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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1,210.00 | 1,204.00 | 1,210.00 | 1,210.00 | 1,202.00 | 1,210.00 | 33,735 | 16:35:24 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | 187.81M | 164.53M | 2.4421 | 4.94 | 812.48M |
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TIDMICGT
7 October 2020
ICG Enterprise Trust Plc
Unaudited Interim Results for the six months ended 31 July 2020
FOCUS ON DEFENSIVE GROWTH DRIVES RESILIENT PERFORMANCE
-- NAV per share of 1,126.9p -- total return of -1.0%
-- Ahead of the FTSE All-Share, which returned -17.8% over the same
period
-- Portfolio began to recover in Q2, +3.2% total return versus -4.1%
in Q1
-- Diversified Portfolio alongside top-tier managers demonstrating
resilience in volatile markets
-- +0.1% Sterling return on the Portfolio; -3.6% local currency
return
-- +15% average LTM earnings growth from Top 30 underlying companies
which represents 47% of the Portfolio
-- This compares to -24% LTM EBITDA growth for the FTSE
All-Share
-- Continued realisation and secondary sales activity generates GBP94m of
proceeds
-- GBP39m of proceeds from realisations; 7% uplift to carrying value;
2.0x multiple to cost
-- GBP55m of proceeds received and GBP21m of undrawn commitments
released by secondary sales
-- Further selective secondary sales completed post period end to
re-balance the Portfolio and expand investment capacity
-- Strong balance sheet and available liquidity
-- GBP197m of available liquidity to fund uncalled commitments and
capitalise on new investment opportunities
-- Disciplined investment selection maintained with five new primary
fund commitments to top-tier managers
-- Strong pipeline of high conviction investments
-- Quarterly dividend of 5p per share maintained
-- Dividends for Q1 and Q2 of 5p per share; total dividends 10p
Performance to 31 July
2020 3 months 6 months 1 year 3 year 5 year 10 year
---------------------- -------- -------- ------ ------ ------ -------
Net asset value per
share (total return) +3.2% -1.0% -2.2% +28.0% +77.8% +182.7%
Share price (total
return) +8.5% -16.9% -7.4% +14.6% +51.9% +248.9%
FTSE All-Share Index
(total return) +1.2% -17.8% -17.8% -9.1% +8.4% +73.0%
Oliver Gardey, Head of Private Equity Fund Investments, ICG, commented:
"We have been pleased by the performance, realisation activity and
resilience of the portfolio through a period of extraordinary disruption
caused by the COVID-19 pandemic. These results demonstrate the benefit
of our focus on investing in market-leading, defensive growth companies,
alongside top-tier private equity managers. They also highlight, more
broadly, the benefit of the private equity model -- its focus on long
term investing means we are well suited to managing through challenging
economic cycles such as these.
"We have constructed a portfolio with strong defensive characteristics,
focused on mature buyouts in Europe and North America. Despite the
disruption caused by the pandemic, we have been able to continue our
realisation and selective secondary sales activity to help re-balance
the Portfolio and expand investment activity. It was particularly
pleasing to report PAI's agreed sale of Roompot from our high conviction
portfolio, which resulted in a significant uplift to the value of our
holding in the company.
"I would like to take this opportunity to thank our team for their
incredibly hard work during this challenging period. I take great pride
in their ability to react to changes in working environments and to
ensure continuity in actively managing the Portfolio. They have done
this superbly over the past six months.
"Previous crises have demonstrated that market dislocation and
volatility can also create opportunities. We have continued to focus on
selecting new commitments to leading fund managers and built a pipeline
of exciting high conviction investment opportunities. We believe the
decisive action we have taken in the last six months, the strength of
the current Portfolio and our commitments to some of the world's leading
buyout managers leave us well placed to continue delivering long-term
shareholder value."
Enquiries
Analyst / Investor enquiries: +44 (0) 20 3545 2000
Oliver Gardey, Head of Private Equity Fund Investments, ICG
Colm Walsh, Managing Director, Private Equity Fund Investments, ICG
James Caddy, Investor Relations, ICG
Media:
Alicia Wyllie, Co-Head of Corporate Communications, ICG
+44 (0) 20 3545 1338
Ed Gascoigne Pees, Eddie Livingstone-Learmonth, Camarco
+44 (0) 20 3757 4993
Website:
www.icg-enterprise.co.uk
Comparison to prior financial year
Six months to/as at 12 months to/as at
31 July 2020 31 January 2020
NAV per share 1,126.9p 1,152.1p
Realisations in the period (including
secondary sales) GBP94m GBP149m
Realisations -- uplift to carrying
value 7% 37%
Realisations -- multiple to cost 2.0x 2.4x
Capital deployed GBP52m GBP159m
% of Capital deployed into high
conviction investments 10% 39%
New primary fund commitments GBP35m GBP156m
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.
Chair's Foreword
In my first foreword as your Chair, I am pleased to report that your
Company has continued to demonstrate resilient performance in a period
that has been defined by severe economic contraction and stock market
volatility.
At 31 July net asset value (NAV) stood at GBP775m, or 1,127p per share
(31 Jan 20: GBP794m, 1,152p). Total return over the six months to 31
July was -1.0%, ahead of the FTSE All-Share's total return of -17.8%.
Our performance in this challenging period has been a reflection of the
Company's defensive growth investment policy; we have a well diversified
global Portfolio that is weighted towards resilient sectors. Furthermore,
our Portfolio has a bias to some of the world's best private equity
managers who have a strong operational focus and demonstrable experience
of successfully managing investments through periods of economic stress.
Despite the incredibly volatile macroeconomic backdrop to the period, we
have continued to demonstrate progress against our strategic goals. High
conviction investments now represent 44% of the Portfolio and are an
increasingly important driver of long-term outperformance. Our exposure
to the US, which stood at 24% just two years ago, now represents 35% of
the Portfolio. This progress has been driven by strong performance, new
investments and selective secondary sales.
I would like to thank my predecessor, Jeremy Tigue, for his stewardship
as Chairman over the last three years and as Board member for 12 years.
I would also like to thank Emma Osborne, who is standing down from her
senior adviser role, for her support in overseeing the transition of
leadership in the investment team. We wish them both well for the
future.
We regret to announce that due to current government guidelines we have
had to postpone our plans for an in-person shareholder meeting until
2021. We will inform shareholders of any updates in due course. Any
further shareholder questions should therefore continue to be sent to
icg-enterprise@icgam.com.
Whilst the current environment remains challenging and the outlook is
far from certain, your Company is extremely well placed to navigate the
challenges ahead. The substantial expertise of the investment team and
ICG's long track record of managing private companies through multiple
financial and economic cycles are invaluable resources. As we emerge
from the current crisis, market dislocation is likely to present
attractive investment opportunities. I am confident that through ICG
Enterprise Trust's differentiated investment approach we will take
advantage of such opportunities and continue to generate value over the
long term for our shareholders.
Jane Tufnell
Chair
6 October 2020
Manager's Review
Performance overview
Robust Portfolio performance
This has been an extraordinary six-month period, with the COVID-19
pandemic impacting all of our lives and having a far-reaching impact on
global economies. Against this backdrop, the benefit of our
long-standing investment approach of investing with well-established
managers, in resilient sectors with defensive growth characteristics has
been evident. Over the first half of the financial year the Portfolio
generated a +0.1% gain in Sterling, or an underlying decline of -3.6%,
significantly outperforming the FTSE-All Share over the same period.
On a quarter by quarter basis, the period February to April 2020 (Q1),
saw the sharpest decline in the value of the Portfolio being the period
of the greatest market uncertainty. In this period, we saw a -7.0%
underlying local currency decline and had anticipated that the impact
from COVID-19 would continue to weigh on company valuations in the
second quarter. However, as public markets stabilised and company
earnings rebounded, performance recovered and it is therefore
encouraging to report an underlying local currency gain of 3.7% in the
second quarter.
Our Portfolio is constructed with a focus on defensive growth and
companies with non-cyclical growth drivers, such as demographics,
increasing regulation and the shift towards Software-as-a-Service. The
defensive growth theme has contributed significantly to the resilience
of the Portfolio during this period.
The strength of our performance in the first half was driven by some
noteworthy contributors from our high conviction portfolio and US
investments. This included the performance of Chewy (the listed portion
of the leading US pet retailer PetSmart) within our high conviction
portfolio. As an online retailer and market leader in its space, the
company benefited significantly from a migration of demand towards
online retail channels amid the pandemic. This was evidenced by a 98%
increase in its listed share price during the period.
Outside of our high conviction portfolio, another notable contributor to
performance was Leaf Home Solutions. The business is a branded direct to
consumer platform focused on providing guttering protection and other
home safety solutions. It is part of the Gridiron III portfolio.
Throughout the period the company experienced minimal disruption to
trading and continued to deliver consistent growth. Leaf Home Solutions
is now the fifth largest company in the Portfolio.
Realisation activity has continued in the first half of the year
generating, GBP94m of proceeds of which GBP39m related to sales from our
underlying managers. We also executed several selective secondary sales
including the partial disposal of our sizeable holding in Graphite VIII.
These secondary transactions reduced the concentration of our portfolio
and expand our capacity to make new investments aligned to our strategic
goals.
Six months Year ended
Movement in the Portfolio to 31 July 31 Jan
GBPm 2020 2020
----------------------------------------------------- --- ---------- ----------
Opening Portfolio* 806.4 694.8
Third party funds Portfolio drawdowns 47.1 97.4
High conviction drawdowns -- ICG funds, secondary
investments and co-investments 5.3 61.2
---------- ----------
Total new investment*** 52.4 158.6
Realisation Proceeds (94.4) (148.8)
---------- ----------
Net cash (inflow)/outflow (42.0) 9.8
Underlying Valuation Movement** (28.7) 115.4
Currency movement 29.3 (13.6)
Closing Portfolio* 765.0 806.4
---------- ----------
% underlying Portfolio growth (local currency) (3.6%) 16.6%
% currency movement 3.7% (2.0%)
---------- ----------
% underlying Portfolio growth (Sterling) 0.1% 14.6%
---------- ----------
* Refer to the Glossary for reconciliation to the
Portfolio balance presented in the unaudited results.
** 96% of the Portfolio is valued using 30 June 2020
(or later) valuations (31 Jan 20: 95%).
*** Includes GBP2.7m of unpaid drawdowns accrued at
the period end
Portfolio Overview
High conviction investments underpinned by a Portfolio of leading funds
Our strategy is focused on investing in larger companies, those with
leading market positions and strong management teams as we believe they
will generate the most consistently strong returns through the cycle.
Our Portfolio combines investments managed by ICG and those managed by
third parties, in both cases directly and through funds. At 31 July 2020
the Portfolio was valued at GBP765m (31 Jan 2020: GBP806m).
Third party funds were valued at GBP425m (31 Jan 2020: GBP477m) 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 11% p.a.
High conviction investments were valued at GBP340m (31 Jan 2020:
GBP329m). 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 of the
underlying investment decisions.
Our high conviction portfolio, which is weighted towards investments in
our Top 30 underlying companies, allows us to proactively increase
exposure to companies that benefit from long-term structural trends,
those which we believe would be more resilient in an economic downturn,
like the one we are currently experiencing. We are able to enhance
returns and increase visibility on underlying performance drivers, and
we mitigate the more concentrated risk through a highly selective
approach and a focus on defensive growth companies. Over the last five
years, high conviction investments have generated a net return of 18%
p.a. in local currencies. High conviction investments now represent 44%
of the Portfolio (31 Jan 2020: 41%) and we have a strategic goal to
increase the weighting to these investments towards 50% - 60% of the
Portfolio.
31 July
2020 31 January 2020
Investment category % of Portfolio % of Portfolio
---------------------------------- -------------- ---------------
High conviction investments
ICG managed investments 23 22
Third party co-investments 16 14
Third party secondary investments 5 5
Total High conviction investments 44 41
Third party primary funds 56 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 47% of the Portfolio by
value and are biased towards high conviction investments, continue to
perform well, reporting aggregate LTM revenue and EBITDA growth of 11%
and 15%, respectively. This compares to LTM revenue and EBITDA growth of
-9% and -24% respectively for the FTSE All-Share. Over the six months,
valuation multiples increased from 11.7x to 13.0x, which is 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
has increased to 4.4x.
Realisation activity
Lower realisation activity in light of COVID-19 pandemic
As expected, given the backdrop, realisations slowed during the period,
with 14 full exits from the Portfolio compared to 25 in the six months
to 31 July 2019. Total proceeds received were GBP39m, of which full
exits accounted for GBP18m (or 45%). A number of these realisations were
already in progress before the impact of the pandemic became more acute.
Despite this, realisations continued to attract uplifts to previous
carrying value, with an average uplift of 7% over the period and an
average return multiple of 2.0x cost.
During the first half of the financial year, PAI Partners reached an
agreement to sell Roompot, the 3rd largest company in the Portfolio.
Roompot is an operator and developer of holiday parks in Northern
Europe. It was sold to KKR at a significant uplift to the value of the
Company's holding in the business. This illustrates that the demand for
high quality businesses at pre-COVID-19 valuations remains strong.
Several other Top 30 underlying companies were partially realised in the
period including Gerflor, which returned GBP6m of proceeds. The French
vinyl floor manufacturer was the 12th largest underlying company at the
start of the year, held via two ICG funds. In addition, partial sales by
the managers of the listed investments in Ceridian and TeamViewer
returned a further GBP6m.
In addition to sales by our underlying managers, we took advantage of
our in-house secondary market expertise to execute several selective
secondary sales. The sales, which highlight our active approach to
managing the Portfolio, generated GBP55m of proceeds, and released
GBP21m of undrawn commitments. We worked alongside the previous Manager
of the Company (Graphite Capital) to facilitate the most significant
secondary sale in the period, being the partial disposal of our sizeable
holding in Graphite VIII, a fund focussed on small to mid-sized UK
buyouts.
New investment activity
Continued selective investment activity
We have continued to commit selectively to top-tier managers through the
first half of the financial year. A key area of focus in our selection
and due diligence process has been assessing and understanding the
performance of managers during periods of significant financial stress.
We invested GBP52m in the six months with 10% of investments into our
high conviction portfolio, reflecting the decline in co-investment
opportunities and lower levels of deal activity. This compares to GBP64m
invested in the first six months of 2019.
We completed five new primary fund commitments in the six months
totalling GBP35m. These third party fund commitments were raised by
managers we have backed successfully before: two European funds (Hg
Genesis 9 and Saturn 2), two global funds (CVC VIII and Apax X), and one
US fund (Bain Capital Tech Opportunities). The managers we back tend to
raise funds which are often oversubscribed and therefore difficult to
access to new investors. The calibre of these managers speaks to the
relationships which we have built with these firms over many years.
We made the following commitments to funds with investment mandates
which are aligned with our long-term strategic objectives as well as a
bias towards sectors which are aligned with our defensive growth focus:
-- EUR15m (GBP14m) to CVC VIII, a European buyout strategy. CVC is one of
our longest standing manager relationships
-- Two commitments to Hg (Genesis 9 and Saturn 2) totalling GBP9m. These
funds are focussed on predominantly Northern European software and
services businesses
-- $5m (GBP4m) to Bain Capital Tech Opportunities, a fund focused on
mid-market buyouts and late stage growth capital in technology and
technology-enabled businesses, predominantly in North America
-- EUR10m (GBP9m) commitment to Apax X, a global buyout fund focused on the
technology & telecoms, services, healthcare, and consumer sectors
We will continue to be highly disciplined in our investment approach
focusing on high quality, defensive businesses. We remain well placed to
take advantage of attractive investment opportunities as they arise.
Portfolio analysis
We have exposure to over 600 underlying companies, of which the Top 30
contributes 47% of the Portfolio value. This strikes an appropriate
balance between concentration, so that high conviction investments can
meaningfully impact performance, and diversification, so that we are not
overly exposed to the risks of individual portfolio companies.
Focus on mid-market and large companies
The Portfolio is weighted towards the mid-market (37%) and large deals
(53%), which we view as more defensive than smaller deal sizes,
benefiting from stronger management teams and often market leading
positions. A total of 95% of the Portfolio is invested in buyouts.
Focus on developed markets
The Portfolio is focused on developed private equity markets, with 93%
invested across continental Europe (37%), the US (35%) and the UK (21%).
We have 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 moving to ICG in 2016. Over the same period, the UK
weighting has reduced from 45%.
Focus on sectors with defensive growth characteristics
The Portfolio is well diversified and weighted towards sectors with
defensive growth characteristics. Healthcare (18%) and education (6%)
make up 24% of the Portfolio and are particularly attractive sectors.
Elsewhere the Portfolio is broadly spread across the industrials (14%),
business services (13%), consumer goods and services (18%) and
technology (16%) sectors. Within our exposure to the consumer and
industrial sectors, we have a bias to companies with more defensive
business models, non-cyclical growth drivers and high recurring revenue
streams. The Company has a minimal exposure to the leisure (7%) and
financials (6%) sectors.
Well-balanced vintage year exposure
Our vintage year exposure is well-balanced with 62% of the value of the
Portfolio in investments made since 2017 or later. These vintages have
yet to see significant realisation activity unlike investments made in
2016 or earlier which make up the remaining 38% of the Portfolio.
Balance sheet and financing
Our liquidity position was strengthened significantly, with the
Portfolio generating a net cash inflow of GBP45m during the period.
After allowing for dividends and expenses, the outstanding cash balance
increased to GBP39m at the end of the period (31 Jan 2020: GBP14m). In
March, we drew down GBP40m from our bank facility as a precautionary
measure at the onset of the COVID-19 pandemic. This was deemed surplus
to requirements and repaid in full prior to the period end.
At the period end the Portfolio represented 99% of net assets, compared
to 102% at 31 January 2020.
GBPm 31 Jul 2020 31 Jan 2020
------------------------- ---------------- ---------------
Portfolio* 765 806
Cash 39 14
Net obligations* (29) (26)
------------------------- ---------------- ---------------
Net assets 775 794
------------------------- ---------------- ---------------
* Refer to the Glossary for reconciliation to the
portfolio balance presented in the preliminary results
and definition and calculation of net obligations.
At 31 July 2020, we had uncalled commitments of GBP439m, 20% (GBP86m) of
which were to funds outside of their investment period. Against these
uncalled commitments we had available liquidity of GBP197m (including
GBP158m of undrawn bank lines).
GBPm 31 Jul 2020 31 Jan 2020
---------------------------------------------------- ----------- -----------
Outstanding commitments -- funds in investment
period 353 377
Outstanding commitments -- funds outside investment
period 86 82
----------- -----------
Total outstanding commitments 439 459
Total available liquidity (including facility) (197) (162)
----------- -----------
Overcommitment (including facility) 242 297
---------------------------------------------------- ----------- -----------
Overcommitment % of net asset value 31% 37%
---------------------------------------------------- ----------- -----------
Our objective is to be 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.
Outstanding commitments tend to be drawn down over a four to six-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 a linear drawdown rate to the end of their
respective remaining investment periods, approximately GBP83m would be
called over the next 12 months.
Activity since the period end
Since the period end the Portfolio has continued to generate cash
proceeds and undertake selective investment activity. In total GBP41m of
distributions have been received in the two months to 30 September 2020,
including that of Roompot. A further two secondary transactions have
also been agreed at attractive prices, further reducing our outstanding
commitments. Had these realisations and secondary transactions been
completed by 31 July 2020, the overcommitment ratio at that date would
have stood at 27%. The valuation impact of secondary sales completed
post period end is reflected in the 31 July 2020 NAV.
We have invested GBP22m, including a $5m co-investment in Visma
alongside Hg in the world's largest ever software buyout. In addition,
we have continued the expansion of our US programme with two primary
commitments; $10m commitments to both Bain XIII and Clayton Dubilier &
Rice XI, the latter being a new manager relationship.
Outlook
We are encouraged by the strength and resilience of our Portfolio in
this unprecedented period of uncertainty and are well placed to
withstand further uncertainty and volatility. ICG Enterprise has a well
diversified Portfolio, investing in companies with strong defensive
growth characteristics and weighted towards more resilient sectors.
Furthermore, by investing with leading managers in the US and Europe
which focus on mid-market and larger buyouts, we are investing with
managers who have significant experience in managing companies through
periods of economic stress.
We believe the private equity model is especially well suited to dealing
with current market conditions, with an ability to act quickly and
decisively where required and importantly with a focus on long-term
value creation. We have the utmost confidence that our managers will be
able to adapt to future events. Our flexible mandate, and our high
conviction approach, allows us to be nimble and adapt the mix of new
investments to evolving market conditions. With this differentiated
investment approach at our disposal we are well placed to take advantage
of attractive opportunities as they arise and continue to generate
long-term shareholder value.
ICG Private Equity Funds Investment Team
6 October 2020
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 2020. 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 PetSmart +
BC
Retailer of pet products and services Partners 2015 USA 4.3%
2 DomusVi +
Operator of retirement homes ICG 2017 France 4.1%
3 Roompot +
PAI
Operator and developer of holiday parks Partners 2016 Netherlands 3.6%
4 Minimax +
Supplier of fire protection systems and services ICG 2018 Germany 3.3%
5 Leaf Home Solutions
Provider of gutter protection solutions Gridiron 2016 USA 3.1%
6 Doc Generici +
Retailer of pharmaceutical products ICG 2019 Italy 2.2%
7 Visma +
Provider of business critical software such as accounting,
payroll, HR and other ERP software ICG 2017 Norway 2.1%
8 City & County Healthcare Group
Graphite
Provider of home care services Capital 2013 UK 2.0%
9 Froneri^
PAI
Manufacturer and distributor of ice cream products Partners 2019 UK 1.9%
10 Supporting Education Group +^
Provider of temporary staff for the education sector ICG 2014 UK 1.9%
11 Yudo +
Manufacturer of components for injection moulding ICG 2018 Hong Kong 1.8%
12 IRI +
Provider of data and predictive analytics to consumer New
goods manufacturers Mountain 2018 USA 1.6%
13 System One +
Thomas H
Lee
Provider of specialty workforce solutions Partners 2016 USA 1.5%
14 Endeavor Schools +
Leeds
Equity
Operator of schools Partners 2018 USA 1.4%
15 Berlin Packaging +
Oak Hill
Capital
Provider of global packaging services and supplies Partners 2019 USA 1.4%
16 VitalSmarts +
Leeds
Provider of corporate training courses focused on Equity
communication skills and leadership development Partners 2019 USA 1.1%
17 PSB Academy +
Provider of private tertiary education ICG 2018 Singapore 1.1%
18 U-POL^
Manufacturer and distributor of automotive refinishing Graphite
products Capital 2010 UK 1.0%
19 Cognito +^
Graphite
Supplier of communications equipment, software & services Capital 2002/2014 UK 0.8%
20 EG Group
TDR
Operator of petrol station forecourts Capital 2014 UK 0.8%
21 Compass Community
Provider of fostering services and children residential Graphite
care Capital 2017 UK 0.8%
22 nGAGE
Graphite
Provider of recruitment services Capital 2014 UK 0.7%
23 RegEd +
Provider of regulatory compliance and management software Gryphon
products Investors 2019 USA 0.6%
24 David Lloyd Leisure +
TDR
Operator of premium health clubs Capital 2013 UK 0.6%
25 Beck & Pollitzer
Provider of industrial machinery installation and Graphite
relocation Capital 2016 UK 0.6%
26 Allegro
Operator of an online marketplace and price comparison Cinven /
website Permira 2017 Poland 0.6%
27 YSC
Provider of leadership consulting and management assessment Graphite
services Capital 2017 UK 0.6%
28 ICR Group
Provider of repair and maintenance services to the Graphite
energy industry Capital 2014 UK 0.6%
29 Alerian^
Provider of data and investment products focused on
natural resources ICG 2018 USA 0.6%
30 IRIS
Provider of business critical software and services
to the accountancy and payroll sectors ICG 2018 UK 0.6%
------------------------------------------------------------ ---------- ---------------- ---------
Total of the 30 largest underlying investments 47.3%
------------------------------------------------------------------------ ---------------------------- ---------
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 2020.
The valuations are net of any carried interest provision.
Year of Outstanding commitment
Fund commitment Country/ region Value GBPm GBPm
------------------- --------------- ----------------- ---------- ------------------------
Graphite Capital
1 Partners VIII *
Mid-market buyouts 2013 UK 46.6 10.6
Gridiron Capital
2 Fund III
Mid-market buyouts 2016 North America 29.1 4.2
BC European Capital
3 IX **
Large buyouts 2011 Europe/USA 19.5 1.6
4 ICG Europe VI **
Mezzanine and
equity in
mid-market
buyouts 2015 Europe 19.3 3.6
CVC European Equity
5 Partners VI
Large buyouts 2013 Europe/USA 18.1 3.1
Thomas H Lee Equity
6 Fund VII
Mid-market and
large buyouts 2015 USA 17.8 1.5
7 ICG Europe VII
Mezzanine and
equity in
mid-market
buyouts 2018 Europe 17.2 22.1
8 Sixth Cinven Fund
Large buyouts 2016 Europe 17.1 3.2
Advent Global
Private Equity
9 VIII
Large buyouts 2016 Europe/USA 17.1 0.8
10 PAI Europe VI
Mid-market and
large buyouts 2013 Europe 16.5 1.4
PAI Strategic
11 Partnerships **
Mid-market and
large buyouts 2019 Europe 14.8 1.6
BC European Capital
12 X
Large buyouts 2016 Europe 13.2 2.2
Graphite Capital
Partners VII * /
13 **
Mid-market buyouts 2007 UK 12.2 2.8
14 Permira V
Large buyouts 2013 Europe/USA 11.7 0.9
CVC European Equity
15 Partners VII
Large buyouts 2017 Europe/North America 11.5 10.8
One Equity Partners
16 VI
Mid-market buyouts 2016 Europe/USA 11.5 0.7
ICG Strategic
Secondaries Fund
17 II
Secondary fund
restructurings 2016 Europe/USA 11.5 16.0
18 TDR Capital III
Mid-market and
large buyouts 2013 Europe 10.6 1.7
19 Gryphon V
Mid-market buyouts 2019 North America 10.3 2.1
ICG Asia Pacific
20 Fund III
Mezzanine and
equity in
mid-market
buyouts 2016 Asia Pacific 10.0 2.7
New Mountain
21 Partners V
Mid-market buyouts 2017 North America 9.6 2.7
Charterhouse
22 Capital Partners X
Large buyouts 2015 Europe 9.5 4.6
23 Resolute II **
Mid-market buyouts 2018 USA 9.3 1.8
24 Permira VI
Large buyouts 2016 Europe 9.2 0.9
25 IK VIII
Mid-market buyouts 2016 Europe 9.2 0.5
Oak Hill Capital
26 Partners IV
Mid-market buyouts 2017 USA 8.8 2.7
Thomas H Lee Equity
27 Fund VIII
Mid-market and
large buyouts 2017 USA 8.5 9.4
28 Resolute IV
Mid-market buyouts 2018 USA 8.3 5.4
Graphite Capital
29 Partners IX
Mid-market buyouts 2018 UK 8.0 20.6
Bain Capital Europe
30 IV
Mid-market buyouts 2014 Europe 7.3 1.3
Total of the largest 30 fund
investments 423.3 143.5
Percentage of total investment
Portfolio 55.3%
------------------------------------ --------------------- ---------- ------------------------
* 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 2020
% of value of % of value of
underlying underlying
investments investments
Portfolio by investment type 31 July 2020 31 January 2020
----------------------------- ------------- ----------------
Large buyouts 52.6% 46.4%
Mid-market buyouts 36.8% 42.2%
Small buyouts 9.8% 8.7%
Other 0.8% 2.7%
------------------------------ ------------- ----------------
Total 100.0% 100.0%
------------------------------ ------------- ----------------
% of value of % of value of
underlying underlying
Portfolio by calendar year of investments investments
investment 31 July 2020 31 January 2020
------------------------------------ ------
2020 3.3% 0.1%
2019 19.4% 17.2%
2018 20.8% 19.7%
2017 18.4% 19.2%
2016 15.4% 16.2%
2015 7.6% 7.7%
2014 6.9% 8.5%
2013 4.1% 5.5%
2012 1.2% 1.4%
2011 0.1% 0.9%
2010 1.2% 1.3%
2009 0.4% 0.6%
2008 and before 1.2% 1.7%
--------------------------------------------- ------------- ----------------
Total 100.0% 100.0%
--------------------------------------------- ------------- ----------------
% of value of underlying investments % of value of underlying investments
Portfolio by sector 31 July 2020 31 January 2020
------------------- ------------------------------------ ------------------------------------
Healthcare and
education 24.0% 23.2%
Consumer goods and
services 17.8% 15.1%
Technology, Media &
Telecommunications 15.5% 13.6%
Industrials 14.4% 15.5%
Business services 12.5% 15.4%
Leisure 6.7% 7.7%
Financials 5.6% 5.3%
Other 3.5% 4.2%
------------------- ------------------------------------ ------------------------------------
Total 100.0% 100.0%
------------------- ------------------------------------ ------------------------------------
% of value of % of value of
underlying underlying
Portfolio by geographic distribution based on location investments investments
of company headquarters 31 July 2020 31 January 2020
Europe 37.3% 36.7%
UK 20.8% 27.1%
North America 34.9% 29.9%
Rest of world 7.0% 6.3%
------------------------------------------------------- ------------- ----------------
Total 100.0% 100.0%
------------------------------------------------------- ------------- ----------------
Commitments analysis
The following tables analyse commitments at 31 July 2020. Original
commitments are translated at 31 July 2020 exchange rates.
Total undrawn commitments
Original Outstanding Average
commitment commitment drawdown % of outstanding
GBP'000 GBP'000 percentage commitments
--------------------- ----------- ----------- ----------- ----------------
Investment period not
commenced 18,003 18,003 0.0% 4.1%
Funds in investment
period 479,375 335,216 30.1% 76.3%
Funds post investment
period 767,384 86,064 88.8% 19.6%
--------------------- ----------- ----------- ----------- ----------------
Total 1,264,762 439,283 65.3% 100.0%
--------------------- ----------- ----------- ----------- ----------------
Movement in outstanding commitments in 6 months to
31 July 2020 GBPm
--------------------------------------------------- ------
As at 1 February 2020 458.6
New primary commitments 34.9
Drawdowns (51.8)
Secondary disposals (20.5)
Currency and other movements 18.1
--------------------------------------------------- ------
As at 31 July 2020 439.3
--------------------------------------------------- ------
New commitments during the six months to 31 July 2020
Fund Strategy Geography GBPm
--------------------- -------------------- ---------------------- -----
Primary commitments
CVC VIII Large buyouts Europe/North America 13.5
Apax X Mid-market buyouts Global 8.7
Hg Genesis 9 Mid-market buy-outs Europe 4.5
Mid-market and large
Hg Saturn 2 buy-outs Europe 4.2
Bain Tech
Opportunities Mid-market buyouts North America 4.0
Total primary
commitments 34.9
Commitments relating to co-investments and secondary
investments -
------------------------------------------------------------------- -----
Total new commitments 34.9
--------------------- --------------------- --------------------- -----
Currency exposure
31 July 31 July 31 January 31 January
2020 2020 2020 2020
Portfolio(1) GBPm % GBPm %
----------------- -------- -------- ---------- ----------
Sterling 177.3 23.2 246.0 30.5
Euro 216.7 28.3 226.6 28.1
US Dollar 249.2 32.6 224.2 27.8
Other European 55.7 7.3 59.6 7.4
Other 66.1 8.6 50.0 6.2
----------------- -------- -------- ---------- ----------
Total 765.0 100.0 806.4 100.0
----------------- -------- -------- ---------- ----------
(1) Currency exposure is calculated by reference to
the location of the underlying Portfolio companies'
headquarters.
31 July 31 July 31 January 31 January
2020 2020 2020 2020
Outstanding commitments GBPm % GBPm %
------------------------ ------- ------- ---------- ----------
-- Euro 221.0 50.3 213.0 46.5
-- US Dollar 170.5 38.8 178.5 38.9
-- Sterling 47.1 10.7 65.3 14.2
-- Other European 0.7 0.2 1.8 0.4
------------------------ ------- ------- ---------- ----------
Total 439.3 100.0 458.6 100.0
------------------------ ------- ------- ---------- ----------
Realisation activity
Year of Realisation Proceeds
Investment Manager investment type Exit GBPm
---------------- ---------------- ----------------- ------------- -------- --------
Financial
Gerflor* ICG 2011 buyer Full 6.2
Thomas H Lee Sell down
Ceridian Partners 2007 post IPO Partial 4.4
Sell down
TeamViewer Permira 2014 post IPO Partial 2.2
Financial
Marston ICG 2016 buyer Partial 2.1
Thomas H Lee
Give & Go Partners 2016 Trade Full 2.1
IK Investment Financial
Cerelia Partners 2015 buyer Full 1.9
IK Investment
CID Lines Partners 2016 Trade Full 1.8
Financial
P&I Permira 2016 buyer Partial 1.6
Offerco Graphite Capital 2009 Dividend Partial 1.5
Dent Wizard Gridiron 2015 Trade Full 1.4
---------------- ---------------- ----------------- ------------- -------- --------
Total of 10 largest underlying
realisations 25.2
---------------------------------- ------------- -----------------
Total realisations (excluding secondary sales) 39.1
----------------------------------------------------- ------------- -----------------
*Note: Gerflor was fully exited from ICG European
Fund 2006B, partially exited from ICG Recovery Fund
2008B
Investment activity
Cost(1)
Investment Description Manager Country GBPm
------------ -------------------------------------------------------------- --------- ----------- -------
Profi Operator of a convenience supermarket chain ICG Romania 2.1
LCG Manufacturer of life sciences tools Cinven UK 1.4
Diagnostyka Provider of laboratory diagnostics ICG Poland 1.3
Pageant Provider of information solutions and events to the
Media alternative asset management industry ICG UK 1.2
Manufacturer of advanced insulation and engineered
Armacell foam products PAI Luxembourg 1.2
Dealer Tire Distributor of replacement tyres for automotive dealerships Gridiron USA 1.1
Thomas H
Provider of marketing and distribution solutions for Lee
AmeriLife insurance and retirement planning Partners USA 1.1
Golden Goose Manufacturer of sneakers Permira Italy 1.0
Focus Group Provider of communications and IT solutions Bowmark UK 1.0
Provider of creative/technology services to the entertainment
Prime Focus industry ICG India 0.9
------------ -------------------------------------------------------------- --------- ----------- -------
Total of 10 largest underlying new investments 12.3
---------------------------------------------------------------------------------------- -------------------
Total new investment 52.4
---------------------------------------------------------------------------------------- -------------------
(1) 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 facing the Company 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 2020 which was approved by the
Board on 27 April 2020.
The principal risks and uncertainties 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.
In addition to these, emerging risks are regularly considered to assess
any potential impact on the Company and to determine whether any actions
are required. Emerging risks include those related to regulatory/
legislative change and macro-economic and political change, which in the
current year have included the impact of ESG on the Company and the UK's
trade negotiations with the EU.
As disclosed in the Annual Report, following the year ended 31 January
2020, there have been significant developments in relation to the
COVID-19 outbreak. These developments have been unprecedented and have
had a material impact on a number of our principal risks, in particular
on investment performance risk and valuation risk. Throughout the period,
the Manager and the Board have worked closely to understand and mitigate
the immediate and potential future impact of the COVID-19 pandemic, and
its economic fallout, on the Company. This work continues, and the
Manager is in regular contact with the underlying managers, who have a
strong operational focus, to understand the ongoing impact on their
portfolios and mitigating actions that they may take.
The ongoing and unprecedented nature of this crisis means it remains
difficult to fully assess the impact of COVID-19 on the Company at this
stage, and accordingly a number of risks remain heightened.
Interim financial statements
Income statement
Half year to 31 July 2020 Half year to 31 July 2019
(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 2,127 (3,964) (1,837) 5,257 89,622 94,879
Deposit interest 24 -- 24 202 -- 202
Other income 46 -- 46 22 -- 22
Foreign exchange gains
and losses -- (89) (89) -- 1,210 1,210
------------ ------------- ----------- -------- -------- --------
2,197 (4,053) (1,856) 5,481 90,832 96,313
------------ ------------- ----------- -------- -------- --------
Expenses
Investment management
charges (1,247) (3,741) (4,988) (1,154) (3,464) (4,618)
Other expenses (1,392) (648) (2,040) (833) (773) (1,606)
------------ ------------- ----------- -------- -------- --------
(2,639) (4,389) (7,028) (1,987) (4,237) (6,224)
------------ ------------- ----------- -------- -------- --------
(Loss)/profit before
tax (442) (8,442) (8,884) 3,494 86,595 90,089
------------ ------------- ----------- -------- -------- --------
Taxation -- -- -- (605) 605 --
------------ ------------- ----------- -------- -------- --------
(Loss)/profit for the
period (442) (8,442) (8,884) 2,889 87,200 90,089
------------ ------------- ----------- -------- -------- --------
Attributable
to:
------------ ------------- ----------- -------- -------- --------
Equity shareholders (442) (8,442) (8,884) 2,889 87,200 90,089
------------ ------------- ----------- -------- -------- --------
Basic and diluted (12.91p) 130.30p
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 below are an integral part of the condensed interim financial
statements.
Balance sheet
31 July 31 January
2020 2020
(unaudited) (audited)
Notes GBP'000 GBP'000
--------------------------------------------- ----- ------------ ----------
Non-current assets
Investments held at fair value 7 737,468 778,416
------------ ----------
Current assets
Cash and cash equivalents 38,831 14,470
Receivables 993 1,142
------------ ----------
39,824 15,612
------------ ----------
Current liabilities
Payables 2,351 483
------------ ----------
Net current assets 37,473 15,129
------------ ----------
Total assets less current liabilities 774,941 793,545
------------ ----------
Capital and reserves
Share capital 7,292 7,292
Capital redemption reserve 2,112 2,112
Share premium 12,936 12,936
Capital reserve 753,043 771,205
Revenue reserve (442) --
------------ ----------
Total equity 774,941 793,545
------------ ----------
Net asset value per share (basic and diluted) 6 1,126.9p 1,152.1p
The notes below are an integral part of the condensed interim financial
statements.
Cash flow statement
Half year to Half year to
31 July 2020 31 July 2019
(unaudited) (unaudited)
GBP'000 GBP'000
Operating activities
Sale of portfolio investments 74,934 48,186
Purchase of portfolio investments (31,590) (40,656)
Net cash flows to subsidiary investments (4,383) (11,329)
Interest income received from portfolio
investments 867 4,349
Dividend income received from portfolio
investments 1,281 756
Other income received 39 224
Investment management charges paid (5,082) (4,384)
Other expenses paid (861) (799)
------------------ ---------------
Net cash inflow/(outflow) from operating
activities 35,205 (3,653)
------------------ ---------------
Financing activities
Proceeds from short-term borrowings 40,000 --
Repayments of short-term borrowings (40,000) --
Bank facility fee (613) (1,871)
Interest paid (421) --
Purchase of own shares into treasury (775) (1,294)
Equity dividends paid to shareholders (8,945) (8,298)
------------------ ---------------
Net cash outflow from financing
activities (10,754) (11,463)
------------------ ---------------
Net increase/(decrease) in cash and cash
equivalents 24,451 (15,116)
------------------ ---------------
Cash and cash equivalents at beginning of
period 14,469 60,626
Net increase/(decrease) in cash and cash
equivalents 24,451 (15,116)
Effect of changes in foreign exchange
rates (89) 1,210
------------------ ---------------
Cash and cash equivalents at end of
period 38,831 46,720
------------------ ---------------
The notes below 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 2020 (unaudited)
Opening balance at 1 February
2020 7,292 2,112 12,936 771,205 -- 793,545
Profit for the period and total
comprehensive income -- -- -- (8,442) (442) (8,884)
Dividends paid -- -- -- (8,945) -- (8,945)
Purchase of own shares into
treasury -- -- -- (775) -- (775)
Closing balance at 31 July 2020 7,292 2,112 12,936 753,043 (442) 774,941
--------------- ------------------- --------------- ----------------- ----------------- ---------------------
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
--------------- ------------------- --------------- ----------------- ----------------- ---------------------
The notes below 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 Procession
House, 55 Ludgate Hill, London, EC4M 7JW. 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. The
financial information for the year ended 31 January 2020 has been
extracted from the statutory accounts for that year which were approved
by the Board of Directors on 27 April 2020 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 2020,
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
ended 31 January 2020, 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 2020, 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 ('SORP') for
investment trusts issued by the Association of Investment Companies in
October 2019.
4) Dividends
Half year to Half year to
31 July 31 July
2020 2019
GBP'000 GBP'000
--------------------------------------------------- ------------ ------------
Third quarterly dividend in respect of year ended
31 January 2020 of 5.0p per share (2019: 5.0p) 3,444 3,459
Final dividend in respect of year ended 31 January
2020 of 8.0p per share (2019: 7.0p) 5,501 4,839
------------ ------------
Total 8,945 8,298
------------ ------------
The Company paid an interim dividend of 5p per share (totalling GBP3.4m)
in September 2020 in respect of the quarter to 30 April 2020. The Board
has approved a further interim dividend for the quarter to 31 July 2020
of 5p per share (totalling GBP3.4m) which will be paid on 4 December
2020 to shareholders on the register on 13 November 2020.
5) Earnings per share
Half year to Half year to
31 July 31 July
2020 2019
--------------------------------------------- ------------ ------------
Revenue return per ordinary share (0.64p) 4.18p
Capital return per ordinary share (12.27p) 126.12p
Earnings per ordinary share (basic and
diluted) (12.91p) 130.30p
Weighted average number of shares 68,796,506 69,140,038
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 GBP774.9m (31 January 2020: GBP793.5m)
and 68,767,055 (31 January 2020: 68,877,055) 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 1,126.9p (31
January 2020: 1,152.1p).
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 2020 and 31 January 2020. The Company had no financial
liabilities measured at fair value at those dates.
Level 1 Level 2 Level 3 Total
31 July 2020 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ ------- ------- ------- -------
Investments held at fair value
Unquoted investments -- indirect -- -- 391,850 391,850
Unquoted investments -- direct -- -- 125,469 125,469
Quoted investments -- direct 1,189 -- -- 1,189
Subsidiary undertakings -- -- 218,960 218,960
-------
Total investments held at fair value 1,189 -- 736,279 737,468
------- ------- ------- -------
Level 1 Level 2 Level 3 Total
31 January 2020 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ ------- ------- ------- -------
Investments held at fair value
Unquoted investments -- indirect -- -- 454,586 454,586
Unquoted investments -- direct -- -- 116,557 116,557
Quoted investments -- direct 1,231 -- -- 1,231
Subsidiary undertakings -- -- 206,042 206,042
------- ------- ------- -------
Total investments held at fair value 1,231 -- 777,185 778,416
------- ------- ------- -------
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 and reviewed by ICG, 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. A 30% increase/(decrease) in the
value of these assets would result in a rise and fall in NAV of
GBP216.1m and GBP213.5m respectively or 27.9% and 27.5% (31 January
2020: rise and fall in NAV of GBP223.4m and GBP228.1m respectively or
28.2% and 28.7%).
The following tables present the changes in level 3 instruments for the
periods to 31 July 2020 and 31 January 2020.
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 2020 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------------- ----------------------------------------------------- --------------------------------------------------- ------------------ ----------------
Opening balance at 1 February 2020 454,586 116,557 206,042 777,185
Additions 33,246 321 4,383 37,950
Disposals (72,227) (2,707) -- (74,934)
Gains and losses recognised in profit or loss (23,755) 11,298 8,535 (3,922)
----------------------------------------------------- --------------------------------------------------- ------------------ ----------------
Closing balance at 31 July 2020 391,850 125,469 218,960 736,279
----------------------------------------------------- --------------------------------------------------- ------------------ ----------------
Total gains included in income statement for assets
held at the end of the period 5,919 13,656 8,535 28,110
----------------------------------------------------- --------------------------------------------------- ------------------ ----------------
Unquoted investments (indirect) at fair value through Unquoted investments (direct) at fair value through Subsidiary
profit or loss profit or loss undertakings Total
Year ended 31 January 2020 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------------- ----------------------------------------------------- --------------------------------------------------- ------------ --------------
Opening balance at 1 February 2019 410,970 108,836 148,611 668,417
Additions 79,227 15,930 34,446 129,603
Disposals (77,597) (28,596) -- (106,193)
Gains and losses recognised in profit or loss 41,986 20,387 22,985 85,358
----------------------------------------------------- --------------------------------------------------- ------------ --------------
Closing balance at 31 January 2020 454,586 116,557 206,042 777,185
----------------------------------------------------- --------------------------------------------------- ------------ --------------
Total gains included in income statement for assets
held at the end of the period 37,117 10,570 22,985 70,672
----------------------------------------------------- --------------------------------------------------- ------------ --------------
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 2020, with the exception of Jeremy Tigue who stepped down from
the Board at the AGM on 17 June 2020. A list of current directors is
maintained on the ICG Enterprise Trust plc website:
https://www.globenewswire.com/Tracker?data=AcYR7LF9Wn_Bf5lnxzTBL7GOHmORPCtLwFVGMnbRY3T2QoAJd4LPCf8Ccn6G_pHIZFaiPEQfCCUphy6xaH2g87boCQAaUol7DUI131q9IiKvt11nsPcqH368aFchqJCUMgB3EXvWSb8O44YTnSKh8qKKRMPPAKel33pBAseXPCk=
http://www.icg-enterprise.co.uk/about-us/the-board.
Going Concern
In assessing the appropriateness of continuing to adopt the going
concern basis of accounting, the Board has assessed the financial
position and prospects of the Company over the next 12 months. As part
of this review, the Board assessed the ongoing and potential impact of
principal risks and the COVID-19 pandemic on the Company's business
activities.
As part of the Board's assessment of going concern a range of stressed
scenarios and sensitivity analyses were examined to identify conditions
that might result in the facility's covenants being breached. This
included the consideration of possible remedial action that the Company
could undertake to avoid such breaches. The diversification and
defensive characteristics of the Portfolio were also considered.
The output from the scenario analysis is sensitive to the reduction in
Portfolio value which is dependent on external factors. The Company
continues not to be in breach of any of its facility covenants, has
sufficient headroom and is well placed to manage the Portfolio cash
flows and its level of undrawn commitments, even in an extreme downside
scenario. Based on this assessment, the Board expects that the Company
will be able to continue in operation and meet its liabilities as they
fall due for a period of at least 12 months. Therefore, it is
appropriate to continue to adopt the going concern basis of preparation
of the Company's interim financial statements
On behalf of the Board
Jane Tufnell, Chair
6 October 2020
Independent review report to ICG Enterprise Trust plc
Introduction
We have been engaged by ICG Enterprise Trust plc (the 'Company') to
review the condensed set of financial statements in the interim
financial report for the six months ended 31 July 2020 which comprises
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
are 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 six months ended 31 July 2020 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
6 October 2020
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 Rate
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 2020 and 31 January 2020, 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 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 Partner
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.
GBPm
--------------------------------------- ------
Receivables 1.0
Payables (2.4)
Co-investment incentive scheme accrual (27.5)
------
Net obligations (28.9)
------
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
2020 737.5 -- -- 27.5 765.0
31
Jan
2020 778.4 -- -- 28.0 806.4
Portfolio net cash flows
The net cash flows generated by the Portfolio is calculated as follows:
GBPm
-------------------------------- ------
Per Cash flow statement
Realisation proceeds 94.4
Total new investment cash flows (49.7)
------
Net cash inflow from Portfolio 44.7
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 74.9
Sale of portfolio investments, interest received
and dividends received within subsidiary investments 17.3
Interest income 0.9
Dividend income 1.3
Realisation proceeds 94.4
------
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 31.6
Purchase of portfolio investments
within subsidiary investments 18.1
------
Total new investment cash flows 49.7
Unpaid drawdowns at the period end 2.7
------
Total new investment 52.4
------
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 07, 2020 02:00 ET (06:00 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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