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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Intermediate Capital Group Plc | LSE:ICP | London | Ordinary Share | GB00BYT1DJ19 | ORD 26 1/4P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2,124.00 | 2,128.00 | 2,130.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Security Brokers & Dealers | 737.1M | 280.6M | 0.9801 | 21.67 | 6.08B |
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TIDMICP
19 November 2019
First Half Results for the six months ended 30 September 2019
Diversification strategy delivers continued asset growth, driving fund
management profits up 32%
Intermediate Capital Group plc (ICG or the Group) announces its first
half results for the six months ended 30 September 2019.
Highlights
-- AUM up 11% on 31 March 2019 to EUR41.1bn, with EUR4.6bn of new money
raised across 14 strategies
-- Fund Management Company profits up 32% to GBP85.0m (H1 2019: GBP64.4m);
average fee rates maintained
-- Group profit before tax on an IFRS basis up 24% to GBP153.4m (H1 2019:
GBP124.0m)
-- Earnings per share of 50.8p (H1 2019: 43.6p); Fund Management Company
28.4p (H1 2019: 21.4p) and Investment Company 22.4p (H1 2019: 22.2p)
-- Interim ordinary dividend up 50% to 15.0p per share (H1 2019: 10.0p)
-- Positive outlook underpins increase in operating margin target to be in
excess of 50%, up from 43% previously
Commenting on the results, Benoit Durteste, CEO, said:
"These strong results demonstrate our ability to attract assets to a
broad range of new fund strategies that are adjacent to our existing
portfolios. Our diversification has resulted in continued healthy
fundraising results and the 32% growth in Fund Management Company
profits.
"We are well-positioned to deliver sustainable growth. Unlike
traditional asset managers, we do not suffer short term outflows as a
consequence of the movement in financial markets; we are maintaining or
increasing average fee rates on an underlying fund basis. Our long fund
life-cycles are designed to withstand economic cycles. This is
underpinned by a disciplined attitude to the deployment of funds and
proactive approach to realisations."
Commenting on the results, Kevin Parry, Chairman, said:
"Our business model is more robust than at any time in the Company's
history and provides the Board with a strong backdrop against which to
increase our Fund Management Company operating margin target to above
50%. The new target reflects the maturing of existing strategies while
still providing capacity to invest in new fund strategies that will
underpin the continued long-term sustainable growth of the Group.
"Our approach to building sustainable growth, while enhancing our
responsible investing approach and maintaining our corporate culture,
will be the subject of further discussion at our capital markets update
on 30 January 2020."
Financials
Unaudited Unaudited Audited
6 months to 6 months to % change 12 months to
30 September 2019 30 September 2018 31 March 2019
------------ ------------------ ------------------ ---------- --------------
Adjusted as
internally
reported(1)
------------
Fund GBP85.0m GBP64.4m 32% GBP143.8m
Management
Company
profit
before tax
Investment GBP66.0m GBP115.1m (43%) GBP134.5m
Company
profit
before tax
Group profit GBP151.0m GBP179.5m (16%) GBP278.3m
before tax
Earnings per 50.4p 59.8p (16%) 94.9p
share
Gearing 0.87x 0.86x 1% 0.86x
Net asset GBP5.00 GBP4.82 4% GBP4.93
value per
share
IFRS
Consolidated
------------
Fund GBP85.0m GBP64.4m 32% GBP143.8m
Management
Company
profit
before tax
Investment GBP68.4m GBP59.6m 15% GBP39.1m
Company
profit
before tax
Group profit GBP153.4m GBP124.0m 24% GBP182.9m
before tax
Earnings per 50.8p 43.6p 17% 63.4p
share
Dividend per 15.0p 10.0p 50% 45.0p
share in
respect of
the period
------------ ------------------ ------------------ ---------- --------------
(1) These are non IFRS GAAP alternative performance measures and
represent internally reported financial measures excluding the impact of
the consolidation of structured entities following the adoption of IFRS
10. In the prior year, the IFRS valuation of CLO loan notes were aligned
with the valuation technique used for the internally reported financial
information resulting in a one-off reduction to the IFRS reported profit
after tax. Further details can be found on page 6.
Assets under management(1)
30 September 2019 30 September 2018 31 March 2019
------------------------- ----------------- ----------------- -------------
Third party assets under
management EUR38,380m EUR31,228m EUR34,461m
Balance sheet portfolio EUR2,694m EUR2,370m EUR2,621m
------------------------- ----------------- ----------------- -------------
Total assets under
management EUR41,074m EUR33,598m EUR37,082m
------------------------- ----------------- ----------------- -------------
Third party fee earning
assets under management EUR32,892m EUR26,026m EUR29,626m
The following foreign exchange rates have been used.
30 September 2019 30 September 2018 31 March 2019 30 September 2019 30 September 2018 31 March 2019
Average Average Average Period end Period end Period end
-------- ----------------- ----------------- ------------- ----------------- ----------------- -------------
GBP:EUR 1.1237 1.1283 1.1343 1.1282 1.1228 1.1619
GBP:USD 1.2497 1.3232 1.3090 1.2292 1.3031 1.3038
Enquiries
A presentation for investors and analysts will be held at 09:00 GMT
today at ICG's offices, Juxon House, 100 St Paul's Churchyard, London,
EC4M 8BU. The presentation will also be streamed live at 09:00 GMT and
be available on demand from 14:00 GMT at
http://www.icgam.com/shareholders/Pages/shareholders.aspx.
Analyst / investor enquiries:
Ian Stanlake, Investor Relations, ICG +44 (0) 20 3201 7880
Media enquiries:
Alicia Wyllie, Corporate Communications, ICG
+44 (0) 20 3201 7994
Neil Bennett, Sam Turvey, Maitland +44 (0) 20 7379 5151
This Half Year Results statement has been prepared solely to provide
additional information to shareholders and meets the relevant
requirements of the UK Listing Authority's Disclosure and Transparency
Rules. The Half Year Results statement should not be relied on by any
other party or for any other purpose.
This Half Year Results statement 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.
About ICG
ICG is a global alternative asset manager with over 30 years' history.
We manage EUR41.1bn of assets in private debt, credit and equity,
principally in closed-end funds. We provide capital to help companies
grow through private and public markets, developing long-term
relationships with our business partners to deliver value for
shareholders, clients and employees.
We operate across four asset classes -- corporate, capital market, real
asset and secondary investments. In addition to growing existing
strategies, we are committed to innovation and pioneering new strategies
across these asset classes where the market opportunity exists.
ICG is listed on the London Stock Exchange (ticker symbol: ICP). Further
details are available at: www.icgam.com. You can follow ICG on LinkedIn
https://www.globenewswire.com/Tracker?data=sWqA605_6Cdz1v-7s_p_xs7MiCD3ic7mBgN3_oxmb8kZk2uYAS8iBfoKqVmhfNDdicYxKazxpNtP3BqAg7vVL9vihLR3Vn628dBgYpv8lvkvBnUjzZ72StcrRtcIJlgt
.
Business review
Our specialist asset management business has continued to grow strongly
in line with our strategic objectives, delivering:
-- Fundraising (inflows): EUR4.6bn raised in total, across 14 different
strategies
-- Fees: weighted average fee rate(1) in line with March 2019 at 0.86%
-- Investment: disciplined deployment remains strong across strategies
-- Performance: all funds are on course to meet or exceed their return
hurdle rates
-- Operating margin(1): target increased to be in excess of 50%
Market conditions remain buoyant for alternative assets
Alternative asset classes continue to be attractive to institutional
investors for their enhanced returns and diversification opportunities.
These drivers remain unchanged, supporting the trend towards growth in
institutional assets under management for private market fund managers.
Global economic growth is slowing, with revenue and earnings growth in
the US and Europe moderating. However, we consider global recession and
systemic default risks to be low, providing a continued constructive
environment for the alternative asset management industry. Furthermore,
the duration of our funds mean they are designed to withstand economic
cycles.
Strong fundraising across our diverse portfolio
Inflows in the first half totalled EUR4.6bn (H1 2019: EUR6.1bn). As 86%
of our AUM is in closed end funds, inflows are significantly influenced
by the timing of when our larger funds come to market resulting in
fluctuating inflows year on year. Closed end funds lock in investor
commitments and related fee streams for the lifecycle of the fund,
providing high quality recurring income for the Group.
Given the absence of larger fund asset raisings, funds raised in the
period demonstrate our ability to successfully launch new fund
strategies which are adjacent to our existing offering. Europe
Mid-Market, an offshoot of our successful European Corporate fund
strategy, contributed EUR0.8bn to inflows and closed in October at
EUR0.9bn of third-party commitments. We also raised capital for our new
Sale and Leaseback fund strategy, combining the expertise of our senior
debt and real estate teams. By charging fees on committed capital, these
new fund strategies immediately contribute to profit.
We closed the latest vintage of our real estate partnership capital
strategy in November at EUR1.0bn of third-party commitments,
contributing EUR0.2bn to inflows in the first half. We also attracted
further funds for our strategic equity strategy, real estate senior debt
strategy and our Australian senior debt fund, and closed two CLOs. We
had further success across our scalable capital market strategies
raising EUR0.8bn in the period and we continue to attract European
senior debt mandates ahead of raising European Senior Debt Partners IV
in the coming months.
Maintaining investment discipline in a competitive market
We deployed EUR2.3bn across our direct investment strategies during the
period, a reduction on the EUR3.6bn deployed in H1 2019 when we
experienced a particularly high level of deal activity in our European
Corporate fund strategy. All funds are currently investing at, or ahead
of, their linear investment pace.
The size and flexibility of our fund mandates, combined with our 'on the
ground' investment resources, are a competitive advantage in sourcing
deals. Furthermore, as we size our funds based on an assessment of the
investment market opportunity, rather than purely on investor demand, we
are focused on maintaining our discipline by being selective in our
investment decisions.
Fund returns benefiting from robust portfolio performance
Liquidity in the market continues to provide a positive environment for
realisations. Where appropriate, our portfolio managers capitalise on
this liquidity and actively realise assets within their portfolios. This
facilitates our ability to lock in performance and return capital to our
fund investors, providing the foundations for future fundraising
success.
Our fund and balance sheet portfolios are performing well. Despite some
macroeconomic uncertainty, portfolio performance and credit fundamentals
remain healthy. We expect the performance of our portfolios and level of
realisations to be similar in the second half of the financial year.
Interim dividend increased and ongoing capital management
The Board has approved an interim dividend of 15.0p, an increase of 50%
on the prior year interim dividend and in line with the Company's stated
policy that the interim dividend will equate to a third of the prior
year total dividend. The dividend will be paid on 14 January 2020 to
shareholders on the register on 6 December 2019. We will continue to
make the dividend reinvestment plan available.
We continue to manage our sources of balance sheet financing to ensure
we have access to sufficient cash and diversified debt facilities. The
weighted average life of drawn debt at 30 September 2019 was 3.6 years
and the balance sheet was geared 0.87x.
Positive outlook underpins increase in operating margin target
Our closed end funds model provides good visibility on future assets
under management and fund management company profits. Further, our long
duration funds and client commitments mean we are able to manage our
portfolios across economic cycles.
We have completed the structural steps necessary to rearrange our
affairs for Brexit. We will monitor developments related to the
implementation of Brexit and refine our affairs as appropriate.
We remain focused on steadily building out our existing fund strategies,
while at the same time continuing to innovate to increase
diversification by asset class and geography, and enhancing our ESG
credentials. This underpins our sustainable growth for the future.
Moreover, we will continue to use our balance sheet capital to enable
and accelerate the growth of our specialist asset management strategies.
Significant investment in new teams is often required before a fund
strategy can raise third party money and begin generating fees. As these
strategies raise successor funds with their existing teams, operating
leverage increases. Since we set our fund management company operating
margin target of above 43% in early 2018, a number of existing fund
strategies have raised larger funds, increasing fund management company
profits. We have therefore decided to increase our target to be in
excess of 50%, to reflect the maturing of existing strategies while
maintaining capacity to invest in new fund strategies that will underpin
the continued long-term growth of the Group.
(1) These are non IFRS GAAP alternative performance measures. Please see
the glossary on page 35 for further information.
Finance and operating review
The financial information prepared for, and reviewed by, management and
the Board is on a non IFRS basis. These are alternative performance
measures as defined in the glossary on page 35. The IFRS financial
statements are on pages 13 to 33.
Under IFRS the Group is deemed to control funds where it can make
significant decisions that can substantially affect the variable returns
of investors. There are 17 credit funds and CLOs required to be
consolidated under this definition of control. This has the impact of
including all of the assets and liabilities of these funds in the
consolidated statement of financial position and recognises all the
related interest income and gains or losses on investments in the
consolidated income statement. However, the legal and economic structure
of these funds means that shareholders are only at risk for the Group's
investment into these funds.
The Board believes that presenting the financial information in this
review on a non IFRS GAAP basis, and therefore excluding the impact of
the consolidated credit funds and CLOs, assists shareholders in
assessing their investment and the delivery of the Group's strategy
through its financial performance. This is consistent with the approach
taken by management, the Board and other stakeholders.
The Group's profit after tax on an IFRS basis was above the prior year
at GBP147.5m (H1 2019: GBP125.0m), with earnings per share for the
period of 50.8p (H1 2019: 43.6p). On an internally reported basis profit
after tax was below the prior year at GBP143.5m (H1 2019: GBP170.0m).
The reconciliation is below:
6 months to 30 September 2019 6 months to 30 September 2018
---------------------------------------------------------- ----------------------------------------------------------
IFRS IFRS
Income Adjusted as internally reported Adjustments as reported Adjusted as internally reported Adjustments as reported
Statement GBPm GBPm GBPm GBPm GBPm GBPm
--------------- ------------------------------- ----------- ------------ ------------------------------- ----------- ------------
Revenue
--------------- ------------------------------- ----------- ------------ ------------------------------- ----------- ------------
Fee and other
operating
revenue 135.6 (8.0) 127.6 105.4 (3.4) 102.0
--------------- ------------------------------- ----------- ------------ ------------------------------- ----------- ------------
Finance and
dividend
income 17.4 (5.7) 11.7 16.9 (16.8) 0.1
--------------- ------------------------------- ----------- ------------ ------------------------------- ----------- ------------
Net investment
returns /
gains on
investments 131.6 33.1 164.7 185.7 (29.3) 156.4
--------------- ------------------------------- ----------- ------------ ------------------------------- ----------- ------------
Total revenue 284.6 19.4 304.0 308.0 (49.5) 258.5
--------------- ------------------------------- ----------- ------------ ------------------------------- ----------- ------------
Finance costs (20.3) (8.8) (29.1) (16.9) 2.5 (14.4)
--------------- ------------------------------- ----------- ------------ ------------------------------- ----------- ------------ Administrative expenses (113.3) (9.6) (122.9) (111.6) (8.7) (120.3) --------------- ------------------------------- ----------- ------------ ------------------------------- ----------- ------------ Other - 1.4 1.4 - 0.2 0.2 --------------- ------------------------------- ----------- ------------ ------------------------------- ----------- ------------ Profit before tax 151.0 2.4 153.4 179.5 (55.5) 124.0 --------------- ------------------------------- ----------- ------------ ------------------------------- ----------- ------------ Tax (7.5) 1.6 (5.9) (9.5) 10.5 1.0 --------------- ------------------------------- ----------- ------------ ------------------------------- ----------- ------------ Profit after tax 143.5 4.0 147.5 170.0 (45.0) 125.0 --------------- ------------------------------- ----------- ------------ ------------------------------- ----------- ------------ The prior year difference between internal and IFRS financial information was primarily in the valuation of the CLO loan notes within the Investment Company. The adoption of IFRS 9 in the prior year prompted the Group to reconsider the valuation technique used to determine the valuation of the CLO loan notes in the IFRS financial information. The IFRS valuation of CLO loan notes were aligned with the valuation technique used for the internally reported financial information resulting in a one-off reduction to the IFRS reported profit after tax. Going forward we do not anticipate profit, or earnings per share, on an internally reported basis to be materially different to that on an IFRS basis. The Group has adopted IFRS 16 'Leases' with effect from 1 April 2019, with the impact of adoption detailed in note 1 to the financial statements. Non-GAAP measures are denoted by (1) throughout this review. The definition, and where appropriate, reconciliation to a GAAP measure, is included in the glossary on page 35. Overview The Group's internally reported profit before tax(1) for the period was 16% lower at GBP151.0m (H1 2019: GBP179.5m), with Fund Management Company (FMC) profit 32% higher at GBP85.0m (H1 2019: GBP64.4m) and Investment Company (IC) profit 43% lower at GBP66.0m (H1 2019: GBP115.1m). Our principal profit metric is FMC profit which has benefited from the increase in assets under management, increased fee income and a slower increase in operating costs. IC profits are lower as the prior period benefited from higher net investment returns, primarily driven by the revaluation of a legacy asset in line with its listed share price, and include the impact of the fair value gain on hedging derivatives of GBP8.5m (H1 2019: GBP9.8m credit). Income Statement - 6 months to 30 September 2019 6 months to 30 September 2018 Change adjusted GBPm GBPm % ----------- ----------------------------- ----------------------------- ------ Fund Management Company 85.0 64.4 32% ----------- ----------------------------- ----------------------------- ------ Investment Company 66.0 115.1 (43%) ----------- ----------------------------- ----------------------------- ------ Profit before tax 151.0 179.5 (16%) ----------- ----------------------------- ----------------------------- ------ Tax (7.5) (9.5) (21%) ----------- ----------------------------- ----------------------------- ------ Profit after tax 143.5 170.0 (16%) ----------- ----------------------------- ----------------------------- ------ The effective tax rate is lower than the standard corporation tax rate of 19%, as detailed on page 33. This is due to a significant proportion of the Investment Company's assets being invested directly into funds based outside the United Kingdom. Investment returns from these funds are paid to the Group in the form of non-taxable dividend income. This outcome is in line with other UK investment companies. The Investment Company's taxable costs offset the taxable profits of our UK Fund Management business, reducing the overall Group charge. Based on the internally reported profit above, the Group generated a ROE(1) of 21.0% (H1 2019: 26.0%) and adjusted earnings per share(1) for the period of 50.4p (H1 2019: 59.8p). Net current assets(1) of GBP20.5m are down from GBP328.1m at 31 March 2019, with financial liabilities maturing within one year increasing by GBP251.1m and a decrease in cash of GBP59.2m. There is sufficient balance sheet headroom to meet these financial liabilities without the need to raise additional debt. Fund Management Company Assets under management A key measure of the success of our strategy to generate value from our fund management business is our ability to grow assets under management(1). AUM is our best lead indicator to sustainable future fee streams and therefore increasing sustainable profits. In the six-month period to 30 September 2019, the net impact of fundraising and realisations saw third party AUM increase 11% to EUR38.4bn. AUM by strategic asset class is detailed below, where all figures are quoted in EURm. Third party AUM by Total strategic Corporate Investments Capital Market Investments Real Asset Investments Secondary Investments Third Party AUM asset class EURm EURm EURm EURm EURm ------------- --------------------- -------------------------- ---------------------- --------------------- ----------------- At 1 April 2019 17,144 11,505 3,581 2,231 34,461 ------------- --------------------- -------------------------- ---------------------- --------------------- ----------------- Additions 1,984 1,543 637 441 4,605 ------------- --------------------- -------------------------- ---------------------- --------------------- ----------------- Realisations (697) (116) (123) (4) (940) ------------- --------------------- -------------------------- ---------------------- --------------------- ----------------- FX and other 43 203 (91) 99 254 ------------- --------------------- -------------------------- ---------------------- --------------------- ----------------- At 30 September 2019 18,474 13,135 4,004 2,767 38,380 ------------- --------------------- -------------------------- ---------------------- --------------------- ----------------- Change % 8% 14% 12% 24% 11% ------------- --------------------- -------------------------- ---------------------- --------------------- ----------------- Corporate Investments Corporate Investments third party funds under management have increased 8% to EUR18.5bn in the period as new AUM of EUR2.0bn, including EUR0.8bn for Europe Mid-Market and EUR0.9bn of Senior Debt mandates, more than outstripped the realisations from our older funds. Capital Market Investments Capital Markets third party funds under management have increased 14% to EUR13.1bn, with new third party AUM of EUR1.5bn raised in the period. During the period we raised two CLOs, one each in Europe and the US, raising a total EUR763m, including EUR26m from our balance sheet to meet regulatory requirements. The remaining EUR806m was raised across our liquid credit funds, maintaining the momentum generated in recent years. Real Asset Investments Real Assets third party funds under management have increased 12% to EUR4.0bn. With new AUM of EUR637m raised in the period, primarily for our real estate senior debt strategy, we have demonstrated our ability to continue to raise money from UK institutions despite Brexit uncertainty. Secondary Investments Secondaries third party funds under management have increased 24% to EUR2.8bn, with new AUM of EUR441m raised in the period for our Strategic Equity fund strategy. Fee earning AUM The deployment rate for our Senior Debt Partners strategy, our Real Estate funds and our North American Private Debt funds has a direct impact on FMC income as fees are charged on an invested capital basis. The total amount of third-party capital deployed on behalf of the direct investment funds was EUR2.2bn in the period compared to EUR3.3bn in the first half of the last financial year. The direct investment funds are invested as follows:
Strategic % invested at % invested at Assets in fund at Deals completed
asset class Fund 30 September 2019 31 March 2019 30 September 2019 in period
------------ ------------ ------------------ -------------- ------------------ ---------------
Corporate ICG Europe
Investments Fund VII 48% 38% 7 1
North
American
Private
Corporate Debt Fund
Investments II 24% 22% 6 1
Senior Debt
Corporate Partners
Investments III* 65% 43% 29 9
Corporate Asia Pacific
Investments Fund III 93% 93% 8 0
ICG Longbow
Real Asset Real Estate
Investments Fund V 49% 43% 11 3
Strategic
Secondary Secondaries
Investments II 100% 82% 12 1
Secondary Strategic
Investments Equity III 15% 0% 1 1
------------ ------------ ------------------ -------------- ------------------ ---------------
* Co-mingled fund, excluding mandates and undrawn commitments
Fee earning AUM has increased 11% to EUR32.9bn since 1 April 2019
primarily due to the immediate impact of Europe Mid-Market fund which
charges fees on committed capital and fundraising across our capital
markets strategies. New investments made in our direct investment funds
are partially offset by realisations as detailed below:
Third party Capital Market Real Asset Total
fee earning Corporate Investments Investments Investments Secondary Investments Third Party Fee Earning AUM
AUM EURm EURm EURm EURm EURm
------------- --------------------- -------------- ------------ --------------------- -----------------------------
At 1 April
2019 13,545 11,123 2,891 2,067 29,626
------------- --------------------- -------------- ------------ --------------------- -----------------------------
Additions 2,154 1,505 380 441 4,480
------------- --------------------- -------------- ------------ --------------------- -----------------------------
Realisations (1,070) (215) (140) (5) (1,430)
------------- --------------------- -------------- ------------ --------------------- -----------------------------
FX and other 24 163 (83) 112 216
------------- --------------------- -------------- ------------ --------------------- -----------------------------
At 30
September
2019 14,653 12,576 3,048 2,615 32,892
------------- --------------------- -------------- ------------ --------------------- -----------------------------
Change % 8% 13% 5% 27% 11%
------------- --------------------- -------------- ------------ --------------------- -----------------------------
Fee income
Third party fee income(1) of GBP135.6m was 29% higher than the prior
year due to the successful fundraising of funds which charges fees on
committed capital in the current and prior year; and investments made by
other funds that charge fees on invested capital. Details of movements
are shown below:
6 months to 6 months to
30 September 2019 30 September 2018 Change
Fee income GBPm GBPm %
--------------------------- ------------------ ------------------ ------
Corporate Investments 81.2 65.4 24%
--------------------------- ------------------ ------------------ ------
Capital Market Investments 25.8 19.7 31%
--------------------------- ------------------ ------------------ ------
Real Asset Investments 11.3 11.1 2%
--------------------------- ------------------ ------------------ ------
Secondary Investments 17.3 9.2 88%
--------------------------- ------------------ ------------------ ------
Total third party funds 135.6 105.4 29%
--------------------------- ------------------ ------------------ ------
IC management fee 11.4 10.0 14%
--------------------------- ------------------ ------------------ ------
Total 147.0 115.4 27%
--------------------------- ------------------ ------------------ ------
Third party fees include GBP15.6m of net performance fees (H1 2019:
GBP10.6m), primarily related to Corporate Investments. Performance fees
are an integral recurring part of the fee income profile and
profitability stream of the Group.
Third party fees are 84% denominated in Euros or US Dollars. The Group's
policy is to hedge non Sterling fee income to the extent that it is not
matched by costs and is predictable. Total fee income included a GBP3.1m
FX benefit in the period.
The weighted average fee rate(1), excluding performance fees, across our
fee earning AUM is 0.86% (March 2019: 0.86%).
30 September 2019 31 March 2019
Weighted average fee rates GBPm GBPm
--------------------------- ----------------- -------------
Corporate Investments 1.05% 1.05%
--------------------------- ----------------- -------------
Capital Market Investments 0.49% 0.52%
--------------------------- ----------------- -------------
Real Asset Investments 0.88% 0.88%
--------------------------- ----------------- -------------
Secondary Investments 1.50% 1.29%
--------------------------- ----------------- -------------
Total third party funds 0.86% 0.86%
--------------------------- ----------------- -------------
Other income
In addition to fees, the FMC recorded dividend receipts(1) of GBP17.4m
(H1 2019: GBP16.9m) from the increased number and improved performance
of our CLOs.
Operating expenses
Operating expenses of the FMC were GBP79.4m (H1 2019: GBP67.9m), of
which incentive scheme costs of GBP30.0m (H1 2019: GBP22.3m) were a
significant component. The increase in incentive scheme costs reflects
the performance of the fund management business and increase in
headcount. Salaries were GBP27.5m (H1 2019: GBP23.6m) as average
headcount increased 20% from 272 to 326 as we continue to invest in our
investment, distribution and support teams commensurate with the demand
for our asset classes. Other administrative costs have remained flat at
GBP21.9m (H1 2019: GBP22.0m).
The FMC operating margin(1) was 51.7% up from 48.7% in the prior year,
as a result of average fee earning AUM increasing 28% to EUR31.4bn for
the six months ending 30 September 2019 thereby increasing the operating
leverage of our existing strategies.
Investment Company
Balance sheet investments
The balance sheet investment portfolio(1) increased 6% in the period to
GBP2,388m at 30 September 2019, as detailed below:
GBPm
----------------------- -------
At 1 April 2019 2,255.7
-------------------------- -------
New investments 102.6
-------------------------- -------
Realisations (160.6)
-------------------------- -------
Net investment returns 121.3
-------------------------- -------
Cash interest received (8.0)
-------------------------- -------
FX and other 76.6
-------------------------- -------
At 30 September 2019 2,387.6
-------------------------- -------
In the period GBP69.3m was invested in new and follow on investments
made by our corporate funds; GBP23.3m was invested in our capital market
funds; GBP7.5m in our Strategic Equity funds and GBP2.5m in our real
estate funds.
Realisations comprise the return of GBP79.7m of principal and the
crystallisation of GBP80.9m of net investment returns.
The Sterling value of the portfolio increased by GBP81.5m due to FX
movements. The portfolio is 41% Euro denominated, 32% US dollar
denominated, and 16% Sterling denominated.
Net investment returns
Net investment returns(1) of GBP131.6m (H1 2019: GBP185.7m) represents
the total return generated from the balance sheet portfolio in the
period.
At 10.8% (H1 2019: 17.1%) of the average balance sheet portfolio, net
investment returns were lower in the period reflecting the mix and
performance of the underlying portfolios in which the balance sheet is
invested. Returns in the prior period had benefited from a GBP41.1m
increase in value in respect of one of the last remaining legacy assets
which was revalued in line with its listed share price.
The balance sheet investment portfolio is weighted towards the higher
returning asset classes as detailed below:
As at As at
Target return 30 September 2019 % of 31 March 2019 % of
profile GBPm total GBPm total
------------ --------------- ------------------ ----- -------------- -----
Corporate
Investments 15-20% 1,408 59% 1,343 59%
------------ --------------- ------------------ ----- -------------- -----
Capital
Market
Investments 5-10% 607 25% 556 25%
------------ --------------- ------------------ ----- -------------- -----
Real Asset
Investments c10% 186 8% 183 8%
------------ --------------- ------------------ ----- -------------- -----
Secondary
Investments 15-20% 187 8% 174 8%
------------ --------------- ------------------ ----- -------------- -----
Total
balance
sheet
portfolio 2,388 100% 2,256 100%
------------ --------------- ------------------ ----- -------------- -----
In addition, GBP116.3m (31 March 2019: GBP110.7m) of current assets are
held on the balance sheet prior to being transferred to third party
investors or funds. The flexibility of our balance sheet enables our
investment teams to continue to source attractive deals whilst a fund is
being raised and to hold deals in excess of capacity prior to
syndication to third party investors. At 30 September 2019, these assets
were in respect of our new real asset investment strategies where we are
using the balance sheet to demonstrate proof of concept.
Interest expense
Interest expense(1) of GBP28.8m was GBP2.1m higher than the prior period
(H1 2019: GBP26.7m), following the raising of new private placement debt
in the period.
Operating expenses
Operating expenses(1) of the IC amounted to GBP33.9m (H1 2019: GBP43.7m),
of which incentive scheme costs of GBP24.4m (H1 2019: GBP35.3m) were the
largest component. The GBP10.9m decrease is due to a reduction in net
investment returns compared to the prior period. Other staff and
administrative costs were GBP9.5m compared to GBP8.4m in the first half
of last year, a GBP1.1m increase due to increasing regulatory and
governance costs.
Group cash flow and debt
The balance sheet headroom remains healthy, with GBP653.6m of available
cash and debt facilities at 30 September 2019, excluding the
consolidated structured entities. The movement in the Group's unutilised
cash and debt facilities during the period is detailed as follows:
Headroom bridge GBPm
----------------------------------- ------
At 1 April 2019 572.7
-------------------------------------- ------
New private placement notes issued 140.7
-------------------------------------- ------
Movement in cash (59.1)
-------------------------------------- ------
Movement in drawn debt (44.8)
-------------------------------------- ------
FX and other 44.1
-------------------------------------- ------
At 30 September 2019 653.6
-------------------------------------- ------
Total drawn debt at 30 September 2019 was GBP1,229m compared to
GBP1,184m at 31 March 2019, with available cash of GBP104m compared to
GBP163m at 31 March 2019.
Capital position
Shareholders' funds increased by GBP27.9m to GBP1,411.3m (31 March 2019:
GBP1,383.4m), as the retained profits in the period were offset by the
payment of the ordinary dividend. Total debt to shareholders' funds
(gearing) as at 30 September 2019 increased to 0.87x from 0.86x at 31
March 2019.
Principal risks and uncertainties
The principal risks and uncertainties to which the Group is exposed for
the remainder of the year have been subject to robust assessment by the
Directors and remain consistent with those outlined in our annual
report. As part of the risk management development plan, amongst other
activities, we have implemented an enterprise wide risk management
policy and developed associated reporting. We proactively plan for and
respond to emerging risks, which has led to an enhancement of the
liquidity risk management of our Capital Markets business. We are
currently focussed on the UK general election and the potential
implications for UK economic policy and the enactment of the EU-UK
Brexit agreement. In particular, we have actively mitigated the impact
of a potential Brexit on our business by strengthening our EU operations
and obtaining the required permissions to enable continuity of our
marketing services.
Responsibility Statement
We confirm to the best of our knowledge:
-- The condensed set of financial statements have been prepared in
accordance with IAS 34 'Interim Financial Reporting';
-- The interim management report, which is incorporated into the Directors'
report, includes a fair review of the development and performance of the
business and the position of the Group and the undertakings included in
the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face; and
-- There have been no material related party transactions that have an
effect on the financial position or performance of the Group in the first
six months of the current financial year since that reported in the 31
March 2019 Annual Report.
This responsibility statement was approved by the Board of Directors on
18 November 2019 and is signed on its behalf by:
Benoit Durteste Vijay Bharadia
CEO CFOO
Consolidated Income Statement
For the six months ended 30 September 2019
Six months ended Six months ended
30 September 2019 30 September 2018
(Unaudited) (Unaudited)
Notes GBPm GBPm
------------------------------------------------------- ------ ------------------ -------------------
Fee and other operating income 2 127.6 102.0
Finance and dividend income 11.7 0.1
Net gains on investments 164.7 156.4
Total revenue 304.0 258.5
------------------------------------------------------- ------ ------------------ -------------------
Finance costs 1 (29.1) (14.4)
Administrative expenses 1 (122.9) (120.3)
Share of results of joint ventures accounted for using
equity method 1.4 0.2
Profit before tax 153.4 124.0
------------------------------------------------------- ------ ------------------ -------------------
Tax (charge)/credit 7 (5.9) 1.0
------------------------------------------------------- ------ ------------------ -------------------
Profit after tax 147.5 125.0
------------------------------------------------------- ------ ------------------ -------------------
Attributable to:
------------------------------------------------------- ------ ------------------ -------------------
Equity holders of the parent 144.5 124.0
Non controlling interests 3.0 1.0
------------------------------------------------------- ------ ------------------ -------------------
147.5 125.0
------------------------------------------------------- ------ ------------------ -------------------
Earnings per share 6 50.8p 43.6p
------------------------------------------------------- ------ ------------------ -------------------
Diluted earnings per share 6 50.8p 43.6p
------------------------------------------------------- ------ ------------------ -------------------
The Group has adopted IFRS 16 from 1 April 2019. As permitted under the
transition rules the prior period comparatives have not been restated.
Further information can be found in note 1.
All activities represent continuing operations. The accompanying notes
are an integral part of these financial statements.
Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2019
Six months ended Six months ended
30 September 2019 30 September 2018
(Unaudited) (Unaudited)
GBPm GBPm
---------------------------------------------------- ------------------ ------------------
Profit for the period 147.5 125.0
Items that will not be reclassified subsequently to
profit or loss
Exchange differences on translation of foreign
operations 9.6 9.6
Tax on items taken directly to or transferred from
equity 1.1 (2.1)
------------------------------------------------------ ------------------ ------------------
10.7 7.5
---------------------------------------------------- ------------------ ------------------
Total comprehensive income for the period 158.2 132.5
------------------------------------------------------ ------------------ ------------------
Attributable to:
---------------------------------------------------- ------------------ ------------------
Equity holders of the parent 154.6 131.5
Non controlling interests 3.6 1.0
------------------------------------------------------ ------------------ ------------------
158.2 132.5
---------------------------------------------------- ------------------ ------------------
Consolidated Statement of Financial Position
As at 30 September 2019
30 September 2019 31 March 2019
(Unaudited) (Audited)
Notes GBPm GBPm
----------------------------------------------------- ------ ----------------- -------------
Non current assets
Intangible assets 14.3 15.4
Property, plant and equipment 1 20.3 12.6
Investment in joint venture accounted for under the
equity method 3.3 1.8
Financial assets at fair value 4 6,274.7 5,647.1
Derivative financial assets 4 6.1 3.1
Deferred tax asset 9.5 12.8
----------------------------------------------------- ------ ----------------- -------------
6,328.2 5,692.8
----------------------------------------------------- ------ ----------------- -------------
Current assets
Trade and other receivables 245.0 227.1
Financial assets at fair value 4 9.4 77.3
Derivative financial assets 4 54.3 51.6
Current tax debtor 8.5 8.4
Cash and cash equivalents 353.1 354.0
----------------------------------------------------- ------ ----------------- -------------
670.3 718.4
----------------------------------------------------- ------ ----------------- -------------
Disposal groups held for sale 4 263.5 107.1
----------------------------------------------------- ------ ----------------- -------------
Total assets 7,262.0 6,518.3
----------------------------------------------------- ------ ----------------- -------------
Equity and reserves
Called up share capital 77.2 77.2
Share premium account 179.9 179.5
Other reserves 0.4 (3.5)
Retained earnings 1,153.8 1,130.2
----------------------------------------------------- ------ ----------------- -------------
Equity attributable to owners of the Company 1,411.3 1,383.4
----------------------------------------------------- ------ ----------------- -------------
Non controlling interest 15.4 10.9
----------------------------------------------------- ------ ----------------- -------------
Total equity 1,426.7 1,394.3
----------------------------------------------------- ------ ----------------- -------------
Non current liabilities
Provisions 0.7 0.9
Financial liabilities at fair value 4 3,967.8 3,449.0
Financial liabilities at amortised cost 979.8 1,183.5
Other financial liabilities 1 7.6 -
Derivative financial liabilities 4 43.8 45.8
Deferred tax liabilities 0.9 0.2
----------------------------------------------------- ------ ----------------- -------------
5,000.6 4,679.4
----------------------------------------------------- ------ ----------------- -------------
Current liabilities
Provisions 0.4 0.4
Trade and other payables 406.5 350.5
Financial liabilities at amortised cost 251.1 -
Current tax creditor 3.2 2.7
Derivative financial liabilities 4 14.2 14.1
----------------------------------------------------- ------ ----------------- -------------
675.4 367.7
----------------------------------------------------- ------ ----------------- -------------
Liabilities directly associated with disposal groups
held for sale 4 159.3 76.9
----------------------------------------------------- ------ ----------------- -------------
Total liabilities 5,835.3 5,124.0
----------------------------------------------------- ------ ----------------- -------------
Total equity and liabilities 7,262.0 6,518.3
----------------------------------------------------- ------ ----------------- -------------
Consolidated Statement of Cash Flows
Six months ended
30 September 2019
(Unaudited) Six months ended 30 September 2018 (Unaudited)
For the six months ended 30 September 2019 GBPm GBPm
--------------------------------------------------- ------------------ ----------------------------------------------
Operating activities
Interest received 124.0 105.9
Fees received 106.5 79.8
Dividends received 0.5 1.6
Payments to suppliers and employees (58.7) (106.4)
Proceeds from sale of current financial assets and
disposal groups 80.7 147.4
Purchase of current financial assets and disposal
groups (82.1) (258.1)
Purchase of non current financial assets (1,294.0) (1,445.6)
Proceeds from sale of non current financial assets 1,031.4 1,333.3
Net cash inflow from derivative contracts 15.4 17.4
Cash used in operating activities (76.3) (124.7)
Taxes received/(paid) 0.9 (15.4)
---------------------------------------------------- ------------------ ----------------------------------------------
Net cash used in operating activities (75.4) (140.1)
---------------------------------------------------- ------------------ ----------------------------------------------
Investing activities
Purchase of property, plant and equipment (2.7) (2.5)
Net cash used in investing activities (2.7) (2.5)
---------------------------------------------------- ------------------ ----------------------------------------------
Financing activities
Dividends paid (100.0) (59.9)
Interest paid (93.8) (88.8)
Increase in long term borrowings 496.8 1,091.9
Repayment of long term borrowings (150.5) (970.9)
Purchase of own shares (48.5) (34.1)
Net cash generated from/(used in) financing
activities 104.0 (61.8)
---------------------------------------------------- ------------------ ----------------------------------------------
Net increase/(decrease) in cash 25.9 (204.4)
---------------------------------------------------- ------------------ ----------------------------------------------
Cash and cash equivalents at beginning of period 354.0 520.7
Effect of foreign exchange rate changes (26.8) (39.8)
Net cash and cash equivalents at end of period 353.1 276.5
---------------------------------------------------- ------------------ ----------------------------------------------
Presented on the statement of financial position
as:
--------------------------------------------------- ------------------ ----------------------------------------------
Cash and cash equivalents 353.1 276.5
---------------------------------------------------- ------------------ ----------------------------------------------
The Group's cash and cash equivalents includes GBP249.5m (31 March 2019:
GBP191.3m) of restricted cash held principally by structured entities
controlled by the Group.
Consolidated Statement of Changes in Equity
For the six months ended 30 September 2019
Capital
Share Share redemption Share based Own Retained Total
capital premium reserve payments reserve shares Foreign currency translation reserve earnings Total Non controlling interest equity
(Unaudited) GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------------------------- -------- -------- ----------- ----------------- ------- ------------------------------------ --------- ------- ------------------------ -------
Balance at 1 April 2019 77.2 179.5 5.0 64.3 (92.8) 20.0 1,130.2 1,383.4 10.9 1,394.3
--------------------------------------------------- -------- -------- ----------- ----------------- ------- ------------------------------------ --------- ------- ------------------------ -------
Adjustment on initial application
of IFRS 16 (note 1) - - - - - - (1.8) (1.8) - (1.8)
--------------------------------------------------- -------- -------- ----------- ----------------- ------- ------------------------------------ --------- ------- ------------------------ -------
Profit for the period - - - - - - 144.5 144.5 3.0 147.5
Exchange differences on
translation of foreign operations - - - - - 9.0 - 9.0 0.6 9.6
Tax on items taken directly to or transferred from
equity - - - 1.1 - - - 1.1 - 1.1
--------------------------------------------------- -------- -------- ----------- ----------------- ------- ------------------------------------ --------- ------- ------------------------ -------
Total comprehensive income for the period - - - 1.1 - 9.0 144.5 154.6 3.6 158.2
--------------------------------------------------- -------- -------- ----------- ----------------- ------- ------------------------------------ --------- ------- ------------------------ -------
Movement in control of subsidiary - - - - - - (0.9) (0.9) 0.9 -
Own shares acquired in the period - - - - (36.9) - - (36.9) - (36.9)
Options/awards exercised - 0.4 - (30.3) 48.5 - (18.2) 0.4 - 0.4
Credit for equity settled
share schemes - - - 12.5 - - - 12.5 - 12.5
Dividends paid - - - - - - (100.0) (100.0) - (100.0)
--------------------------------------------------- -------- -------- ----------- ----------------- ------- ------------------------------------ --------- ------- ------------------------ -------
Balance at 30 September 2019 77.2 179.9 5.0 47.6 (81.2) 29.0 1,153.8 1,411.3 15.4 1,426.7
--------------------------------------------------- -------- -------- ----------- ----------------- ------- ------------------------------------ --------- ------- ------------------------ -------
For the six months ended 30 September 2018
Capital Available
Share Share redemption Share based for sale Own Retained Total
capital premium reserve payments reserve reserve shares Foreign currency translation reserve earnings Total Non controlling interest equity
(Unaudited) GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------------------------- -------- -------- ----------- ----------------- --------- ------- ------------------------------------ --------- ------- ------------------------ -------
Balance at 1 April 2018 77.2 179.4 5.0 61.9 5.7 (77.6) 11.2 1,054.8 1,317.6 0.5 1,318.1
--------------------------------------------------- -------- -------- ----------- ----------------- --------- ------- ------------------------------------ --------- ------- ------------------------ -------
Adjustment on initial application
of IFRS 9 - - - - (5.7) - - 5.7 - - -
--------------------------------------------------- -------- -------- ----------- ----------------- --------- ------- ------------------------------------ --------- ------- ------------------------ -------
Profit for the period - - - - - - - 124.0 124.0 1.0 125.0
Exchange differences on
translation of foreign operations - - - - - - 9.6 - 9.6 - 9.6
Tax on items taken directly to or transferred from
equity - - - (2.1) - - - - (2.1) - (2.1)
--------------------------------------------------- -------- -------- ----------- ----------------- --------- ------- ------------------------------------ --------- ------- ------------------------ -------
Total comprehensive income for the period - - - (2.1) (5.7) - 9.6 129.7 131.5 1.0 132.5
--------------------------------------------------- -------- -------- ----------- ----------------- --------- ------- ------------------------------------ --------- ------- ------------------------ -------
Own shares acquired in the period - - - - - (34.1) - - (34.1) - (34.1)
Options/awards exercised - 0.1 - (23.2) - 33.9 - (10.7) 0.1 - 0.1
Credit for equity settled
share schemes - - - 13.5 - - - - 13.5 - 13.5
Dividends paid - - - - - - - (59.9) (59.9) - (59.9)
--------------------------------------------------- -------- -------- ----------- ----------------- --------- ------- ------------------------------------ --------- ------- ------------------------ -------
Balance at 30 September 2018 77.2 179.5 5.0 50.1 - (77.8) 20.8 1,113.9 1,368.7 1.5 1,370.2
--------------------------------------------------- -------- -------- ----------- ----------------- --------- ------- ------------------------------------ --------- ------- ------------------------ -------
Notes to the Half Year Report
For the six months ended 30 September 2019
1. Basis of preparation
(i) Basis of preparation
The condensed set of financial statements included in this half year
financial report have been prepared in accordance with International
Accounting Standard (IAS) 34 'Interim Financial Reporting' as adopted by
the European Union, and except as detailed below, on the basis of the
accounting policies and methods of computation set out in the
consolidated financial statements of the Group for the year ended 31
March 2019.
While the financial information included in this announcement has been
prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards (IFRSs) as adopted by the
European Union, this announcement does not itself contain sufficient
information to comply with IFRSs.
The comparative figures are not the Group's statutory accounts for the
financial year, as defined in section 434 of the Companies Act 2006.
Those accounts have been reported on by the Group's auditors and
delivered to the registrar of companies. The report of the auditors was
(i) unqualified, (ii) did not include a reference to any matters which
the auditors drew attention by way of emphasis without qualifying their
report, and (iii) did not contain a statement under section 498 (2) or
(3) of the Companies Act 2006.
The consolidated financial statements of the Group as at and for the
year ended 31 March 2019 which were prepared under International
Financial Reporting Standards as adopted by the EU are available on the
Group's website, www.icgam.com.
ii) Going concern
The Directors have prepared the condensed financial statements on a
going concern basis which requires the Directors to have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. The Directors made
this assessment in light of GBP653.6m of cash and unutilised debt
facilities, meaning that any debt repayments due in the next 18 months
can be made without the need to raise further debt.
(iii) Related party transactions
There have been no material changes to the nature or size of related
party transactions since 31 March 2019.
(iv) Changes in significant accounting policies
The Group has adopted IFRS 16 'Leases' with effect from 1 April 2019. As
permitted under the transition rules, comparative figures for the period
to 30 September 2018 and for the year ended 31 March 2019 have not been
restated. The impact of adopting this new accounting standard on the
Group's significant accounting policies is outlined below.
IFRS 16 - 'Leases'
IFRS 16 introduces changes to lease accounting by removing the
distinction between operating and finance leases. This requires the
Group to recognise a 'right-of-use' (ROU) asset and a lease liability at
the commencement of all leases, except for short-term leases, those
leases that are contractually less than 12 months, and leases of low
value assets.
Under the new standard, the present value of total rentals payable over
the life of the lease is recognised as a liability. This is offset by an
asset comprising the initial measurement of the corresponding lease
liability, and any other initial direct costs, lease incentives and any
costs to dismantle or return the asset to its original form. The ROU
asset is subsequently measured at cost less accumulated depreciation and
impairment losses.
The standard therefore increases debt liabilities on the balance sheet
and the income statement expense is represented as depreciation and
finance cost, rather than rent.
Notes to the Half Year Report continued
For the six months ended 30 September 2019
1. Basis of preparation continued
Accounting policy -- IFRS 16 Leases
The Group has assessed low value assets to be those with a value of less
than GBP10,000 (or local currency equivalent). As a result, the Group's
material leases impacted by the adoption of this accounting standard are
its rented office spaces.
As permitted by IFRS 16, we have elected not to restate comparative
numbers, presenting the GBP1.8m cumulative effect of applying the
standard as an opening reserves adjustment. The impact of this standard
on the consolidated statement of financial position is as follows:
30 September 2019 1 April 2019
(Unaudited) (Unaudited)
GBPm GBPm
------------------------------- ----------------- ------------
Non current assets
Property, plant and equipment 6.8 8.5
-------------------------------
Non current liabilities
Other financial liabilities 7.6 10.3
------------------------------- ----------------- ------------
Equity and reserves
Retained earnings - 1.8
------------------------------- ----------------- ------------
2. Revenue
Revenue and its related cashflows, within the scope
of IFRS 15, are all derived from the Group's fund
management company activities. The significant components
of the Group's fund management revenues are as follows:
Six months ended Six months ended
30 September 2019 30 September 2018
(Unaudited) (Unaudited)
Type of contract/service GBPm GBPm
------------------------------- ------------------ ------------------
Management fees* 124.0 94.9
Other income 3.6 7.1
------------------------------- ------------------ ------------------
Fee and other operating income 127.6 102.0
------------------------------- ------------------ ------------------
*Included within management fees is GBP15.6m (H1 2019: GBP10.6m) of
performance related fee income.
Management Fees
The Group earns management fees from its performance of investment
management services. Management fees are charged on third party money
managed by ICG and are based on an agreed percentage of either committed
money, invested money or net asset value (NAV), dependent on the fund.
Management fees are variable fee revenue streams which relate to one
performance obligation and contain a non-performance and performance
related fee element. Non-performance related management fees for the
period of GBP108.4m (H1 2019: GBP84.3m) are charged in arrears and are
recognised in the period services are performed.
Performance related fees are recognised only where it is highly probable
that the revenue will not be reversed in the future. Performance related
fees will only be crystallised when a performance hurdle is met and
portfolio liquidations are made. The estimate of performance fees is
made with reference to the liquidation profile for the fund, which
factors in portfolio exits and timeframes. A constraint is applied to
the estimate to reflect uncertainty of future fund performance.
Performance fees are recognised as the services are performed, with time
elapsed being the measure of progress. Performance fees of GBP15.6m (H1
2019: GBP10.6m) have been recognised for services performed during the
period.
There are no other individually significant components of revenue from
contracts with customers.
Notes to the Half Year Report continued
For the six months ended 30 September 2019
3. Business segments
For management purposes, the Group is currently organised into the Fund
Management Company (FMC) and the Investment Company (IC). Segment
information about these businesses is presented below and is reviewed by
the Executive Directors.
The Group reports the profit of the FMC separately from the profits generated by the IC. The FMC is defined as the operating unit and as such incurs the majority of the Group's costs, including the cost of the investment network, i.e. the Investment Executives and the local offices, as well as the cost of most support functions, primarily information technology, human resources and marketing. The IC is charged a management fee of 1% of the carrying value of the average investment portfolio by the FMC and this is shown below as fee income. The costs of finance, treasury and portfolio administration teams, and the costs related to being a listed entity, are allocated to the IC. The remuneration of the Executive Directors is allocated equally to the FMC and the IC. Six months ended Real Total 30 September 2019 Corporate Investments Capital Market Investments Asset Investments Secondary Investments FMC IC Total internally reported (Unaudited) GBPm GBPm GBPm GBPm GBPm GBPm GBPm ------------------- --------------------- -------------------------- ------------------ --------------------- ------ ------ ------------------------- External fee income 81.2 25.8 11.3 17.3 135.6 - 135.6 Inter-segmental fee 7.1 2.0 1.3 1.0 11.4 (11.4) - ------------------- --------------------- -------------------------- ------------------ --------------------- ------ ------ ------------------------- Fund management fee income 88.3 27.8 12.6 18.3 147.0 (11.4) 135.6 ------------------- --------------------- -------------------------- ------------------ --------------------- ------ ------ ------------------------- Net investment returns - 131.6 131.6 Dividend income 17.4 - 17.4 Total revenue 164.4 120.2 284.6 ------------------- --------------------- -------------------------- ------------------ --------------------- ------ ------ ------------------------- Interest expense - (28.8) (28.8) Net fair value gain on derivatives - 8.5 8.5 Staff costs (27.5) (4.0) (31.5) Incentive scheme costs (30.0) (24.4) (54.4) Other administrative expenses (21.9) (5.5) (27.4) Profit before tax 85.0 66.0 151.0 ------------------- --------------------- -------------------------- ------------------ --------------------- ------ ------ ------------------------- Six months ended Real Total 30 September 2018 Corporate Investments Capital Market Investments Asset Investments Secondary Investments FMC IC Total internally reported (Unaudited) GBPm GBPm GBPm GBPm GBPm GBPm GBPm ------------------- --------------------- -------------------------- ------------------ --------------------- ------ ------ ------------------------- External fee income 65.4 19.7 11.1 9.2 105.4 - 105.4 Inter-segmental fee 6.4 1.8 0.9 0.9 10.0 (10.0) - ------------------- --------------------- -------------------------- ------------------ --------------------- ------ ------ ------------------------- Fund management fee income 71.8 21.5 12.0 10.1 115.4 (10.0) 105.4 ------------------- --------------------- -------------------------- ------------------ --------------------- ------ ------ ------------------------- Net investment returns - 185.7 185.7 Dividend income 16.9 - 16.9 Total revenue 132.3 175.7 308.0 ------------------- --------------------- -------------------------- ------------------ --------------------- ------ ------ ------------------------- Interest expense - (26.7) (26.7) Net fair value gain on derivatives - 9.8 9.8 Staff costs (23.6) (4.0) (27.6) Incentive scheme costs (22.3) (35.3) (57.6) Other administrative expenses (22.0) (4.4) (26.4) Profit before tax 64.4 115.1 179.5 ------------------- --------------------- -------------------------- ------------------ --------------------- ------ ------ ------------------------- Notes to the Half Year Report continued For the six months ended 30 September 2019 3. Business segments continued Reconciliation of financial statements reported to the Executive Directors to the position reported under IFRS Included in the table below are statutory adjustments made to the Investment Company for the following: -- In the current period, all income generated from Investment Company investments is presented as net investment returns for internal reporting purposes whereas under IFRS it is presented within gains on investments and other operating income. -- The structured entities controlled by the Group are presented as fair value investments for internal reporting purposes, whereas the statutory financial statements present these entities on a fully consolidated basis. Consolidated Income Statement Six months ended 30 September 2019 Internally reported Consolidated structured entities Financial statements (Unaudited) GBPm GBPm GBPm ------------------------------------------------------- --- ------------------- -------------------------------- -------------------- - Fund management fee income 135.6 (11.6) 124.0 - Other operating income - 3.6 3.6 Fee and other operating income 135.6 (8.0) 127.6 - Dividend income 17.4 (17.4) - - Net fair value gain on derivatives - 11.7 11.7 Finance and dividend income 17.4 (5.7) 11.7 Net investment returns/Net gains on investments 131.6 33.1 164.7 -------------------------------------------------------- ------------------- -------------------------------- -------------------- Total revenue 284.6 19.4 304.0 -------------------------------------------------------- ------------------- -------------------------------- -------------------- - Interest expense (28.8) (0.3) (29.1)
- Net fair value gain/(loss) on derivatives 8.5 (8.5) - Finance costs (20.3) (8.8) (29.1) - Staff costs (31.5) 0.2 (31.3) - Incentive scheme costs (54.4) - (54.4) - Other administrative expenses (27.4) (9.8) (37.2) Administrative expenses (113.3) (9.6) (122.9) Share of results of joint ventures accounted for using equity method - 1.4 1.4 -------------------------------------------------------- ------------------- -------------------------------- -------------------- Profit before tax 151.0 2.4 153.4 -------------------------------------------------------- ------------------- -------------------------------- -------------------- Tax (charge)/credit (7.5) 1.6 (5.9) -------------------------------------------------------- ------------------- -------------------------------- -------------------- Profit after tax 143.5 4.0 147.5 -------------------------------------------------------- ------------------- -------------------------------- -------------------- Notes to the Half Year Report continued For the six months ended 30 September 2019 3. Business segments continued Consolidated Income Statement continued Six months ended 30 September 2018 Internally reported Consolidated structured entities Financial statements (Unaudited) GBPm GBPm GBPm -------------------------------------- ------------------- --------------------- -------------------------------- -------------------- - Fund management fee income 105.4 (10.5) 94.9 - Other operating income - 7.1 7.1 Fee and other operating income 105.4 (3.4) 102.0 - Interest income - 0.1 0.1 - Dividend income 16.9 (16.9) - Finance and dividend income 16.9 (16.8) 0.1 Net investment returns/Net gains on investments 185.7 (29.3) 156.4 ------------------------------------------------------------ ------------------- -------------------------------- -------------------- Total revenue 308.0 (49.5) 258.5 ------------------------------------------------------------ ------------------- -------------------------------- -------------------- - Interest expense (26.7) - (26.7) - Net fair value gain on derivatives 9.8 2.5 12.3 Finance costs (16.9) 2.5 (14.4) - Staff costs (27.6) 0.5 (27.1) - Incentive scheme costs (57.6) - (57.6) - Other administrative expenses (26.4) (9.2) (35.6) Administrative expenses (111.6) (8.7) (120.3) Share of results of joint ventures accounted for using equity method - 0.2 0.2 ------------------------------------------------------------ ------------------- -------------------------------- -------------------- Profit before tax 179.5 (55.5) 124.0 --------------------------------------- -------------------- ------------------- -------------------------------- -------------------- Tax (charge)/credit (9.5) 10.5 1.0 --------------------------------------- -------------------- ------------------- -------------------------------- -------------------- Profit after tax 170.0 (45.0) 125.0 --------------------------------------- -------------------- ------------------- -------------------------------- -------------------- Notes to the Half Year Report continued For the six months ended 30 September 2019 3. Business segments continued Consolidated Statement of Financial Position 30 September 2019 Internally reported Consolidated structured entities Financial statements (Unaudited) GBPm GBPm GBPm ----------------------------------------------------- ------------------- -------------------------------- -------------------- Non current financial assets 2,387.6 3,890.4 6,278.0 Other non current assets 44.4 5.8 50.2 Cash 104.0 249.1 353.1 Current financial assets 116.3 (106.9) 9.4 Other current assets 218.0 89.8 307.8 Disposal groups held for sale - 263.5 263.5 ----------------------------------------------------- ------------------- -------------------------------- -------------------- Total assets 2,870.3 4,391.7 7,262.0 ----------------------------------------------------- ------------------- -------------------------------- -------------------- Non current financial liabilities 979.8 3,967.8 4,947.6 Other non current liabilities 55.7 (2.7) 53.0 Current financial liabilities 251.1 - 251.1 Other current liabilities 166.7 257.6 424.3 Liabilities directly associated with disposal groups held for sale - 159.3 159.3 ----------------------------------------------------- ------------------- -------------------------------- -------------------- Total liabilities 1,453.3 4,382.0 5,835.3 ----------------------------------------------------- ------------------- -------------------------------- -------------------- Equity 1,417.0 9.7 1,426.7 ----------------------------------------------------- ------------------- -------------------------------- -------------------- Total equity and liabilities 2,870.3 4,391.7 7,262.0 ----------------------------------------------------- ------------------- -------------------------------- -------------------- 31 March 2019 Internally reported Consolidated structured entities Financial Statements (Audited) GBPm GBPm GBPm ----------------------------------------------------- ------------------- -------------------------------- -------------------- Non current financial assets 2,255.7 3,393.2 5,648.9
Other non current assets 36.1 7.8 43.9
Cash 163.2 190.8 354.0
Current financial assets 110.7 (33.4) 77.3
Other current assets 215.7 71.4 287.1
Disposal groups held for sale - 107.1 107.1
------------------------------------------------------ ------------------- -------------------------------- --------------------
Total assets 2,781.4 3,736.9 6,518.3
------------------------------------------------------ ------------------- -------------------------------- --------------------
Non current financial liabilities 1,183.5 3,449.0 4,632.5
Other non current liabilities 46.7 0.2 46.9
Other current liabilities 161.5 206.2 367.7
Liabilities directly associated with disposal groups
held for sale - 76.9 76.9
------------------------------------------------------ ------------------- -------------------------------- --------------------
Total liabilities 1,391.7 3,732.3 5,124.0
------------------------------------------------------ ------------------- -------------------------------- --------------------
Equity 1,389.7 4.6 1,394.3
------------------------------------------------------ ------------------- -------------------------------- --------------------
Total equity and liabilities 2,781.4 3,736.9 6,518.3
------------------------------------------------------ ------------------- -------------------------------- --------------------
Notes to the Half Year Report continued
For the six months ended 30 September 2019
3. Business segments continued
Consolidated Statement of Cash Flows
Internally
30 September 2019 reported Consolidated structured entities Financial Statements
(Unaudited) GBPm GBPm GBPm
--------------------------------------------------- --- ---------- -------------------------------- --------------------
Interest received 12.2 111.8 124.0
Fees received 111.1 (4.6) 106.5
Dividends received 17.8 (17.3) 0.5
Payments to suppliers and employees (52.8) (5.9) (58.7)
Proceeds from sale of current financial assets and
disposal groups 80.7 - 80.7
Purchase of current financial assets and disposal
groups (82.1) - (82.1)
Purchase of non current financial assets (102.6) (1,191.4) (1,294.0)
Proceeds from sale of non current financial assets 164.5 866.9 1,031.4
Net cash inflow from derivative contracts 9.7 5.7 15.4
Cash generated from/(used in) operating activities 158.5 (234.8) (76.3)
---------------------------------------------------- ---------- -------------------------------- --------------------
Taxes received 0.9 - 0.9
---------------------------------------------------- ---------- -------------------------------- --------------------
Net cash generated from/(used in) operating
activities 159.4 (234.8) (75.4)
---------------------------------------------------- ---------- -------------------------------- --------------------
Net cash used in investing activities (2.7) - (2.7)
---------------------------------------------------- ---------- -------------------------------- --------------------
Dividends paid (100.0) - (100.0)
Interest paid (25.8) (68.0) (93.8)
Increase in long term borrowings 133.7 363.1 496.8
Repayment of long term borrowings (140.0) (10.5) (150.5)
Purchase of own shares (48.5) - (48.5)
Net cash (used in)/generated from financing
activities (180.6) 284.6 104.0
---------------------------------------------------- ---------- -------------------------------- --------------------
Net (decrease)/increase in cash (23.9) 49.8 25.9
---------------------------------------------------- ---------- -------------------------------- --------------------
Cash and cash equivalents at beginning of period 163.2 190.8 354.0
FX impact on cash (35.3) 8.5 (26.8)
---------------------------------------------------- ---------- -------------------------------- --------------------
Cash and cash equivalents at end of period 104.0 249.1 353.1
---------------------------------------------------- ---------- -------------------------------- --------------------
Notes to the Half Year Report continued
For the six months ended 30 September 2019
3. Business segments continued
Consolidated Statement of Cash Flows
Internally
30 September 2018 reported Consolidated structured entities Financial Statements
(Unaudited) GBPm GBPm GBPm
--------------------------------------------------- --- ---------- -------------------------------- --------------------
Interest received 18.4 87.5 105.9
Fees received 83.9 (4.1) 79.8
Dividends received 17.9 (16.3) 1.6
Payments to suppliers and employees (98.9) (7.5) (106.4)
Proceeds from sale of current financial assets and
disposal groups 147.4 - 147.4
Purchase of current financial assets and disposal
groups (258.1) - (258.1)
Purchase of non current financial assets (401.7) (1,043.9) (1,445.6)
Proceeds from sale of non current financial assets 370.1 963.2 1,333.3
Net cash inflow from derivative contracts 12.1 5.3 17.4
Cash used in operating activities (108.9) (15.8) (124.7)
-------------------------------------------------------- ---------- -------------------------------- --------------------
Taxes paid (15.4) - (15.4)
-------------------------------------------------------- ---------- -------------------------------- --------------------
Net cash used in operating activities (124.3) (15.8) (140.1)
-------------------------------------------------------- ---------- -------------------------------- --------------------
Net cash used in investing activities (2.5) - (2.5)
-------------------------------------------------------- ---------- -------------------------------- --------------------
Dividends paid (59.9) - (59.9)
Interest paid (25.2) (63.6) (88.8)
Increase in long term borrowings 200.0 891.9 1,091.9
Repayment of long term borrowings (82.5) (888.4) (970.9)
Purchase of own shares (34.1) - (34.1)
Net cash used in financing activities (1.7) (60.1) (61.8)
-------------------------------------------------------- ---------- -------------------------------- --------------------
Net decrease in cash (128.5) (75.9) (204.4)
-------------------------------------------------------- ---------- -------------------------------- --------------------
Cash and cash equivalents at beginning of period 248.0 272.7 520.7
FX impact on cash (28.3) (11.5) (39.8)
-------------------------------------------------------- ---------- -------------------------------- --------------------
Cash and cash equivalents at end of period 91.2 185.3 276.5
-------------------------------------------------------- ---------- -------------------------------- --------------------
Notes to the Half Year Report continued
For the six months ended 30 September 2019
4. Financial assets and liabilities
Financial assets
Financial assets are classified as financial assets 'at fair value
through profit or loss' (FVTPL).
Financial assets at fair value through profit or loss include held for
trading derivative financial instruments, debt and equity instruments. A
financial asset is classified as at FVTPL if:
-- it is a derivative that is not designated and effective as a
hedging instrument; or
-- the designation eliminates or significantly reduces a
measurement or recognition inconsistency that would otherwise arise; or
-- the financial asset is managed, evaluated and reported
internally on a fair value basis, in accordance with the Group's
documented risk management or investment strategy.
Financial assets at fair value through profit or loss are initially
recognised and subsequently measured at fair value on a recurring basis
with gains or losses arising from changes in fair value recognised
through net gains in investments in the Consolidated Income Statement.
Dividends or interest earned on the financial asset are included in the
net gains on investments line in the Consolidated Income Statement.
30 September 2019 31 March 2019
(Unaudited) (audited)
Financial assets -- non current GBPm GBPm
----------------------------------------- ----------------- -------------
Financial assets held at FVTPL 6,274.7 5,647.1
Investments in equity accounted joint
ventures 3.3 1.8
6,278.0 5,648.9
----------------------------------------- ----------------- -------------
Other derivative financial instruments
held at FVTPL 6.1 3.1
------------------------------------------ ----------------- -------------
6,284.1 5,652.0
----------------------------------------- ----------------- -------------
Included within Financial Assets held at FVTPL is GBP692.4m (31 March
2019: GBP772.7m) relating to the Group's 20% investment in ICG Europe
Fund V Limited, ICG North American Private Debt Fund and ICG Asia
Pacific Fund III, and 16.67% investment in ICG Europe Fund VI Limited,
which are accounted for as associates designated as FVTPL.
Included within Financial Assets held at FVTPL is GBP38.0m (31 March
2019: GBP34.7m) relating to the Group's investment in Océinde
Communications which is accounted for as an associate designated at
FVTPL and GBP65.5m (31 March 2019: GBP66.7m) relating to the Group's
joint venture investments in Brighton Marina Group Limited and Avanton
Richmond Developments Limited.
Notes to the Half Year Report continued
For the six months ended 30 September 2019
4. Financial assets and liabilities continued
Fair value measurements recognised in the statement of financial
position
The information set out below provides information about how the Group
determines fair values of various financial assets and financial
liabilities.
The following table provides an analysis of financial instruments that
are measured subsequent to initial recognition at fair value, grouped
into Levels 1 to 3 based on the degree to which the fair value is
observable.
-- Level 1 fair value measurements are those derived from quoted prices
(unadjusted) in active markets for identical assets or liabilities;
-- Level 2 fair value measurements are those derived from inputs other than
quoted prices included within Level 1 that are observable for the asset
or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices); and
-- Level 3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are not
based on observable market data (i.e. unobservable inputs).
This is followed by a more detailed analysis of the financial
instruments which are based on unobservable inputs (Level 3 assets). The
subsequent tables provide reconciliations of movement in their fair
value during the period split by asset category.
Fair value
Fair value as at Relationship
as at 31 March of
Financial 30 September 2019 2019 unobservable
assets/ (Unaudited) (Audited) Significant unobservable inputs to
Financial liabilities GBPm GBPm Valuation techniques and inputs inputs fair value
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ ------------
Level 1 assets
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ ------------
Investment in
funds 10.7 10.6 Quoted bid prices in an active market n/a n/a
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ ------------
Total 10.7 10.6
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ ------------
Level 2 assets
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ ------------
Internally modelled valuation based on a combination
Direct investment in portfolio companies 42.9 27.8 of market prices and observable inputs n/a n/a
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ ------------
Investments in loans held in credit funds consolidated The fair value has been determined using independent
under IFRS 10 4,340.2 3,803.5 broker quotes based on observable inputs n/a n/a
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ ------------
The Group uses widely recognised valuation models
for determining the fair values of over the counter
interest rate swaps and forward foreign exchange contracts.
The most frequently applied valuation techniques include
forward pricing and swap models, using present value
calculations. The valuations are market observable,
internally calculated and verified to externally sourced
Current and non current derivative assets 60.4 54.7 data and are therefore included within Level 2 n/a n/a
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ ------------
Total 4,443.5 3,886.0
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ ------------
Notes to the Half Year Report continued
for the six months ended 30 September 2019
4. Financial assets and liabilities continued
Fair value measurements recognised in the statement of financial
position continued
Fair value
Fair value as at
as at 31 March
Financial 30 September 2019 2019
assets/ (Unaudited) (Audited) Significant unobservable
Financial liabilities GBPm GBPm Valuation techniques and inputs inputs Relationship of unobservable inputs to fair value
----------------------------------------------------- ------------------ ---------- ----------------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------
Level 3 assets
---------------------------------------------------- ------------------- ---------- ----------------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------
Earnings based technique. The earnings multiple is
derived from a set of comparable listed companies
or relevant market transaction multiples. A premium
or discount is applied to the earnings multiple to
adjust for points of difference relating to risk and
earnings growth prospects between the comparable company
set and the private company being valued. Earnings
multiples are applied to the maintainable earnings
to determine the enterprise value. From this, the The discount applied is generally in a range of 8%
value attributable to the Group is calculated based -- 28% and exceptionally as high as 52%. A premium
on its holding in the company after making deductions has been applied to nine assets in the range of 1%
for higher ranking third party instruments in the -- 28%. The earnings multiple is generally in the
capital structure. To determine the value of warrants, range of 8 -- 14 and exceptionally as high as 20 and
Direct investments in portfolio companies 377.1 342.5 the exercise price is deducted from the equity value as low as 6 The higher the adjusted multiple, the higher the valuation
---------------------------------------------------- ------------------- ---------- ----------------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------
The net asset value (NAV) of the fund is based on
the underlying investments which are held as FVTPL The NAV of the underlying fund, typically calculated
Investments in funds 1,366.6 1,334.7 assets under IFRS The higher the NAV, the higher the fair value
----------------------------------------------------- ------------------ ---------- ----------------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------
Discounted cash flow at a discount rate of 11%. The
following assumptions are applied to each investment's
Investments in cash flows: 3% annual default rate, 20% annual prepayment The higher the cash flows the higher the fair value.
CLO loan notes 137.2 128.0 rate, 75% recovery rate Discounted cash flows The higher the discount, the lower the fair value
----------------------------------------------------- ------------------ ---------- ----------------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------
Included in current financial assets are direct investments
in portfolio companies valued using the earnings based
technique and investments in funds using the NAV of See direct investment in portfolio companies and investments See direct investment in portfolio companies and investments
Current financial assets 9.4 77.3 the fund. in funds in funds
----------------------------------------------------- ------------------ ---------- ----------------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------
During the year the Group held investment property
for both capital appreciation and rental yield. Investment
properties are held at fair value. The valuation technique
applied depends on the strategy and is either a residual
method of valuation or a discounted cash flow on rental
income and is based on valuations performed by independent Planning permission approval risk, the proportion
Investments in investment property held in disposal third parties. Key inputs include expected property of affordable housing and the discount applied to The higher the key observable inputs the lower the
groups held for sale 263.5 107.1 sales proceeds and rental income rental incomes fair value
----------------------------------------------------- ------------------ ---------- ----------------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------
Total 2,153.8 1,989.6
----------------------------------------------------- ------------------ ---------- ----------------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------
Total Assets 6,608.0 5,886.2
----------------------------------------------------- ------------------ ---------- ----------------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------
Notes to the Half Year Report continued
for the six months ended 30 September 2019
4. Financial assets and liabilities continued
Fair value measurements recognised in the statement of financial
position continued
Fair value
Fair value as at
as at 31 March
Financial 30 September 2019 2019
assets/ (Unaudited) (Audited) Significant unobservable
Financial liabilities GBPm GBPm Valuation techniques and inputs inputs Relationship of unobservable inputs to fair value
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ -----------------------------------------------------
Level 2 liabilities
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ -----------------------------------------------------
The debt securities issued by credit funds consolidated
under IFRS 10 are contractually linked to the performance
of the underlying investment portfolio; therefore,
fair value is determined with reference to the observable
market prices of the underlying portfolio. The Group's
holding at fair value of the borrowings are subsequently
deducted from this. The valuation techniques and inputs
to estimate the fair value of the Group's holding
Borrowings and loans held in credit funds consolidated is consistent with the Investment in CLO loan notes The higher the cash flows, the higher the fair value.
under IFRS 10 (3,967.8) (3,449.0) detailed above Discounted cash flows The higher the discount, the lower the fair value
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ -----------------------------------------------------
The Group uses widely recognised valuation models
for determining the fair values of over the counter
interest rate swaps and forward foreign exchange contracts.
The most frequently applied valuation techniques include
forward pricing and swap models, using present value
Current and calculations. The valuations are market observable,
non current internally calculated and verified to externally sourced
derivative liabilities (58.0) (59.9) data and are therefore included within Level 2 n/a n/a
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ -----------------------------------------------------
Total (4,025.8) (3,508.9)
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ -----------------------------------------------------
Level 3 liabilities
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ -----------------------------------------------------
Liabilities directly associated with disposal groups Borrowings held in disposal groups are measured based
held for sale (159.3) (76.9) on contractual cash flows n/a n/a
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ -----------------------------------------------------
Total (159.3) (76.9)
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ -----------------------------------------------------
Total liabilities (4,185.1) (3,585.8)
------------------------------------------------------- ------------------ ---------- ------------------------------------------------------------ ------------------------ -----------------------------------------------------
There were no transfers between levels during the period.
Notes to the Half Year Report continued
for the six months ended 30 September 2019
4. Financial assets and liabilities continued
The following table summarises financial assets and liabilities that are
held at fair value, by type and level.
As at 30 September 2019
Level 1 Level 2 Level 3 Total
(Unaudited) GBPm GBPm GBPm GBPm
------------------------------------------------------- ------- ------- ------- -------
Non current financial assets at fair value
Financial assets designated as FVTPL 10.7 4,383.1 1,880.9 6,274.7
Other derivative financial instruments - 6.1 - 6.1
------------------------------------------------------- ------- ------- ------- -------
10.7 4,389.2 1,880.9 6,280.8
------------------------------------------------------- ------- ------- ------- -------
Current financial assets at fair value
Current financial assets - - 9.4 9.4
Disposal groups held for sale - - 263.5 263.5
Other derivative financial instruments - 54.3 - 54.3
- 54.3 272.9 327.2
------------------------------------------------------- ------- ------- ------- -------
Financial liabilities at fair value
Liabilities directly associated with disposal groups
held for sale - - 159.3 159.3
Borrowings and loans held in credit funds consolidated
under IFRS 10 - 3,967.8 - 3,967.8
Other derivative financial instruments - 58.0 - 58.0
------------------------------------------------------- ------- ------- ------- -------
- 4,025.8 159.3 4,185.1
------------------------------------------------------- ------- ------- ------- -------
As at 31 March 2019
Level
1 Level 2 Level 3 Total
(Audited) GBPm GBPm GBPm GBPm
------------------------------------------------------- ----- ------- ------- -------
Non current financial assets at fair value
Financial assets designated as FVTPL 10.6 3,831.3 1,805.2 5,647.1
Other derivative financial instruments - 3.1 - 3.1
------------------------------------------------------- ----- ------- ------- -------
10.6 3,834.4 1,805.2 5,650.2
------------------------------------------------------- ----- ------- ------- -------
Current financial assets at fair value
Current financial assets - - 77.3 77.3
Disposal groups held for sale - - 107.1 107.1
Other derivative financial instruments - 51.6 - 51.6
------------------------------------------------------- ----- ------- ------- -------
-- 51.6 184.4 236.0
------------------------------------------------------- ----- ------- ------- -------
Financial liabilities at fair value
Liabilities directly associated with disposal groups
held for sale - - 76.9 76.9
Borrowings and loans held in credit funds consolidated
under IFRS 10 - 3,449.0 - 3,449.0
Other derivative financial instruments - 59.9 - 59.9
------------------------------------------------------- ----- ------- ------- -------
- 3,508.9 76.9 3,585.8
------------------------------------------------------- ----- ------- ------- -------
Notes to the Half Year Report continued
for the six months ended 30 September 2019
4. Financial assets and liabilities continued
The following table only includes financial assets. The only financial
liabilities measured subsequently at fair value on Level 3 fair value
measurement represent third party debt held in disposal groups held for
sale, these are non recurring and are therefore excluded from the below
tables.
As at 30 September 2019
Reconciliation of Level 3 fair value measurements of financial assets
Financial assets designated at FVTPL
(Unaudited) GBPm
At 1 April 2019 1,805.2
Total gains or losses in the income
statement
- Realised gains (88.2)
- Fair value gains 103.1
- Foreign exchange 57.2
Purchases 84.7
Realisations (81.6)
Transfer from current financial assets 0.5
-------------------------------------- --------------------------------------
At 30 September 2019 1,880.9
-------------------------------------- --------------------------------------
As at 31 March 2019
Financial assets designated at FVTPL AFS financial assets held at FVOCI Total
(Unaudited) GBPm GBPm GBPm
At 1 April 2018 1,368.5 42.2 1,410.7
Reclassification of AFS financial assets 42.2 (42.2) -
Loans and receivables previously held at amortised
cost 171.1 - 171.1
Total gains or losses in the income statement
- Realised gains (245.2) - (245.2)
- Fair value gains 202.7 - 202.7
- Foreign exchange 13.6 - 13.6
Total gains or losses in other comprehensive income
Purchases 553.0 - 553.0
Realisations (332.2) - (332.2)
Transfer between assets 31.5 31.5
At 31 March 2019 1,805.2 - 1,805.2
--------------------------------------------------- -------------------------------------- ------------------------------------ -------
During the year to 31 March 2019, IFRS 9 removed the classification of
AFS financial assets, the opening balance of GBP42.2m was reclassified
to financial assets designated at FVTPL. In addition the opening balance
of GBP171.1m of loans and receivables previously held at amortised cost
was reclassified to FVTPL.
Notes to the Half Year Report continued
for the six months ended 30 September 2019
5. Financial risk management
Capital management
The primary objectives of the Group's capital management are to ensure
that the Group complies with externally imposed capital requirements by
the Financial Conduct Authority (FCA) and ensure that the Group
maximises the return to Shareholders through the optimisation of the
debt and equity balance. The Group's strategy has remained unchanged
from the year ended 31 March 2019.
The capital structure comprises debts, which includes the borrowings
disclosed in note 5 of audited Group Financial Statements for the year
ended 31 March 2019, cash and cash equivalents, and capital and reserves
of the Parent Company, comprising called up share capital, reserves and
retained earnings as disclosed in the Consolidated Statement of Changes
in Equity.
The Group has complied with the imposed minimum capital throughout the
year. The full Pillar 3 disclosures are
available on the Company's website
https://www.globenewswire.com/Tracker?data=l7LMCtDF9vBWwTAJWfBgg5aiKnLbez22GwDpc4QL9wwz4FImxNtTd80DzbNfeMhDjn5mahtMcY0KqtOqsknQkA==
www.icgam.com.
Credit Risk
The carrying amount of financial assets represents the Directors'
assessment of the maximum credit risk exposure of the Group at the
balance sheet date. Fair value losses taken during the period reflect
the decline in recoverability on individual assets, either as a result
of company specific or of general macroeconomic conditions.
The Directors believe that credit risk as a result of the concentration
of significant counterparties is low as there is no individual
counterparty comprising more than 10% of the Group's total exposure.
6. Earnings per share
Six months ended Six months ended
30 September 2019 30 September 2018
(Unaudited) (Unaudited)
GBPm GBPm
-------------------------------------------------------- ------------------ ------------------
Earnings for the purposes of basic and diluted earnings
per share being net profit attributable to the equity
holders of the parent 144.5 124.0
--------------------------------------------------------- ------------------ ------------------
Number of shares
Weighted average number of ordinary shares for the
purposes of basic earnings per share 284,681,971 284,431,888
Effect of dilutive potential ordinary share options - 25,530
--------------------------------------------------------- ------------------ ------------------
Weighted average number of ordinary shares for the
purposes of diluted earnings per share 284,681,971 284,457,418
--------------------------------------------------------- ------------------ ------------------
Earnings per share 50.8p 43.6p
--------------------------------------------------------- ------------------ ------------------
Diluted earnings per share 50.8p 43.6p
--------------------------------------------------------- ------------------ ------------------
Reconciliation of total number of shares allotted, called up and in
issue
Number of
shares in
Total number of shares allotted, called up and in own share
issue reserve
As at 1 April
2019 294,084,351 11,218,285
Purchased 82,200 2,772,206
Options/awards
exercised - (5,083,419)
----------------- ------------------------------------------------------ ----------------
As at 30
September 2019 294,166,551 8,907,072
----------------- ------------------------------------------------------ ----------------
As at 30 September 2018 the total number of shares allotted, called up
and in issue was 294,081,838 of which 9,723,829 were held in the own
shares reserve.
Notes to the Half Year Report continued
for the six months ended 30 September 2019
7. Tax expense
Six months ended Six months ended
30 September 2019 30 September 2018
Analysis of tax on ordinary (Unaudited) (Unaudited)
activities GBPm GBPm
---------------------------------- ------------------ -------------------
Current tax
Current period 4.8 9.0
Prior year adjustment (4.2) -
----------------------------------- ------------------ -------------------
0.6 9.0
Deferred tax
Current period 6.9 (10.0)
Prior year adjustment (1.6) -
----------------------------------- ------------------ -------------------
5.3 (10.0)
Tax charge/(credit) on profit on
ordinary activities 5.9 (1.0)
----------------------------------- ------------------ -------------------
The effective rate is lower than the standard corporation tax rate of
19%. This is in part due to a significant proportion of the investment
Company's assets being invested directly into funds based outside of the
United Kingdom. Investment returns from these funds are paid to the
Group in the form of non taxable dividend income. This outcome is in
line with other UK investment companies. The Investment Company's
taxable costs can offset against the taxable profits of our UK Fund
Management business, reducing the overall Group charge.
Six months ended Six months ended
30 September 2019 30 September 2018
(Unaudited) (Unaudited)
GBPm GBPm
-------------------------------------------------------- ------------------ -------------------
Profit on ordinary activities before tax 153.4 124.0
Profit before tax multiplied by the rate of corporation
tax in the UK of 19% (H1 2019: 19%) 29.2 23.6
Effects of:
Prior year adjustment to current tax (4.2) -
Prior year adjustment to deferred tax (1.6) -
Non deductible expenditure (2.2) 0.3
Non taxable income (0.1) (0.1)
Different tax rates of overseas subsidiaries (8.1) (18.9)
Changes in statutory tax rates (0.3) -
Other temporary differences (6.8) (5.9)
Tax charge/(credit) on profit on ordinary activities 5.9 (1.0)
--------------------------------------------------------- ------------------ -------------------
8. Subsidiaries, associates and joint ventures
The following change is of note to the Group's subsidiaries, associates
and joint ventures during the period. The Group holds 57.5% of the
issued subordinated loan notes of St Paul's CLO XI, the Group is deemed
to have significant exposure to the variable returns of the CLO and
therefore control the entity. The entity is consolidated within the
results of the Group for the period to 30 September 2019.
Independent Review Report to Intermediate Capital Group plc
We have been engaged by the company to review the condensed set of
financial statements in the half-yearly financial report for the six
months ended 30 September 2019 which comprises the consolidated income
statement, the consolidated statement of comprehensive income, the
consolidated balance sheet, the consolidated statement of changes in
equity, the consolidated cash flow statement and related notes 1 to 8.
We have read the other information contained in the half-yearly
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
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 Financial Reporting Council. Our
work has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review report
and for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the company,
for our review work, for this report, or for the conclusions we have
formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing
the half-yearly financial report in accordance with the Disclosure
Guidance and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly
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 half-yearly 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 Financial Reporting Council for use in the United Kingdom. A
review of interim financial information consists of making inquiries,
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
half-yearly financial report for the six months ended 30 September 2019
is not prepared, in all material respects, in accordance with
International Accounting Standard 34 as adopted by the European Union
and the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
Deloitte LLP
Statutory Auditor
London, United Kingdom
18 November 2019
Glossary
Items denoted with a (1) throughout this document have been identified
as non IFRS GAAP alternative performance measures. These are defined
below:
Term
Short form
Definition
Adjusted earnings per share
Adjusted EPS
Adjusted profit after tax divided by the weighted average number of
ordinary shares as detailed in note 6.
Adjusted Group profit before tax
Group profit before tax adjusted for the impact of the consolidated
structured entities. As at 30 September, this is calculated as follows:
2019 2018
Profit before tax GBP153.4m GBP124.0m
Less consolidated structured entities (GBP2.4m) GBP55.5m
Adjusted group profit before tax GBP151.0m GBP179.5m
Adjusted Investment Company profit before tax
Investment Company profit adjusted for the impact of the consolidated
structured entities.
As at 30 September, this is calculated as follows:
2019 2018
Investment Company profit before tax GBP68.4m GBP59.6m
Less consolidated structured entities (GBP2.4m) GBP55.5m
Adjusted Investment Company profit before tax GBP66.0m GBP115.1m
Adjusted return on equity
Adjusted profit after tax (annualised when reporting a six month
period's results) divided by average shareholders' funds for the period.
As at 30 September, this is calculated as follows:
2019 2018
Adjusted profit after tax GBP287.0m GBP340.0m
Average shareholders' funds GBP1,364.8m GBP1,308.8m
Adjusted return on equity 21.0% 26.0%
Assets under management
AUM
Value of all funds and assets managed by the FMC. During the investment
period third party (external) AUM is measured on the basis of committed
capital. Once outside the investment period third party AUM is measured
on the basis of cost of investment. AUM is presented in Euros, with
non-Euro denominated at the period end closing rate.
Balance sheet investment portfolio
The balance sheet investment portfolio represents non-current financial
assets from the Statement of Financial Position, adjusted for the impact
of the consolidated structured entities. See note 3 for a full
reconciliation.
Dividend income
Dividend income represents distributions received from equity
investments. Dividend income reported on an internal basis excludes the
impact of the consolidated structured entities. See note 3 for a full
reconciliation.
Earnings per share
Profit after tax divided by the weighted average number of ordinary
shares as detailed in note 6.
Gearing
Gearing is used by management as a measure of balance sheet efficiency.
Gross borrowings, excluding the consolidated structured entities,
divided by closing shareholders' funds. Gross borrowings represent the
cash amount repayable to debt providers. As at 30 September, this is
calculated as follows:
30 September 2019 31 March 2019
Gross borrowings GBP5,197m GBP4,633m
Less consolidated structured entities (GBP3,968m) (GBP3,449m)
------------------------------------- ----------------- -------------
Adjusted gross borrowings GBP1,229m GBP1,184m
Shareholders' funds GBP1,411m GBP1,383m
Gearing 0.87x 0.86x
Interest expense
Interest expense excludes the cost of financing associated with the
consolidated structured entities.
Net asset value per share
Total equity from the Statement of Financial Position divided by the
closing number of ordinary shares. As at 30 September, this is
calculated as follows:
30 September 2019 31 March 2019
Total equity GBP1,427m GBP1,394m
Closing number of ordinary shares 285,259,479 282,866,066
Net asset value per share 500p 493p
Net current assets
The total of cash, plus current financial assets, plus other current
assets, less current liabilities as internally reported. This excludes
the consolidated structured entities. As at 30 September, this is
calculated as follows:
30 September 2019 31 March 2019
Cash GBP104.0m GBP163.2m
Current financial assets GBP116.3m GBP110.7m
Other current assets GBP218.0m GBP215.7m
Current financial liabilities (GBP251.1m) -
Other current liabilities (GBP166.7m) (GBP161.5m)
----------------- -------------
Net current assets GBP20.5m GBP328.1m
On an IFRS GAAP basis net current assets are as follows:
30 31 March
September 2019
2019
Cash GBP353.1m GBP354.0m
Current financial assets GBP9.4m GBP77.3m
Other current assets GBP307.8m GBP287.1m
Disposal groups held for sale GBP263.5m GBP107.1m
Current financial liabilities (GBP251.1m) -
Other current liabilities (GBP424.3m) (GBP367.7m)
Liabilities directly associated with disposal groups (GBP159.3m) (GBP76.9m)
held for sale
----------- -----------
Net current assets GBP99.1m GBP380.9m
Net debt
Net debt, along with gearing, is used by management as a measure of
balance sheet efficiency. Net debt includes unencumbered cash whereas
gearing uses gross borrowings and is therefore not impacted by movements
in cash balances.
Total drawn debt less unencumbered cash of the Group. As at 30 September,
this is calculated as follows:
30 September 2019 31 March 2019
Adjusted gross borrowings GBP1,229.0m GBP1,184.3m
Less unencumbered cash (GBP103.6m) (GBP162.7m)
Net debt GBP1,125.4m GBP1,021.6m
Net investment returns
Net investment returns is the total of interest income, capital gains,
dividend and other income less asset impairments.
Operating cashflow
Operating cashflow represents the cash generated from operating
activities from the Statement of Cash Flows, adjusted for the impact of
the consolidated structured entities. See note 3 for a full
reconciliation.
Operating expenses of the Investment Company
Investment Company operating expenses are adjusted for the impact of the
consolidated structured entities. See note 3 for a full reconciliation.
Operating profit margin
Fund Management Company profit divided by Fund Management Company total
revenue. As at 30 September this is calculated as follows:
2019 2018
Fund Management Company Profit GBP85.0m GBP64.4m
Fund Management Company Total Revenue GBP164.4m GBP132.3m
Operating profit margin 51.7% 48.7%
Return on equity
ROE
Profit after tax (annualised when reporting a six month period's
results) divided by average shareholders' funds for the period.
Third party fee income
Fees generated on fund management activities as reported in the Fund
Management Company including fees generated on consolidated structured
entities which are excluded from the IFRS consolidation position. See
note 3 for a full reconciliation.
Weighted average fee rate
An average fee rate across all strategies based on fee earning AUM in
which the fees earned are weighted based on the relative AUM.
Other definitions which have not been identified as non IFRS GAAP
alternative performance measures are as follows:
Term Short Definition
form
-------------- --------- ----------------------------------------------------------
AIFMD The EU Alternative Investment Fund Managers Directive.
-------------- --------- ----------------------------------------------------------
Catch up fees Fees charged to investors who commit to a fund after
its first close. This has the impact of backdating
their commitment thereby aligning all investors in
the fund.
-------------- --------- ----------------------------------------------------------
Closed end A fund where investor's commitments are fixed for
fund the duration of the fund and the fund has a defined
investment period.
-------------- --------- ----------------------------------------------------------
Co-investment Co-invest A direct investment made alongside or in a fund taking
a pro-rata share of all instruments.
-------------- --------- ----------------------------------------------------------
Collateralised CDO Investment grade security backed by a pool of non-mortgage
Debt based bonds, loans and other assets.
Obligation
-------------- --------- ----------------------------------------------------------
Collateralised CLO CLO is a type of CDO, which is backed by a portfolio
Loan of loans.
Obligation
-------------- --------- ----------------------------------------------------------
Close A stage in fundraising whereby a fund is able to release
or draw down the capital contractually committed at
that date.
-------------- --------- ----------------------------------------------------------
Core Plus Core+ Assets which have infrastructure characteristics (physical
assets, protected and predictable cash flows) with
a slightly higher risk/return profile than Core assets.
-------------- --------- ----------------------------------------------------------
Direct Funds which invest in self-originated transactions
investment for which there is a low volume, inactive secondary
funds market.
-------------- --------- ----------------------------------------------------------
EBITDA Earnings before interest, tax, depreciation and
amortisation.
-------------- --------- ----------------------------------------------------------
Employee EBT Special purpose vehicle used to purchase ICG plc shares
Benefit Trust which are used to satisfy share options and awards
granted under the Group's employee share schemes.
-------------- --------- ----------------------------------------------------------
Financial FCA Regulates conduct by both retail and wholesale financial
Conduct service firms in provision of services to consumers.
Authority
-------------- --------- ----------------------------------------------------------
Financial FRC The UK's independent regulator responsible for promoting
Reporting high quality corporate governance and reporting.
Council
-------------- --------- ----------------------------------------------------------
Fund FMC The Group's fund management business, which sources
Management and manages investments on behalf of the IC and third
Company party funds.
-------------- --------- ----------------------------------------------------------
HMRC HM Revenue & Customs, the UK tax authority.
-------------- --------- ----------------------------------------------------------
IAS International Accounting Standards.
-------------- --------- ----------------------------------------------------------
IFRS International Financial Reporting Standards as adopted
by the European Union.
-------------- --------- ----------------------------------------------------------
Illiquid Asset classes which are not actively traded.
assets
-------------- --------- ----------------------------------------------------------
Internal ICAAP The ICAAP allows companies to assess the level of
Capital capital that adequately supports all relevant current
Adequacy and future risks in their business.
Assessment
Process
-------------- --------- ----------------------------------------------------------
Investment IC The Investment Company invests the Group's capital
Company in support of third party fundraising and funds the
development of new strategies.
-------------- --------- ----------------------------------------------------------
Internal Rate IRR The annualised return received by an investor in a
of Return fund. It is calculated from cash drawn from and returned
to the investor together with the residual value of
the asset.
-------------- --------- ----------------------------------------------------------
Key Man Certain funds have designated Key Men. The departure
of a Key Man without adequate replacement triggers
a contractual right for investors to cancel their
commitments.
-------------- --------- ----------------------------------------------------------
Key KPI A business metric used to evaluate factors that are
performance crucial to the success of an organisation.
indicator
-------------- --------- ----------------------------------------------------------
Key risk KRI A measure used to indicate how risky an activity is.
indicator It is an indicator of the possibility of future adverse
impact.
-------------- --------- ----------------------------------------------------------
Liquid assets Asset classes with an active, established market in
which assets may be readily bought and sold.
-------------- --------- ----------------------------------------------------------
Open ended A fund which remains open to new commitments and where
fund an investor's commitment may be redeemed with appropriate
notice.
-------------- --------- ----------------------------------------------------------
Payment in PIK Also known as rolled up interest. PIK is the interest
kind accruing on a loan until maturity or refinancing,
without any cash flows until that time.
-------------- --------- ----------------------------------------------------------
Performance Carry Share of profits that the fund manager is due once
fees it has returned the cost of investment and agreed
preferred return to investors.
-------------- --------- ----------------------------------------------------------
Realisation The return of invested capital in the form of principal,
rolled up interest and/or capital gain.
-------------- --------- ----------------------------------------------------------
Securitisation A form of financial structuring whereby a pool of
assets is used as security (collateral) for the issue
of new financial instruments.
-------------- --------- ----------------------------------------------------------
Senior debt Senior debt ranks above mezzanine and equity.
-------------- --------- ----------------------------------------------------------
Structured Entities which are classified investment funds, CLO's
entities or CDO's and are deemed to be controlled by the Group,
though its interest in either an investment, loan,
fee receivable, guarantee or commitment. These entities
can also be interchangeably referred to as credit
funds.
-------------- --------- ----------------------------------------------------------
Total AUM The aggregate of the third party external AUM and
the Investment Company's balance sheet.
-------------- --------- ----------------------------------------------------------
UK Corporate The Code Sets out standards of good practice in relation to
Governance board leadership and effectiveness, remuneration,
Code accountability and relations with shareholders.
-------------- --------- ----------------------------------------------------------
UNPRI UN Principles for Responsible Investing.
-------------- --------- ----------------------------------------------------------
Weighted An average in which each quantity to be averaged is
average assigned a weight. These weightings determine the
relative importance of each quantity on the average.
-------------- --------- ----------------------------------------------------------
Company timetable
Ex-dividend date 5 December 2019
Record date for interim dividend 6
December 2019
Last date for dividend reinvestment election 19 December 2019
Payment of interim dividend 14 January 2020
Capital Markets Update and Trading Update 30 January 2020
Full year results announcement 19 May 2020
(END) Dow Jones Newswires
November 19, 2019 02:00 ET (07:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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