Great Portland Estates Share Discussion Threads

[goldthorpe] 21/5/2005 10:48

Maplin's woes add to fears for private equity
By Tom Bawden
FEARS that private equity firms could be facing a spate of disasters grew, after it emerged that Maplin Electronics was close to breaching its banking covenants.....



Last year I bemoaned what I thought was a rather early sale of Maplin to Montagu Private Equity: naively believing there was more value to be extracted. Time for humble pie - well-timed Graphite Capital team and thank you! Indeed, the GPE 2004 Annual Report states "We believe that the Private Equity market is at a cyclical peak from which it is likely to fall over the next 12 to 18 months, especially if the economy slows or interest rates rise further." With other wonderful phrases such as "we shall remain enthusiastic sellers and cautious buyers."
MRG

[goldthorpe] 18/5/2005 10:18

Discount now 14.5%. Re-rating due?

[thedaidai] 05/4/2005 09:40

Graphite Capital is putting "tens on millions into an expansion programme for Sure maintenance. Not sure how much exposure GPE will have.

[thedaidai] 05/4/2005 09:34

Ridgmont has now been sold for £88m vs the Times' guestimate of £100m


GPE issued an RNS stating that the sale increased net assets per share compared with the end of December figure of 320.6p by 4.9p


No word yet on progress with the potential sale of Jane Norman mooted by the Times

[nil pd] 17/3/2005 10:49

goldthorpe, yes that would be good to know. Wonder if we should phone the company?

I think we should be trading at 300p plus a bit soon, and maybe move sideways from there until news.

[goldthorpe] 16/3/2005 18:00

A good GPE year.
Any more recent news on the sale of Jane Norman and Ridgemont,
posted by
thedaidai - 22 Feb'05 - 11:46 - 52 of 57
?

[nil pd] 16/3/2005 11:12

Well, here's the news - NAV now 320.6p



RNS Number:8149J
Graphite Enterprise Trust PLC
16 March 2005


For immediate release 16 March 2005







GRAPHITE ENTERPRISE TRUST PLC

UNAUDITED PRELIMINARY STATEMENT OF RESULTS

FOR THE YEAR TO 31 DECEMBER 2004





SUMMARY



* Net assets per share rose by 12.5%



* Total return to shareholders was #38.2 million or 14.8%



* The share price rose by 27.3%



* Realisations from the investment portfolio totalled #109.3 million



* Closing shareholders' funds were #287.6 million







FINANCIAL RESULTS


2004 2003 Change



Net assets per share 320.6p 284.9p +12.5%
attributable to ordinary
shareholders

Share price 283.0p 222.3p +27.3%

FTSE All-Share Index 2,410.75 2,207.38 +9.2%

Final dividend per share 4.3p 4.3p -

Special dividend per share 2.8p - n/a






John Sclater, Chairman, made the following statement on the results:



Performance



The net asset value per share of Graphite Enterprise increased by 12.5% in 2004,
mainly as a result of a number of profitable disposals. The share price
performed particularly strongly, rising by 27.3% in the year. These increases
compare with a rise of 9.2% in our benchmark, the FTSE All-Share Index. At the
year end shareholders' funds were #287.6 million.



Reflecting the strong share price performance, the discount of the share price
to the underlying net asset value narrowed sharply in the year from 22.0% to
11.7%. This was the lowest the discount had been since May 2001.



The objective of Graphite Enterprise is to provide shareholders with long term
capital growth measured against our benchmark, the FTSE All-Share Index. Equity
markets have been turbulent since the late 1990s, with most indices still
significantly below the peaks they reached in 1999 and 2000. In the five years
to 31 December 2004, the FTSE All-Share Index fell by 25.6% while the net asset
value per share of Graphite Enterprise rose by 0.8% and its share price fell by
12.4%.



The longer term performance of Graphite Enterprise has been strong, with
increases of 285.7% in the net asset value per share and 301.4% in the share
price in the ten years to 31 December 2004. These movements compare with an
increase of 58.5% in the FTSE All-Share Index over the same period.



Portfolio movements



In last year's annual report we commented on rising confidence and prices in the
private equity market and we anticipated that the rate of disposals from the
Graphite Enterprise portfolio would be higher in 2004. In the event the market
remained strong and conditions for disposals were excellent.



Total proceeds from the investment portfolio were #109.3 million, realising a
surplus over opening valuations of #36.1 million or 49.4%. As we took the view
that prices were unusually high, it was unsurprising that total new investments
of #29.4 million were considerably less than the exceptionally high level of
disposals. This resulted in an increase in the level of liquidity in the year.
At the same time, as anticipated in last year's report, few new fund commitments
were made in a market where, in our view, there were few high quality funds
available.



Balance sheet



At 31 December 2004 #234.8 million was invested in or committed to the
investment portfolio, representing 80.3% of total net assets. Adjusting for
further commitments of #35.9 million since the year end, this rises to 92.6%. A
year earlier, the amount invested in or committed to the portfolio represented
112.2% of total net assets. The change in 2004 was the result of the high level
of disposals.



The investment portfolio was valued at #151.4 million at the end of the year,
representing 51.8% of total net assets. Cash and near-cash were #140.8 million
(48.2%) offset by #83.3 million of commitments (28.5%). Uncommitted cash and
near-cash was therefore #57.5 million, an amount which has fallen to #21.6
million, or 7.4% of total net assets, following the commitments since the year
end. Given the nature of our commitments, uncommitted cash and near-cash is the
best measure of liquidity.



The great majority of our commitments are to funds and are contractual, long
term and binding. It is therefore essential to have sufficient liquidity
available to meet cash calls from funds, whether in cash or in borrowing
facilities. Although Graphite Enterprise is currently liquid following the
successful recent disposals, looking forward we expect commitments to exceed
liquidity once again, and it is also possible that borrowing facilities will be
required.



Share buy backs



The discount of the share price to net asset value fluctuated widely during the
year, hitting a peak of 24.8% and narrowing in the last few months to end at
11.7%. We have continued to follow the policy of enhancing shareholder returns
by buying back shares when they are available in reasonable volumes at a high
discount, while maintaining sufficient liquidity for new investments. For a
large part of 2004, however, it was not possible, for regulatory reasons, to buy
back shares when negotiations were under way to make disposals that would be
likely to affect the share price if they completed. Following the announcement
of these disposals, share buy-backs resumed.



A total of 1.075 million shares was bought back during the year at a cost of
#2.9 million. Prices paid varied between 262.0p and 270.0p, with an average
price of 266.9p, and an average discount to net asset value of 15.0%. The buy
backs enhanced net asset value per share by 0.6p.



Statement of total return and dividend



The total return for the year was #38.2 million, or 42.1p per share,
representing 14.8% of opening shareholders' funds. The capital return was #30.4
million or 33.6p per share, and the net revenue attributable to shareholders was
#7.7 million or 8.5p per share.



Net revenue increased by #3.3 million, principally as a result of higher
dividend and interest income from portfolio investments. The income included an
unusually large dividend of #2.1 million received from Maplin Electronics prior
to its sale. The increase in net revenue was partly offset by a higher tax
charge and slightly higher expenses.



The exceptional level of net revenue in 2004, and in particular the receipt of
the dividend income from Maplin, allowed Graphite Enterprise to pay a special
dividend of 2.8p per share in December. The Board is recommending an unchanged
final dividend of 4.3p per share.



International financial reporting standards (IFRS)



As a listed group which prepares consolidated accounts, Graphite Enterprise will
apply IFRS from 1 January 2005, and the first published results under IFRS will
be those for the six months ending 30 June 2005 with restatement of prior year
comparatives.



While the precise application of IFRS to investment trusts is still under
debate, it seems unlikely at this stage that it will result in any major change
to the net asset value of Graphite Enterprise.



Outlook



The UK private equity market has been unusually strong for some time, with
private company valuations at the end of 2004 higher than for many years. The
supply of debt remains plentiful, and this encourages equity providers to offer
high prices when bidding for companies. Conditions therefore remain good for
disposals, while it is often questionable whether the prices demanded for new
investments represent good value. We believe that the UK private equity market
is at a cyclical peak from which it is likely to fall over the next 12 to 18
months, especially if the economy slows or interest rates rise further.
Conditions in continental European markets have generally been similar, if not
so extreme as in the UK.



Against this background, we shall remain enthusiastic sellers of mature
companies and cautious buyers until conditions change. This may result in a
further short term increase in liquidity, leaving us well positioned to take
advantage of any downturn in the market. In the meantime there has been a
significant change in the fund market where we expect the supply of high quality
funds to increase in 2005. We have already made two commitments since the year
end and we are actively considering a number of others. The raising of these
funds is well timed in relation to our view of the market, as they will be
investing over the next three or four years when conditions for new investments
are likely to be more attractive than they are at present.



For further information, please contact:


Rod Richards / William Eccles Tel: [phone]

Graphite Capital









GRAPHITE ENTERPRISE TRUST PLC

Preliminary Statement (unaudited) for the year ended 31 December 2004



SUMMARY OF CONSOLIDATED BALANCE SHEET
At 31 December
2004 2003

#'000s #'000s

Investments listed in Great Britain 17,231 24,446
Investments listed outside Great Britain 210
168
Unlisted investments at directors' valuation 133,998 168,467
Net current assets 140,791
69,734
Total assets less current liabilities 292,230 262,815
Minority interests (4,609) (4,110)
Net assets attributable to ordinary shareholders 287,621
258,705





CONSOLIDATED STATEMENT OF TOTAL RETURN (INCORPORATING THE REVENUE ACCOUNT)


For the year ended 31 December 2004
2003


Revenue Capital Total Revenue Capital Total

#'000s #'000s #'000s #'000s #'000s #'000s

Gains and losses on investments - 38,256 38,256 -
26,319 26,319
Income (see Note 1) 11,681 - 11,681 7,537 - 7,537
Investment management charges (1,209) (3,626) (4,835) (1,076)
(3,229) (4,305)
Other expenses (874) 181 (693) (770) (152) (922)
Net return before finance costs and
tax
9,598 34,811 44,409 5,691
22,938 28,629
Interest payable and similar (1) - (1) (15) - (15)
charges
Return on ordinary activities 5,676
22,938 28,614
before tax
9,597 34,811 44,408
Tax on ordinary activities (1,864) 1,864 - (1,242) 1,245 3
Return on ordinary activities after
tax
7,733 36,675 44,408 4,434 24,183 28,617
Minority interests - (6,232) (6,232) - (1,406) (1,406)
Return attributable to equity
shareholders
7,733 30,443 38,176 4,434 22,777 27,211
Dividends in respect of ordinary
shares (equity)
Proposed final dividend (3,858) - (3,858) (3,904)
- (3,904)
Special dividend (2,512) - (2,512) - - -
Transfer to reserves 1,363 30,443 31,806 530
22,777 23,307
Return per ordinary share 8.54p 33.61p 42.15p 4.88p 25.08p 29.96p







SUMMARY OF CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 December 2004
2003
#'000s
#'000s
Net cash inflow from operating activities 2,720
943
Net cash outflow from servicing of finance (1) (15)
Net cash inflow from tax -
544
Net cash inflow/(outflow) from investing activities 79,890 (865)
Equity dividends paid (6,417) (3,904)
Net cash (outflow)/inflow from movement in liquid resources (52,792)
18,500
Net cash outflow from financing (8,610) (1,321)
Increase in cash 14,790
13,882





Reconciliation of net cash flow to movement in net liquid funds


2004 2003
#'000s #'000s #'000s
#'000s


Net liquid funds at 1 January 73,528 76,635
Increase in cash as above 14,790 13,882

Purchase/(sale) of institutional sterling funds 52,792 (18,500)
Change in net liquid funds resulting from cash flows 67,582 (4,618)
Exchange difference 269 (39)
Capitalised income 2,435 1,550
Movement of net liquid funds 70,286 (3,107)
Net liquid funds at 31 December 143,814
73,528








Note 1



Analysis of Income
2004 2003
#'000s
#'000s
Dividends 3,556 1,682
Interest from investments 3,852
3,152
Income from current asset investments 2,435 1,550
Other income 1,838 1,153
11,681
7,537







The Directors propose a final dividend of 4.3p (2003 - 4.3p) per share payable
on 25 May 2005 to shareholders registered on 22 April 2005.



The Annual General Meeting will be held at 11.30 a.m. on 18 May 2005 at The
Richmond Room, The Washington Mayfair Hotel, 5/7 Curzon Street, London W1. The
registered office of the Company is 4th Floor, Berkeley Square House, Berkeley
Square, London W1J 6BQ.



The above financial information comprises non-statutory accounts within the
meaning of Section 240 of the Companies Act 1985. The financial information for
the year ended 31 December 2003 has been extracted from published accounts for
the year ended 31 December 2003 which have been delivered to the Registrar of
Companies and on which the report of the auditors was unqualified. For the year
ended 31 December 2004 copies of the audited Report and Accounts will be posted
to shareholders on or about 15 April 2005 and copies may be obtained during
normal business hours from the Company's registered office thereafter.


By order of the Board

Graphite Capital Management Limited

Secretary

16 March 2005









This information is provided by RNS
The company news service from the London Stock Exchange
END

FR PKAKNKBKDCND

[nil pd] 15/3/2005 19:43

Nice price move today. I wonder if news is coming and someone knows something..

[goldthorpe] 23/2/2005 15:32

An acquaintance of mine did a due diligence report a couple of years ago for Graphite, concerning a company they were considering (and now own). He was very impressed with the Graphite team, particularly Andy Gray.

[thedaidai] 23/2/2005 14:32

Graphite seem to have a value realisation strategy for 2005 -the larger private equity firms appear to be awash with cash and are bidding against each other - which is fine by me


"Andy Gray, a partner at Graphite Capital, is less enthusiastic than his counterparts about prospects for investors because 'prices are high'. He believes his organisation will sell more companies from its portfolio than it takes on"

[goldthorpe] 23/2/2005 12:48

thedaidai,

Thanks for that.

In the 2003 accounts GPE owned 30% of the Ridgmont ordinary B shares. The recent refinancing raised the GPE part of the valuation from 3.1M to 6.7M.

It's quite interesting that the recent Graphite deals are to larger private equity firms.

[thedaidai] 22/2/2005 11:46

The Times reckons that Graphite Capital is considering selling Jane Norman and Ridgmont Care Homes for up £100m each. GPE's share in Jane Norman was 22% (share of Ridgmont unknown as it was refinanced during the 1st half of 2004) and the stakes were valued at £7.4m and £6.7m in the interims.

If the Times' valuations are to be believed, there could be a £20-30m (approx 10%) or so uplift in NAV on the way soon

[nil pd] 22/2/2005 10:48

agreed raxzi. I'm also in EFM (Edinburgh Dragon Trust) - the discount there is currently 7.1%

But I also agree that NAV of Graphite is going higher than 320p

Good luck!

[raxzi] 17/2/2005 12:15

goldthorpe

Buy and sells are only indications because one can't always say if a trade is a buy or a sell. For eg if the price rises (perhaps because of a buy in a narrow market), the advice of that buy trade may not appear immediately and could be (in numerical terms) closer to the latest bid than the offer price, in which case advfn will show it as a sell.

[raxzi] 17/2/2005 12:01

goldthorpe
My impression is that discounts have narrowed generally on investment companies.

[goldthorpe] 17/2/2005 11:49

Discount has narrowed to less than 10%. I wonder if a better NAV than 320p is due to be announced next month.

[goldthorpe] 12/1/2005 15:04

>1m sells today with a slight price rise?

[nil pd] 04/1/2005 10:34

RNS just out:



RNS Number:9600G
Graphite Enterprise Trust PLC
04 January 2005


ANNOUNCEMENT TO STOCK EXCHANGE

GRAPHITE ENTERPRISE TRUST PLC

4 January 2005


Graphite Enterprise Trust PLC (the "Trust") announces that the ten largest
investments at 30 September 2004, the most recent date at which the portfolio
valuations have been reviewed by the Directors, were as set out below. All
investments representing more than 5% of the gross assets of the Trust are
included.


Company


ICG Mezzanine Fund 2000

Hicks Muse Tate & Furst Europe Fund

Jane Norman

Intermediate Capital Group

U-POL

Deutsche Beteiligungs AG IV

Corpfin Capital II

Huntress Search

Computacenter

Standard Brands


The Trust announces its net asset value quarterly, with any movements in the
valuation of individual unquoted holdings that are material to the Trust
announced as they occur.

This information is provided by RNS
The company news service from the London Stock Exchange
END

[purse] 23/12/2004 22:01

What happened just before the close, more buys than sells and out the blue a 2p drop on the bid, back to square one.

[goldthorpe] 16/12/2004 12:55

Nil Pd,
Agreed, the lack of volatility is great. I bought lots at sub 2.40 at a lovely discount to NAV, hoping that the wonderful Maplin would be kept on the books until my next purchase. It's a nice stress-free way into the world of private equity, especially when you climb onto the bandwagon when few others are interested.

[nil pd] 16/12/2004 09:57

Just look at the share price go! You could make more money out of this with less anxiety than by trading a lot of AIM stocks (and frequently being in a loss situation).

[purse] 26/11/2004 13:47

I see there is a Dividend being paid, due to the high level of income.

[goldthorpe] 20/10/2004 08:20

Nil Pd,
Hopefully, they have more lucrative future uses for the cash they've recently received. I don't think the buy-backs have been particularly supporting the share price.

Personally, I would have preferred them to have hung on to Maplin for a while longer: another private equity buyer obviously saw good value in them. Anyway, perhaps they are working on similarly rewarding investments. Let's hope so.

[nil pd] 18/10/2004 10:54

goldthorpe: agreed, especially with your last comment. This is very positive. I suppose what matters now is how long will the programme of re-purchases continue and what will happen when they stop..

[goldthorpe] 16/10/2004 10:01

There are now 89,950,000 shares in issue. At the time of the 2003 report there
were about 90,805,500. I suppose it makes sense to use some of the cash from
recent displosals to buy back the shares at a 15% or so discount.
I wish they'd have bought back a million when he share price was 200p!