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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| F&C Private Equity Trust | LSE:FPEO | London | Ordinary Share | GB0030738271 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 336.00 | 331.00 | 337.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
TIDMFPEO
RNS Number : 6787I
F&C Private Equity Trust PLC
23 March 2018
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To: Stock Exchange For immediate release:
23 March 2018
F&C Private Equity Trust plc
Preliminary Announcement for the Year to 31 December 2017
F&C Private Equity Trust plc today announces its unaudited financial results for the year ended 31 December 2017.
Financial Highlights
-- Share price total return for the year of 19.2 per cent for the Ordinary Shares. -- Net Asset Value total return for the year of 5.6 per cent for the Ordinary Shares.
-- Total dividends of 14.04p per Ordinary Share which represents growth of 11.4 per cent in comparison to the previous year.
-- Dividend yield of 4.1 per cent based on the year-end share price.
Chairman's Statement
I am pleased to report that your Company has achieved a net asset value ("NAV") total return for the year ended 31 December 2017 of 5.6 per cent. With the discount falling to 5.1 per cent as at 31 December 2017 (2016: 15.8 per cent), the share price total return for the year was 19.2 per cent. This compares to a total return from the FTSE All-Share Index for the year of 13.1 per cent. The share price at the year-end was 339.00p per share (2016: 295.50p), and NAV per share was 357.23p (2016: 350.98p). At times during the year the share price traded at a premium to NAV, a situation which has not occurred for many years.
During the year the Company made new investments either through funds or as co-investments, totalling GBP69.9 million. Realisations and associated income totalled GBP65.1 million. Outstanding undrawn commitments at the year-end were GBP123.4 million of which GBP18.0 million was to funds where the investment period has expired.
The Company's performance fee arrangements contain a hurdle rate, calculated over rolling three year periods, of an IRR of 8.0 per cent per annum. The annual IRR of the NAV for the three year period ended 31 December 2017 was 13.2 per cent and, consequently, a performance fee of GBP2.0 million is payable to the Manager, F&C Investment Business Limited, in respect of 2017. This is the fifth consecutive year that a performance fee has been payable, demonstrating consistent performance and providing shareholders with an attractive total return, which includes capital growth and an above average dividend yield.
Dividends
Since 2012 your Company has paid a substantial dividend from realised capital profits allowing shareholders to participate, to some degree, directly in the proceeds of the steady stream of private equity realisations which the Company achieves. This policy has been well received by shareholders and your Board is fully committed to maintaining this general approach for the foreseeable future. One enhancement which the Board implemented during the year was for the Company to move from the payment of semi-annual dividends to quarterly dividends. This innovation regularises the flow of income to shareholders.
The quarterly dividends are payable in respect of the quarters ended 31 March, 30 June, 30 September and 31 December and are paid in the following July, October, January and April respectively. As shareholders no longer have an opportunity to approve a final dividend at each Annual General Meeting, shareholders have been asked to approve the Company's dividend policy at the forthcoming Annual General Meeting.
In accordance with the Company's stated dividend policy, the Board recommends a further quarterly dividend of 3.57p per Ordinary Share, payable on 30 April 2018 to shareholders on the register on 6 April 2018. Total dividends paid for the year therefore amount to 14.04p per Ordinary Share equivalent to a dividend yield of 4.1 per cent at the year-end.
Financing
At 31 December 2017 the Company held cash balances in excess of the EUR30.0 million term loan element of the GBP70.0 million total loan facility. It is the Company's policy to employ moderate levels of gearing to enhance returns to shareholders. The Company has a very well diversified underlying portfolio of investments and this provides a robust platform on which to base borrowings. As the Manager takes advantage of new fund, co-investment and secondary opportunities over the coming months, we expect that a moderate level of gearing will be achieved.
Markets in Financial Instruments Directive ('MiFID') II
A significant regulatory task during the last year for the investment management industry was the implementation of the requirements of the revised European Union Markets in Financial Instruments Directive, better known as MiFID II. The preparation of a Key Information Document for the Company was the responsibility of the investment manager. This document, which, to ensure comparability, was prepared according to prescriptive guidelines and rules laid down by the FCA is available on the Company's website. However concerns have been raised, across the investment trust sector, which your Board shares that the performance scenarios disclosed in the document, which applies a methodology based upon past performance, may provide results for future returns which are too optimistic. Shareholders are reminded that past performance does not guarantee future results.
Annual General Meeting
The Annual General Meeting will be held at 12 noon on 24 May 2018 at the offices of BMO Global Asset Management (EMEA), Exchange House, Primrose Street, London EC2A 2NY. This will be followed by a presentation by Hamish Mair, the Company's lead fund manager. This is a good opportunity for shareholders to meet the Manager and the Board and we would encourage you to attend.
Outlook
The private equity market internationally has raised record amounts of equity capital and is well supported by debt from diverse sources. Confidence levels amongst private equity professionals and company management are high and this makes for a healthy and active market in most geographies. The Company has many relationships with some of the most successful private equity investors and through partnership with them we have delivered good growth in shareholder value for many years. This is evidenced by the flow of exits which remains at impressive levels. We are also re-investing for the future with new commitments to funds and co-investments alongside experienced and motivated managers. The Company remains one of the few vehicles which gives investors exposure to predominantly European lower mid-market private equity with an emphasis on emerging private equity firms. This remains a broad and attractive sector in which to invest for the long term.
Mark Tennant
Chairman
Manager's Review
Introduction
The Company's portfolio continued to make progress during the year. Key influences were the overall positive tone in the private equity market internationally and the specific contributions from some of our larger investments. The majority of our holdings increased in value over the year through fundamental growth in profits or through achieving good exits. Towards the end of the year a small number of investments encountered serious difficulties and the associated write downs have led to the NAV growing less strongly than originally expected. These issues are not linked nor reflect any systemic weakness but are rather a coincidental outcome of investing in a wide range of small private companies which carries with it inescapable vulnerabilities. There are many positives in the Company's portfolio and much of this is not yet fully reflected in the portfolio valuation.
New Investments
In order to lay the foundations for future value growth it is important that fresh commitments to funds and co-investments are made. In the case of primary funds and co-investments there is generally a lag before progress can be seen in the value of these investments as it takes time for investments to be drawn down and for profits to grow sufficiently to prove that the investment thesis is working and to justify an uplift. It follows that a substantial new investment programme can act in the short term as a minor drag on performance but over the longer term it is essential if returns are to be maintained and enhanced. During the year we have made commitments to eight new funds and invested in nine new co-investments. Each of these funds will in turn build a portfolio of around ten investments. The co-investment portfolio now numbers 24 investments and accounts for nearly a third of the total portfolio.
As it happens almost all of the new fund commitments are to funds with their principal focus outside the UK and most of the co-investments are UK focused. Whilst this is not a deliberate result of our research process, it does give a helpful amount of geographic diversification.
The only primarily UK fund added during the year was Apposite Healthcare II to which GBP6 million was committed. This fund focuses on UK lower mid-market companies in healthcare services, digital health, social care and medical products and has the flexibility to invest up to 30% in Western Europe. The fund is managed by a very experienced team and already has made four investments taking the fund to approximately 20% drawn. Also in the healthcare sector, but with a broader geographic remit, is ArchiMed II to which EUR5 million has been committed. Both funds were selected following an extensive market mapping exercise looking at opportunities in the healthcare and related sectors in Europe.
As previously noted we have renewed our commitment to leading French mid-market investor Chequers through a EUR6 million commitment to their Fund XVII. After a considerable period of review of the Central and Eastern European private equity markets we have committed EUR5 million to ARX CEE IV, a Czech Republic based mid-market investor which was originally a spin-out from DBAG. In Finland we have committed EUR6 million to Vaaka Partners Buyout III, a lower mid-market buyout fund focusing on this small but well defined market.
We have refreshed our North American exposure with three new commitments. $8 million was committed to Blue Point Capital IV. Blue Point is based in Cleveland Ohio and is a mid-market focused fund which generally invests in the vicinity of its HQ and close to its Seattle and Charlotte offices. Additionally, and unusually for a mid-market firm, Blue Point has for many years successfully developed the China angle of its US investee companies. This is the fourth Blue Point fund we have backed with our original investment dating back to 2002. We have committed $6 million to Graycliff Private Equity Partners III which specialises in lower mid-market buyouts. We have also committed $4 million to Stellex Capital Partners, an investor in distressed situations and companies requiring significant operational improvements primarily in the US mid-market. This investment begins with three platform investments in place and the fund 25% invested.
After the year end there are two further fund commitments. SEK 50 million was committed to Verdane Edda, a Nordic area focused fund investing in technology and technology enabled companies. GBP5 million was committed to Apiary Capital Partners I, a new lower mid-market UK fund focusing on B2B services, healthcare and education sectors. The team which is comprised of managers from Bowmark, Inflexion and August, will target control buyouts in the size range of enterprise value GBP10-50 million. This lower mid-market focus and their pricing disciplines match closely with our preferences.
During 2017 we made six new co-investments in the UK. These are in diverse sectors and are led by management teams with different specialisms.
We have invested GBP5 million in TWMA, an Aberdeen based oil services company involved in drilling waste management services. The investment thesis is that TWMA's largely offshore-based drilling waste solution, using a thermomechanical cylindrical mill, can make a major contribution to reducing the total cost of production for oil companies. Understandably, bringing costs down remains a key focus while the oil price is depressed. Buckthorn, which is an energy specialist, is the lead on the deal.
In the clothing sector, we have partnered with Total Capital Partners to invest GBP6.2 million, through an integrated finance structure, in Weird Fish. Its main products are active lifestyle clothes such as T-shirts and 'macaroni' sweatshirts aimed at the stable and affluent 35-55 age demographic. The company is both a wholesaler and retailer with a limited estate of stores in outdoor holiday areas in the UK.
We have committed to invest GBP3.0 million with Apposite Capital in Swanton Care Group. The initial investment is GBP1.4 million creating a platform for the company which is involved in residential care homes and supported living for people with learning disabilities and autism spectrum disorders. The company already has 23 properties and the plan is to add to this through acquisition during the holding period.
We have invested GBP2.8 million in CETA, a specialist insurance broker, which concentrates on the caravan and leisure boat niches. The company has set up a Managing General Agent (MGA) which will allow it to capture more of the value chain in this sector. The investment is led by Kester Capital.
We have invested GBP3.0 million in Walkers, a Leeds based transport and logistics company which specialises in small pallet loads and operates a distribution hub for one of the large pallet networks. Pallet hubs are being utilised increasingly, in part due to the increase in the popularity of online shopping and the requirement for many small batch deliveries. This investment is led by Total Capital Partners.
We have invested GBP4.0 million alongside leading venture capitalist SEP in a specialist software company Dotmatics. This company provides sophisticated software to the pharmaceutical industry which is primarily used to facilitate research.
There has been one new co-investment in Continental Europe. EUR2 million was invested in December in RGI, an Italian based provider of software solutions for the insurance industry. The deal is led by Corsair Capital, a financial services focused private equity house that spun-out of JP Morgan over a decade ago. The need for digital solutions is reshaping insurers' business models generating opportunities for third party software vendors. European insurers' IT spend on external software is growing strongly driven by insurers' need to replace legacy systems and keep up with technological advances. The investment thesis is based upon expanding from the company's base in Italy into adjacent markets of France, Germany and Spain.
In North America at the start of the year $5 million was invested in North Carolina based Sigma Electric Manufacturing, a leading manufacturer of metal castings, precision machined components and sub-assemblies for the US low voltage electrical products market. The investment is led by Argand, a mid-market specialist.
Near the end of 2017 $3 million was invested in Tier1 CRM, an Ontario based cloud-based customer relationship management ('CRM') software provider for financial services firms. The investment is led by Wavecrest Growth Partners, a Boston based lower mid-market growth equity firm focused on the software and tech enabled services sector.
Drawdowns
During the year drawdowns from our portfolio of funds totalled GBP38.8 million. Taking into account the co-investments as well brings the total newly invested up to GBP69.9 million. This represents around 27% of the Company's NAV at the start of the period. The detail of many of the significant drawdowns has been reported earlier in the year. The notable drawdowns in the final quarter are described below.
In the UK our key mid-market investment partners were active. Inflexion called a total of GBP2.3 million across its range of funds for several different investments. Inflexion Enterprise IV, their lower mid-market fund, invested GBP0.3 million into two new deals; Virgin Experience Days and Alston Eliot (Sports television graphics). Inflexion Buyout IV called GBP1.1 million for four investments; Xtrac (transmissions systems for racing cars), Bollington Wilson (commercial and personal insurance), PCMS (commercial software mainly for the retail sector) and Atcore (software for travel agents). August Equity Partners IV called GBP1.3 million for three investments; Fosters (low cost funerals), Zenergie (energy procurement) and Genesis (Dental Practices). RJD Private Equity III invested GBP0.5 million in Class Tours (bespoke school trips).
In Continental Europe Corpfin Capital IV invested GBP0.5 million in Kids & Us, a leading provider of English learning services in Spain operating more than 300 franchise centres with 115,000 students and GBP0.7 million in Marjal, one of the leading operators of camping holiday resorts in Spain. In Germany DBAG VII invested GBP0.7 million in More than Meals, a pan-European supplier of private label chilled convenience foods. In France Astorg IV invested GBP0.6 million in Audiotronix (digital sound mixing consoles for professionals). In the USA Blue Point Capital III invested GBP0.5 million in Italian Rose Garlic Products, a leading manufacturer and distributor of premium salsa, dips, sauces and spreads going into the retail and foodservice sectors.
Realisations
Over the fourth quarter realisations totalled GBP13.5 million bringing the total for 2017 to GBP65.1 million, just below the level achieved in 2016. There were several notable exits coming from different parts of the portfolio.
In the UK August Equity Partners II sold fostering company, Compass returning GBP2.5 million (2.2x, 15% IRR). Mezzanine Management IV exited US robotics company PAR returning GBP0.9 million (2.3x, 13% IRR). Ticketscript and Weird Fish each returned some capital through loan stock redemptions amounting to GBP0.6 million and GBP0.7 million respectively. SEP IV sold online retailer Matchesfashion to Apax returning GBP1.2 million (8.5x, 55% IRR).
In Europe Procuritas Capital IV exited Sonans, a Norwegian schools chain returning GBP2.1 million (4.3x, 32% IRR).
In the USA Blue Point Capital II returned GBP1.3 million from the exit of valves and pipes company Smith Cooper (2.9x, 24% IRR) and final sale proceeds from the 2015 sale of AWP. Camden Partners IV returned GBP2.1 million from the sale of healthcare software company, Essence Group (3.2x, 21% IRR).
Valuation Changes
Over the course of the year there were dozens of notable changes in valuation. These covered both the fund portfolio and the growing co-investment portfolio.
The funds which contributed most over the year were from each section of the portfolio. In the UK August Equity was notable with uplifts of GBP1.5 million and GBP1.2 million respectively for their Funds II and III. Part of this came from the exit after the year end of Active Assistance which achieved 4.7x and an IRR of 28%. August Equity Partners III benefitted from an uplift in the carrying value of VetPartners (veterinary clinics) to 4.9x, in line with the terms of a recapitalisation which took place in January.
In Germany DBAG V and VI were uplifted by a combined GBP3.2 million reflecting a flow of good exits. Nordic based Procuritas also had a good year with exits and trading related uplifts giving a combined uplift of GBP3.1 million for Procuritas Capital IV and V. Procuritas IV benefitted from the sale of Sonans noted above and an uplift for Green Magnum, the ice-cream machine maker which has since been sold to FSN achieving 6.5x and an IRR of 41%.
A number of funds were down over the year. These included RJD Private Equity II (GBP1.5 million), Pinebridge New Europe II (GBP0.9 million) and Primary Capital III (GBP0.6 million).
In our portfolio of co-investments there was a mixture of excellent progress and some disappointments.
Over the year the total uplift for Ambio Holdings, our co-investment in the peptide related active pharmaceutical ingredient (API) sector, was GBP10 million. The company is growing robustly and plans are afoot for an IPO possibly as early as the end of this year. Collingwood Insurance Group, our co-investment in Gibraltar based specialist motor insurer, has traded well and is uplifted by GBP2.1 million.
David Phillips (furniture for rental properties) has been reduced to zero from GBP4 million, as the company, which was in breach of banking covenants, was sold as a going concern to a consortium led by Epic Private Equity on 19 December. This repaid the bank in full but did not yield any value for our equity. This deal was led by FPE. Our initial investment was GBP2 million which was supplemented by GBP0.6 million in a 'rescue' refinancing in July 2017. Shortly after this it became clear that the forecasts on which the refinancing was based were not being met and whilst revenues were close to budget the business displayed a degree of operational gearing which made small misses on revenue produce a large adverse impact on EBITDA. FPE worked on a further refinancing option but this was deemed unjustifiable and an accelerated M&A process was initiated to meet the bank's requirements for full recovery as soon as possible.
Burgess Marine was reduced from GBP0.9 million to zero. The company went into administration in December and the administrators sold the company's subsidiary Global. After collection of the debtor book there may be a small recovery of our original investment of GBP3.0 million. Burgess has struggled for a number of reasons since our investment with RJD in January 2015. Competition from East Coast yards, which had spare capacity in the wake of the weak offshore market, eroded margins. In addition the MoD business was smaller and later than expected and the workboat business Meercat failed to convert prospects into orders. The proximate cause of the demise was a cashflow crisis resulting from a major yacht refit.
We have also recognised a large downgrade of GBP3.2 million for the RJD led co-investment in debt management company Harrington Brooks. The company has been badly impacted by the prolonged process of becoming regulated by the FCA which has affected both Harrington Brooks and the debt management sector as a whole. Specifically the company struggles to find a reliable and cost effective means of acquiring new customers as the smaller companies who historically 'fed' customers to Harrington Brooks and others have been very much reduced during the elongated process of regulation.
The coincidence of these developments offset much of the progress in the rest of the portfolio in the final quarter. However our overall contribution from co-investments this year remains strong and we expect this to continue.
Financing
The company is effectively ungeared at present and has all of its GBP70 million borrowing facility available. The facility expires at the end of June 2019 and we will commence discussions with RBS and some alternative lenders later in the year with a view to replacing the facility in due course.
Outlook
The downgrades in a few of the co-investments have complicated origins and these provide useful learning for the future, but it is clear that there do not appear to be systemic underlying factors. On the contrary the general tenor of the European private equity market is good with fundamental progress in profits across the portfolio and a healthy two-way market of new deals and exits in many sectors and geographies. As noted on several occasions before, the price of new deals in the market in general is higher than in recent years although most of the deals made by our investment partners are below the market and not far away from our historically observed norms. Maintaining buying discipline and making realistic and conservative assumptions for their investment theses is critical. As we move further into 2018 confidence levels within the private equity market internationally are high and this should allow us to deliver more growth for shareholders this year.
Hamish Mair
Investment Manager
F&C Investment Business Limited
F&C Private Equity Trust plc
Statement of Comprehensive Income for the
year ended 31 December 2017
(Unaudited)
Revenue Capital Total
GBP'000 GBP'000 GBP'000
-------------------------------------------- --------- --------- ---------
Income
Gains on investments held at fair value - 21,216 21,216
Exchange losses - (1,019) (1,019)
Investment income 1,422 - 1,422
Other income 51 - 51
-------------------------------------------- --------- --------- ---------
Total income 1,473 20,197 21,670
-------------------------------------------- --------- --------- ---------
Expenditure
Investment management fee - basic fee (641) (1,922) (2,563)
Investment management fee - performance
fee - (2,037) (2,037)
Other expenses (830) - (830)
-------------------------------------------- --------- --------- ---------
Total expenditure (1,471) (3,959) (5,430)
-------------------------------------------- --------- --------- ---------
Profit before finance costs and taxation 2 16,238 16,240
Finance costs (428) (1,283) (1,711)
-------------------------------------------- --------- --------- ---------
(Loss)/profit before taxation (426) 14,955 14,529
Taxation - - -
(Loss)/profit for year/total comprehensive
income (426) 14,955 14,529
Return per Ordinary Share - Basic (0.58)p 20.23p 19.65p
-------------------------------------------- --------- --------- ---------
Return per Ordinary Share - Fully diluted (0.58)p 20.23p 19.65p
-------------------------------------------- --------- --------- ---------
F&C Private Equity Trust plc
Statement of Comprehensive Income for the
year ended 31 December 2016
(Audited)
Revenue Capital Total
GBP'000 GBP'000 GBP'000
-------------------------------------------- --------- --------- ---------
Income
Gains on investments held at fair value - 58,538 58,538
Exchange losses - (3,584) (3,584)
Investment income 1,386 - 1,386
Other income 54 - 54
-------------------------------------------- --------- --------- ---------
Total income 1,440 54,954 56,394
-------------------------------------------- --------- --------- ---------
Expenditure
Investment management fee - basic fee (582) (1,745) (2,327)
Investment management fee - performance
fee - (2,024) (2,024)
Other expenses (739) - (739)
-------------------------------------------- --------- --------- ---------
Total expenditure (1,321) (3,769) (5,090)
-------------------------------------------- --------- --------- ---------
Profit before finance costs and taxation 119 51,185 51,304
Finance costs (419) (1,257) (1,676)
-------------------------------------------- --------- --------- ---------
(Loss)/profit before taxation (300) 49,928 49,628
Taxation - - -
(Loss)/profit for year/total comprehensive
income (300) 49,928 49,628
Return per Ordinary Share - Basic (0.41)p 68.16p 67.75p
-------------------------------------------- --------- --------- ---------
Return per Ordinary Share - Fully diluted (0.41)p 67.53p 67.12p
-------------------------------------------- --------- --------- ---------
F&C Private Equity Trust plc
Balance Sheet
As at 31 As at 31
December December
2017 2016
(Unaudited) (Audited)
GBP'000 GBP'000
------------------------------------------ ------------- -----------
Non-current assets
Investments at fair value through profit
or loss 266,536 239,049
266,536 239,049
Current assets
Other receivables 232 26
Cash and cash equivalents 26,765 48,575
------------------------------------------ ------------- -----------
26,997 48,601
Current liabilities
Other payables (3,081) (3,057)
Net current assets 23,916 45,544
------------------------------------------ ------------- -----------
Total assets less current liabilities 290,452 284,593
------------------------------------------ ------------- -----------
Non-current liabilities
Interest-bearing bank loan (26,308) (25,070)
------------------------------------------ ------------- -----------
Net assets 264,144 259,523
------------------------------------------ ------------- -----------
Equity
Called-up ordinary share capital 739 739
Share premium account 2,527 2,527
Special distributable capital reserve 15,040 15,040
Special distributable revenue reserve 31,403 31,403
Capital redemption reserve 1,335 1,335
Capital reserve 213,100 203,679
Revenue reserve - 4,800
-----------
Shareholders' funds 264,144 259,523
------------------------------------------ ------------- -----------
Net asset value per Ordinary Share 357.23p 350.98p
F&C Private Equity Trust plc
Statement of Changes in Equity
Share Share Special Special Capital Capital Revenue Total
Capital Premium Distributable Distributable Redemption Reserve Reserve
Account Capital Revenue Reserve
Reserve Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- --------- ---------- -------------- -------------- ------------ ---------- ---------- --------
For the year ended 31 December
2017 (unaudited)
Net assets at
1 January
2017 739 2,527 15,040 31,403 1,335 203,679 4,800 259,523
Profit/(loss)
for
the
year/total
comprehensive
income - - - - - 14,955 (426) 14,529
Dividends paid - - - - - (5,534) (4,374) (9,908)
Net assets at
31 December
2017 739 2,527 15,040 31,403 1,335 213,100 - 264,144
--------------- --------- ---------- -------------- -------------- ------------ ---------- ---------- --------
For the year ended 31 December
2016 (audited)
Net assets at
1 January
2016 720 - 15,040 31,403 1,335 158,002 9,625 216,125
Issue of
Ordinary
Shares 19 2,527 - - - - - 2,546
Profit/(loss)
for
the
year/total
comprehensive
income - - - - - 49,928 (300) 49,628
Dividends paid - - - - - (4,251) (4,525) (8,776)
Net assets at
31 December
2016 739 2,527 15,040 31,403 1,335 203,679 4,800 259,523
--------------- --------- ---------- -------------- -------------- ------------ ---------- ---------- --------
F&C Private Equity Trust plc
Statement of Cash Flows
Year ended Year ended
31 December 31 December
2017 2016
(Unaudited) (Audited)
GBP000 GBP000
---------------------------------------------- ------------- -------------
Operating activities
Profit before taxation 14,529 49,628
Adjustments for:
Gains on disposals of investments (32,637) (33,421)
Decrease/(increase) in holding gains 11,421 (25,117)
Exchange differences 1,019 3,584
Interest income (51) (54)
Interest received 51 54
Investment income (1,422) (1,386)
Investment income received 1,422 1,386
Finance costs 1,711 1,676
Decrease in other receivables 1 -
Increase in other payables 26 778
---------------------------------------------- ------------- -------------
Net cash outflow from operating activities (3,930) (2,872)
---------------------------------------------- ------------- -------------
Investing activities
Purchases of investments (69,546) (32,797)
Sales of investments 63,068 67,997
Net cash (outflow)/inflow from investing
activities (6,478) 35,200
---------------------------------------------- ------------- -------------
Financing activities
Shares issued (net of costs) - 2,546
Interest paid (1,497) (1,459)
Equity dividends paid (9,908) (8,776)
---------------------------------------------- ------------- -------------
Net cash outflow from financing activities (11,405) (7,689)
---------------------------------------------- ------------- -------------
Net (decrease)/increase in cash and
cash equivalents (21,813) 24,639
Currency gains/(losses) 3 (87)
---------------------------------------------- ------------- -------------
Net (decrease)/increase in cash and
cash equivalents (21,810) 24,552
Opening cash and cash equivalents 48,575 24,023
---------------------------------------------- ------------- -------------
Closing cash and cash equivalents 26,765 48,575
---------------------------------------------- ------------- -------------
Notes (unaudited)
1. The unaudited financial results, which were approved by the Board on 22 March 2018, have been prepared in accordance with the Companies Act 2006 and International Financial Reporting Standards ('IFRS') as adopted by the European Union. Where presentation guidance set out in the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ('SORP') issued by the Association of Investment Companies in November 2014 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.
The accounting policies adopted are consistent with those of the previous financial year, except that the following new standard has been adopted in the current year:
-- 'Disclosure Initiative - Amendments to IAS 7'. The adoption of these amendments did not have any impact on the current period or any prior period and are not likely to affect future periods.
The following new standards have been issued but are not effective for this accounting period and have not been adopted early:
-- In July 2014, the IASB published the final version of IFRS 9 'Financial Instruments' which replaces the existing guidance in IAS 39 'Financial Instruments: Recognition and Measurement'. The IFRS 9 requirements represent a change from the existing requirements in IAS 39 in respect of financial assets. The standard contains two primary measurement categories for financial assets: amortised cost and fair value. A financial asset would be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, and the asset's contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding. All other financial assets would be measured at fair value. The standard eliminates the existing IAS 39 categories of held-to-maturity, available-for-sale and loans and receivables.
For financial liabilities, IFRS 9 largely carries forward without substantive amendment the guidance on classification and measurement from IAS 39. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of fair value change due to an entity's own credit risk is recorded in other comprehensive income rather than in profit or loss.
The standard introduces new requirements for hedge accounting that align hedge accounting more closely with risk management and establishes a more principles-based approach to hedge accounting. The standard also adds new requirements to address the impairment of financial assets and means that a loss event will no longer need to occur before an impairment allowance is recognised.
The standard will be effective for annual periods beginning on or after 1 January 2018, and is required to be applied retrospectively with some exemptions. There will be no material impact for the Company as financial assets will continue to be classified as fair value through profit and loss, financial liabilities will continue to be held at amortised cost, the expected credit loss model will not give rise to a material increase in impairment and the Company does not apply hedge accounting.
-- IASB has issued a new standard for the recognition of revenue, IFRS 15 'Revenue from Contracts with Customers'. This will replace IAS 18 which covers contracts for goods and services. The new standard is based on the principle that revenue is recognised when control of a good or service transfers to a customer - so the notion of control replaces the existing notion of risks and rewards. The standard permits a modified retrospective approach for the adoption. Under this approach entities will recognise transitional adjustments in retained earnings on the date of initial application ie without restating the comparative period. They will only need to apply the new rules to contracts that are not completed as of the date of initial application. The standard will be effective for annual periods beginning on or after 1 January 2018. The Company is yet to assess IFRS 15's full impact but it is not currently anticipated that this standard will have any material impact on the Company's financial statements as presented for the current year.
The Company does not consider that the future adoption of any new standards, in the form currently available, will have any material impact on the financial statements as presented.
2. Returns per Ordinary Share are based on the following weighted average number of shares in issue during the year:
Basic: 73,941,429 (2016: 73,249,836) Diluted: 73,941,429 (2016: 73,941,429)
The net asset value per Ordinary Share is based on the following number of shares in issue at the year-end: 73,941,429 (2016: 73,941,429)
During the year ended 31 December 2017, the Company issued nil Ordinary Shares. During the previous year ended 31 December 2016, the Company issued 1,959,156 Ordinary Shares of 1p each in the capital of the Company, following the exercise of subscription rights by holders of a corresponding number of management warrants previously issued by the Company in the capital of the Company. No warrants remain in issue.
3. The Board has proposed an interim dividend of 3.57p per Ordinary Share, payable on 30 April 2018 to those shareholders on the register on 6 April 2018.
4. This results announcement is based on the Company's unaudited financial statements for the year ended 31 December 2017 which have been prepared in accordance with International Financial Reporting Standards as adopted by the EU ('IFRS').
5. This announcement is not the Company's statutory accounts. The full audited accounts for the year ended 31 December 2016, which were unqualified, have been lodged with the Registrar of Companies. The statutory accounts for the year to 31 December 2017 (on which the audit report has not been signed) will be delivered to the Registrar of Companies following the Company's Annual General Meeting which will be held at the offices of BMO Global Asset Management (EMEA), Exchange House, Primrose Street, London, EC2A 2NY on 24 May 2018 at 12 noon.
6. The Annual Report and Accounts for the year will be sent to shareholders and will be available for inspection at the Company's registered office, Quartermile 4, 7a Nightingale Way, Edinburgh, EH3 9EG and the Company's website www.fcpet.co.uk
For more information, please contact:
Hamish Mair (Investment Manager) 0131 718 1000 Scott McEllen (Company Secretary) 0131 718 1000 hamish.mair@bmogam.com / scott.mcellen@bmogam.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEEFWEFASELD
(END) Dow Jones Newswires
March 23, 2018 03:00 ET (07:00 GMT)
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