is available until 31 May 2019. This facility was reduced from GBP20m to GBP10m at 31 May 2018 and the Board will keep under review the need to retain a credit facility depending upon the timing of further realisations from the portfolio.
B shares
Following the realisation of Pyroguard, the Company holds cash and cash equivalents of GBP24.3m. In light of the outstanding commitments to limited partnership funds, the Board has decided to return GBP10.3m to shareholders via a further issue of B Shares of 50p each. These B Shares will be paid up from capital and issued to all shareholders by way of a bonus issue pro-rata to their holding of Ordinary Shares on the basis of one B Share for every one Ordinary Share held at the record date of 6.00pm on 8 October 2018. The B Shares will be issued on 9 October 2018 and immediately redeemed at 50p each. The Ordinary Shares will trade ex-B Share entitlement with effect from 5 October 2018. The proceeds from the redemption of the B Shares will be sent to shareholders on 23 October 2018, either through CREST to uncertificated shareholders or via cheque to certificated shareholders.
Dividends
A final dividend of 5.5p per share relating to the year ended 31 December 2017 was paid to shareholders in May 2018 amounting to GBP1.1m.
Outlook
The Board will continue to maximise shareholder value through the orderly wind-down of the remaining investments held by the Company. This policy has served shareholders well to date.
The Board will continue to monitor the secondary market for interests in private equity funds to evaluate whether shareholders' interests are best served by realising our fund interests or whether continuing to hold them is likely to provide better returns.
The Board is encouraged that the pricing of realisations of quality businesses and fund interests remains buoyant, and by the improving trading performance in the majority of the portfolio.
Duncan Budge
28 September 2018
Manager's Review
Results for the six months to 30 June 2018
In the six months to 30 June 2018, Dunedin Enterprise's net asset value per share total return was 2.8%, after taking account of dividends paid for 2017 of 5.5p per share (paid in May 2018) and an issue and redemption of B shares equivalent to 50p per share (paid in February 2018). This compares with an increase in the FTSE Small Cap Index (ex Inv. Cos) over the same period of 0.1%.
In the six months to 30 June 2018 Dunedin Enterprise invested a total of GBP10.0m and realised GBP2.6m from investments.
Net asset and cash movements in the half year to 30 June 2018
The movement in net asset value is summarised in the table below: -
GBP'm
------
Net asset value at 31 December 2017 100.9
Unrealised value increases 7.8
Unrealised value decreases (4.9)
Realised profit over opening valuation 0.3
Dividends paid to shareholders (1.1)
B share redemption (10.3)
Other movements (0.3)
------
Net asset value at 30 June 2018 92.4
======
Cash movements in the half year to 30 June 2018 can be summarised as follows: -
GBP'm
------
Cash & near cash balances at 31 December 2017 32.9
Investments made (*1) (3.3)
Investments realised 2.6
B share redemption (10.3)
Dividends paid to shareholders (1.1)
Operating activities 0.9
------
Cash & near cash balances at 30 June 2018 21.7
======
(*1) - excludes GBP6.7m drawn down by DBFIII following the half year end for the investment in GPS and ongoing costs
Portfolio composition and movements
Dunedin Enterprise holds investments in unquoted companies through: -
- Dunedin managed funds (including direct investments), and - Third party managed funds.
The portfolio movements can be analysed as shown in the table below: -
Additions Disposals
Valuation in half in half Realised Unrealised Valuation
at 31-12-17 year year movement movement at 30-6-18
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
------------- ---------- ---------- ---------- ----------- ------------
Dunedin managed 57.2 9.9 (1.6) 0.3 2.3 68.1
Third party managed 10.0 0.1 (1.0) - 0.6 9.7
------------- ---------- ---------- ---------- ----------- ------------
Investment portfolio 67.2 10.0 (2.6) 0.3 2.9 77.8
AAA rated money
market funds
(*2) 23.5 - (2.1) - - 21.4
------------- ---------- ---------- ---------- ----------- ------------
Total 90.7 10.0 (4.7) 0.3 2.9 99.2
============= ========== ========== ========== =========== ============
(*2) - includes GBP6.7m drawn down by DBFIII following the half year end for the investment in GPS and ongoing costs
New investment activity
In June 2018, the Company made an investment of GBP6.4m through Dunedin Buyout Fund III LP in GPS, the global payments processor which supports a number of digital banks, challenger banks, fintechs and financial institutions. GPS is a market leader in issuer processing, enabling next generation payment technology. It provides a single, global integrated platform, GPS Apex, that powers and enables functionality of next generation fintech payment companies. GPS employs circa 150 people based in London and Newcastle.
There were follow-on investments into Formaplex (GBP1.5m), Hawksford (GBP1.1m) and Premier Hytemp (GBP0.5m). A follow-on investment was made into Formaplex, the designer and manufacturer of injection-moulded tooling, composite tooling and lightweight components for the automotive industry, to provide ongoing working capital support. Hawksford, the provider of corporate, private client and specialist fund services, completed an acquisition in Asia which was funded by a combination of bank debt and investment from Dunedin managed funds. An investment was made in Premier Hytemp, the provider of highly engineered steel and nickel alloys and components for the oil and gas industry, to fund the acquisition of a facility in Malaysia.
A further GBP0.5m was drawn down by Dunedin and third party managed funds to meet management fees and ongoing expenses.
Realisations
In the half year a total of GBP2.6m was realised from the portfolio of investments.
Deferred realisation proceeds of GBP1.3m were received from Steeper during the half year. A further GBP0.3m was also received in August 2018. Red repaid GBP0.3m of loan stock following a period of strong trading.
There was a GBP1.0m repayment of loan stock from within the Realza portfolio following a recapitalisation of Dolz, the automotive pump manufacturer.
Unrealised movements in valuations
Unrealised valuation increases in the half year amounted to GBP7.8m. There were valuation uplifts at Red (GBP2.5m), FRA (GBP2.2m), Pyroguard (GBP1.2m) and Steeper (GBP1.1m).
Red, the supplier of SAP software experts on both a contract and permanent basis, has continued to experience a strengthening demand for its services particularly in the contracting division. This has resulted in a 24% increase in maintainable EBITDA in the half year.
FRA, the provider of forensic accounting, data analytics and e-discovery expertise, continues to experience a strong demand for its services since the buyout was completed in March 2017. The company is significantly outperforming the original business plan with maintainable EBITDA increasing a further 15% during the half year. This performance has been driven by a combination of growth in existing projects and new project wins. The pipeline for new projects remains strong.
Pyroguard, the manufacturer and distributor of fire resistant glass, has been valued at the realised proceeds received in September 2018.
The principal valuation reduction was at Formaplex (GBP2.8m). The maintainable EBITDA of Formaplex has suffered in the period from a number of lost and delayed orders. This has resulted in maintainable EBITDA being reduced by 28% in the half year.
The average earnings multiple applied to the valuation of the Dunedin managed portfolio was 7.9x EBITDA (31 December 2017: 7.6x) or 9.6x EBITA (31 December 2017: 9.3x). These multiples are applied to the maintainable earnings of portfolio companies. Within the Dunedin managed portfolio, the weighted average gearing of the companies was 2.9x EBITDA (31 December 2017: 3.1x) or 3.5x EBITA (31 December 2017: 3.7x).
The portfolio continues to be valued in accordance with the International Private Equity Venture Capital valuation guidelines (www.privateequityvaluation.com).
Dunedin LLP
28 September 2018
Ten largest investments by value at 30 June 2018
Approx. Percentage
percentage Cost of Directors' of net
of equity investment valuation assets
% GBP'000 GBP'000 %
------------ ------------ ----------- -----------
Hawksford 17.8 6,746 11,488 12.4
FRA 5.4 6,035 11,410 12.4
Weldex 15.1 9,505 9,611 10.4
Realza 8.9 6,649 9,394 10.2
Pyroguard 41.7 9,450 9,266 10.0
Kingsbridge 12.7 4,112 6,963 7.5
GPS 8.2 6,357 6,357 6.9
CitySprint 5.1 7,308 5,964 6.5
RED 20.1 9,665 4,918 5.3
U-POL 5.0 5,657 3,743 4.1
------------ ------------ ----------- -----------
71,484 79,114 85.7
============ =========== ===========
Total return of ten largest investments at 30 June 2018
Original
cost of Realised Directors'
investment to date valuation Total return
GBP'000 GBP'000 GBP'000 GBP'000
------------ --------- ----------- -------------
Hawksford 6,910 362 11,488 11,850
FRA 6,035 28 11,410 11,438
Weldex 9,505 119 9,611 9,730
Realza 11,545 6,081 9,394 15,475
Pyroguard 3,791 13,262 9,266 22,528
Kingsbridge 4,212 105 6,963 7,068
GPS 6,357 - 6,357 6,357
CitySprint 9,838 19,763 5,964 25,727
RED 10,844 1,405 4,918 6,323
U-POL 5,657 2,590 3,743 6,333
------------ --------- ----------- -------------
74,694 43,715 79,114 122,829
============ ========= =========== =============
Top ten investments (held via funds and direct investments)
Percentage of equity held Hawksford
17.8% Hawksford is a leading international
Cost of Investment GBP6.7m provider of corporate, private client
Directors' valuation GBP11.5m and funds services. The business offers
Percentage of net assets 12.4% a comprehensive range of services to,
and solutions for, trusts, companies,
foundations, partnerships, family offices
and investment funds.
Hawksford completed the acquisition of
P&P, a Hong Kong based trust business
in June 2018. Hawksford's international
clients will now have access to a greater
depth of service across Asia, while P&P
clients will be able to utilise Hawksford's
wider services in other locations. To
date Hawksford has completed six major
acquisitions in Jersey, the Middle East
and the Far East and further extended
the company's global reach in the Far
East by opening an office in Hong Kong
in 2015. These acquisitions have further
enhanced Hawksford's market-leading position
through additional high-quality people
and clients. The focus of the business
remains on providing excellent service
and increasing client choice by growing
the international footprint.
================================ ===============================================
Percentage of equity held FRA
5.4% FRA is an international consultancy business
Cost of Investment GBP6.0m that provides forensic accounting, data
Directors' valuation GBP11.4m analytics and e-discovery expertise to
Percentage of net assets 12.4% help businesses respond to major regulatory
investigations in an increasingly regulated
global environment.
FRA works on some of the largest and
most complex regulatory investigations
globally. Its clients are typically blue-chip
multinational corporates seeking advice
to help navigate regulatory scrutiny,
effect compliant cross border data transfer
and manage risk. It has offices in London,
Providence (Rhode Island), Paris, Dallas
and Washington DC. It also runs data
centres near each office location as
well as in Montreal and Zurich.
================================ ===============================================
Percentage of equity held Weldex
15.1% Weldex was established in 1979 and has
Cost of Investment GBP9.5m grown into the UK's largest crawler crane
Directors' valuation GBP9.6m hire company. The company employs over
Percentage of net assets 10.4% 100 staff and operates nationwide and overseas
from its headquarters in Inverness and
its depot at Alfreton. The company provides
its customers with an established team
of fully accredited operators, site managers
and service engineers and also supplies
associated lifting equipment including
wheeled cranes, forklifts, lorry loaders
and trailers.
Weldex serves the offshore wind, oil &
gas, commercial construction and infrastructure
markets. Its cranes, including two of the
largest in the UK, have been used in a
number of significant construction projects
including Heathrow Terminal 5, the iconic
arch at the new Wembley Stadium, the 2012
Olympic site and Crossrail. More recent
projects include erecting a Mitsubishi
wind turbine at the offshore test facility
at Hunterston, North Ayrshire and refurbishing
the blast furnace at the Tata steel works
in Scunthorpe.
================================== =====================================================
Percentage of equity held Realza Capital
8.9% Realza Capital is a Spanish private equity
Cost of Investment GBP6.6m fund making investments in Spain and Portugal.
Directors' valuation GBP9.4m The fund is limited to investing 15% of
Percentage of net assets 10.2% commitments in Portugal. Dunedin Enterprise's
investment is held via Dunedin Fund of
Funds LP.
The fund invests in companies with leading
market positions and attractive growth
prospects either through organic growth
or through merger & acquisition activity.
Realza seeks to invest in companies with
an enterprise value normally ranging from
EUR20m to EUR100m. The fund's typical equity
investment ranges from EUR10m to EUR25m.
================================== =====================================================
Percentage of equity held CGI (trading as Pyroguard)
41.7% CGI, trading under the Pyroguard brand,
Cost of Investment GBP9.5m is a leading designer, manufacturer and
Directors' valuation GBP9.3m supplier of specialist fire resistant
Percentage of net assets glass. The company serves the construction
10.0% markets in the UK, Ireland, France, Holland,
Scandinavia, Iberia and the Middle East
from its manufacturing bases in Haydock,
UK and Seingbouse, France. Significant
recent projects completed by CGI include
the installation of fire-resistant glass
at Here East (the multipurpose redevelopment
of the former 2012 Olympic site), the
Biomedicum medical facility in Stockholm,
the Paris Expo redevelopment project,
and Zaanstad Prison in the Netherlands.
The investment in Pyroguard was realised
in September 2018 and over the life of
the investment, a total of GBP22.5m has
been received by Dunedin Enterprise, representing
a 5.9 times return and an IRR of 35%.
================================ =====================================================
Percentage of equity held Kingsbridge
12.7% Kingsbridge is a market leading FCA
Cost of Investment GBP4.1m regulated specialist insurance intermediary
Directors' valuation GBP7.0m which operates through two core divisions,
Percentage of net assets 7.5% a contractor insurance division and
a corporate brokerage division.
Working alongside its strong partner
network, Kingsbridge covers a broad
range of industry sectors in its market,
including aerospace, banking and finance,
rail, automotive, nuclear, oil and gas
and information technology.
Kingsbridge is forecast to continue
to grow the market as insurance becomes
more of a standard requirement for both
contractors and corporates alike. This
growth will come through expansion into
new occupations and through the introduction
of new products that are tailored for
the contractor market.
=============================== ================================================
Percentage of equity held GPS
8.2% Global Processing Services ("GPS"), is
Cost of Investment GBP6.4m a global payments processor which supports
Directors' valuation GBP6.4m a number of digital banks, challenger
Percentage of net assets 6.9% banks, fintechs and financial institutions.
GPS is the market leader in issuer processing,
enabling next generation payment technology
with 100+ clients including Starling Bank,
Revolut, Pockit, Volt Bank, Loot, Stocard,
Glint, Osper and Curve. GPS provides a
single, global integrated platform, GPS
Apex, that powers and enables functionality
of next generation fintech payment companies.
GPS has demonstrated rapid growth, driven
by market and customer demand for its
market leading technical functionality
and speed in getting customers' new products
to market. The addressable international
market for GPS is large, serving innovative
and emerging fintech/challenger bank offerings
and gaining traction with traditional
providers. The Company has circa 150 employees
based in London and Newcastle.
=============================== ==================================================
Percentage of equity held CitySprint
5.1% CitySprint is the UK's largest national
Cost of Investment GBP7.3m time-critical and same day distribution
Directors' valuation GBP6.0m network. It benefits from an asset-light
Percentage of net assets 6.5% business model with over 3,000 self-employed
couriers, making the business both highly
flexible and scalable. It operates from
40 service centres in the UK and handles
over ten million critical same day deliveries
a year.
CitySprint offers a range of services
including SameDay Courier, UK Overnight
and International courier services, as
well as more complex logistics services.
It services a number of different sectors,
including healthcare, online retail fulfilment
and parts fulfilment such as outsourced
supply chain services for engineering
and servicing companies. During the period
of Dunedin's investment, CitySprint has
completed 29 acquisitions. CitySprint
now has the UK's largest same day healthcare
courier network.
In February 2016 the investment in CitySprint
was partially realised in a sale to LDC.
On completion Dunedin Enterprise received
proceeds totalling GBP26.1m of which GBP22.8m
was capital and GBP3.3m was loan interest.
A total of GBP7.3m has been rolled into
a CitySprint Newco alongside LDC, resulting
in net cash proceeds received of GBP18.8m
by Dunedin Enterprise. Dunedin Enterprise
retains a 5% interest in the Newco. The
overall return to Dunedin Enterprise was
2.8 times the original investment of GBP9.8m
over five years.
=============================== ==================================================
Percentage of equity held RED
20.1% RED is a global supplier of SAP experts
Cost of Investment GBP9.7m to international corporations and consultancies.
Directors' valuation GBP4.9m SAP stands for Systems, Applications and
Percentage of net assets 5.3% Products in data processing. SAP is the
market leader in ERP software (Enterprise
Resource Planning software), which helps
companies of all sizes and industries
operate more efficiently, including many
of the world's largest organisations.
Red, which was founded in 2000, now has
a global footprint with access to over
200,000 SAP experts in 80 countries, and
has offices in the UK, Germany, Switzerland
and the US. Clients include Bosch, Johnson
& Johnson and Novartis.
=============================== ==================================================
Percentage of equity held UPOL
5.0% U-POL is a leading independent manufacturer
Cost of Investment GBP5.7m of automotive refinish products including
Directors' valuation GBP3.7m body fillers, coatings, aerosols, polishing
Percentage of net assets 4.1% compounds and consumables. Included in
the product range is RAPTOR(TM), a tough
protective coating product which can be
used over a multitude of surfaces. Sales
of RAPTOR(TM) continue to grow steadily
and the business is exploring opportunities
to sell this product into adjacent sectors.
From its UK manufacturing base in Wellingborough,
U-POL exports a range of products to 120
countries worldwide. The company has a
strong market position in the UK and a
growing position in other large markets
such as the USA, the Far East, the Middle
East, Africa and Russia. Its growth strategy
is to continue expanding in both developed
and emerging markets.
In August 2016 a re-financing of the business
was undertaken with Dunedin Enterprise
receiving proceeds of GBP2.6m.
=============================== ===================================================
Overview of portfolio
Fund Analysis
30 June 2018
%
------------------------------ -------------
Direct 13
Dunedin Buyout Fund II 45
Dunedin Buyout Fund III 28
Equity Harvest Fund (Dunedin
managed) 2
Third party managed 12
Analysed by valuation method
30 June 2018
%
---------------------- -------------
Cost/written down 9
Earnings - provision 21
Earnings - uplift 45
Assets basis 14
Exit value 11
Analysed by geographic location
30 June 2018
%
---------------- -------------
UK 89
Rest of Europe 11
Analysed by sector
30 June 2018
%
------------------------------ -------------
Automotive 4
Construction and building
materials 11
Consumer products & services 4
Financial services 30
Industrials 9
Support services 41
Technology, media & telecoms 1
Analysed by age of investment
30 June 2018
%
----------- -------------
<1 year 8
1-3 years 31
3-5 years 3
>5 years 58
Income Statement (unaudited)
for the six months ended 30 June 2018
Six months ended Six months ended Year ended
30 June 2018 30 June 2017 31 December 2017
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Investment income 156 - 156 2,687 - 2,687 4,589 - 4,589
Gain / (loss) on
investments - 3,267 3,267 - 3,858 3,858 - 20,573 20,573
-------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total Income 156 3,267 3,423 2,687 3,858 6,545 4,589 20,573 25,162
Expenses
Investment management
fees (30) (89) (119) (15) (44) (59) (26) (77) (103)
Other expenses (221) (60) (281) (230) (47) (277) (490) (63) (553)
-------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit / (loss) before
finance costs and tax (95) 3,118 3,023 2,442 3,767 6,209 4,073 20,433 24,506
Finance costs (45) (136) (181) (47) (141) (188) (94) (284) (378)
-------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit / (loss) before
tax (140) 2,982 2,842 2,395 3,626 6,021 3,979 20,149 24,128
Taxation - - - (167) 167 - (52) 55 3
-------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Profit / (loss) for the
period (140) 2,982 2,842 2,228 3,793 6,021 3,927 20,204 24,131
-------------------------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Earnings per ordinary
share (basic & diluted) (0.7)p 14.5p 13.8p 10.8p 18.4p 29.2p 19.0p 97.9p 116.9p
The Total column of this statement represents the Income Statement of the Company, prepared in accordance with International Financial Reporting Standards as adopted by the EU. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies.
All income is attributable to the equity shareholders of Dunedin Enterprise Investment Trust PLC.
Statement of Changes in Equity (unaudited)
for the six months ended 30 June 2018
Six months ended 30 June 2018
Capital Capital Capital Special Total
Share redemption Reserve reserve Distributable Revenue retained Total
capital reserve realised - Reserve account earnings equity
GBP'000 GBP'000 GBP'000 unrealised GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
At 31 December
2017 5,161 23,409 57,936 (18,752) 26,956 6,278 72,418 100,988
Profit/(loss)
for the half
year - - 576 2,406 - (140) 2,842 2,842
B shares
issued 10,322 (10,322) - - - - - -
B shares
redeemed (10,322) 10,322 - - (10,322) - (10,322) (10,322)
Dividends paid - - - - - (1,135) (1,135) (1,135)
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
At 30 June
2018 5,161 23,409 58,512 (16,346) 16,634 5,003 63,803 92,373
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
Six months ended 30 June 2017
Capital Capital Capital Special Total
Share redemption Reserve reserve Distributable Revenue retained Total
capital reserve realised - Reserve account earnings equity
GBP'000 GBP'000 GBP'000 unrealised GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
At 31 December
2016 5,161 2,765 49,204 (9,580) 47,600 8,751 95,975 103,901
Profit/(loss)
for the half
year - - 4,472 (679) - 2,228 6,021 6,021
Dividends paid - - - - - (3,613) (3,613) (3,613)
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
At 30 June
2017 5,161 2,765 53,676 (10,259) 47,600 7,366 98,383 106,309
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
Year ended 31 December 2017
Capital Capital Capital Special Total
Share redemption Reserve reserve Distributable Revenue retained Total
capital reserve realised - Reserve account earnings equity
GBP'000 GBP'000 GBP'000 unrealised GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
At 31 December
2016 5,161 2,765 49,204 (9,580) 47,600 8,751 95,975 103,901
Profit/(loss)
for the year - - 29,376 (9,172) - 3,927 24,131 24,131
B shares
issued 20,644 - (20,644) - - - (20,644) -
B shares
redeemed (20,644) 20,644 - - (20,644) - (20,644) (20,644)
Dividends paid - - - - - (6,400) (6,400) (6,400)
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
At 31 December
2017 5,161 23,409 57,936 (18,752) 26,956 6,278 72,418 100,988
--------------- ---------- ----------- ---------- ------------ -------------- ---------- ---------- ----------
Balance Sheet (unaudited)
As at 30 June 2018
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
------------------------------------ ---------- ---------- --------------
Non-current assets
Investments held at fair value 99,211 103,621 90,690
Current assets
Other receivables 38 66 1,032
Cash and cash equivalents 294 3,904 9,441
------------------------------------ ---------- ---------- --------------
332 3,970 10,473
Total assets 99,543 107,591 101,163
Current liabilities
Other liabilities (7,170) (1,282) (175)
Net assets 92,373 106,309 100,988
------------------------------------ ---------- ---------- --------------
Capital and reserves
Share capital 5,161 5,161 5,161
Capital redemption reserve 23,409 2,765 23,409
Capital reserve - realised 58,512 53,676 57,936
Capital reserve - unrealised (16,346) (10,259) (18,752)
Special distributable reserve 16,634 47,600 26,956
Revenue reserve 5,003 7,366 6,278
------------------------------------ ---------- ---------- --------------
Total equity 92,373 106,309 100,988
------------------------------------ ---------- ---------- --------------
Net asset value per ordinary share
(basic and diluted) 447.5p 515.0p 489.2p
Cash Flow Statement (unaudited)
for the six months ended 30 June 2018
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
---------------------------------------- --------- --------- ------------
Operating activities
Profit before tax 2,842 6,021 24,128
Adjustments for:
(Gain) on investments (3,267) (3,858) (20,573)
Interest paid 181 188 378
(Increase) / decrease in debtors 994 39 (927)
Increase / (decrease) in creditors 291 171 (935)
Net cash from operating activities 1,041 2,561 2,071
Cash flows from investing activities
Purchase of investments (3,151) (8,223) (9,393)
Drawn from subsidiary (82) (291) (385)
Purchase of 'AAA' rated money market
funds (31) (10,604) (42,117)
Sale of investments 1,604 7,960 53,142
Distribution from subsidiary 1,014 4,606 13,794
Sale of 'AAA' rated money market funds 2,100 11,606 19,658
---------------------------------------- --------- --------- ------------
Net cash used in investing activities 1,454 5,054 34,699
Taxation
Tax recovered - - 3
Cash flows from financing activities
Redemption of B shares (10,322) (20,644)
Dividends paid (1,135) (3,613) (6,400)
Interest paid (181) (188) (378)
Net cash used in financing activities (11,638) (3,801) (27,422)
Net increase / (decrease) in cash and
cash equivalents (9,143) 3,814 9,351
Cash and cash equivalents at the start
of the period 9,441 90 90
Effect of exchange rate fluctuations (4) - -
on cash held
---------------------------------------- --------- --------- ------------
Cash and cash equivalents at the end
of the period 294 3,904 9,441
---------------------------------------- --------- --------- ------------
Responsibility statement of the Directors
in respect of the half-yearly financial report
We confirm that to the best of our knowledge:
- the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU
- the interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
By Order of the Board
Duncan Budge
Chairman
28 September 2018
Notes to the Accounts
1. Unaudited Interim Report
The comparative financial information contained in this report for the year ended 31 December 2017 does not constitute the Company's statutory accounts but is derived from those accounts. Statutory accounts for the year ended 31 December 2017 have been delivered to the Registrar of Companies. The auditor has reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The financial statements for the six months ended 30 June 2017 and 30 June 2018 have not been audited.
2. Basis of Preparation
These condensed set of financial statements for the six months ended 30 June 2018 have been prepared in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority (FCA) and IAS 34 Interim Financial Reporting as adopted by the European Union (EU). They do not include all the information required by International Financial Reporting Standards (IFRS) in full annual financial statements and should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2017.
The Association of Investment Companies ('AIC') issued a revised Statement of Recommended Practice for the Financial Statements of Investment Trust Companies and Venture Capital Trusts in February 2018 ('SORP') applicable to accounting periods commencing on or after 1 January 2019. Where presentational guidance set out in the SORP is consistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.
In May 2016 shareholders approved a change in the investment policy of the Company. The Company's new investment objective is to conduct an orderly realisation of its relatively illiquid assets, to be effected in a manner that seeks to achieve a balance between maximising the value of its assets and progressively returning cash to shareholders. As it is likely this process, which is expected to have a duration of several years, will ultimately lead to the liquidation of the Company, these financial statements have not been prepared on a going concern basis. No adjustments were necessary to the investment valuations or other assets and liabilities included in the financial statement as a consequence of the change in the basis of preparation.
3. Income
Six months Six months
to to Year to
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
Dividend income - UK - 967 967
Interest income - UK 23 611 635
Limited partnership income - UK 99 946 2,807
AAA rated money market funds 31 4 17
Deposit interest 3 - 4
Other income - 159 159
---------- ---------- ------------
156 2,687 4,589
========== ========== ============
4. Dividends
Six months Six months
to to Year to
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
Dividends paid in the period 1,135 3,613 6,400
========== ========== ============
5. Investments
All investments are designated fair value through profit or loss at initial recognition, therefore all gains and losses that arise on investments are designated at fair value through profit or loss. Given the nature of the Company's investments the fair value gains recognised in these financial statements are not considered to be readily convertible to cash in full at the balance sheet date and therefore the movement in these fair values are treated as unrealised.
Fair value hierarchy
The Company measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:
-- Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.
-- Level 2: Valuation techniques based on observable inputs, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.
-- Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.
The table below analyses financial instruments, measured at fair value at the end of the reporting period, by the level in the fair value hierarchy into which the fair value measurement is categorised:
At At At
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
Level 1
'AAA' rated money market funds OEICs 21,398 6 23,467
Level 2 - - -
Level 3
Unlisted investments 77,813 103,615 67,223
-------- -------- ------------
99,211 103,621 90,690
======== ======== ============
The Company recognises transfers between the levels of the fair value hierarchy as of the end of the reporting period during which the transfer occurred. There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the six months ended 30 June 2018.
Level 3 fair values
Details of the determination of Level 3 fair value measurements and the movements in Level 3 fair values during the six months ended 30 June 2018 are set out below:-
Level 3
GBP'000
Book cost at 31 December 2017 85,975
Unrealised (depreciation) (18,752)
------------------------------------ --------
Valuation at 31 December 2017 67,223
Purchases at cost 9,937
Sales - proceeds (2,618)
Sales - realised gains against cost 865
Increase in unrealised appreciation 2,406
------------------------------------ --------
Valuation at 30 June 2018 77,813
------------------------------------ --------
Book cost at 30 June 2018 94,159
Closing unrealised (depreciation) (16,346)
------------------------------------ --------
Details of the determination of Level 3 fair value measurements and the movements in Level 3 fair values during the six months ended 30 June 2017 are set out below:-
Level 3
GBP'000
Book cost at 31 December 2016 113,388
Unrealised (depreciation) (9,580)
------------------------------------ --------
Valuation at 31 December 2016 103,808
Purchases at cost 8,514
Sales - proceeds (12,566)
Sales - realised gains against cost 4,538
Decrease in unrealised appreciation (679)
------------------------------------ --------
Valuation at 30 June 2017 103,615
------------------------------------ --------
Book cost at 30 June 2017 113,874
Closing unrealised (depreciation) (10,259)
------------------------------------ --------
Details of the determination of Level 3 fair value measurements and the movements in Level 3 fair values during the year ended 31 December 2017 are set out below:-
Level 3
GBP'000
Book cost at 31 December 2016 113,388
Unrealised appreciation (9,580)
------------------------------------ --------
Valuation at 31 December 2016 103,808
Purchases at cost 9,778
Sales - proceeds (66,936)
Sales - realised gains against cost 29,745
Decrease in unrealised appreciation (9,172)
------------------------------------ --------
Valuation at 31 December 2017 67,223
------------------------------------ --------
Book cost at 31 December 2017 85,975
Closing unrealised (depreciation) (18,752)
------------------------------------ --------
Valuation of investments
Unquoted investments are fair valued by the Directors in accordance with the following rules, which are consistent with the International Private Equity and Venture Capital Valuation Guidelines:
-- Investments are only valued at cost for a limited period after the date of acquisition, otherwise investments are valued on one of the other basis detailed below. Generally the earnings multiple basis of valuation will be used.
-- When valuing on an earnings basis, the maintainable earnings of a company are multiplied by an appropriate multiple.
-- An investment may be valued by reference to the value of its net assets. This is appropriate for businesses whose value derives mainly from the underlying value of its assets rather than its earnings.
-- When investments have obtained an exit (either by listing or trade sale) after the valuation date but before finalisation of the relevant accounts (interim or final), the valuation is based on the exit valuation.
-- Accrued interest on loans to portfolio companies is included in valuations where there is an expectation that the interest will be received.
IFRS 13 requires disclosure, by class of financial instrument, if the effect of changing one or more inputs to reasonably possible alternative assumptions would result in a significant change to the fair value measurement. The information used in determination of the fair value of Level 3 investments is chosen with reference to the specific underlying circumstances and position of the investee company. On that basis the Board believe that the impact of changing one or more of the inputs to reasonably possible alternative assumptions would not change the fair value significantly.
The Directors consider the carrying value of financial instruments in the financial statements to represent their fair value.
6. Statement of Principal Risks and Uncertainties
The Directors believe that the principal risks and uncertainties faced by the Company include investment and strategic, liquidity, cash drag, people and loss of investment trust status risks. These risks and other risks, and the way in which they are managed, are described in more detail under the heading "Principal Risks, Risk Management and Regulatory Environment" in the Strategic Report Review in the Company's Annual Report and Accounts for the year ended 31 December 2017. The Company's principal risks and uncertainties have not changed materially since the date of that report. These principal risks and uncertainties are not expected to change materially for the remaining six months of the Company's financial year.
7. Earnings per share
Six months Six months
to to Year to
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
Revenue return per ordinary share (p) (0.7) 10.8 19.0
Capital return per ordinary share (p) 14.5 18.4 97.9
Earnings per ordinary share (p) 13.8 29.2 116.9
Weighted average number of shares 20,644,062 20,644,062 20,644,062
The earnings per share figures are based on the weighted average numbers of shares set out above. Earnings per share is based on the revenue profit in the period as shown in the consolidated income statement.
8. Related party transactions
There have been no material changes to the related party transactions described in the last annual report.
ENDS
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR LLFFTAIIDFIT
(END) Dow Jones Newswires
September 28, 2018 02:01 ET (06:01 GMT)
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