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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 : 4008X
F&C Private Equity Trust PLC
24 November 2017
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24 November 2017
F&C Private Equity Trust plc
LEI: 2138009FW98WZFCGRN66
Quarterly results for the three month period ended 30 September 2017
-- NAV total return per Ordinary Share for the nine month period ended 30 September 2017 of 4.7 per cent.
-- Share price total return per Ordinary Share for the nine month period ended 30 September 2017 of 18.5 per cent.
-- A quarterly dividend of 3.55 pence per Ordinary Share payable on 31 January 2018 to shareholders on the register on 5 January 2018.
Manager's Review
Introduction
As at 30 September 2017, the net assets of the Company were GBP266.9 million, giving a Net Asset Value ("NAV") per share of 360.98p, an increase over the quarter of 1.2%. For the first nine months of the year, the NAV total return is 4.7%. At 30 September, the Company had net cash of GBP15.5 million. Outstanding undrawn commitments were GBP126.8 million with approximately GBP15.7 million of these to funds where the investment period has expired and where we would expect only a small proportion to be drawn.
In line with the Company's new dividend policy to pay dividends on a quarterly basis, the first quarterly dividend of 3.55p will be paid on 31 January 2018 to shareholders on the register on 5 January 2018. The ex-dividend date is 4 January 2018.
New Investments
There were two new commitments to funds and two new co-investments during the quarter.
GBP6.0 million was committed to Apposite Healthcare II. 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. EUR5.0 million has been committed to ArchiMed II, a predominantly European healthcare fund. Both funds were selected following an extensive market mapping exercise looking at opportunities in the healthcare and related sectors in Europe.
GBP3.0 million was committed to Swanton Care Group with an initial investment of GBP1.4 million. This is a platform investment led by Apposite Capital 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.
GBP2.8 million was invested 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, the managers of GCP II.
Following the quarter-end two more co-investments have been added to the portfolio. GBP3.0 million has been invested 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 with whom we are invested in two other investments. GBP4.0 million has been invested in a SEP led specialist software company Dotmatics. This company provides sophisticated software to the pharmaceutical industry which is primarily used to facilitate research.
The total of drawdowns from funds and co-investments during the quarter is GBP16.5 million. GBP12.3 million of this was accounted for by drawdowns from the portfolio of funds covering a wide range of new investments and some follow on investment into existing holdings in the co-investment portfolio.
The largest drawdown was for TDR Capital II which drew GBP4.1 million as our share of the capital to create additional value in modular buildings company Algeco Scotsman. As noted above, Apposite Healthcare II has started with a partially invested portfolio of four holdings and GBP1.2 million was drawn for these. GBP0.9 million was called from SEP V, principally for software company, Dotmatics, as described above. GBP0.5 million was called from Nordic Fund Summa I for its first four investments; Sortera (construction waste bags), eGain (energy saving), Lin Education (digitalisation of learning) and Summa Digital (a combination of three 'big data' analytics companies). Inflexion Enterprise IV has called GBP0.4 million for three investments; MyPolicy (telematics insurance broker and MGA), Prolabs (optical transceivers for fibreoptics) and Virgin Experience Days. In the US Blue Point Capital III called GBP0.4 million for SASE, a provider of various products for the polishing of concrete. There were two follow on investments in co-investments; GBP0.6 million to Burgess Marine and GBP0.4 million to David Phillips.
Realisations
There were realisations totalling GBP24.2 million and income of GBP0.9 million in the third quarter. This gives a total for the first nine months of GBP51.9 million which is approximately a third more than at the same stage in 2016.
The largest exit was of GBP6.2 million when our co-investment in the Stirling Square led security products company 3si was sold in two parts to US private equity house LLR and to a European trade buyer. This was a much longer hold than expected at almost 11 years and during that time the company has had some challenges, which have necessitated a substantial, but ultimately successful, updating of its product range. The net return is 1.9x and an IRR of 9% which, whilst sub optimal, is creditable given the difficulties the company has faced. GBP1.8 million was distributed by Blue Point Capital III from shoe insole company Ortholite which has been sold to Trilantic North America achieving an excellent 7x investment. The German speaking area of Europe has been especially strong for exits this quarter. The remaining holding in vacuum valves company VAT Holdings, which is now listed, was sold down for Capvis Funds III and IV, together returning GBP1.4 million. This investment has achieved 5.2x and an IRR of 82%. DBAG V had no less than three exits returning a total of GBP6.4 million. Formel D (automotive documentation) achieved 4.9x on its sale to 3i. ProXES (process machinery) made 5.5x on its sale to Capvis (our share GBP0.3 million). Romaco (machinery for pharmaceutical packaging) was partially sold to Chinese engineering group Truking for 2.4x cost. In addition to this DBAG VI returned GBP1.4 million with the sale of tutoring business Schulerhilfe to Oakley Capital which represented 3.9x cost and an IRR of 51%. In Iberia, N+1 Private Equity II exited Probos, the world's third largest producer of edgebands for the furniture industry by selling to industrial buyer Surtico SE. This returned GBP1.6 million which was 2.1x cost and an IRR of 18%. In France Chequers Capital XV distributed GBP0.4 million from the sale of Accleya (IT for the aviation industry) which has been sold to Mercator achieving 11.7x cost and an IRR of 36%. Lastly GBP0.8 million came in from TDR Capital II from the sale of MCS Group, which itself had developed out of the US business of property services company VPS. This represented 2.4x cost.
Valuation Changes
There were a considerable number of uplifts reflecting good underlying progress for a range of companies. The net impact of these has been partially offset by a small number of downgrades.
On the upside, we have uplifted Ambio Holdings by GBP3.2 million. The company, which specialises in producing API (active pharmaceutical ingredient) for a range of generic and patented peptide oriented drugs, has traded very strongly. Chequers Capital XV is uplifted by GBP0.9 million mainly due to the strong progress of its holding, Store Electronics Systems, which provides electronic shelf labelling systems for the food retail sector. Procuritas Capital IV, one of our principal Nordic exposures, is up by GBP0.9 million mainly due to further progress by ice cream machinery company Green Magnum. Lyceum Capital III is up by GBP0.6 million reflecting good progress across a number of holdings. Ciclad 5, one of our longest standing French relationships, is uplifted by GBP0.6 million mainly due to the exit of Seabird, a financial consultancy focusing on the insurance industry, which has been sold achieving 3.6x cost and an IRR of 52%. SEP IV is up by GBP0.5 million mainly due to the sale of online luxury retailer Matchesfashion to Apax which completed after the quarter end with an excellent outcome of 8.3x cost and an IRR of 55%.
There was a downgrade in Burgess Marine (GBP1.2 million) which is in the midst of a reconstruction. Pentech II is down by GBP0.6 million mainly because the putative merger of FanDuel with US company DraftKings has been blocked by the Federal Trade Commission. PineBridge New Europe II is down by GBP0.4 million mainly because of the write off of Polish convenience store company Malpka, which has been a problem investment for some time. Schaetti, the specialist adhesives company based in Switzerland has been reduced by GBP0.4 million to reflect difficult trading and Calucem, the Croatia based specialist cement company is down by GBP0.3 million due to reduced sales volumes in the refractory market.
Financing
The Company is in a strong financial position with net cash of GBP15.5 million at 30 September. There has been minimal impact from exchange rate movements over the quarter. All of our GBP70 million borrowing facility remains available for new investments. The new quarterly dividend means that a payment of approximately GBP2.6 million will be made in late January 2018.
Outlook
There are a number of new funds, co-investments and secondaries at advanced stages of the investment process and these are likely to complete by the year end. There is substantial dealflow in each section and we are constantly assessing opportunities looking for distinctive ways of building shareholder value for the future. In the UK market the Brexit negotiations occupy the minds of many business people to an increasing extent, although it is our view that this has been fully priced into deal values since the Referendum last year. In Continental Europe, the improved economic background has provided some useful support to deal activity and valuations across most of the individual geographies. The general tenor of the market is of good progress in underlying earnings with a small number of exceptions where company specific issues are being addressed. As always the quality of management and the support received from the private equity lead is critical in handling difficult challenges. This is an area on which we, with our investment partners, place much emphasis. The price of new deals is generally at the upper end of the historic range but this varies considerably by size and by sector. Private equity managers invest on an absolute return basis and are not obliged to invest if pricing means that their target returns are unlikely to be met. The market is very broad and our portfolio deliberately covers a range of sectors and styles within its mid-market focus and in any given time period our investment partners, in aggregate, will always find some attractive investments with potential for long term value growth. There are excellent prospects for further growth in shareholder value over the remainder of the year.
Hamish Mair
Investment Manager
F&C Investment Business Limited
F&C Private Equity Trust plc
Statement of Comprehensive Income for the
nine months ended 30 September 2017
(Unaudited)
Revenue Capital Total
GBP'000 GBP'000 GBP'000
----------------------------------------- --------- --------- ---------
Income
Gains on investments held at fair
value - 17,889 17,889
Exchange losses - (802) (802)
Investment income 1,001 - 1,001
Other income 33 - 33
----------------------------------------- --------- --------- ---------
Total income 1,034 17,087 18,121
----------------------------------------- --------- --------- ---------
Expenditure
Investment management fee - basic
fee (479) (1,438) (1,917)
Investment management fee - performance
fee - (2,175) (2,175)
Other expenses (562) - (562)
----------------------------------------- --------- --------- ---------
Total expenditure (1,041) (3,613) (4,654)
----------------------------------------- --------- --------- ---------
(Loss)/profit before finance costs
and taxation (7) 13,474 13,467
Finance costs (321) (964) (1,285)
----------------------------------------- --------- --------- ---------
(Loss)/profit before taxation (328) 12,510 12,182
Taxation - - -
(Loss)/profit for period/total
comprehensive income (328) 12,510 12,182
========================================= ========= ========= =========
Return per Ordinary Share - Basic (0.44)p 16.92p 16.48p
Return per Ordinary Share - Fully
diluted (0.44)p 16.92p 16.48p
========================================= ========= ========= =========
F&C Private Equity Trust plc
Statement of Comprehensive Income for the
nine months ended 30 September 2016
(Unaudited)
Revenue Capital Total
GBP'000 GBP'000 GBP'000
----------------------------------------- --------- --------- ---------
Income
Gains on investments held at fair
value - 33,962 33,962
Exchange losses - (3,927) (3,927)
Investment income 630 - 630
Other income 45 - 45
----------------------------------------- --------- --------- ---------
Total income 675 30,035 30,710
----------------------------------------- --------- --------- ---------
Expenditure
Investment management fee - basic
fee (424) (1,273) (1,697)
Investment management fee - performance
fee - (1,508) (1,508)
Other expenses (547) - (547)
----------------------------------------- --------- --------- ---------
Total expenditure (971) (2,781) (3,752)
----------------------------------------- --------- --------- ---------
(Loss)/profit before finance costs
and taxation (296) 27,254 26,958
Finance costs (313) (940) (1,253)
----------------------------------------- --------- --------- ---------
(Loss)/profit before taxation (609) 26,314 25,705
Taxation - - -
(Loss)/profit for period/total
comprehensive income (609) 26,314 25,705
========================================= ========= ========= =========
Return per Ordinary Share - Basic (0.84)p 36.04p 35.20p
Return per Ordinary Share - Fully
diluted (0.83)p 35.59p 34.76p
========================================= ========= ========= =========
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
Amounts Recognised as Dividends
Nine months Nine months Year
ended ended ended
30 September 30 September 31 December
2017 (unaudited) 2016 (unaudited) 2016 (audited)
GBP'000 GBP'000 GBP'000
----------------------------------- ------------------ ------------------ ----------------
Final Ordinary Share dividend
of 5.83p per share for the
year ended 31 December 2015 - 4,251 4,251
Interim Ordinary Share dividend
of 6.12p per share for the
year ended 31 December 2016 - - 4,525
Final Ordinary Share dividend 4,791 - -
of 6.48p per share for the
year ended 31 December 2016
----------------------------------- ------------------ ------------------ ----------------
4,791 4,251 8,776
=================================== ================== ================== ================
F&C Private Equity Trust plc
Balance Sheet
As at As at As at 31
30 September 30 September December
2017 2016
(unaudited) (unaudited) 2016
(audited)
GBP'000 GBP'000 GBP'000
-------------------------------- -------------- -------------- -----------
Non-current assets
Investments at fair value
through profit or loss 254,423 235,892 239,049
-------------------------------- -------------- -------------- -----------
Current assets
Other receivables 166 21 26
Cash and cash equivalents 41,592 32,081 48,575
-------------------------------- -------------- -------------- -----------
41,758 32,102 48,601
Current liabilities
Other payables (3,210) (2,508) (3,057)
Net current assets 38,548 29,594 45,544
-------------------------------- -------------- -------------- -----------
Total assets less current
liabilities 292,971 265,486 284,593
Non-current liabilities
Interest-bearing bank
loan (26,057) (25,361) (25,070)
-------------------------------- -------------- -------------- -----------
Net assets 266,914 240,125 259,523
================================ ============== ============== ===========
Equity
Called-up ordinary share
capital 739 739 739
Share premium account 2,527 - 2,527
Special distributable
capital reserve 15,040 17,567 15,040
Special distributable
revenue reserve 31,403 31,403 31,403
Capital redemption reserve 1,335 1,335 1,335
Capital reserve 215,456 180,065 203,679
Revenue reserve 414 9,016 4,800
-------------------------------- -------------- -------------- -----------
Shareholders' funds 266,914 240,125 259,523
================================ ============== ============== ===========
Net asset value per Ordinary
Share 360.98p 324.75p 350.98p
================================ ============== ============== ===========
F&C Private Equity Trust plc
Reconciliation of Movements in Shareholders' Funds
Nine months Nine months Year
ended 30 ended 30 ended 31
September September December
2017 2016 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
----------------------------- ------------ ------------ ----------
Opening shareholders'
funds 259,523 216,125 216,125
Issue of Ordinary Shares - 2,546 2,546
Profit for the period/total
comprehensive income 12,182 25,705 49,628
Dividends paid (4,791) (4,251) (8,776)
Closing shareholders'
funds 266,914 240,125 259,523
============================= ============ ============ ==========
Notes (unaudited)
1. The unaudited quarterly results have been prepared on the basis of the accounting policies set out in the statutory accounts of the Company for the year ended 31 December 2016. Earnings for the nine months to 30 September 2017 should not be taken as a guide to the results for the year to 31 December 2017.
2. Investment management fee:
Nine months Nine months Year ended
ended ended 31 December
30 September 30 September 2016
2017 2016
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
management
fee - basic
fee 479 1,438 1,917 424 1,273 1,697 582 1,745 2,327
Investment
management
fee - performance
fee - 2,175 2,175 - 1,508 1,508 - 2,024 2,024
479 3,613 4,092 424 2,781 3,205 582 3,769 4,351
------------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
3. Finance costs:
Nine months ended Nine months Year ended
30 September ended 31 December
2017 30 September 2016
2016
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
------------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
Interest payable
on bank loan 321 964 1,285 313 940 1,253 419 1,257 1,676
4. In accordance with the Company's stated dividend policy, the Board declares a quarterly dividend of 3.55 pence per share payable on 31 January 2018 to shareholders on the register on 5 January 2018. The ex-dividend date is 4 January 2018.
This payment represents the first quarterly dividend to be paid by the Company. Previously dividends were paid on a semi-annual basis. This innovation, which was introduced to regularise the flow of income to shareholders, will result in the payment of dividends in January, April, July and October of each year.
5. The basic return per Ordinary Share is based on a net profit on ordinary activities after taxation of GBP12,182,000 (30 September 2016 - GBP25,705,000; 31 December 2016 - GBP49,628,000) and on 73,941,429 (30 September 2016 - 73,017,623; 31 December 2016 - 73,249,836) shares, being the weighted average number of Ordinary Shares in issue during the period.
The fully diluted return per Ordinary Share is based on a net profit on ordinary activities after taxation of GBP12,182,000 (30 September 2016 - GBP25,705,000; 31 December 2016 - GBP49,628,000) and on 73,941,429 (30 September 2016 - 73,941,429; 31 December 2016 - 73,941,429) shares, being the weighted average number of Ordinary Shares in issue during the period after conversion of the Ordinary Share warrants.
During the year ended 31 December 2016, the Company issued 1,959,156 Ordinary Shares of 1p each in 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. As at 30 September 2017, no warrants remain in issue (30 September 2016 - nil; 31 December 2016 - nil).
6. The net asset value per Ordinary Share is based on net assets at the period end of GBP266,914,000 (30 September 2016 - GBP240,125,000; 31 December 2016 - GBP259,523,000) and on 73,941,429 (30 September 2016 - 73,941,429; 31 December 2016 - 73,941,429) shares, being the number of Ordinary Shares in issue at the period end.
7. The financial information for the nine months ended 30 September 2017, which has not been audited or reviewed by the Company's auditor, comprises non-statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2016, on which the auditor issued an unqualified report, have been lodged with the Registrar of Companies. The quarterly report is available on the Company's website www.fcpet.co.uk.
For more information, please contact:
F&C Investment Business Limited 0131 718 1000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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November 24, 2017 02:00 ET (07:00 GMT)
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