Electra Private Equity Invest PLC Half Yearly Report (8447N)

TIDMELTZ

RNS Number : 8447N

Electra Private Equity Invest PLC

21 May 2015

EMBARGOED UNTIL 07:00 AM, THURSDAY 21 MAY 2015

ELECTRA PRIVATE EQUITY INVESTMENTS PLC

Unaudited Results for the Half Year ended 31 March 2015

The information contained in this announcement is restricted and is not for release, publication or distribution, directly or

indirectly, nor does it constitute an offer of securities for sale in the United States, Canada, Japan, Australia or New Zealand.

References in this announcement to Electra Private Equity Investments PLC have been abbreviated to 'the Company'. References to the Company's parent company, Electra Private Equity PLC, have been abbreviated to 'Electra'. References to Electra Partners LLP, Electra's Manager, have been abbreviated to 'Electra Partners'.

Corporate Summary of Zero Dividend Preference Shares

Electra Private Equity PLC Asset Cover at 31 March 2015: 18.4 times (2014:14.8 times) Final Capital Entitlement as at 5 August 2016.

Redemption Yield of 6.5% based on initial placing price of 100p per ZDP Share.

Final Capital Entitlement per ZDP Share of 155.41p on 5 August 2016.

The figures below show the movement in the middle market price from the first day the ZDP Shares were listed on 5 August 2009 through to 31 March 2015. The initial placing price of the ZDP Shares was 100p.

Share price of ZDP Shares

 
                  Share price 
                            p 
---------------  ------------ 
 5 August 2009          102.0 
 30 September 
  2009                  106.8 
 31 March 2010          107.8 
 30 September 
  2010                  115.5 
 31 March 2011          116.1 
 30 September 
  2011                  119.0 
 31 March 2012          128.6 
 30 September 
  2012                  132.3 
 31 March 2013          134.9 
 30 September 
  2013                  139.9 
 31 March 2014          143.5 
 30 September 
  2014                  145.0 
 31 March 2015          148.9 
---------------  ------------ 
 

The ZDP Shares offer a pre-determined rate of growth in capital entitlement up to the repayment date of 5 August 2016 but no right of income. The ZDP Shares rank ahead of Electra's Ordinary Shareholders and Subordinated Convertible Bondholders but behind any bank borrowings of Electra. The Final Capital Entitlement for the ZDP Shares is not guaranteed should Electra's net assets be insufficient on the repayment date of 5 August 2016.

The ZDP Shares do not normally carry voting rights at general meetings of the Company. The separate approval of a special resolution of holders of the Company's ZDP Shares is required for certain proposals which would be likely to affect their rights or general interests.

The Half Year Report for the six months ended 31 March 2015 will be available on the Company's website www.electraequity.com/eltz. Neither the contents of this website nor the contents of any website accessible from hyperlinks on this website (or any other website) is incorporated into, or forms part of, this announcement.

Chairman's Statement

I am pleased to present the Company's Half Year Report for the six months ended 31 March 2015.

The Company is a wholly owned subsidiary of Electra Private Equity PLC ("Electra") and was established solely for the purpose of issuing and redeeming Zero Dividend Preference ("ZDP") Shares. Further details can be found elsewhere in this Half Year Report.

ZDP Shares

Following the ZDP Share issues in 2009, the Company has not issued any further ZDP Shares.

The 2009 ZDP Share issues raised a total of GBP46 million of net proceeds. Pursuant to a loan agreement between the Company and Electra, in 2009 the Company lent Electra the whole of the net proceeds and these funds continue to be managed in accordance with the investment policy of Electra. This loan is on terms requiring its repayment by Electra to the Company at any time up to or immediately prior to the ZDP repayment date.

Electra has undertaken that, at any time up to or immediately prior to the ZDP repayment date, it will subscribe for such number of ordinary shares in the Company as is necessary to provide the Company on the ZDP repayment date (after taking into account the monies to be received by it on repayment of the loan) with sufficient funds to meet the repayment obligations in respect of the ZDP Shares.

Board Composition

Geoffrey Cullinan, Roger Perkin and I were respectively Directors and Chairman of the Company throughout the six months to 31 March 2015.

All the Directors of the Company are also Directors of Electra.

Outlook

The Board believes that the Company will be in a position to fulfil its requirement to meet the Final Capital Entitlement to the ZDP Shareholders in August 2016.

Roger Yates

Chairman

20 May 2015

Half Year Management Report

Objective

The objective of the Company is to provide the final capital entitlement of the Company's Zero Dividend Preference ("ZDP") Shares to the ZDP Shareholders at the repayment date of 5 August 2016.

Current and Future Development

A review of the main features of the six months to 31 March 2015 is contained in the Corporate Summary of Zero Dividend Preference Shares and in the Chairman's Statement on pages 1 and 2.

Risk Management

The Company is a wholly owned subsidiary of Electra and was established solely for the purpose of issuing and redeeming ZDP Shares, and accordingly the principal risks facing the Company include Market Price Risk, Liquidity Risk and Capital Risk as set out in note 12 in the Notes to the Financial Statements of the Company's Report and Accounts for the year ended 30 September 2014. In addition, the Company is also focused on the following principal risks: Final Capital Entitlement, Liquid Market for ZDP Shares, Macroeconomic and Investment Risks and Government Policy and Regulation Risk as set out in the Strategic Report of the Company's Report and Accounts for the year ended 30 September 2014. The risks identified in the Company's Report and Accounts for the year ended 30 September 2014 have not changed significantly since the year end.

Related Party Transactions

Details of Related Party Transactions are contained in Note 5 of the Notes to the interim financial statements for the six months ended 31 March 2015.

Going Concern

The Company is in the position of having net liabilities and is loss making. However, Electra has guaranteed that it will provide adequate resources for the Company to continue in operational existence for the foreseeable future. The Directors believe, therefore, that it is appropriate to continue to adopt the going concern basis in preparing the interim financial statements.

Responsibility Statement

The Directors confirm to the best of their knowledge that:

a) The condensed interim financial statements have been prepared in accordance with IAS 34 as adopted by the European Union; and

   b)    The Half Year Management Report includes a fair review of the information required by: 

(i) DTR 4.2.7R of the Disclosure 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

(ii) DTR 4.2.8R of the Disclosure 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 Company 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 of Directors

Roger Yates

Chairman

20 May 2015

Income Statement (unaudited)

 
                                                     2015         2014 
 Note    For the six months to 31 March           GBP'000      GBP'000 
------  ------------------------------------  -----------  ----------- 
  Income                                            1,149        1,042 
  Expenses                                            (6)         (23) 
 -------------------------------------------  -----------  ----------- 
  Net profit before finance costs 
   and taxation                                     1,143        1,019 
 -------------------------------------------  -----------  ----------- 
  Finance costs                                   (2,193)      (2,060) 
 -------------------------------------------  -----------  ----------- 
  Loss on ordinary activities before 
   taxation                                       (1,050)      (1,041) 
  Taxation                                          (234)        (225) 
 -------------------------------------------  -----------  ----------- 
  Loss on ordinary activities                     (1,284)      (1,266) 
         Basic and diluted earnings per 
 3        ordinary share                       GBP(25.68)   GBP(25.32) 
------  ------------------------------------  -----------  ----------- 
 

Other than the items in the income statement above, there are no other items of comprehensive income and accordingly, a separate statement of comprehensive income has not been prepared.

Statement of Changes in Equity (unaudited)

 
                              Ordinary                        Total 
                                 Share     Revenue    Shareholders' 
 For the six months ended      Capital    Reserves            Funds 
  31 March 2015                GBP'000     GBP'000          GBP'000 
---------------------------  ---------  ----------  --------------- 
 Total equity at 1 October 
  2014                              50     (8,952)          (8,902) 
 Loss for the period                 -     (1,284)          (1,284) 
 Total equity at 31 March 
  2015                              50    (10,236)         (10,186) 
---------------------------  ---------  ----------  --------------- 
 
 
                              Ordinary                        Total 
                                 Share     Revenue    Shareholders' 
 For the six months ended      Capital    Reserves            Funds 
  31 March 2014                GBP'000     GBP'000          GBP'000 
---------------------------  ---------  ----------  --------------- 
 Total equity at 1 October 
  2013                              50     (6,178)          (6,128) 
 Loss for the period                --     (1,266)          (1,266) 
 Total equity at 31 March 
  2014                              50     (7,444)          (7,394) 
---------------------------  ---------  ----------  --------------- 
 

Balance Sheet (unaudited)

 
                                                (Audited) 
                                        As at       As at      As at 
                                       31 Mar     30 Sept     31 Mar 
                                         2015        2014       2014 
 Note                                 GBP'000     GBP'000    GBP'000 
-----  ---------------------------  ---------  ----------  --------- 
        Current Assets 
        Loans and receivables          56,828      56,037     55,287 
        Cash and cash equivalents         316         315        316 
                                       57,144      56,352     55,603 
-----  ---------------------------  ---------  ----------  --------- 
        Current Liabilities 
        Trade and other payables        (257)       (374)      (254) 
        Net Current Assets             56,887      55,978     55,349 
-----  ---------------------------  ---------  ----------  --------- 
        Non-Current Liabilities 
        Zero Dividend Preference 
         Shares                      (67,073)    (64,880)   (62,743) 
        Net Liabilities              (10,186)     (8,902)    (7,394) 
-----  ---------------------------  ---------  ----------  --------- 
        Capital and Reserves 
 4      Called-up share capital            50          50         50 
        Retained earnings            (10,236)     (8,952)    (7,444) 
        Total Equity Shareholders' 
         Funds                       (10,186)     (8,902)    (7,394) 
-----  ---------------------------  ---------  ----------  --------- 
 

The notes on pages 6 and 7 form an integral part of the financial statements.

Cash Flow Statement (unaudited)

 
                                                  2015       2014 
 For the six months ended 31 March             GBP'000    GBP'000 
-------------------------------------------  ---------  --------- 
 Operating Activities 
 Interest received                                  --         -- 
-------------------------------------------  ---------  --------- 
 Net Cash Inflow from Operating Activities          --         -- 
-------------------------------------------  ---------  --------- 
 Net Cash Inflow from Financing Activities          --         -- 
-------------------------------------------  ---------  --------- 
 Net increase in cash and cash equivalents          --         -- 
-------------------------------------------  ---------  --------- 
 Cash and cash equivalents at 1 October            316        316 
-------------------------------------------  ---------  --------- 
 Cash and cash equivalents at 31 
  March                                            316        316 
-------------------------------------------  ---------  --------- 
 

Notes to the Interim Financial Statements

Within the notes to the interim financial statements all current and comparative data covering periods to, or as at, 31 March are unaudited unless otherwise indicated.

1 Basis of Preparation

The condensed interim financial statements are unaudited and do not constitute financial statements within the meaning of Section 434 of the Companies Act 2006. The statutory accounts for the year ended 30 September 2014, which were prepared in accordance with International Financial Reporting Standards, as endorsed by the European Union ("IFRS") and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, have been delivered to the Registrar of Companies. The Auditors' opinion on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain a statement made under Section 498(2) or Section 498(3) of the Companies Act 2006.

The condensed interim financial statements comprise the Balance Sheets as at 31 March 2015, 30 September 2014 and 31 March 2014 and, for the six months ended 31 March 2015 and 31 March 2014, the related Income Statement, Statement of Changes in Equity, Cashflow Statement and the related notes hereinafter referred to as "financial information".

The condensed interim financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority. The accounting policies adopted are consistent with those of the previous financial year and with IAS 34 'Interim Financial Reporting', as adopted by the European Union, and are set out in the Annual Report for the year ended 30 September 2014, which is available on the Company's website (www.electraequity.com/eltz). The interim financial statements have been prepared on a going concern basis and under the historical cost basis of accounting, modified to include the revaluation of certain assets at fair value.

Application of New Standards

The accounting policies used are consistent with those applied in the last annual financial statements, as amended to reflect the adoption of new standards, amendments, and interpretations which became effective in the year. During 2015 there is no applicable new standard.

New Standards to be Applied

The following relevant standards have been issued and adopted by the EU but are not yet effective and have not been adopted early:

   --      IFRS 11 Joint Arrangements; 
   --      IFRS 12 Disclosure of Interests in Other Entities; 
   --      IAS 27 Separate Financial Statements (revised); 
   --      IAS 28 Investments in Associates and Joint Ventures (revised); 
   --      IAS 32 Financial Instruments: Presentation (amendment); 
   --      IAS 36 Impairment of Assets (amendment); and 
   --      Amendments to IFRS 11 and IFRS 12 (transition guidance). 

None of these standards, amendments and interpretations are expected to have a significant effect on the consolidated financial statements of the Company. These will result in changes to presentation or additional disclosure only.

Other pronouncements are not expected to have a material impact on the financial statements, but may result in changes to presentation or disclosure.

Additionally a number of standards have been issued but are not yet adopted by the EU and so are not available for early adoption. The most significant of these is IFRS 9 Financial Instruments along with related amendments to other IFRSs and the impact on the Company is being reviewed.

None of these standards, amendments and interpretations are presently expected to have a significant effect on the consolidated Financial Statements of the Company.

2 Segmental Analysis

The chief operating decision-maker has been identified as the Board of the Company. The Board of the Company considers there to be only one business segment and there is therefore no further segmental analysis.

3 Loss per Share

 
                                          2015      2014 
 For the six months ended 31 March         GBP       GBP 
------------------------------------  --------  -------- 
 Earnings per ordinary share (Basic 
  and Diluted)                         (25.68)   (25.32) 
------------------------------------  --------  -------- 
 

The calculation of earnings per share is based on the loss of GBP1,284,000 (2014: loss of GBP1,266,000) and on a weighted average number of 50,000 (2014: 50,000) ordinary shares of GBP1 each in issue.

4 Share Capital

 
                                             2015       2014 
 As at 31 March                           GBP'000    GBP'000 
--------------------------------------  ---------  --------- 
 Allotted, called up and fully paid 
  50,000 ordinary shares of GBP1 each          50         50 
--------------------------------------  ---------  --------- 
 

5 Related Party Transactions

Pursuant to a loan agreement between the Company and Electra, in 2009 the Company lent Electra the whole of the net proceeds of the ZDP shares and these funds continue to be managed in accordance with the investment policy of Electra. This loan is on terms requiring its repayment by Electra to the Company at any time up to or immediately prior to the ZDP repayment date. As at 31 March 2015, the outstanding balance of the loan was GBP56,828,000 (2014: GBP55,287,000) including interest accrued of GBP12,265,000 (2014: GBP10,064,000).

6 Immediate and Ultimate Parent

The Company's immediate and ultimate parent undertaking is Electra, a company incorporated in Great Britain and registered in England and Wales. Copies of the financial statements are available at the Company's registered office at Paternoster House, 65 St. Paul's Churchyard, London, EC4M 8AB.

Independent review report to Electra Private Equity Investments PLC

Report on the condensed interim financial statements

Our conclusion

We have reviewed the condensed interim financial statements, defined below, in the Half Year Report of Electra Private Equity Investments PLC for the six months ended 31 March 2015. Based on our review, nothing has come to our attention that causes us to believe that the condensed interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

This conclusion is to be read in the context of what we say in the remainder of this report.

What we have reviewed

The condensed interim financial statements, which are prepared by Electra Private Equity Investments PLC, comprise:

   --      the Balance Sheet as at 31 March 2015; 
   --      the Income Statement for the period then ended; 
   --      the Cash Flow Statement for the period then ended; 
   --      the Statement of Changes in Equity for the period then ended; and 
   --      the explanatory notes to the condensed interim financial statements. 

As disclosed in note 1, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Company is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

The condensed interim financial statements included in the Half Year Report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

What a review of condensed financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the Half Year Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed interim financial statements.

Responsibilities for the condensed interim financial statements and the review

Our responsibilities and those of the directors

The Half Year Report, including the condensed interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Half Year Report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express to the company a conclusion on the condensed interim financial statements in the Half Year Report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

PricewaterhouseCoopers LLP

Chartered Accountants

20 May 2015

London

Notes:

(a) The Half Year Report is published on the Electra website (www.electraequity.com/eltz), which is a website maintained by Electra Partners. The maintenance and integrity of the website is, so far as it relates to the Company, the responsibility of Electra Partners; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

(b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Contact Details

Board of Directors

Roger Yates (Chairman)

Geoffrey Cullinan

Roger Perkin

Telephone [phone]

Company Secretary

Frostrow Capital LLP

25 Southampton Buildings

London WC2A 1AL

Telephone [phone]

Registered Office

Paternoster House

65 St Paul's Churchyard

London EC4M 8AB

Company Number

06885579

Registered Independent Auditors

PricewaterhouseCoopers LLP

Chartered Accountants &

Statutory Auditors

7 More London Riverside

London SE1 2RT

Stockbroker

J.P. Morgan Cazenove

Registrar and Transfer Office

Equiniti Limited

Aspect House

Spencer Road

Lancing

West Sussex BN99 6DA

Telephone (UK) 0871 384 2351 *

Textel/Hard of hearing line (UK) 0871 384 2255 *

Telephone (Overseas) [phone]

* Calls to these numbers cost 8p per minute plus network extras. Lines open 8.30am to 5.30pm, Monday to Friday.

This information is provided by RNS

The company news service from the London Stock Exchange

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