We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Customisable watchlists with full streaming quotes from leading exchanges, such as LSE, NASDAQ, NYSE, AMEX, Bovespa, BIT and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Henderson Pr | LSE:HPEQ | London | Ordinary Share | GB0030955313 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 356.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
TIDMHPEQ
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
27 April 2012
This announcement contains regulated information
Investment Objective
To conduct an orderly realisation of the assets of the Company in a manner that
seeks to maximise their value and return cash to Shareholders promptly (the
"Realisation Strategy").
Financial Highlights
31 December 31 December Change
2011 2010 %
Net Assets(1) GBP62.5m GBP62.3m 0.3%
Net Asset Value per share(1) 402.0p 330.4p 21.7%
Share price(2) 319.0p 221.5p 44.0%
Discount(1) 20.6% 33.0% N/A
Total expense ratio(1) 2.0% 2.9% N/A
FTSE All-Share Index(2) 2,857.9 3,062.9 -6.7%
LPX Indirect Index(2)*# 39.7 38.6 2.8%
LPX Europe Index (2)# 257.6 338.8 -24.0%
(1) Source: Henderson Global Investors Limited.
(2) Source: Morningstar.
TER is calculated as pre-tax operating expenses divided by average
Shareholders' Funds.
* The LPX Indirect Index represents the private equity companies most
comparable to the Company traded on a European exchange.
# Sterling adjusted.
MANAGEMENT REPORT
CHAIRMAN'S STATEMENT
2011 was an excellent year for your Company.
The execution of the Company's Realisation Strategy gathered considerable
momentum. The Portfolio Manager disposed of eight investments at satisfactory
prices generating proceeds of GBP30.9 million at values that met or exceeded
expectations. These proceeds were used mainly to repay the Company's bank
borrowings in full and to fund the GBP12.4 million return of cash to Shareholders
which occurred just prior to the year end.
Pleasingly, share price and Net Asset Value ("NAV") per share performance were
strong during the year. There was also a further significant narrowing of the
Company's share price discount to NAV per share.
Portfolio Valuation and Share Price Performance
The Company's investment portfolio again performed robustly despite the
continuing macro-economic
uncertainty across Europe. At 31 December 2011 the Company's NAV per share was
402.0p compared with 330.4p at 31 December 2010, an increase of 21.7% over the
period. Further information on the Company's investment portfolio is provided
in the Annual Report.
The Company's share price performed strongly during the year, rising by 44.0%
to 319.0p compared with a 2.8% rise in the LPX Indirect Index which includes
the private equity companies most comparable to the Company that trade on a
European exchange. The Company also significantly outperformed the FTSE
All-Share Index which experienced a 6.7% fall during the period.
Encouragingly, the Company's share price discount to NAV per share continued to
narrow falling to 20.6% by the year end. This compared favourably with 33.0% at
31 December 2010.
Page 2 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
CHAIRMAN'S STATEMENT (continued)
Balance Sheet and Liquidity
The asset realisations completed during the year generated GBP30.9 million of
cash disposal proceeds
and released the Company from GBP19.8 million of undrawn limited partnership
commitments. This led to a major improvement in the Company's balance sheet and
liquidity position. In view of this, it was possible to cancel the Company's GBP
30.0 million committed bank facility well in advance of its final maturity date
of 1 May 2012, thereby delivering considerable savings in financing costs.
Also, it should be noted that notwithstanding December's GBP12.4 million return
of cash to Shareholders, the Company ended the year with liquid assets (being
cash, cash equivalents and listed holdings) of GBP7.4 million (31 December 2010:
GBP4.8 million).
Regardless of the improvements to the Company's balance sheet and liquidity,
the Board continues to
work closely with the Portfolio Manager to assess and update the Company's
cashflow projections on
a regular basis. This process takes into account the timescales over which the
modest level of remaining
limited partnership commitments may be drawn down and underlying portfolio
investments may be realised. In the opinion of the Board the Company has
sufficient resources to meet its future commitments until the Realisation
Strategy is complete.
Realisation Strategy
On 27 September 2010 the Company's Shareholders voted decisively in favour of
the Realisation
Strategy recommended to them by the Board with the full support of the
Portfolio Manager. Whilst no fixed timeframe was stipulated for the disposal
programme, the Board's expectation was that it would be materially complete in
two years, namely around September 2012. Although considerable progress has
been made with execution of the strategy, it now seems likely that the disposal
programme will continue into 2013 as the Portfolio Manager endeavours to strike
the right balance between delivering value from the Company's investments and
returning cash to Shareholders as quickly as possible.
Separately, it should be noted that, as the disposal programme progresses and
the number of investments reduces, Shareholders face the risk of greater asset
concentration within the portfolio. This is particularly the case in relation
to Rutland Fund I's investment in Notemachine which, at the year end,
represented 34.5% of the Company's total portfolio by value. This is discussed
further in the Portfolio Manager's Review.
Related Party Transactions
During the year ended 31 December 2011, with the exception of fees paid in the
ordinary course of business, no transactions with related parties have taken
place that materially affected the financial position or performance of the
Company. Details of related party transactions are contained in the Report of
the Directors in the Annual Report.
Dividend
It remains the Company's policy to pay dividends only to the extent required to
maintain investment trust status. In this regard, it will be necessary for the
Company to declare an interim dividend for the year ended 31 December 2011, the
final amount of which will be determined when the Company's tax computations
for the year are finalised.
Page 3 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
CHAIRMAN'S STATEMENT (continued)
Summary and Outlook
The Realisation Strategy is progressing well. Disposals have been completed at
satisfactory valuations and the Company is now debt-free and liquid. During the
year the Company's share price continued to perform strongly and its share
price discount to NAV per share improved significantly.
A return of cash to Shareholders of GBP12.4 million was completed in December
2011 and the Portfolio Manager has a clear strategy for the realisation of the
remaining portfolio, with further disposals having been completed since the
year end. The Board is, of course, committed to returning further cash to
Shareholders as soon as possible over the coming months.
Whilst there is always the risk that the fragile macro-economic outlook across
Europe will negatively impact the value of the Company's remaining portfolio,
the Board is confident that, barring major macro-economic setbacks, the
Company's strategy remains both well-timed and firmly in the best interests of
Shareholders.
John Mackie CBE
Chairman
27 April 2012
Page 4 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
Principal Risks and Uncertainties
The Board has established a matrix of risks facing the Company and has put in
place a schedule of investment limits and restrictions appropriate to the
investment objective and policy to mitigate these risks as far as possible. The
principal risks which have been identified and the steps taken, where
appropriate, by the Board to mitigate these are:
? Investment strategy and performance
Inappropriate long-term investment strategies in terms of, inter alia, asset
allocation, level of gearing or manager selection may result in
underperformance of the Company against the selected comparable benchmark index
or companies within the peer group. The Board regularly considers the Company's
investment strategy and monitors performance at each Board meeting. The Board's
focus is now, however, very much on the successful execution of the Company's
Realisation Strategy.
? Long-term nature of private equity investments
Private equity investments are long-term in nature and may take a considerable
period of time to be realised.
? Financial risks of private equity
A substantial proportion of the Company's assets are invested in limited
partnerships which invest in private companies. These unquoted investments are
less readily realisable than quoted securities. Such investments may therefore
carry a higher degree of risk than quoted securities.
? Business conditions and general economy
The Company's investment returns are influenced by economic conditions in the
UK and globally. Factors such as interest rates, inflation, investor sentiment
and the availability and cost of credit could adversely affect the performance
of both the Company and its underlying investments.
The Company's assets are invested on a predominantly fund of funds basis. This
helps mitigate investment risk by providing access to a range of private equity
funds and private equity managers. In addition, the underlying portfolio is
diversified across a spread of different vintages, sectors and countries,
although the benefit of such diversification may reduce as assets are realised.
In recognising the revised investment objective of the Company the Board
regularly monitors the Company's asset allocation and the status of the
Realisation Strategy. Realised cash from the sale of investments may be
invested in liquid cash-equivalent securities, including short-dated corporate
bonds, government bonds, cash funds, or bank cash deposits pending its return
to Shareholders. A detailed analysis of the portfolio may be found in the
Annual Report. Further information on how the Company manages risk may be found
in the Internal Controls section of the Annual Report.
? Valuation and realisation uncertainty
In valuing its investments in unlisted private equity funds or limited
partnerships and in calculating its NAV, the Company relies to a significant
extent on the accuracy of financial and other information provided by these
funds to the Manager. Limited partnerships typically provide updated
(unaudited) valuations on a quarterly or six-monthly basis. The value at which
investments mature or are exited will depend on a number of factors including
the performance of the relevant general partner, the quality of underlying
portfolios and the state of the M&A and IPO markets.
? Regulatory risk
Failure to comply with applicable legal and regulatory requirements could lead
to the suspension or loss of the Company's Stock Exchange listing or result in
financial penalties.
Breach of Section 1158 of the Corporation Tax Act 2010 could lead to the loss
of the Company's investment trust status, resulting in the Company being
subject to tax on its capital gains.
Page 5 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
Principal Risks and Uncertainties (continued)
? Regulatory risk (continued)
A breach of the UKLA Listing Rules could result in suspension of the Company's
shares.
Finally, a breach of the Companies Act 2006 could lead to criminal proceedings,
financial or reputational damage.
The Board receives quarterly internal control reports produced by the Manager
to confirm or otherwise regulatory compliance during the year. The Portfolio
Manager also prepares monthly schedules of Investment Limits and Restrictions
which detail both the regulatory compliance factors and the management and
investment limits set by the Board from time to time.
? Manager
The quality of the management team employed by the Manager is an important
factor in delivering good-quality performance and the loss by the Manager of
key staff could adversely affect investment returns. In addition, the failure
of the Manager's core fund management systems might lead to the loss of data or
inaccurate reporting. The performance of the Manager is reviewed by the Board
on an ongoing basis. The Management Engagement Committee undertakes a formal
annual review of the management arrangements and makes appropriate
recommendations to the Board. The Board formally approved the continuing
appointment of the Manager on the current agreed terms at the meeting held in
November 2011.
? Operational
Disruption to, or failure of, the Manager's accounting, dealing or payment
systems or the Custodian's records could prevent the accurate reporting and
monitoring of the Company's financial position. The Company is also exposed to
the operational risk that one or more of its suppliers may not provide the
required level of service. Details of how the Board monitors the services
provided by the Manager and its other suppliers and the key elements designed
to provide effective internal control, are explained further in the Internal
Controls section of the Annual Report.
Related Party Transactions
Investment management, accounting, company secretarial and administration
services are provided to the Company by wholly-owned subsidiary companies of
Henderson Group plc ("Henderson"). This is the only related party arrangement
currently in place. Other than fees paid in the ordinary course of business,
there have been no transactions with this related party which materially
affected the financial position or performance of the Company during the year
under review. As detailed within the substantial share interests in the Annual
Report, funds managed by Henderson have interests in 30.5% of the issued share
capital of the Company.
Page 6 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
Statement under Disclosure and Transparency Rule 4.1.12
The Directors each confirm to the best of their knowledge that:
? the financial statements, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company; and
? the Report of the Directors in the Annual Report includes a fair review of
the development and performance of the business and the position of the
Company, together with a description of the principal risks and uncertainties
that the Company faces.
For and on behalf of the Board of Directors
John Mackie CBE
Chairman
27 April 2012
PORTFOLIO MANAGER'S REVIEW
Performance Overview
Following the Company's adoption of the Realisation Strategy on 27 September
2010, 2011 was
the first full year of disposal activity during what was another period of
macro-economic weakness and
market nervousness across the UK and Europe.
It is therefore pleasing to report that 2011 proved to be another excellent
year for your Company as it experienced strong share price and Net Asset Value
("NAV") per share growth and a further narrowing of its share price discount to
NAV per share. This strong performance appeared to confirm that the adoption of
the Realisation Strategy was the correct course of action and that, so far, it
has been executed efficiently.
Realisation Strategy
We made significant progress with the asset disposal programme during the year.
Eight private equity
investments were transferred or sold, comprising five unlisted limited
partnership interests, one unlisted direct investment and two listed holdings.
As anticipated, the secondary market for private equity limited partnership
interests remained competitive during 2011 despite some softening in pricing
towards the final quarter as the Eurozone crisis once again came to the fore.
We took advantage of these generally attractive market conditions by
transferring five limited partnership
interests between March and early August. These were the Company's holdings in
August Equity Partners II A, Elderstreet Capital Partners, Rutland Fund II,
Lyceum Capital Fund II and Palatine (formerly Zeus) Private Equity Fund. In
each case a competitive auction process was conducted in an attempt to maximise
investor interest in each individual holding.
The five limited partnership transfers produced cash proceeds of GBP24.1 million.
On a blended basis they
were transferred above their combined carrying value and the overall outcome
compared favourably with prevailing levels of secondary market pricing.
Importantly, the five transfers also released the Company from GBP19.8 million of
undrawn commitments.
Page 7 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
PORTFOLIO MANAGER'S REVIEW (continued)
In July the Company announced the disposal of its direct investment interests
in The Logic Group Holdings
Limited for cash of GBP4.6 million, an 82.4% premium to the Company's carrying
NAV of GBP2.5 million. This was a particularly satisfactory outcome following
what was a protracted and time-consuming sale process conducted against a
difficult macro-economic back-drop.
Finally, two listed investments were realised during the year. These were the
Company's holdings in Private Equity Investor plc and Graphite Enterprise Trust
plc which were sold for a total of GBP2.2 million, 20.1% above their combined
valuation at the 31 December 2010 year end.
In summary, therefore, cash disposal proceeds totalled GBP30.9 million during the
year and were generated at
values which met or exceeded our expectations.
Since the year end, five further asset disposals have been completed generating
GBP4.4 million of cash. These were the Company's listed investments in SVG
Capital 8.25% Convertible Bonds 2016, Wendel Investments SA, Reconstruction
Capital II and HgCapital Trust plc and its unlisted fund holding in Pragma
Capital II, a French mid-market buy-out fund. The transfer of Pragma Capital II
also released the Company from a GBP1.4 million undrawn commitment.
Portfolio Activity - Limited Partnerships
Drawdowns and Distributions
The level of drawdown activity within the Company's limited partnership fund
holdings was inevitably reduced by the transfer of five of the Company's twelve
fund investments during the year, four of which had a significant level of
undrawn investment capacity. This, combined with relatively subdued market
conditions, meant that limited partnership fund drawdowns from the Company
during the year totalled only GBP6.0 million (2010: GBP15.4 million); of this
amount, GBP4.2 million related to new transactions, the largest being Astorg IV's
investment in Saverglass, a French-based world leader in the design and
manufacture of high-quality glass bottles for spirits and fine wine. The
Company's share of this investment was GBP1.1 million.
In contrast, there was a good level of distribution activity. Limited
partnership distributions (capital and income) totalled GBP10.0 million (2010: GBP
4.0 million), as the Company's more mature funds in particular benefited from
what was generally regarded as a seller's market for good-quality European
mid-market corporate assets. The main highlight was a distribution of GBP3.1
million from August Equity Partners I following the sale of Planit Holdings, a
UK-based provider of design software and associated software services for the
woodworking, cabinet-making, engineering and stone industries. Parallel
Ventures 2006 also produced distributions totalling GBP2.6 million following
three successful underlying portfolio company exits.
Portfolio Valuation
Despite the uncertain macro-economic environment, the Company's portfolio once
again continued to
perform robustly during the year. At 31 December 2011 the value of the
Company's total portfolio,
including cash and cash equivalents, was GBP62.5 million, of which GBP55.1 million
(88.1%) represented investments in seven limited partnerships.
Due to FSA Disclosure and Transparency Rule 4.2 requiring the Company to
publish its full-year financial statements by 30 April 2012, it has not been
possible to update all limited partnership valuations using audited reports for
the year ended 31 December 2011. As a result, 60.9% by value of the limited
partnership portfolio has been valued using 31 December 2011 audited reports
and 34.1% using unaudited reports. In addition, 5.0% of the limited partnership
portfolio was valued using the sale proceeds received on 4 January 2012 from
the transfer of the Company's investment in Pragma Capital II.
Page 8 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
PORTFOLIO MANAGER'S REVIEW (continued)
Although the Company's remaining limited partnership funds were invested across
46 underlying
portfolio companies at the year end, Shareholders should note that the
Realisation Strategy has contributed to the creation of increased asset
concentration and, therefore, increased portfolio risk. It is particularly
noteworthy that the Company's two most mature remaining limited partnership
funds, Rutland Fund I and August Equity Partners I, represented 59.2% of the
Company's total portfolio at the year end. Moreover, this value resided in just
five portfolio companies, four of which were the Company's largest individual
investments by value (please refer to the "Portfolio Analysis - 10 Largest
`Underlying' Investments" included in the Annual Report). Pleasingly, each of
these four companies performed either strongly or satisfactorily during the
year. Most notably, the Company's Rutland Fund I investment in Notemachine, a
provider of ATM services in the UK and Germany, experienced a significant
improvement in its financial performance. Over the course of the year this
resulted in a GBP14.1 million uplift in the valuation of the Company's holding in
Notemachine through Rutland Fund I.
Whilst welcome, the combination of such a large uplift in value and a reducing
asset base meant that Notemachine represented 34.5% of the Company's total
portfolio value at the year end. It is therefore clear that the final outcome
for the Company's Shareholders is significantly dependent on the performance of
this particular investment and the proceeds eventually realised from it.
It should be noted that the value of Notemachine now constitutes more than
15.0% of total Company assets for the purposes of s1158. This means that the
Company will currently make no additional investment in Notemachine through
Rutland Fund I.
At 31 December 2011 the Company's remaining listed portfolio comprised six
shareholdings with a total value of GBP2.4 million.
Company Liquidity
The Company's liquidity position continued to strengthen significantly during
the year. This was for a number of reasons. Firstly, GBP17.0 million of the GBP30.9
million of asset disposal proceeds were used to repay the Company's bank
borrowings in full. Secondly, the disposal of five limited partnership
investments resulted in the Company being released from GBP19.8 million of the GBP
34.1 million of undrawn limited partnership commitments that were outstanding
at 31 December 2010. Thirdly, the Company experienced a net cash inflow from
the activities of its limited partnership holdings. Finally, the Company
exerted its usual tight cost control to preserve cash for Shareholders.
Even after the impact of the GBP12.4 million return of capital to Shareholders in
December, the Company's year end liquidity position was satisfactory with
liquid assets (being cash, cash equivalents and listed holdings) of GBP7.4
million (31 December 2010: GBP4.8 million) and limited partnership undrawn
commitments of only GBP8.4 million compared with GBP34.1 million a year previously.
It should also be noted that the transfer of Pragma Capital II just after the
year end reduced undrawn commitments by a further GBP1.4 million and also
produced GBP2.8 million of cash proceeds.
Prospects
Despite the Company's strong recent performance, it remains the case that the
value of its remaining
investment portfolio is vulnerable to any significant setback to economic
recovery in the UK and Europe and to falls in public market valuations which,
in turn, are likely to translate into lower underlying portfolio company
valuations. Also, as explained above, Shareholders must be mindful that, as the
Realisation Strategy progresses, it is creating increased asset concentration
in relation to the Company's remaining portfolio.
Page 9 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
PORTFOLIO MANAGER'S REVIEW (continued)
Despite these notes of caution, on balance, market conditions across the UK and
European private equity sector continue to favour sellers of assets such as
your Company. For example, competition for secondary purchases of limited
partnership holdings remains strong. At the same time, the Company's older
limited partnerships such as Rutland Fund I and August Equity Partners I, which
are likely to be held to maturity, should continue to benefit from the
continued lack of availability of good-quality mid-market corporate assets as
they seek exits for their remaining investments. It is the case, however, that
transactions remain difficult to close in today's uncertain markets.
With regard to timing, as mentioned in the Chairman's Statement, it is likely
that the realisation programme will now run into 2013. This is mainly due to
the need to allow for Rutland Fund I and August Equity Partners I to realise
their remaining portfolio investments as efficiently as possible.
Finally, it is currently anticipated that a further return of cash to
Shareholders will be announced within the next few months.
Ian Barrass
Portfolio Manager
Henderson Global Investors Limited
27 April 2012
Page 10 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
Investment Portfolio
The Company's investments at 31 December 2011 were:
Investment Category Country Vintage/ Valuation % of
/Region at
Investment Portfolio
date 31 December
2011
GBP'000
Rutland Fund I LP UK 2000 25,939 41.5
August Equity Partners LP UK 2001 11,045 17.7
I
Parallel Ventures 2006 LP UK 2006 5,999 9.6
Astorg IV LP France 2008 5,184 8.3
Pragma Capital II* LP France 2007 2,782 4.4
Century Capital LP US 2007 2,393 3.8
Partners Fund IV
Fondinvest Capital LP France 2007 1,725 2.8
VIII
SVG Capital 8.25% Listed UK 2007 751 1.2
Convertible Bonds 2016
*
EIH plc Listed India 2007 708 1.1
Wendel Investments SA* Listed Europe 2007 363 0.6
----------- -----------
Ten largest 56,889 91.0
investments
---------- ----------
Reconstruction Capital Listed Eastern 2007 335 0.5
II* Europe
HgCapital Trust* Listed UK 2007 113 0.2
Dinamia Listed Spain 2007 106 0.2
----------- -----------
Total investments 57,443 91.9
---------- ---------
Cash and cash 5,051 8.1
equivalents
---------- ---------
Total portfolio 62,494 100.0
====== =====
*Sold post year end
Page 11 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
Portfolio Analysis
At 31 December 2011
Type of investment by value
Type of investment Percentage of Percentage of
portfolio 2011 portfolio 2010
Limited partnerships 88% 91%
Listed funds 4% 6%
Cash and cash 8% -
equivalents
Direct unquoted - 3%
100% 100%
Geographical exposure of investments by value
Country or region Percentage of Percentage of
portfolio 2011 portfolio 2010
UK 78% 69%
Europe 17% 27%
Other 5% 4%
100% 100%
Sector exposure of underlying companies in limited partnerships by value
Sector Percentage of Percentage of
portfolio 2011 portfolio 2010
Business Services 43% 20%
Healthcare 24% 35%
Manufacturing 20% 23%
Financial 7% 5%
Consumer Services 2% 6%
Media 1% 1%
Consumer Goods - 1%
Software - 5%
Telecoms - 1%
Other 3% 3%
100% 100%
Underlying companies in limited partnerships investment vintage by value
Vintage Percentage of Percentage of
portfolio 2011 portfolio 2010
Less than 1 year 4% 9%
1 - 2 years 3% 13%
2 - 3 years 8% 14%
More than 3 years 85% 64%
Source: Henderson Global Investors Limited
Page 12 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
Portfolio Analysis - Limited Partnerships
August Equity Partners
August Equity Partners provides equity capital for management buy-outs and
buy-ins and development capital for growth businesses. It invests between GBP10
million and GBP25 million of equity in UK companies in the healthcare, media and
technology, industrial products and services and business services sectors.
www.augustequity.com
Rutland Partners
Rutland Partners ("Rutland"), founded in 1986, invests in UK and European
companies which may be underperforming, in need of restructuring or entering a
period of change. Rutland does not focus on any specific sectors and provides
equity for management buy-outs, buy-ins, public-to-privates and turnarounds. It
invests between GBP10 million and GBP50 million of equity per investment into
companies valued at between GBP20 million and GBP200 million.
www.rutlandpartners.com
Parallel Private Equity
Established in 1997, Parallel Private Equity ("Parallel") operates formal
co-investment agreements with a number of UK and European mid-market private
equity managers. Parallel will invest up to GBP10 million of equity per
transaction in companies valued at between GBP10 million and GBP400 million.
www.parallelprivateequity.com
Astorg Partners
Astorg Partners ("Astorg") is an independent French private equity manager
whose origins date back to 1983 when it was created as a joint-venture between
SUEZ and state-owned Institut de Dévelopment Industriel. Astorg will invest at
least EUR15 million of equity into companies primarily in the healthcare,
professional services and retail sectors valued between EUR100 million and EUR800
million.
www.astorg-partners.com
Fondinvest Capital
Fondinvest Capital ("Fondinvest") was founded in 1994 and is a specialist
primary fund-of-funds and secondary funds investor. It launched one of the
first secondary funds in Europe in 1996. Fondinvest currently manages over EUR2
billion and has offices in Paris, Tokyo and San Francisco.
www.fondinvest.com
Pragma Capital
Pragma Capital ("Pragma") is an independent French private equity manager
founded in 2002 by a spin-out from Crédit Agricole and Crédit Lyonnais. It
focuses on the French middle-market and will typically invest between EUR10
million and EUR35 million into companies valued at between EUR50 million and EUR250
million across a wide variety of sectors.
www.pragmacapital.fr
Century Capital Management
Century Capital Management ("Century") is a Boston based investment adviser
whose origins date back to 1928. It formed its first private equity fund in
1987 and specialises in the mid-market of the North American financial services
industry, with a focus on insurance. Century invests equity of between US$10
million and US$30 million per transaction.
www.centurycap.com
Page 13 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
Portfolio Analysis 10 Largest "Underlying" Investments
1. Notemachine
Limited partnership Rutland Fund I
Valuation GBP21.5 million
Percentage of Total Portfolio 34.5%
Notemachine is the largest cash machine supplier across the UK and the leading
independent ATM business in Europe. It currently has an estate of over 7,000
cash machines.
www.notemachine.com
2. Liberty Acquisitions ("Lifeways")
Limited partnership August Equity Partners I
Valuation GBP7.7 million
Percentage of Total Portfolio 12.4%
Lifeways is a market leading provider of supported living for people with
complex needs and is the only provider offering nationwide coverage. Lifeways
offers specialist care to over 3,200 people with challenging needs, including
autism, psychiatric or learning disabilities and acquired brain injuries, in
their own home or a community setting.
www.lifeways.co.uk
3. Advantage Healthcare
Limited partnership Rutland Fund I
Valuation GBP5.8 million
Percentage of Total Portfolio 9.2%
Advantage Healthcare was formed following the acquisition of a group of
healthcare staffing businesses from BUPA and specialises in flexible healthcare
staffing. It has a significant database of temporary nurses, doctors, other
health professionals and carers which provides staffing to the NHS, BUPA and
other private healthcare organisations to cover staff shortfalls and
fluctuating workloads.
www.advantagehealthcare.com
4. Rollford Holdings ("Rixonway")
Limited partnership August Equity Partners I
Valuation GBP3.4 million
Percentage of Total Portfolio 5.4%
Rixonway is a UK kitchen manufacturing business with a particular focus on the
social housing market. The company was established in 1979 and is located in
Dewsbury near Leeds.
www.rixonway.co.uk
5. Metalor
Limited partnership Astorg IV
Valuation GBP1.9 million
Percentage of Total Portfolio 3.1%
Metalor is an international Swiss-based group, with subsidiaries in 16
countries. It is a leading player in the field of precious metals and advanced
materials with three operating divisions: refining, advanced coating, and
electrotechnics.
www.metalor.com
Page 14 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
6. NORMA Group
Limited partnership Parallel Ventures 2006
Valuation GBP1.6 million
Percentage of Total Portfolio 2.6%
NORMA Group is a global market and technology leader in engineered joining
technologies offering more than 35,000 high-quality products and solutions to
approximately 10,000 customers around the world across a diverse range of
industries.
www.normagroup.com
7. OGF
Limited partnership Astorg IV
Valuation GBP1.1 million
Percentage of Total Portfolio 1.8%
OGF is the leading funeral services operator in France. Founded 165 years ago,
OGF operates the largest domestic network of funeral services, with 951 sales
outlets, 415 funeral homes and 45 crematoriums.
www.pfg.fr
8. Jerrold Holdings
Limited partnership Parallel Ventures 2006
Valuation GBP1.1 million
Percentage of Total Portfolio 1.8%
Jerrold Holdings is a secured lender to the residential and commercial sectors.
Founded in 1973, the company is headquartered in Manchester and operates under
the brand names of Blemain, Cheshire and Lancashire Mortgage Corporation and
Bridging Finance.
www.jerroldholdings.co.uk
9. Gras Savoye
Limited partnership Astorg IV
Valuation GBP1.0 million
Percentage of Total Portfolio 1.6%
Gras Savoye is the leading insurance broker in France. Founded in 1907, the
Group's main activities include the brokerage of insurance contracts, insurance
policy administration and advisory services.
www.grassavoye.fr
10. Saverglass
Limited partnership Astorg IV
Valuation GBP1.0 million
Percentage of Total Portfolio 1.6%
Saverglass is the world leader in the design and manufacture of high-quality
glass bottles for spirits and fine wines as well as the perfume sector.
www.saverglass.com
Page 15 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
Income Statement
for the year ended 31 December 2011
Year ended 31 December 2011 Year ended 31 December 2010
Revenue Capital Total Revenue Capital Total
return GBP return GBP return GBP return GBP
'000 '000 GBP'000 '000 '000 GBP'000
Gains on investments - 11,433 11,433 - 6,204 6,204
held at
fair value through
profit or loss
(Losses)/gains on - (54) (54) - 66 66
foreign exchange
Income 2,847 - 2,847 942 - 942
Investment management (660) - (660) (824) - (824)
fee
Administrative expenses (591) - (591) (901) - (901)
--------- ---------- ----------- --------- ---------- -----------
Return on ordinary 1,596 11,379 12,975 (783) 6,270 5,487
activities
before finance costs and
taxation
Interest payable and (123) - (123) (448) - (448)
similar charges
--------- ---------- ----------- --------- ---------- -----------
Return on ordinary 1,473 11,379 12,852 (1,231) 6,270 5,039
activities before
taxation
Taxation - - - 182 - 182
--------- ---------- ----------- --------- ---------- -----------
Return on ordinary 1,473 11,379 12,852 (1,049) 6,270 5,221
activities after finance
costs and taxation (note
6)
--------- ---------- ----------- --------- ---------- -----------
Return per Ordinary 7.9p 60.8p 68.7p (5.6)p 33.3p 27.7p
Share
--------- ---------- ----------- --------- ---------- -----------
Number of Ordinary 15,551,506 18,850,212
Shares in issue at year
end
Average number of 18,696,574 18,850,212
Ordinary Shares in issue
during the year
The total columns of this statement represent the profit and loss account of
the Company. The revenue and capital columns are supplementary to this and are
provided in accordance with guidance issued by the Association of Investment
Companies. The Company has no recognised gains or losses other than those
disclosed in the Income Statement and the Reconciliation of Movements in
Shareholders' Funds. Accordingly, no Statement of Total Recognised Gains and
Losses is presented.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the current or prior
year.
The notes form an integral part of these financial statements.
Page 16 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
Reconcilliation of Movement in Shareholders' Funds
for the year ended 31 December 2011
Year ended 31 Called-up Share Capital Capital Revenue Shareholders'
December 2011 share premium redemption reserves GBP reserve* GBP funds
capital GBP reserve '000 '000
'000 account GBP GBP'000
'000 GBP'000
Balance at 1 984 17,321 705 42,770 499 62,279
January 2011
Net return from - - - 11,379 1,473 12,852
ordinary
activities
(note 6)
Dividends paid - - - - (51) (51)
(note 5)
Tender offer of (164) - 164 (12,567) - (12,567)
own shares
Treasury shares (42) - 42 - - -
cancelled
---------- ---------- ---------- ---------- ---------- ----------
Balance at 31 778 17,321 911 41,582 1,921 62,513
December 2011
====== ====== ====== ====== ====== ======
Year ended 31 Called-up Share Capital Capital Revenue Shareholders'
December 2010 share premium redemption reserves GBP reserve* GBP funds
capital GBP reserve '000 '000
'000 account GBP GBP'000
'000 GBP'000
Balance at 1 984 17,321 705 36,500 1,548 57,058
January 2010
Net return from - - - 6,270 (1,049) 5,221
ordinary
activities
(note 6)
---------- ---------- ---------- ---------- ---------- ----------
Balance at 31 984 17,321 705 42,770 499 62,279
December 2010
====== ====== ====== ====== ====== ======
* The revenue reserve represents the amount of the Company's reserves which can
be distributed by way of a dividend.
The notes form an integral part of these financial statements.
Page 17 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
Balance Sheet
at 31 December 2011
2011 2010
GBP'000 GBP'000
Fixed assets
Investments held at fair value through 57,443 78,357
profit or loss
----------- -----------
Current assets
Debtors 337 39
Cash and cash equivalents 5,051 137
---------- ----------
5,388 176
---------- ----------
Current liabilities
Creditors - amounts falling due within (318) (603)
one year
---------- ----------
Net current assets/(liabilities) 5,070 (427)
---------- ----------
Total assets less current liabilities 62,513 77,930
---------- ----------
Creditors: amounts falling due after
more than one year
Bank loan - (15,651)
---------- ----------
Net assets 62,513 62,279
====== ======
Capital and reserves
Called-up share capital 778 984
Share premium 17,321 17,321
Capital redemption reserve 911 705
Capital reserve 41,582 42,770
Revenue reserve 1,921 499
---------- ----------
Equity Shareholders' Funds 62,513 62,279
====== ======
Net asset value per Ordinary Share 402.0p 330.4p
====== ======
The notes form an integral part of these financial statements.
Page 18 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
Cash Flow Statement
for the year ended 31 December 2011
2011 2011 2010 2010
GBP'000 GBP'000 GBP'000 GBP'000
Net cash outflow from operating 1,367 (664)
activities
Servicing of finance
Bank interest paid (170) (401)
----------- -----------
(170) (401)
Taxation
Tax refunded 9 246
----------- -----------
9 246
Financial Investment
Purchase of unlisted fixed asset (6,018) (15,372)
investments
Sale of listed fixed asset 2,444 1,469
investments
Sale of unlisted fixed asset 35,596 3,389
investments
----------- -----------
Net cash inflow/(outflow) from 32,022 (10,514)
financial investments
Equity dividends paid (51) -
Management of liquid resources
Purchase of AAA rated money market (15,801) -
funds
Sale of AAA rated money market 12,050 -
funds
------------ -----------
Net cash outflow from management (3,751) -
of liquid resources
----------- -----------
Net cash inflow/(outflow)before 29,426 (11,333)
financing
Financing
Bank loan (repaid)/drawndown (15,651) 7,923
Tender offer of own shares (12,558) -
(including expenses)
------------ -----------
(28,209) 7,923
----------- -----------
Increase/(decrease)in cash 1,217 (3,410)
======= =======
Reconciliation of net cash flow to
movement in net debt
Increase/(decrease) in cash (as 1,217 (3,410)
above)
Net funds at start of the year 137 3,481
(Losses)/gains on foreign exchange (54) 66
Net change in liquid resources 3,751 -
------------ ------------
Net funds at end of the year 5,051 137
======= =======
The notes form an integral part of these financial statements.
Page 19 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
Notes to the Financial Statements
1. Accounting policies
The principal accounting policies have been applied consistently
throughout the year ended 31 December 2011, are unchanged from 2010
and are set out below.
Basis of preparation
The financial statements have not been prepared on a going concern
basis as the Company is seeking to realise the investment portfolio,
return the capital to Shareholders and then liquidate the Company, as
outlined in the asset Realisation Strategy agreed by Shareholders on
27 September 2010. The current expectation is that the process is
likely to complete during 2013. Instead the financial statements have
been prepared on a break-up basis.
A review of the investment portfolio has been undertaken to identify
those unlisted investments that will be held until the underlying fund
investment reaches its contractual end and those that are likely to be
exited early. The former have been valued as detailed in the Annual
Report, largely based on the audited and unaudited valuations provided
by the investee funds. The valuations of the latter have been based on
the audited and unaudited valuations provided by the investee funds
less any discount that the Portfolio Manager believes will arise on
exiting the fund early. That discount amounted to GBP3.1 million.
The Company is not an investment company within the meaning of Section
833 of the Companies Act 2006; however, it conducts its affairs as an
investment trust for taxation purposes under Sections 1158-1159 of the
Corporation Tax Act 2010. As such, the Directors consider it
appropriate to present the financial statements in accordance with the
Statement of Recommended Practice `Financial Statements of Investment
Trust Companies and Venture Capital Trusts' (the `SORP'), issued by
The Association of Investment Companies in January 2009.
2. Income 2011 2010
GBP'000 GBP'000
Income from fixed asset investments
Franked income:
Dividends from listed UK investments 11 41
----------- -----------
11 41
Unfranked income:
Dividends from listed overseas 12 34
investments
Distributions from UK unlisted 2,710 798
investments
Listed UK loan stock investments 62 62
Listed UK interest distribution 3 -
----------- -----------
2,787 894
Total income from fixed asset investments 2,798 935
Other income
Deposit interest 12 7
AAA rated money market fund interest 11 -
Miscellaneous income 26 -
----------- -----------
49 7
----------- -----------
2,847 942
======= =======
Income from fixed asset investments:
Listed 88 137
Unlisted 2,710 798
----------- -----------
2,798 935
====== ======
Page 20 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
3. Investment Management Fee 2011 2010
GBP'000 GBP'000
Investment management fee - charged to revenue 660 824
----------- -----------
660 824
====== ======
Up to 30 September 2010 the Investment Management Agreement provided for a
management fee of 1.25% per annum of the Company's assets (at valuation)
invested in limited partnerships and direct equity private equity interests and
0.75% per annum on the remainder of the Company's assets. From 1 October 2010,
the management fee was fixed at a monthly fee of GBP70,000 (net of VAT) for six
months reducing to GBP50,000 (net of VAT) per month for the following 18 months.
For the year under review therefore the Company paid GBP70,000 for three months
and GBP50,000 for nine months (net of VAT).
From 1 October 2010, the hurdle for the achievement of any performance fee
would be a cash amount which must be returned to Shareholders before a
performance fee can be earned. The opening cash hurdle is GBP41,470,466,
increasing at 8% (compound) per annum. At 31 December 2011 the cash hurdle was
GBP45,655,775 compared with GBP12,492,395 which had been returned to Shareholders
at that point by way of a dividend and a cash return.
No performance fee was payable for the year to 31 December 2011 (2010: GBPnil).
Further details of the terms of the Investment Management Agreement are
provided in the Report of the Directors in the Annual Report.
4. Taxation 2011 2011 2011 2010 2010 2010
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
a) Analysis of tax
charge for the
year:
UK corporation tax - - - - - -
at 26.5%
(2010: 28.0%)
WHT on foreign - - - 1 - 1
dividend
income
Adjustment in - - - (183) - (183)
respect of prior
years
----------- ----------- ----------- ----------- ----------- -----------
Total tax for the - - - (182) - (182)
year (note 4b)
====== ====== ====== ====== ====== ======
Page 21 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
4. Taxation (continued)
b) Factors affecting tax charge for the year:
The tax assessed for the year is lower than that resulting from applying the
standard rate of corporation tax in the UK: 26.5% (2010: 28.0%). The
differences are explained below:
2011 2011 2011 2010 2010 2010
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Return on ordinary activities 1,473 11,379 12,852 (1,231) 6,270 5,039
before taxation
----------- ----------- ----------- ----------- ----------- -----------
Tax thereon at 26.5% (2010: 28.0%) 390 3,016 3,406 (345) 1,756 1,411
Tax on undistributed income of 344 - 344 888 - 888
limited partnerships
Non taxable UK dividend income (175) - (175) (233) - (233)
Non taxable foreign dividend (3) - (3) (10) - (10)
income
Non taxable capital gains - (3,016) (3,016) - (1,756) (1,756)
Utilisation of excess management (556) - (556) (299) - (299)
expenses
Prior year adjustment - - - (183) - (183)
----------- ----------- ----------- ----------- ----------- -----------
Current tax charge - - - (182) - (182)
====== ====== ====== ====== ====== ======
5. Dividends on Ordinary Shares
An interim dividend will be proposed for the year ended 31 December 2011
following the finalisation of the Company's tax computations for the year
(2010: nil). A dividend of approximately GBP51,000 (0.27p per share) was declared
and paid during the year in respect of the 2009 year end in order to comply
with Section 1158 (formerly Section 842) of the Corporation Tax Act 2010.
6. Return per Ordinary Share 2011 2011 2011 2010 2010 2010
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Attributable to Ordinary 1,473 11,379 12,852 (1,049) 6,270 5,221
Shareholders
----------- ----------- ----------- ----------- ----------- -----------
Return per Ordinary Share (7.9p) 60.8p 68.7p (5.6p) 33.3p 27.7p
====== ====== ====== ====== ====== ======
The return per Ordinary Share is based on the weighted average number of
18,696,574 Ordinary Shares in issue (2010: 18,850,212).
7. Commitments 2011 2010
GBP'000 GBP'000
The level of outstanding commitments at the year end was:
Rutland Fund I 2,839 2,898
Fondinvest Capital VIII 2,323 3,390
Pragma Capital II 1,395 2,890
Parallel Ventures 2006 817 817
Century Capital Partners Fund IV 422 797
August Equity Partners I 348 348
Astorg IV 295 1,350
August Equity Partners II A - 11,997
Rutland Fund II - 5,737
Lyceum Capital Fund II - 3,335
Palantine (formerly Zeus) Private Equity Fund - 478
Elderstreet Capital Partners - 31
----------- -----------
Outstanding commitments 8,439 34,068
======= =======
Page 22 of 22
HENDERSON PRIVATE EQUITY INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 December 2011
7. Commitments (continued)
Following the sale of the Company's holding in Pragma Capital II on 4
January 2012, outstanding commitments fell to GBP7.0 million. This is
expected to fall further as a result of additional sales of limited
partnership holdings during the course of 2012. Also, it should be
noted that any funds which are held to final maturity are unlikely to
have remaining commitments fully called as they are past their initial
five-year investment periods and also because a portion of commitments
is often held back as a contingency. Overall, therefore, it is
anticipated that drawdowns of the Company's outstanding commitments at
31 December 2011 are likely to total approximately GBP2.5 million prior
to the Company entering its planned liquidation process.
8. Net Asset Value per Ordinary Share
The Net Asset Value per Ordinary Share (which equals the net value
attributable to the Ordinary Shares at the year end calculated in
accordance with the Articles of Association) was as follows:
2011 2010
Net Asset Value per Ordinary Share 402.0p 330.4p
Net Asset Value attributable to Ordinary GBP62,513,000 GBP62,279,000
Shares of 5p
The Net Asset Value per Ordinary Share is based on 15,551,506 (2010:
18,850,212) Ordinary Shares in issue at the year end.
9. 2011Financial Information
The figures and financial information for 2011 are extracted from the
annual financial statements for that period and do not constitute the
statutory accounts. The Company's annual financial statements for the
year ended 31 December 2011 have been audited but have not yet been
delivered to the Registrar of Companies. The report of the Auditor on
the 2011 annual financial statements was unqualified, did not include
a reference to any matter to which the auditors drew attention without
qualifying the report, and did not contain any statements under
section 498 of the Companies Act 2006.
10. 2010Financial Information
The figures and financial information for 2010 are extracted from the
published Annual Report and Financial Statements for the year ended 31
December 2010 and do not constitute the statutory accounts for that
year. The 2010 Annual Report and Financial Statements has been
delivered to the Registrar of Companies and included the Report of the
Independent Auditors which was unqualified and did not contain a
statement under either section 237(2) or section 237(3) of the
Companies Act 1985 or under section 498 of the Companies Act 2006.
11. Annual Report and Financial Statements
Copies of the Annual Report and Financial Statements will be posted to
Shareholders in May 2012 and will be available on the Company's
website (www.hendersonprivateequity.com) or in hard copy format from
the Registered Office, 201 Bishopsgate, London EC2M 3AE.
12. Annual General Meeting
The Annual General Meeting will be held on Thursday 21 June 2012 at
3.00 pm at 201 Bishopsgate, London EC2M 3AE.
For further information please contact:
Ian Barrass (Portfolio Manager) Robin Archibald (Corporate
Stockbroker)
Henderson Private Equity Investment Trust plc
Winterflood Securities Limited
Telephone: 020 7818 2964
Telephone: 020 7100 0290
Sarah Gibbons-Cook (Investor Relations and PR
Manager)
Henderson Global Investors Limited
Telephone: 020 7818 3198
- ENDS -
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) are
incorporated into, or form part of, this announcement.
-MORE-
END
1 Year Henderson Pr Chart |
1 Month Henderson Pr Chart |
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
