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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Icg Enterprise Trust Plc | LSE:ICGT | London | Ordinary Share | GB0003292009 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 6.00 | 0.50% | 1,214.00 | 1,206.00 | 1,210.00 | 1,210.00 | 1,204.00 | 1,208.00 | 45,034 | 16:35:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | 187.81M | 164.53M | 2.4421 | 4.95 | 815.18M |
Hot Features
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TIDMICGT
3 October 2019
ICG ENTERPRISE TRUST PLC
Unaudited Interim Results
STRONG PERFORMANCE WITH DOUBLE DIGIT GROWTH IN THE HALF YEAR
-- NAV per share of 1,175p -- total return of 12.4%
-- Ahead of the FTSE All-Share, which returned 10.6% over the same
period
-- Continued short, medium and long-term outperformance of public
markets
-- Double digit Portfolio return; strong profit growth and realisation
uplifts
-- 10.7% local currency return on Portfolio; 14.8% in Sterling
-- Significant percentage of the growth in the six months driven by a number
of co-investments
-- 16% average LTM earnings growth from Top 30 underlying companies; 48% of
the Portfolio
-- This compares to 6% LTM EBITDA growth for the FTSE All-Share
-- GBP67m of proceeds received; 33% uplift to carrying value; 2.1x multiple
to cost
-- GBP64m of new capital deployed in the six months; 38% into high
conviction investments
-- Focus on defensive growth; two new co-investments - DOC Generici
and RegEd
-- GBP118m committed to eight funds; two new US managers added to the
Portfolio
-- Continued progress towards strategic goals
-- High conviction investments 43% of the Portfolio; average of 19.4% p.a.
net return over last five years
-- US weighting increased to 29% of the Portfolio; driven by strong
performance and new investment
-- ICG managed investments represent 21% of the Portfolio, of which half are
co-investments
-- Quarterly dividend of 5p per share
-- Total dividends for Q1 and Q2 of 10p per share
-- Oliver Gardey joins ICG to lead the investment team
-- Brings over 20 years of private equity investment experience
Performance to 31 July 2019 6 months 1 year 3 year 5 year 10(1) year
----------------------------- -------- ------ ------ ------ ----------
Net asset value per share
(total return) +12.4% +16.9% +57.1% +90.9% +241.0%
Share price (total return) +8.1% +5.5% +60.3% +71.0% +278.5%
FTSE All-Share Index (total
return) +10.6% +1.3% +27.0% +38.9% +172.5%
[1] As the Company changed its year end in 2010, the ten-year figures
are for the 121-month period to 31 July 2019.
Emma Osborne, ICG, commented"Our focus on defensive growth and companies
with non-cyclical growth drivers has again translated into double-digit
returns and I am delighted with the continued strong performance of the
portfolio. Over the last 10 years the portfolio has generated a return
of 18% p.a. and looking across the portfolio the momentum in underlying
profit growth positions it well to continue to generate strong returns
for shareholders. As I transition into my new role later this year, I am
delighted Oliver Gardey has joined to lead the investment team and I
look forward to working with Oliver and the team on the investment
committee."
Enquiries
Analyst / Investor enquiries:
Emma Osborne/Colm Walsh, Portfolio Managers, ICG
+44 (0) 20 3201 7700
Owen Jones, Investor Relations, ICG +44 (0) 20 3201 7700
Media
Alicia Wyllie, Co-Head of Corporate Communications, ICG
+44 (0) 20 3201 7917
Vikki Kosmalska, Associate Partner, Maitland AMO
+44 (0) 20 7379 5151
Financials
Six months to/as at 12 months to/as at
31 July 2019 31 January 2019
NAV per share 1,175p 1,057p
Realisations in the period GBP67m GBP163m
Realisations -- uplift to carrying
value 33% 35%
Realisations -- multiple to cost 2.1x 2.4x
Capital deployed GBP64m GBP158m
% of Capital deployed into high
conviction investments 38% 50%
New primary fund commitments GBP118m GBP162m
Notes
Included in this document are Alternative Performance Measures ("APMs").
APMs have been used if considered by the Board and the Manager to be the
most relevant basis for shareholders in assessing the overall
performance of the Company, and for comparing the performance of the
Company to its peers and its previously reported results. The Glossary
includes further details of APMs and reconciliations to IFRS measures,
where appropriate. The rationale for the APMs is discussed in detail in
the Manager's Review.
In the Chairman's Statement, Manager's Review and Supplementary
Information, reference is made to the "Portfolio". This is an APM. The
Portfolio is defined as the aggregate of the investment Portfolios of
the Company and of its subsidiary limited partnerships. The rationale
for this APM is discussed in detail in the Manager's Review. The
Glossary includes a reconciliation of the Portfolio to the most relevant
IFRS measure.
In the Chairman's Statement, Manager's Review and Supplementary
Information, all performance figures are stated on a total return basis
(i.e. including the effect of re-invested dividends).
ICG Alternative Investment Limited, a regulated subsidiary of
Intermediate Capital Group plc, acts as the Manager of the Company.
Disclaimer
This report may contain forward looking statements. These statements
have been made by the Directors in good faith based on the information
available to them up to the time of their approval of this report and
should be treated with caution due to the inherent uncertainties,
including both economic and business risk factors, underlying such
forward looking information.
These written materials are not an offer of securities for sale in the
United States. Securities may not be offered or sold in the United
States absent registration under the US Securities Act of 1933, as
amended, or an exemption therefrom. The issuer has not and does not
intend to register any securities under the US Securities Act of 1933,
as amended, and does not intend to offer any securities to the public in
the United States. No money, securities or other consideration from any
person inside the United States is being solicited and, if sent in
response to the information contained in these written materials, will
not be accepted. This report contains information which, prior to this
announcement, was inside information.
Chairman's Foreword
I am extremely pleased to report another strong period of performance
for ICG Enterprise Trust. The net asset value (NAV) has risen to GBP811m,
or 1,175p per share (Jan 19: GBP731m, 1,057p). This equates to a total
return of 12.4% over the last six months, ahead of the FTSE All-Share's
total return of 10.6% over the same period. This strong performance was
again driven by earnings growth and favourable realisations within our
Portfolio, coupled with a tailwind from foreign exchange, which had a
positive impact on our European and US valuations.
We have made further progress towards our strategic goals. High
conviction investments represent 43% of the Portfolio and are an
increasingly important driver of long-term outperformance. Our exposure
to the US, now 29% of the Portfolio, has continued to increase, driven
by strong performance and new investments and we expect our weighting to
this market to continue to grow over the next few years.
In July, we announced that ICG had appointed Oliver Gardey to lead the
investment team for Enterprise Trust, succeeding Emma Osborne who will
remain on the investment committee and move to a senior adviser role at
ICG at the end of this year. Oliver has over 20 years' experience in the
private equity industry. For the past decade, he has been a partner at
Pomona Capital where he was a member of the global investment committee.
The strength of Oliver's investment experience, alongside that of our
existing team, will be of great value to the Company and to our focus on
delivering consistently strong returns. Oliver joined the team and the
investment committee in September, and the Board look forward to working
with him.
With an opportunity set far greater than that available in the listed
market, and an active ownership model focused on creating value through
operational and strategic change, private equity has, over multiple
cycles, generated returns that have significantly outperformed public
markets. Our differentiated and selective approach to investing in
private equity continues to generate significant value and we believe
the Company is well positioned to deliver strong returns for
shareholders.
JEREMY TIGUE
CHAIRMAN
2 October 2019
MANAGER'S REVIEW
PERFORMANCE OVERVIEW
Portfolio company performance and realisation activity continue to drive
strong returns
Continued strong operating performance, and realisations at meaningful
uplifts to carrying value, generated a Portfolio return of 10.7% in the
half year, or 14.8% in Sterling. These results further extend our track
record of consistent returns with the Portfolio generating 18.1% p.a.
growth in local currencies over 10 years.
Our high conviction investments, which now represent 43% of the
Portfolio, continue to be a driver of returns with a significant
percentage of the growth in the six months driven by a number of
co-investments, both alongside ICG and third party managers. Our
Portfolio is focused on defensive growth and companies with non-cyclical
growth drivers, such as demographics, increasing regulation and the
shift towards software as a service, and it is pleasing to see many of
these themes contributing to growth in the Portfolio.
Realisations, IPOs and quoted share price movements accounted for around
a third of the underlying gain with other unrealised gains largely
driven by strong earnings growth. Notable contributors to performance
include co-investments PetSmart (a leading US pet retailer), which
successfully listed its Chewy business; Abode Healthcare (a provider of
at-home hospice care), which was sold shortly after the period end at
2.0x cost; and Ceridian (a human capital management software provider),
which was listed in 2018 and whose share price increased by almost 30%
in the six months. All three of these co-investments are based in the US
which is encouraging for our growing US programme.
Six months Year ended
Movement in the Portfolio to 31 July 31 January
GBPm 2019 2019
------------------------------------------------------ --- ---------- ----------
Opening Portfolio* 694.8 600.7
Third party funds Portfolio drawdowns 39.5 79.2
High conviction investments -- ICG funds, secondary
investments and co-investments 24.4 78.4
---------- ----------
Total new investment 63.9 157.6
Realisation Proceeds (67.5) (163.0)
---------- ----------
Net cash (inflow)/outflow (3.6) (5.4)
Underlying Valuation Movement** 74.4 90.4
Currency movement 28.7 9.1
Closing Portfolio* 794.3 694.8
---------- ----------
% underlying Portfolio growth (local currency) 10.7% 15.0%
% currency movement 4.1% 1.6%
---------- ----------
% underlying Portfolio growth (Sterling) 14.8% 16.6%
---------- ----------
* Refer to the Glossary for reconciliation to the
Portfolio balance presented in the unaudited results.
** 95% of the Portfolio is valued using 30 June 2019
(or later) valuations (31 Jan 19: 91%).
Portfolio Overview
High conviction investments underpinned by a Portfolio of leading funds
Our third party funds make up 57% of the Portfolio and underpin our
strategy by providing both a base of strong diversified returns and deal
flow for the third party direct co-investments and secondary investments
in our high conviction Portfolio. The underlying funds are focused on
mid-market and large-cap European and US private equity managers and
over the last five years this Portfolio has generated a local currency
return of 14.2% p.a.
Our high conviction investments account for 43% of the total Portfolio.
These include investments managed directly by the five ICG teams we
partner with, as well as our third party co-investments and secondary
fund investments.
The common characteristic of our high conviction investments is that ICG
selects the underlying companies, in contrast to a conventional fund of
funds in which third party managers make all the underlying investment
decisions.
Our high conviction Portfolio, which is weighted towards investments in
our Top 30 underlying companies, has generated a net return of 19.4%
p.a. over the last five years in local currencies. We have a strategic
goal to increase the weighting to these investments towards 50% - 60% of
the overall Portfolio.
31 July
2019 31 January 2019
Investment category % of Portfolio % of Portfolio
------------------------------------ -------------- ---------------
High conviction investments
ICG managed investments 21 20
Third party co-investments 17 16
Third party secondary investments 5 5
Total High conviction investments 43 41
Third party funds' Portfolio
Graphite Capital primary funds 13 15
Third party primary funds 44 44
Total diversified fund investments 57 59
------------------------------------ -------------- ---------------
Total 100 100
------------------------------------- -------------- ---------------
Our top 30 companies have reported another period of double-digit
revenue and earnings growth
Our top 30 underlying companies, which represent 48% of the Portfolio by
value and are biased to high conviction investments, continue to perform
well, reporting aggregate LTM revenue and EBITDA growth of 13% and 16%,
respectively. This compares to LTM EBITDA growth of 6% for the FTSE
All-Share. Over the six months, valuation multiples increased from 10.9x
to 11.9x, largely a reflection of the change of mix and weightings in
the Top 30 underlying companies with a modest increase in aggregate
multiples overall. The EBITDA multiples used to value our Top 30
companies not only reflect the high quality of these companies and the
strong momentum in EBITDA growth, but also public market comparable
multiples. The net debt/EBITDA ratio remains unchanged at 4.2x.
REALISATION ACTIVITY
Highly cash generative Portfolio at significant up lifts to carrying
value
The realisation environment remained supportive during the period, with
25 full exits from the Portfolio. Total proceeds received were GBP67m,
of which full exits accounted for GBP42m (or 62%).
The average realisation uplift of 33% to the previous carrying value is
broadly in line with the average over the preceding five years, as was
the average return multiple of 2.1x cost. Encouragingly, almost a third
of the realisations during the period returned more than 2.5x cost.
One Top 30 underlying company was fully realised in the period: Atlas
for Men, which was a third party primary investment and the 30th largest
holding at the start of the year, was sold by Activa Capital. A number
of other Top 30 companies were partially realised including Visma which
we held through a 2014 co-investment alongside Cinven and was sold for
2.5x cost, while our 2017 co-investment in Visma alongside ICG remains
unrealised. Other significant partial realisations from the Top 30
underlying companies include a number of share sales such as the listed
holding in Ceridian.
NEW INVESTMENT ACTIVITY
Selective investments into high conviction opportunities
Against a backdrop of high valuations for new investments and continuing
geopolitical uncertainties, we remain cautious in re-deploying capital.
We continue to be highly selective in our investment approach with a
focus on high quality, defensive businesses. We invested a total of
GBP64m in the six months with high conviction investments accounting for
38%, including two new co-investments: DOC Generici and RegEd. The ICG
network accounted for 31% of new investments.
-- DOC Generici is a leading independent generic pharmaceutical company in
Italy. It is active in the supply of drugs for the treatment of all the
common medical conditions with a strong presence in areas including
cardiovascular, gastrointestinal, metabolism and neurological treatments.
We co-invested GBP10m alongside ICG and a further GBP1m will be invested
through ICG Europe VII. DOC Generici is the third largest company in the
Italian pharmaceutical market, which is a resilient and relatively
predictable market.
-- RegEd is a leading provider of regulatory compliance software services,
primarily to broker-dealers, insurance companies and banks in the United
States. The company's customers include over 200 blue-chip customers
including 80% of the top 25 financial services firms in the US. We
invested GBP5m in RegEd alongside a new US manager, Gryphon Investors. We
expect RegEd to benefit from a number of favourable trends as its clients
transition towards greater automation and less reliance on manual
processes.
Both of these companies have defensive business models, with
demonstrated resilience to economic cycles and high cash flow conversion,
as well as strong growth drivers and clear value creation plans.
Additionally, DOC Generici features a combination of subordinated debt
and equity investments giving an element of structural downside
protection, a consistent feature of many of our investments with ICG.
Eight new commitments to both existing and new manager relationships
During the period, we completed eight fund commitments, including a new
ICG managed fund, resulting in a total of GBP118m of new fund
commitments in the six months. Of the seven third party fund commitments,
two are new managers to the Portfolio (AEA and Gryphon), with the
remainder to funds raised by managers we have backed successfully
before. Of these, two are European funds (IK and Cinven), two are global
funds (Advent and Permira), and one is a US fund (Oak Hill). The
managers we back tend to raise funds that are oversubscribed and
therefore difficult to access, and the calibre of these managers speaks
to the relationships that we have built with these firms, in most cases
over many years.
Two new relationships are both US-based:
-- AEA is one of the longest established US private firms, having been
founded in 1968. It is a highly regarded mid-market manager which we have
been tracking for over five years. It focuses on businesses in the
industrial and consumer sectors, targeting niche sub-sectors such as
packaging and high growth consumer brands. It has a highly operationally
focused approach which allows AEA to execute complex transactions
successfully such as corporate carve-outs. The investment team which will
deploy AEA VII has a successful track record of delivering consistently
strong returns through economic cycles.
-- Gryphon Investors is another long-established US manager based in San
Francisco, focused on business services, consumer, healthcare and
industrial growth. We invested in its fifth fund, which by the time of
its final close was already over half invested. This allows us to
diligence the underlying investments, as well as to deploy capital more
efficiently. Gryphon has a highly focused, thematic origination approach
which seeks to identify companies within tightly defined sub-sectors
which have characteristics aligned with our defensive growth focus.
Shortly after committing to the fund, we co-invested in a Gryphon V
investment, RegEd which is discussed above.
We also made a EUR20m commitment to ICG Europe Mid-Market fund, ICG's
latest European fund. This strategy invests in subordinated debt and
equity across a variety of European opportunities, typically with ICG as
the sole institutional investor alongside a strong management team. The
fund will follow the same successful strategy of ICG Europe, but with a
focus on smaller mid-market companies.
The first half of the year has been highly active from a new commitment
perspective, as a significant number of our preferred managers were
raising funds in this period. We expect to complete materially fewer
new funds in the second half.
PORTFOLIO ANALYSIS
Focus on mid-market and large companies
The Portfolio is weighted towards the mid-market (44%) and large deals
(48%), which we view as more defensive than smaller deal sizes,
benefiting from experienced management teams and often leading market
positions.
Portfolio becoming more geographically diverse
The Portfolio is focused on developed private equity markets: primarily
continental Europe (37%), the UK (29%) and the US (29%), with minimal
emerging markets exposure. In line with one of our strategic objectives,
our weighting to the US has increased from 14% at the time of the move
to ICG in 2016. We have a target to increase the US focus to 30% -- 40%
of the Portfolio and it is pleasing to see that a combination of
performance and new investment has resulted in us reaching the threshold
of this target in three years.
Portfolio bias towards sectors with defensive growth characteristics
The Portfolio is weighted towards sectors that primarily have
non-cyclical growth drivers, such as healthcare and education (22%),
business services (14%) and TMT (13%). The remainder of the Portfolio is
broadly spread across the industrial (20%), consumer goods and services
(14%), and leisure (8%) sectors. Even in sectors which may appear
cyclical, many of the underlying investments are focused on defensive
niches.
Portfolio vintage remains balanced
The Portfolio's maturity profile balances near-term realisation
prospects with a strong pipeline of medium to longer-term growth.
Investments completed in 2015 or earlier account for 35% of the
Portfolio, providing a pipeline of realisation opportunities in the
shorter term. Against this, 65% of value is in investments made since
2016, providing the Portfolio with medium to longer term growth
potential as value created within these businesses translates into
gains. The relatively high weighting to more recent investment reflects
both the increased deployment rate since the move to ICG, which expanded
the available opportunity set, coupled with a high level of realisations
over the last three years.
Balance sheet and financing
The Portfolio generated a net cash inflow of GBP4m during the period,
and after allowing for dividends and expenses, and the outstanding cash
balance fell to GBP47m in the half year (2019: GBP61m). After a
particularly busy first six months, outstanding commitments stood at
GBP512m. With total liquidity of GBP207m, including the undrawn bank
facility, commitments therefore exceeded liquidity by 38% of net asset
value. Of the GBP512m of outstanding commitments, GBP80m is committed to
funds that have reached the end of their investment period.
GBPm 31 July 2019 31 Jan 2019
----------------------------------------------- ------------ -----------
Portfolio* 794 695
Cash 47 61
Net obligations* (30) (25)
----------------------------------------------- ------------ -----------
Net assets 811 731
----------------------------------------------- ------------ -----------
* Refer to the Glossary for reconciliation to the
Portfolio balance presented in the unaudited results
and definition of net obligations.
Outstanding commitments 512 411
Total available liquidity (including facility) (207) (164)
------------ -----------
Overcommitment (including facility) 305 247
Overcommitment % of net asset value 38% 34%
Outstanding commitments tend to be drawn down over a four to five-year
period with approximately 10%--15% retained at the end of the investment
period to fund follow-on investments and expenses. If outstanding
commitments were to follow the expected draw down rate to the end of
their respective remaining investment periods, we estimate that
approximately GBP80m would be called over the next 12 months. This
leaves capacity for realisation proceeds to be redeployed into high
conviction investments.
Our objective is to be broadly fully invested through the cycle, while
ensuring that we have sufficient liquidity to be able to take advantage
of attractive investment opportunities as they arise. We do not intend
to be geared other than for short-term working capital purposes.
OUTLOOK
Continued cash generation and a pipeline of new opportunities
Since the period end, the Portfolio has continued to be cash generative,
with GBP38m of proceeds received in the two months to 30 September 2019.
Against this, we have invested GBP22m, including $10m to a new US based
co-investment, Vital Smarts, alongside Leeds Private equity. In addition,
we have committed $10m to a co-investment in Berlin Packaging, alongside
Oak Hill, and made two new primary fund commitments, $15m to Gridiron IV
and EUR15m to Investindustrial VII (a new European manager
relationship).
Portfolio well positioned to generate significant shareholder value
The Portfolio is increasingly geographically diverse and continues to
generate double-digit returns, with strong underlying EBITDA growth and
realisations at significant uplifts to carrying value. We are mindful of
the potential impact to market sentiment and the broader economy of
shocks generated by geopolitical events, such as Brexit. Against this
backdrop, we believe the quality of our underlying companies, our focus
on defensive growth and highly selective approach positions the
Portfolio well to continue to generate strong absolute and relative
returns for shareholders.
ICG Private Equity Funds Investment Team
2 October 2019
Supplementary information
This section presents unaudited supplementary information regarding the
Portfolio (see Manager's Review and the Glossary for further details and
definitions).
The 30 largest underlying companies
The table below presents the 30 companies in which ICG Enterprise had
the largest investments by value at 31 July 2019. These investments may
be held directly or through funds, or in some cases in both ways. The
valuations are gross and are shown as a percentage of the total
investment Portfolio.
Value as
Year of a % of
Company Manager investment Country Portfolio
------------------------------------------------------------ ---------- ----------- ------------ ---------
1 DomusVi +
Operator of retirement homes ICG 2017 France 3.6%
2 PetSmart +
BC
Retailer of pet products and services Partners 2015 USA 3.0%
3 City & County Healthcare Group
Graphite
Provider of home care services Capital 2013 UK 3.0%
4 Minimax +
Supplier of fire protection systems and services ICG 2018 Germany 2.6%
5 Froneri +^
PAI
Manufacturer and distributor of ice cream products Partners 2013 UK 2.6%
6 Yudo +
Manufacturer of components for injection moulding ICG 2018 South Korea 2.2%
7 Roompot +
PAI
Operator and developer of holiday parks Partners 2016 Netherlands 2.2%
8 nGAGE
Graphite
Provider of recruitment services Capital 2014 UK 2.0%
9 Beck & Pollitzer
Provider of industrial machinery installation and Graphite
relocation services Capital 2016 UK 1.9%
10 Visma +
Provider of accounting software and accounting outsourcing
services ICG 2017 Norway 1.7%
11 ICR Group
Provider of repair and maintenance services to the Graphite
energy industry Capital 2014 UK 1.7%
12 Gerflor^
Manufacturer of vinyl flooring ICG 2017 France 1.6%
13 Education Personnel +^
Provider of temporary staff for the education sector ICG 2014 UK 1.6%
14 System One +
Thomas H
Lee
Provider of specialty workforce solutions Partners 2016 USA 1.6%
15 IRI +
Provider of data and predictive analytics to consumer New
goods manufacturers Mountain 2018 USA 1.6%
16 Ceridian +
Thomas H
Lee
Provider of payroll and human capital software Partners 2007 USA 1.5%
17 Endeavor Schools +
Leeds
Equity
Operator of schools Partners 2018 USA 1.4%
18 Doc Generici +
Supplier of generic pharmaceuticals ICG 2019 Italy 1.4%
19 LeafFilter
Provider of gutter protection solutions Gridiron 2016 USA 1.4%
20 Abode Healthcare +
Tailwind
Provider of hospice and homecare services Capital 2018 USA 1.4%
21 YSC
Provider of leadership consulting and management assessment Graphite
services Capital 2017 UK 1.3%
22 Compass Community
Provider of fostering services and children residential Graphite
care Capital 2017 UK 0.9%
23 PSB Academy +
Provider of private tertiary education ICG 2018 Singapore 0.9%
24 U-POL
Manufacturer and distributor of automotive refinishing Graphite
products Capital 2010 UK 0.8%
25 David Lloyd Leisure +
TDR
Operator of premium health clubs Capital 2013 UK 0.8%
26 Cognito +^
Graphite
Supplier of communications equipment, software & services Capital 2002 & 2014 UK 0.7%
27 Intervias
TDR
Operator of petrol station forecourts Capital 2014 UK 0.7%
28 RegEd +
Provider of regulatory compliance and management software Gryphon
products Investors 2019 USA 0.6%
29 Alerian ^
Provider of data and investment products focused on
natural resources ICG 2018 USA 0.6%
30 ITN Networks ^
Operator of television advertising networks ICG 2016 USA 0.5%
------------------------------------------------------------ ---------- ---------------- ---------
Total of the 30 largest underlying investments 47.8%
--------------------------------------------------------------------------------------------------- ---------
All or part of this investment is held directly as
a co-investment or other direct investment.
^ All or part of this investment was acquired as part
of a secondary purchase.
The 30 largest fund investments
The table below presents the 30 largest funds by value at 31 July 2019.
The valuations are net of any carried interest provision.
Outstanding
Year of commitment
Fund commitment Country/ region Value GBPm GBPm
----------------- ---------------- ---------------- ------------ -----------
1 Graphite Capital Partners VIII *
Mid-market buyouts 2013 UK 93.7 14.9
2 ICG Europe VI **
Mezzanine and
equity in
mid-market
buyouts 2015 Europe 20.7 3.5
3 CVC European Equity Partners VI
Large buyouts 2013 Europe/USA 19.2 3.8
Gridiron Capital
4 Fund III
Mid-market buyouts 2016 North America 18.6 5.7
5 PAI Europe VI
Mid-market and
large buyouts 2013 Europe 17.3 1.0
Thomas H Lee
6 Equity Fund VII
Mid-market and
large buyouts 2015 USA 16.8 2.0
BC European
7 Capital IX **
Large buyouts 2011 Europe/USA 16.4 0.4
8 Advent Global Private Equity VIII
Large buyouts 2016 Europe/USA 14.5 1.8
9 ICG Strategic Secondaries Fund II
Secondary fund
restructurings 2016 Europe/USA 14.4 13.1
One Equity
10 Partners VI
Mid-market buyouts 2016 Europe/USA 13.2 1.1
11 Graphite Capital Partners VII * / **
Mid-market buyouts 2007 UK 12.7 4.7
12 Resolute II **
Mid-market buyouts 2018 USA 12.2 2.6
13 Sixth Cinven Fund
Large buyouts 2016 Europe/USA 12.0 7.3
14 Permira V
Large buyouts 2013 Europe/USA 10.9 1.4
15 TDR Capital III
Mid-market and
large buyouts 2013 Europe 10.9 2.3
16 ICG Europe VII
Mezzanine and
equity in
mid-market
buyouts 2018 Europe 10.8 26.3
ICG Asia Pacific
17 Fund III
Mezzanine and
equity in
mid-market
buyouts 2016 Asia Pacific 10.0 4.1
Activa Capital
18 Fund III
Mid-market buyouts 2013 France 9.5 1.5
19 Silverfleet II
Mid-market buyouts 2014 Europe 9.3 4.6
20 Hollyport Secondary Opportunities VI
Tail-end secondary
Portfolios 2017 Global 9.3 2.5
21 IK VII
Mid-market buyouts 2013 Europe 9.2 0.4
22 CVC European Equity Partners V **
Large buyouts 2008 Europe/USA 8.7 0.5
Bowmark Capital
23 Partners V
Mid-market buyouts 2013 UK 8.6 0.1
24 IK VIII
Mid-market buyouts 2016 Europe 8.5 2.4
Nordic Capital
25 Partners VIII
Mid-market and
large buyouts 2013 Europe 8.4 1.3
Oak Hill Capital
26 Partners IV
Mid-market buyouts 2017 USA 7.9 4.3
27 Fifth Cinven Fund
Large buyouts 2012 Europe 7.4 1.4
28 Deutsche Beteiligungs Fund VI
Mid-market buyouts 2012 Germany 7.3 0.8
BC European
29 Capital X
Large buyouts 2016 Europe/USA 7.1 6.9
30 Permira VI
Large buyouts 2016 Global 7.0 3.0
Total of the largest 30 fund
investments 432.5 125.7
Percentage of total investment
Portfolio 54.5%
------------------------------------ -------------------- ------------ -----------
* Includes the associated Top Up
funds.
** All or part of an interest acquired through a secondary
fund purchase.
Portfolio analysis
Closing Portfolio by value at 31 July 2018
31 July 31 January
2019 2019
% of value of % of value of
underlying underlying
Portfolio by investment type investments investments
----------------------------- -------------- --------------
Large buyouts 47.6% 44.7%
Mid-market buyouts 43.9% 47.2%
Small buyouts 5.3% 4.6%
Other 3.3% 3.5%
------------------------------ -------------- --------------
Total 100.0% 100.0%
------------------------------ -------------- --------------
Portfolio
by calendar 31 July 31 January
year of 2019 2019
investment % of value of underlying investments % of value of underlying investments
----------- ------
2019 6.8% 0.3%
2018 21.6% 20.1%
2017 19.4% 20.0%
2016 17.0% 17.9%
2015 9.4% 9.8%
2014 9.8% 11.9%
2013 8.3% 9.2%
2012 1.8% 2.8%
2011 1.1% 1.4%
2010 1.3% 1.7%
2009 1.0% 1.1%
2008 0.1% 0.3%
2007 2.0% 2.7%
2006 and before 0.4% 0.8%
-------------------- ------------------------------------- -------------------------------------
Total 100.0% 100.0%
-------------------- ------------------------------------- -------------------------------------
31 July 31 January
Portfolio by 2019 2019
sector % of value of underlying investments % of value of underlying investments
------------ ------------------------------------- -------------------------------------
Healthcare
and
education 22.1% 20.8%
Industrials 20.3% 20.6%
Consumer
goods and
services 14.3% 13.6%
Business
services 13.5% 15.8%
TMT 12.7% 11.8%
Leisure 8.1% 8.7%
Financials 5.8% 5.5%
Other 3.2% 3.2%
Total 100.0% 100.0%
------------- ------------------------------------- -------------------------------------
31 July 31 January
2019 2019
% of value of % of value of
Portfolio by geographic distribution based on location underlying underlying
of company headquarters investments investments
Europe 37.3% 38.8%
North America 29.3% 25.9%
UK 29.3% 30.9%
Rest of world 4.1% 4.4%
------------------------------------------------------- -------------- --------------
Total 100.0% 100.0%
------------------------------------------------------- -------------- --------------
Commitments analysis
The following tables analyse commitments at 31 July 2019. Original
commitments are translated at 31 July 2019 exchange rates.
Total undrawn commitments
Original Outstanding Average
commitment commitment drawdown % of
GBP'000 GBP'000 percentage commitments
------------------------- ----------- ----------- ----------- ------------
Investment period not
commenced 59,204 59,204 0.0% 11.6%
Funds in investment
period 557,966 373,096 33.1% 72.9%
Funds post investment
period 872,708 79,739 90.9% 15.6%
------------------------- ----------- ----------- ----------- ------------
Total 1,489,878 512,038 65.6% 100.0%
------------------------- ----------- ----------- ----------- ------------
Movement in outstanding commitments in 6 months ended
31 July 2019 GBPm
--------------------------------------------------------- ------
As at 1 February 2019 411.2
New primary commitments 117.9
New commitments relating to co-investments and secondary
purchases 0.1
Drawdowns (50.1)
Currency and other movements 32.9
--------------------------------------------------------- ------
As at 31 July 2019 512.0
--------------------------------------------------------- ------
New commitments during the six months to 31 July 2019
Fund Strategy Geography GBPm
---------------------- --------------------------------- ----------- ------
Primary commitments
AEA VII Mid-market buyouts USA 15.3
Gryphon V Mid-market buyouts USA 11.5
Seventh Cinven Large buyouts Europe 17.3
Advent IX Large buyouts Europe/USA 13.2
Permira VII Large buyouts Global 13.4
IK IX Mid-market buyouts Europe 13.5
Mezzanine and equity in
ICG Europe MMF mid-market buyouts Europe 17.9
Oak Hill V Mid-market buyouts USA 15.8
---------------------- --------------------------------- ----------- ------
Total primary commitments 117.9
Commitments relating to co-investments and secondary
investments 0.1
Total new commitments 118.0
======
31 July 31 July 31 January 31 January
2019 2019 2019 2019
Outstanding commitments GBPm % GBPm %
------------------------- ------- ------- ---------- ----------
-- Sterling 76.8 15.0% 83.3 20.3%
-- Euro 239.3 46.7% 172.2 41.9%
-- US Dollar 194.0 37.9% 153.9 37.4%
-- Other European 1.9 0.4% 1.8 0.4%
------------------------- ------- ------- ---------- ----------
Total 512.0 100.0% 411.2 100.0%
------------------------- ------- ------- ---------- ----------
Currency exposure
31 July 31 July 31 January 31 January
2019 2019 2019 2019
Portfolio(1) GBPm % GBPm %
----------------- -------- -------- ---------- ----------
Sterling 260.7 32.8% 241.9 34.8%
Euro 216.0 27.2% 190.8 27.5%
US Dollar 224.3 28.2% 173.3 25.0%
Other European 54.6 6.9% 53.8 7.7%
Other 38.7 4.9% 35.0 5.0%
----------------- -------- -------- ---------- ----------
Total 794.3 100.0% 694.8 100.0%
----------------- -------- -------- ---------- ----------
(1) Currency exposure is calculated by reference to
the location of the underlying Portfolio companies'
headquarters.
Realisation and new investment activity
Largest underlying realisations in the six months
to 31 July 2019
------------------------------------------------------------------------------
Year of Realisation Proceeds
Investment Manager investment type Size GBPm
------------- ------------- ------------- ------------- -------- --------
Financial
Visma Cinven 2014 buyer Full 8.3
Thomas H Lee Sell down
Ceridian Partners 2007 post IPO Partial 5.2
Financial
Atlas for Men Activa 2016 buyer Full 4.6
Financial
Stella ICG 2015 buyer Full 3.7
Graphite Financial
SK:N Limited Capital 2006 buyer Full 3.4
Parex CVC 2014 Trade Full 2.9
CARE Financial
Fertility Bowmark 2012 buyer Full 2.6
Allflex BC Partners 2013 Trade Full 2.6
One Equity
Pioneer Partners 2017 Trade Full 2.2
Financial
Intervias TDR Capital 2014 buyer Partial 1.5
Total of 10 largest underlying realisations 37.0
Total realisations 67.5
Largest underlying new investments in the six months
to 31 July 2019
-------------------------------------------------------------------------------------------------------------------
Investment Description Manager Country Cost* GBPm
-------------- --------------------------------------------------------------- ------------ -------- ----------
Doc Generici Supplier of generic pharmaceuticals ICG Italy 11.0
Provider of regulatory compliance and management software Gryphon
RegEd products Investors USA 5.0
Provider of community products and services which Graphite
NRS Healthcare are used to help the elderly and disabled live independently. Capital UK 2.9
Konecta Provider of business process outsourcing ICG Spain 2.0
Provider of post trade market infrastructure for global
Pirum Systems securities finance industry Bowmark UK 1.7
Jacent
Strategic
Merchandising Provider of full-service merchandising solutions Gridiron USA 1.5
Remington
Products
Company Manufacturer of footwear, foot care and related products Gridiron USA 1.5
CARE Fertility Provider of fertility treatment clinics Silverfleet UK 1.4
Viridium Provider of retirement and life assurance products Cinven Germany 1.4
SCIO Provider of electrical engineering, project management
Automation and robotic programming ICG Germany 1.3
-------------- --------------------------------------------------------------- ------------ -------- ----------
Total of 10 largest underlying new investments 29.7
------------------------------------------------------------------------------- --------------------- ----------
Total new investment 63.9
* Represents ICG's indirect exposure (share of fund
cost) plus any amounts paid for co-investments in
the period.
Principal risks and uncertainties
The principal risks and uncertainties associated with the Company's
business can be divided into the following areas:
-- Investment performance;
-- Valuation;
-- Political and macroeconomic uncertainty;
-- Private equity sector;
-- Regulatory, legislative and taxation compliance;
-- People;
-- The Manager and other third party advisers;
-- Information security;
-- Foreign exchange; and
-- Financing.
The principal risks and uncertainties facing the Company for the second
half of the financial year are substantially the same as those disclosed
in the Strategic Report and in the notes to the Financial Statements in
the Company's latest Annual Report for the year ended 31 January 2019.
INTERIM FINANCIAL STATEMENTS
INCOME STATEMENT
Half year to 31 July 2019 Half year to 31 July 2018
(unaudited) (unaudited)
Revenue Capital Revenue Capital
return return Total return return Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ----- --------- -------- -------- --------- -------- --------
Investment
returns
Income, gains
and losses
on
investments 5,257 89,622 94,879 5,746 52,121 57,867
Deposit
interest 202 -- 202 65 -- 65
Other income 22 -- 22 2 -- 2
Foreign
exchange
gains and
losses -- 1,210 1,210 -- 1,364 1,364
--------- -------- -------- --------- -------- --------
5,481 90,832 96,313 5,813 53,485 59,298
--------- -------- -------- --------- -------- --------
Expenses
Investment
management
charges 8 (1,154) (3,464) (4,618) (958) (2,872) (3,830)
Other
expenses (833) (773) (1,606) (1,051) (516) (1,567)
--------- -------- -------- --------- -------- --------
(1,987) (4,237) (6,224) (2,009) (3,388) (5,397)
--------- -------- -------- --------- -------- --------
Profit before
tax 3,494 86,595 90,089 3,804 50,097 53,901
--------- -------- -------- --------- -------- --------
Taxation (605) 605 -- (341) 341 --
--------- -------- -------- --------- -------- --------
Profit for
the period 2,889 87,200 90,089 3,463 50,438 53,901
--------- -------- -------- --------- -------- --------
Attributable
to:
--------- -------- -------- --------- -------- --------
Equity
shareholders 2,889 87,200 90,089 3,463 50,438 53,901
--------- -------- -------- --------- -------- --------
Basic and 130.30p 77.82p
diluted
earnings per
share
The columns headed 'Total' represent the income statement for the
relevant financial years and the columns headed 'Revenue return' and
'Capital return' are supplementary information, in line with the
Statement of Recommended Practice for Financial Statements of Investment
Trust Companies and Venture Capital Trusts issued by the Association of
Investment Companies. There is no Other Comprehensive Income.
The notes are an integral part of the condensed interim financial
statements.
BALANCE SHEET
31 July 31 January
2019 2019
(unaudited) (audited)
Notes GBP'000 GBP'000
--------------------------------------------- ----- ------------ ----------
Non-current assets
Investments held at fair value
Unquoted investments 7 577,237 519,806
Quoted investments 7 2,361 1,655
Subsidiary investments 7 183,894 148,611
------------ ----------
763,492 670,072
------------ ----------
Current assets
Cash and cash equivalents 46,720 60,626
Receivables 1,702 548
------------ ----------
48,422 61,174
------------ ----------
Current liabilities
Payables 557 386
------------ ----------
Net current assets 47,865 60,788
------------ ----------
Total assets less current liabilities 811,357 730,860
------------ ----------
Capital and reserves
Share capital 7,292 7,292
Capital redemption reserve 2,112 2,112
Share premium 12,936 12,936
Capital reserve 789,017 708,520
Revenue reserve -- --
------------ ----------
Total equity 811,357 730,860
------------ ----------
Net asset value per share (basic and diluted) 6 1,175.4p 1,056.5p
The notes are an integral part of the condensed interim financial
statements.
CASH FLOW STATEMENT
Half year to Half year to
31 July 31 July
2019 2018
(unaudited) (unaudited)
GBP'000 GBP'000
------------------------------------------------ ------------ ------------
Operating activities
Sale of portfolio investments 48,186 65,517
Purchase of portfolio investments (40,656) (49,547)
Net cash flows to subsidiary investments (11,329) (16,817)
Interest income received from portfolio
investments 4,349 3,752
Dividend income received from portfolio
investments 756 2,023
Other income received 224 67
Investment management charges paid (4,384) (3,673)
Other expenses paid (799) (847)
------------ ------------
Net cash (outflow)/inflow from operating
activities (3,653) 475
------------ ------------
Financing activities
Bank facility fee (1,871) (381)
Purchase of own shares into treasury (1,294) --
Equity dividends paid to shareholders (8,298) (7,619)
------------ ------------
Net cash outflow from financing activities (11,463) (8,000)
------------ ------------
Net decrease in cash and cash equivalents (15,116) (7,525)
------------ ------------
Cash and cash equivalents at beginning of
period 60,626 78,389
Net decrease in cash and cash equivalents (15,116) (7,525)
Effect of changes in foreign exchange rates 1,210 1,252
------------ ------------
Cash and cash equivalents at end of period 46,720 72,116
------------ ------------
The notes are an integral part of the condensed interim financial
statements.
STATEMENT OF CHANGES IN EQUITY
Capital Total
Share capital redemption reserve Share premium Capital reserve Revenue reserve shareholders' equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- ------------- ------------------- ------------- --------------- --------------- ---------------------
Half year to 31 July 2019 (unaudited)
Opening balance at 1 February
2019 7,292 2,112 12,936 708,520 -- 730,860
Profit for the period and total
comprehensive income -- -- -- 87,200 2,889 90,089
Dividends paid -- -- -- (5,409) (2,889) (8,298)
Purchase of own shares into
treasury -- -- -- (1,294) -- (1,294)
Closing balance at 31 July 2019 7,292 2,112 12,936 789,017 -- 811,357
------------- ------------------- ------------- --------------- --------------- ---------------------
Capital Total
Share capital redemption reserve Share premium Capital reserve Revenue reserve shareholders' equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- ------------- ------------------- ------------- --------------- --------------- ---------------------
Half year to 31 July 2018 (unaudited)
Opening balance at 1 February
2018 7,292 2,112 12,936 630,738 11,245 664,323
Profit for the period and total
comprehensive income -- -- -- 50,438 3,463 53,901
Dividends paid -- -- -- -- (7,619) (7,619)
Closing balance at 31 July 2018 7,292 2,112 12,936 681,176 7,089 710,605
------------- ------------------- ------------- --------------- --------------- ---------------------
The notes are an integral part of the condensed interim financial
statements.
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
1) GENERAL INFORMATION
ICG Enterprise Trust plc ("the Company") is registered in England and
Wales and domiciled in England. The registered office is Juxon House,
100 St Paul's Churchyard, London EC4M 8BU. The Company's objective is to
provide shareholders with long term capital growth through investment in
unquoted companies, mostly through private equity funds but also
directly.
2) UNAUDITED INTERIM REPORT
This interim financial report does not comprise statutory accounts
within the meaning of section 434 of the Companies Act 2006. Statutory
accounts for the year to 31 January 2019 were approved by the Board of
Directors on 12 April 2019 and delivered to the Registrar of Companies.
The report of the auditors on those accounts was unqualified, did not
contain an emphasis of matter paragraph and did not contain any
statements under section 498(2) or (3) of the Companies Act 2006.
3) BASIS OF PREPARATION
The interim financial report for the six months ended 31 July 2019,
comprising the condensed interim financial statements, has been prepared
in accordance with the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority and in accordance with IAS 34, 'Interim
financial reporting' as adopted by the European Union.
This interim financial report does not include all the information and
disclosures required in the annual financial statements, and should be
read in conjunction with the annual financial statements for the year to
31 January 2019, which has been prepared in accordance with
International Financial Reporting Standards ("IFRSs") as adopted by the
European Union.
The accounting policies applied are consistent with those of the annual
financial statements for the year to 31 January 2019, as described in
those annual financial statements. In order to reflect the activities of
an investment trust company, supplementary information which analyses
the income statement between items of a revenue and capital nature has
been presented alongside the income statement. In analysing total income
between capital and revenue returns, the directors have followed the
guidance contained in the Statement of Recommended Practice for
investment trusts issued by the Association of Investment Companies in
November 2014 and updated in February 2018 with consequential amendments
(referred to as the 'SORP').
IFRS 16 Leases became mandatory for the period beginning on 1 February
2019. The Company has no lease obligations, therefore the adoption of
IFRS 16 has had no material impact on the interim financial statements.
4) DIVIDS
Half year to Half year to
31 July 31 July
2019 2018
GBP'000 GBP'000
---------------------------------------------------- ------------ ------------
Second interim dividend in respect of year ended 31
January 2018 of 5.0p per share -- 3,463
Final dividend in respect of year ended 31 January
2018 of 6.0p per share -- 4,156
Third quarterly dividend in respect of year ended
31 January 2019 of 5.0p per share 3,459 --
Final dividend in respect of year ended 31 January
2019 of 7.0p per share 4,839 --
------------ ------------
Total 8,298 7,619
------------ ------------
The Company paid an interim dividend of 5p per share (totalling
GBP3.459m) in September 2019 in respect of the quarter to 30 April 2019.
The Board has approved a further interim dividend for the quarter to 31
July 2019 of 5p per share (totalling GBP3.449m) which will be paid on 6
December 2019 to shareholders on the register on 15 November 2019.
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
5) EARNINGS PER SHARE
Half year to Half year to
31 July 31 July
2019 2018
--------------------------------------------- ------------ ------------
Revenue return per ordinary share 4.18p 5.00p
Capital return per ordinary share 126.12p 72.82p
Earnings per ordinary share (basic and
diluted) 130.30p 77.82p
Weighted average number of shares 69,140,038 69,262,055
The earnings per share figures are based on the weighted average numbers
of shares set out above.
6) NET ASSET VALUE PER SHARE
The net asset value per share is calculated as the net assets
attributable to shareholders of GBP811.4m (31 January 2019: GBP730.9m)
and 69,027,055 (31 January 2019: 69,177,055) ordinary shares in issue at
the period end. There were no potentially dilutive ordinary shares, such
as options or warrants, at either period end. Calculated on both the
basic and diluted basis the net asset value per share was 1,175.4p (31
January 2019: 1,056.5p).
7) FAIR VALUES ESTIMATION
IFRS 13 requires disclosure of fair value measurements of financial
instruments categorised according to the following fair value
measurement hierarchy:
-- Quoted prices (unadjusted) in active markets for identical assets or
liabilities (level 1).
-- Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (level 2).
-- Inputs for the asset or liability that are not based on observable market
data (that is, unobservable inputs) (level 3).
The valuation techniques applied to level 1 and level 3 assets are
described in note 1 of the annual financial statements. No investments
were categorised as level 2.
The following tables present the assets that are measured at fair value
at 31 July 2019 and 31 January 2019. The Company had no financial
liabilities measured at fair value at those dates.
Level 1 Level 2 Level 3 Total
31 July 2019 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ ------- ------- ------- -------
Investments held at fair value
Unquoted investments -- indirect -- -- 443,965 443,965
Unquoted investments -- direct -- -- 133,272 133,272
Quoted investments -- direct 2,361 -- -- 2,361
Subsidiary undertakings -- -- 183,894 183,894
-------
Total investments held at fair value 2,361 -- 761,131 763,492
------- ------- ------- -------
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
7) FAIR VALUES ESTIMATION (CONTINUED)
Level 1 Level 2 Level 3 Total
31 January 2019 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ ------- ------- ------- -------
Investments held at fair value
Unquoted investments -- indirect -- -- 410,970 410,970
Unquoted investments -- direct -- -- 108,836 108,836
Quoted investments -- direct 1,655 -- -- 1,655
Subsidiary undertakings -- -- 148,611 148,611
------- ------- ------- -------
Total investments held at fair value 1,655 -- 668,417 670,072
------- ------- ------- -------
All unquoted and quoted investments are valued at fair value in
accordance with IFRS 9.
Investments in level 3 securities are in respect of private equity fund
investments and co-investments. These are held at fair value and are
calculated using valuations provided by the underlying manager of the
investment, with adjustments made to the statements to take account of
cashflow events occurring after the date of the manager's valuation,
such as realisations or liquidity adjustments. The valuations of
unquoted investments provided by underlying managers are calculated in
accordance with the 2018 IPEV Guidelines, which primarily use an
earnings multiple methodology. Investments in level 3 instruments were
in respect of private equity fund investments and directly-held private
investments. These were valued using valuations from the GP or fund
manager of the investment. A 5% increase/(decrease) in the value of
these assets would result in a GBP36.9m or 4.55% (31 January 2019:
GBP32.3m, 4.42%) increase/(decrease) in NAV.
The following tables present the changes in level 3 instruments for the
six months to 31 July 2019 and 31 January 2019.
Unquoted investments (indirect) at fair value through Unquoted investments (direct) at fair value through Subsidiary
profit or loss profit or loss undertakings Total
Six months to 31 July 2019 (unaudited) GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------------- ----------------------------------------------------- --------------------------------------------------- ------------ ---------
Opening balance at 1 February 2019 410,970 108,836 148,611 668,417
Additions 33,236 7,419 11,329 51,984
Disposals (39,629) (8,557) -- (48,186)
Gains and losses recognised in profit or loss 39,388 25,574 23,954 88,916
----------------------------------------------------- --------------------------------------------------- ------------ ---------
Closing balance at 31 July 2019 443,965 133,272 183,894 761,131
----------------------------------------------------- --------------------------------------------------- ------------ ---------
Total gains included in income statement for assets
held at the end of the period 39,388 25,574 23,954 88,916
----------------------------------------------------- --------------------------------------------------- ------------ ---------
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
7) FAIR VALUES ESTIMATION (CONTINUED)
Unquoted investments (indirect) at fair value through Unquoted investments (direct) at fair value through Subsidiary
profit or loss profit or loss undertakings Total
Six months to 31 July 2018 (unaudited) GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------------- ----------------------------------------------------- --------------------------------------------------- ------------ ----------
Opening balance at 1 February 2018 379,921 98,441 96,392 574,754
Additions 79,758 21,676 35,750 137,184
Disposals (102,631) (26,737) -- (129,368)
Gains and losses recognised in profit or loss 53,922 15,456 16,469 85,847
----------------------------------------------------- --------------------------------------------------- ------------ ----------
Closing balance at 31 July 2018 410,970 108,836 148,611 668,417
----------------------------------------------------- --------------------------------------------------- ------------ ----------
Total gains included in income statement for assets
held at the end of the period 52,157 7,892 16,469 76,518
----------------------------------------------------- --------------------------------------------------- ------------ ----------
Statement of Directors' Responsibilities
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors confirm that the interim financial statements have been
prepared in accordance with IAS 34 'Interim Financial Reporting' as
adopted by the European Union and that the business review includes a
fair review of the information required by DTR 4.2.7 and DTR 4.2.8,
namely:
-- an indication of important events that have occurred during the first six
months of the financial year and their impact on the interim financial
statements, and a description of the principal risks and uncertainties
for the remaining six months of the financial year; and
-- that there were no changes in the transactions or arrangements with
related parties as described in the last annual report that would have a
material impact on the interim financial statements
The Directors of ICG Enterprise Trust plc are listed in the ICG
Enterprise Trust plc Annual Report & Accounts for the year ended 31
January 2019, with the exception of Andrew Pomfret who stepped down from
the Board at the AGM on 27 June 2019, and Gerhard Fusenig who was
appointed as a Director on 2 September 2019: A list of current
directors is maintained on the ICG Enterprise Trust plc website:
https://www.globenewswire.com/Tracker?data=NnMWF1ZYDLl1UrWJb0eNXuojsfSm84VQ3neUqrjxjH1-lxriUqXW9P9--0wI-qmboDlqMjqjkJBQveET7OvNZEdHA4ZYPWOQyDFkv1A1lFQRwAwkwJrhywl3N-wKPNW6UTwqkEryGz0NmPILT5L2AEiMpkBd-NSJgS2DF6f0_8g=
http://www.icg-enterprise.co.uk/about-us/the-board.
GOING CONCERN
The factors likely to affect the Company's ability to continue as a
going concern were set out in the Report and Accounts for the year ended
31 January 2019. As at 31 July 2019, there have been no significant
changes to these factors. Having reviewed the Company's forecasts and
other relevant evidence, the Directors have a reasonable expectation
that the Company has adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to
adopt the going concern basis in preparing the interim financial
statements.
On behalf of the Board
Jeremy Tigue, Chairman
2 October 2019
Independent review report to ICG Enterprise Trust plc
Introduction
We have been engaged by the ICG Enterprise Trust plc (the 'Company') to
review the condensed set of financial statements in the interim
financial report for the period from 1 February 2019 to 31 July 2019,
which comprise the Balance Sheet, Income Statement, Cash Flow Statement,
Statement of Changes in Equity and the related Notes 1 to 7. We have
read the other information contained in the interim financial report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
This report is made solely to the Company in accordance with guidance
contained in International Standard on Review Engagements 2410 (UK and
Ireland) "Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company, for our work,
for this report, or for the conclusions we have formed.
Directors' Responsibilities
The interim financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing
the interim financial report in accordance with the Disclosure Guidance
and Transparency Rules of the United Kingdom's Financial Conduct
Authority.
As disclosed in Note 3, the annual financial statements of the Company
will be prepared in accordance with IFRSs as adopted by the European
Union. The condensed set of financial statements included in this
interim financial report has been prepared in accordance with
International Accounting Standard 34, "Interim Financial Reporting," as
adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the
condensed set of financial statements in the interim financial report
based on our review.
Scope of Review
We conducted our review in accordance with International Standard on
Review Engagements (UK and Ireland) 2410, "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity" issued
by the Auditing Practices Board for use in the United Kingdom. A review
of interim financial information consists of making enquiries, primarily
of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK) and consequently does not
enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the interim
financial report for the period from 1 February 2019 to 31 July 2019 is
not prepared, in all material respects, in accordance with International
Accounting Standard 34 as adopted by the European Union and the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
Ernst & Young LLP
London
2 October 2019
Glossary
Alternative Performance Measures - APMs
APMs are a term defined by the European Securities and Markets Authority
as "financial measures of historical or future performance, financial
position, or cash flows, other than a financial measure defined or
specified in the applicable financial reporting framework".
APMs are used in this report if considered by the Board and the Manager
to be the most relevant basis for shareholders in assessing the overall
performance of the Company and for comparing the performance of the
Company to its peers, taking into account industry practice. Definitions
and reconciliations to IFRS measures are provided in the main body of
the report or denoted * in this Glossary, where appropriate.
Buyout funds
Funds that acquire controlling interests in companies with a view
towards later selling those companies or taking them public.
Capital deployed*
See Total new investment
Compound Annual Growth - CAGR
Represents the annual growth rate of an investment over a specified
period of time longer than one year.
Carried interest
Equivalent to a performance fee, this represents a share of the profits
that will accrue to the underlying private equity managers, after
achievement of an agreed preferred return.
Co-investment
Investments in a single underlying company alongside a private equity
fund.
Co-investment incentive scheme accrual
The estimated value of interests in the co-investment incentive scheme
operated by the Company. At both 31 July 2019 and 31 January 2019, the
accrual was estimated as the theoretical value of the interests if the
Portfolio had been sold at its carrying value at those dates.
Commitment
The amount of capital that each limited partner agrees to contribute to
the fund which can be drawn at the discretion of the general partner.
Direct investment
Investments in a single underlying company.
Discount*
Arises when the Investment trust shares trade at a discount to NAV. In
this circumstance, the price that an investor pays or receives for a
share would be less than the value attributable to it by reference to
the underlying assets. The discount is the difference between the share
price and the NAV, expressed as a percentage of the NAV. For example, if
the NAV was 100p and the share price was 90p, the discount would be 10%.
Drawdowns
Amounts invested by the Company into funds when called by underlying
managers in respect of an existing commitment.
Earnings before interest, tax, depreciation and amortisation - EBITDA
Stands for earnings before interest, tax, depreciation and amortisation,
which is a widely used performance measure in the private equity
industry.
Enterprise value - EV
The aggregate value of a company's entire issued share capital and net
debt.
FTSE All-Share Index Total return
The change in the level of the FTSE All-Share Index, assuming that
dividends are re-invested on the day that they are paid.
Full realisations
Exit events (e.g. trade sale, sale by public offering, or sale to a
financial buyer) following which the residual exposure to an underlying
company is zero or immaterial.
Funds in investment period
Funds which are able to make new platform investments under the terms of
their fund agreements, usually up to five years after the initial
commitment.
General - GP
The entity managing a private equity fund that has been established as a
limited partnership. This is commonly referred to as the Manager.
Hedging
An investment technique designed to offset a potential loss on one
investment by purchasing a second investment that is expected to perform
in the opposite way.
High conviction*
Co-investments, ICG managed funds and secondary fund investments.
Indirect investments
Investments held in a private equity fund structure.
Initial Public Offering - IPO
An offering by a company of its share capital to the public with a view
to seeking an admission of its shares to a recognised stock exchange.
Internal Rate of Return - IRR
The annualised rate of return received by an investor in a fund. It is
calculated from cash drawn from and returned to the investor together
with the residual value of the investment.
Last Twelve Months - LTM
The time frame of the immediately preceding 12 months in reference to a
financial metric used to evaluate the company's performance.
Limited Partner - LP
An institution or individual who commits capital to a private equity
fund established as a limited partnership. These funds are generally
protected from legal actions and any losses beyond the original
investment.
Limited Partnership
One or more general partners, who have responsibility for managing the
business of the partnership and have unlimited liability, and one or
more limited partners, who do not participate in the operation of the
partnership and whose liability is ordinarily capped at their capital
and loan contribution to the partnership. In typical fund structures,
the general partner receives a priority profit share ahead of
distributions to limited partners.
Management Buy-in - MBI
A change of ownership, where an incoming management team raises
financial backing, normally a mix of equity and debt, to acquire a
business.
Management Buyout - MBO
A change of ownership, where the incumbent management team raises
financial backing, normally a mix of equity and debt, to acquire a
business it manages.
Net asset value per share / NAV per share
The value of the Company's assets attributable to one Ordinary share. It
is calculated by dividing 'shareholders' funds' by the total number of
Ordinary shares in issue. Shareholders' funds are calculated by
deducting current and long-term liabilities, and any provision for
liabilities and charges, from the Company's total assets.
Net asset value per share Total Return
The change in the Company's net asset value per share, assuming that
dividends are re-invested at the end of the quarter in which the
dividend was paid.
Net cash flows to subsidiary investments
In accordance with IFRS 10, the Company's subsidiaries are deemed to be
investment entities and are included in subsidiary investments within
the condensed interim financial statements. The net cash flows to these
entities are displayed in the cash flow statement, and include the
purchases and sales of investments, interest and dividend income, and
movements in carried interest.
Net debt
The total short term and long-term debt in a business, less cash and
cash equivalents.
Net obligations
The net amount due; comprised of receivables, assets due from
subsidiaries and co-investment incentive scheme accrual.
Overcommitment*
Where private equity fund investors make commitments exceeding the
amount of cash immediately available for investment. When determining
the appropriate level of overcommitment, careful consideration needs to
be given to the rate at which commitments might be drawn down, and the
rate at which realisations will generate cash from the existing
portfolio to fund new investment.
Portfolio*
The aggregate of the investment Portfolios of the Company and of its
subsidiary limited partnerships. This is consistent with the commentary
in previous annual and interim reports. The Board and the Manager
consider that this is the most relevant basis for shareholders to assess
the overall performance of the Company and comparison with its peers.
The closest equivalent amount reported on the balance sheet is
"investments at fair value". A reconciliation of these two measures is
presented below.
Receivables
Investments Cash held by from Co-investment incentive scheme
GBPm per balance sheet subsidiaries subsidiaries accrual Portfolio
----- ------------------ ------------ ------------- ------------------------------ ---------
31
July
2019 763.5 -- (0.1) 30.9 794.3
31
Jan
2019 670.1 -- 1.7 24.7 694.8
Pre-crisis investments
Investments completed in 2008 or before, based on the date the original
deal was completed, which may differ from when the Company invested if
acquired through a secondary.
Preferred return
The preferential rate of return on an individual investment or a
portfolio of investments, which is typically 8% per annum.
Premium
The share price is higher than the NAV and investors would therefore be
paying more than the value attributable to the shares by reference to
the underlying assets.
Public to private - P2P
The purchase of all of a listed company's shares using a special-purpose
vehicle funded with a mixture of debt and unquoted equity.
Quoted company
Any company whose shares are listed or traded on a recognised stock
exchange.
Realisation proceeds*
Amounts received by the Company in respect of the Portfolio, which may
be in the form of capital proceeds or income such as interest or
dividends. In accordance with IFRS 10, the Company's subsidiaries are
deemed to be investment entities and are included in subsidiary
investments within the condensed interim financial statements.
Movements in the Cash flow statement within the condensed interim
financial statements reconcile to the movement in the Portfolio as
follows:
GBPm
------------------------------------------------------ ------
Per Cash flow statement
Sale of portfolio investments 48.2
Sale of portfolio investments, interest received
and dividends received within subsidiary investments 14.2
Interest income 4.3
Dividend income 0.8
Realisation proceeds 67.5
------
Realisations -- multiple to cost*
The average return from full exits from the Portfolio in the period on a
primary investment basis, weighted by cost.
Realisations -- uplift to carrying value*
The aggregate uplift on full exits from the Portfolio in the period
excluding publicly listed companies that were exited via sell downs of
their shares.
Secondary investments
These occur when a Company purchases existing private equity fund
interests and commitments from an investor seeking liquidity.
Share price Total Return
The change in the Company's share price, assuming that dividends are
re-invested on the day that they are paid.
Total new investment*
The total of direct co-investment and fund investment drawdowns in
respect of the Portfolio. In accordance with IFRS 10, the Company's
subsidiaries are deemed to be investment entities and are included in
subsidiary investments within the condensed interim financial
statements.
Movements in the Cash flow statement within the condensed interim
financial statements reconcile to the movement in the Portfolio as
follows:
GBPm
---------------------------------- ------
Per Cash flow statement
Purchase of portfolio investments 40.7
Purchase of portfolio investments
within subsidiary investments 23.2
------
Total new investment 63.9
------
Total Return
A performance measure that assumes the notional re-investment of
dividends. This is a measure commonly used by the listed private equity
sector and listed companies in general.
Underlying valuation movement*
The change in the valuation of the Company's Portfolio, before the
effect of currency movements.
Undrawn commitments
Commitments that have not yet been drawn down (see definition of
drawdowns).
Unquoted company
Any company whose shares are not listed or traded on a recognised stock
exchange.
Uplift on exit
The increase in gross value relative to the underlying manager's most
recent valuation prior to the announcement of the disposal. Excludes a
small number of investments that were public throughout the life of the
investment. May differ from valuation gains in the reporting period in
certain instances due to timing differences.
Valuation multiples
Earnings or revenue multiples applied in valuing a business enterprise.
Venture capital
Investing in companies at a point in that company's life cycle that is
either at the concept, start-up or early stage of development.
(END) Dow Jones Newswires
October 03, 2019 02:00 ET (06:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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