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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Oakley Capital Investments Limited | LSE:OCI | London | Ordinary Share | BMG670131058 | ORD 1P (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.00 | 0.21% | 475.50 | 473.00 | 478.00 | 475.50 | 475.00 | 475.50 | 43,941 | 13:32:25 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Unit Inv Tr, Closed-end Mgmt | 57.09M | 47.49M | 0.2692 | 17.66 | 838.87M |
From May 2019 to May 2024
TIDMOCI
RNS Number : 4327Q
Oakley Capital Investments Limited
12 September 2017
12 September 2017
Oakley Capital Investments Limited
Interim results for the six months ended 30 June 2017
CONTINUED FUND PERFORMANCE AND A HIGH LEVEL OF INVESTMENT ACTIVITY
Oakley Capital Investments Limited(1) (AIM:OCI, the "Company"), which provides investors with access to the investment strategy pursued by the Oakley Funds(2) , today announces its interim results for the six months ended 30 June 2017.
FINANCIAL HIGHLIGHTS
-- NAV of GBP472.6 million, an 8% increase in the six months since 31 December 2016.
-- NAV per share of GBP2.31, flat since 31 December 2016, impacted by final treasury share sale.
-- A 2017 interim dividend of 2.25 pence per share will be paid on 26 October 2017 to shareholders on the register on 6 October.
PORTFOLIO HIGHLIGHTS
-- PERFORMANCE - the fair value of the underlying portfolio companies grew by a further 11% in the period, driven by strong sales and EBITDA growth.
-- INVESTMENTS - five investments have been completed year to date, all within the newly raised Fund III. In the period Casa/atHome, Plesk and TechInsights were acquired, leveraging Oakley's experience and success in the Digital Consumer and TMT subsectors. Two subsequent deals post period have been completed in the Education sector with the acquisition of Schülerhilfe and AMOS, a platform deal for a roll-up in the higher education sector. The investment cost at acquisition of these transactions attributable to OCI is GBP115.4 million.
-- REALISATIONS - Host Europe Group was realised in April 2017 at a 48% premium to its carried value, with OCI receiving proceeds of GBP12.0 million.
-- CO-INVESTMENT - after the period TA Associates made a significant strategic investment into Inspired, previously referred to as Educas. Fund I took the opportunity to exit its holding as it reaches the end of its life. OCI rolled it's Fund I exposure into a direct interest in Inspired and as a result of the transactions received net cash proceeds of EUR10.3 million. OCI's interest in Inspired, through both its co-investment and exposure to Fund II was valued at approximately EUR72 million in July 2017.
Please refer to the Company's website for the full results http://oakleycapitalinvestments.com/investor-relations/publications
Peter Dubens, Managing Partner, Oakley Capital Limited:
"2017 has continued where 2016 left off. Double digit sales and profit growth continue to drive fund performance, which grew by 11% in the period. We retain our ability to generate high quality opportunities investing EUR277 million in five transactions so far this year. I'm also pleased to welcome new partner Ralf Schremper to our growing senior investment team."
Christopher Wetherhill, Chairman, Oakley Capital Investments Limited:
"A strong performance from the Oakley fund portfolio companies drove an 8% increase in the company's net asset value. This growth was offset by January's dilutive treasury share sale and we have subsequently made clear our future intentions not to issue equity at a discount.
There has been an encouraging level of investment activity year to date at attractive prices, proving the manager's unique deal generation capabilities and reducing the impact of cash drag on OCI's future performance."
For further information please contact:
Oakley Capital Investments Limited
+44 20 7766 6900
Peter Dubens, Director
Steven Tredget, Investor Relations
FTI Consulting LLP
+44 20 3727 1000
Edward Bridges / Stephanie Ellis
Liberum Capital Limited (Nominated Adviser & Broker)
+44 20 3100 2000
Steve Pearce / Henry Freeman / Jill Li
(1) About Oakley Capital Investments Limited ("OCI")
Oakley Capital Investments Limited is a Bermudian company listed on AIM. OCI seeks to provide investors with long term capital appreciation through its investment in Oakley Capital Private Equity L.P., Oakley Capital Private Equity II, Oakley Capital Private Equity III and through co-investment opportunities.
(2) About Oakley Capital Private Equity L.P. ("Fund I"), Oakley Capital Private Equity II ("Fund II") and Oakley Capital Private Equity III ("Fund III")
Oakley Capital Private Equity L.P. and its successor funds, Oakley Capital Private Equity II and Oakley Capital Private Equity III, are unlisted mid-market private equity funds with the aim of providing investors with significant long term capital appreciation. The investment strategy of the funds is to focus on buy-out opportunities in industries with the potential for growth, consolidation and performance improvement.
Chairman's Statement
Overview
I am pleased to report that the six months ending 30 June 2017 has been a period of progress for the Company. The underlying portfolio companies have continued to perform strongly, with an 11% increase in fair value from 31 December 2016 on a like-for-like basis. This, however, was offset by the dilution from the treasury share sale, giving rise to an unchanged NAV per share of GBP2.31.
During the first half of 2017, Oakley Fund III completed three acquisitions with invested cost totalling EUR174.1 million: EUR104.3 million for Casa/atHome, this is after refinancing of EUR32.0 million: EUR25.2 million for Plesk: and EUR44.6 million for TechInsights. Post period end, two further acquisitions were completed: in July 2017, Schülerhilfe, with an invested cost of EUR85.9 million, and in August 2017, AMOS, with an invested cost of EUR16.9 million. The Oakley Fund III investments follow on from Oakley's previous success in the TMT and education sectors, as well as building on experience and expertise in online marketing-led businesses.
In January 2017, the Company sold 15 million treasury shares for consideration of GBP23.3 million. The Company subsequently cancelled the remaining 2.1 million shares still held in treasury bringing the balance of treasury shares to nil. The Board is now of the view that the Company will not in future sell stock from treasury or issue new shares at discounts to NAV.
In April 2017, the sale of Host Europe Group was completed, returning proceeds of EUR42.3 million (GBP36.2 million) to Oakley Fund II, representing a gross money multiple of 2.1x and gross IRR of 40%. The Company received proceeds of EUR14.6 million (GBP12.0 million) from this transaction.
In June 2017, the Company acquired the majority of Oakley Fund I's stake in Inspired (previously referred to as Educas), a global group of premium private schools. The Board will continue its investment in the development and expansion of the business.
Funding and commitments
Since 31 December 2016, the Company has invested a further EUR102.9 million (GBP89.9 million) in the Oakley Funds. During the period, a further EUR14.1 million (GBP12.3 million) was called by Oakley Fund I, EUR14.0 million (GBP12.3 million) was called by Oakley Fund II and EUR74.8 million (GBP65.3 million) was called by Oakley Fund III.
Oakley Fund I is now fully invested with just one investment in Time Out remaining. Oakley Fund II is also essentially fully invested with seven investments remaining, and Oakley Fund III is in its investment phase.
Performance
The NAV per share as at 30 June 2017 was unchanged from 31 December 2016, at GBP2.31.
Oakley Fund II's underlying portfolio has continued to perform well over the first half of the year, resulting in uplifts in fair values across a number of investments. In particular, Daisy's fair value increased due to the synergies from the integration of Alternative Networks, a UK based IT and telecoms provider, Parship Elite Group continues to see significant growth in its business and Facile's performance is strong in a buoyant market, which is reflected in the uplift in their fair values over the first half of the year.
Oakley Fund I realised its holding in the international schools group, Inspired, with OCI acquiring the majority of the stake in June 2017. The investment is held in the Company's accounts at a fair value of GBP57.0 million at period end and forms part of the Company's co-investment portfolio.
Three new acquisitions were made by Oakley Fund III during the period with a total invested cost for OCI of EUR81.8 million (GBP72.7 million). Detailed descriptions of these new investments are provided later in the report.
The Board
The Company held its AGM on 14 June 2017 and I am pleased to report that all ordinary resolutions put to shareholders were duly passed. A special resolution, proposed by the Company at the time of its IPO, allowed shareholders to vote on the continuation of the Company as constituted. The shareholder vote overwhelmingly supported the Company's continuation.
Outlook
The Company has performed well in this unpredictable and uncertain market, demonstrated by the performance of the underlying portfolio companies to date. The portfolio has remained resilient to the current challenging macroeconomic and geopolitical markets.
Looking to the second half of 2017 where macroeconomic and geopolitical uncertainty is likely to continue, I believe the Company is in a position to deliver meaningful growth to investors through its commitment to the Oakley Funds given the positivity and prospects of the underlying portfolio companies.
Post balance sheet events
Oakley Fund III completed two further acquisitions following the period end. In July 2017, it purchased the business and operations of ZGS Verwaltungs GmbH ("Schülerhilfe"), a leading provider of after school tutoring to primary and secondary school students in Germany and Austria. In August 2017, it completed the acquisition of AMOS Sport Business School, the leading sport business school in France with seven sites, six in France and one in London, as a cornerstone investment for a roll-up in the higher education space. These acquisitions fit with Oakley's model of partnering with exceptional entrepreneurs and build on Oakley's experience of investing in the education sector.
In July 2017, Inspired received a significant strategic growth investment from TA Associates, a leading global growth private equity firm. In order to facilitate TA Associates' entry into the capital structure, OCI and Oakley Fund II agreed to sell down part of their respective holdings.
In August 2017, Oakley Fund III added new subscribers, increasing its total commitments and thereby diluting the Company's current interest in Oakley Fund III from 47.0% to 42.6%.
Christopher Wetherhill
Chairman
11 September 2017
Market Overview and Outlook
After many years of weak global recovery, 2017 has brought signs of improvement. Trade and manufacturing output growth have picked up, helped by firmer domestic demand growth in Asia and Europe, and private sector confidence has strengthened. Policy uncertainty remains high however, trust in government has diminished and wage growth is still weak.
Despite this backdrop, private equity continues to make strong returns, sustaining its outperformance of other asset classes over 3, 5, 10, and 20 years. Three year returns stand at 9.8%(1) , topping Real Estate, Infrastructure, Hedge Funds and the MSCI World Index.
No surprise therefore that private equity fundraising is at its highest level since the year's pre financial crisis, with 2017 set to eclipse 2016 for private market fundraising. These inflows have led to a ten year high in the total value of private equity investments with EUR42.9 billion(2) invested in European companies in Q2 2017. This demand has contributed to prices reaching record highs with average enterprise valuation multiple paid by a buyout firm for a European company reaching 11.6x(2) EBITDA, exceeding the previous 2016 high of 10x.
Oakley has remained disciplined in its approach to investing. The Investment Adviser's strategy of pursuing entrepreneur led, non-competitive, proprietary deals has been advantageous to Oakley. Reliance is not on the intermediated market to source deals, rather its strong founder/manager relationships, wide network and reputation for sector expertise. Oakley continues to enjoy a strong pipeline from its relationship led sourcing model and has already made five new investments since the start of the year, at an average EV/ EBITDA entry of 10.4x in contrast to a comparable average sector multiple of 13.3x.
The exit environment is showing strength across all routes with private equity year to date sales up nearly 30% in value compared with H1 2016(3) .
Oakley believes that the business models of its portfolio companies are generally resilient to macroeconomic trends and cyclicality. Investments are made in niches within sectors that demonstrate high growth dynamics and fragmented participation. The portfolio continues to broaden its Western European footprint with a shift from the highly intermediated UK market to a greater focus on the DACH region (German/Austrian/Swiss markets) where Oakley has a strong track record.
Looking to the second half of 2017 where geopolitical and economic uncertainty is likely to remain. Whilst macroeconomic factors are unpredictable, the Investment Adviser remains focussed on maximising the value of the current portfolio and continuing to deliver meaningful growth across the underlying companies, whilst identifying high quality investments to deliver attractive long term returns.
1 Source: Burgiss Q4 2016 Benchmarks 2 Source: Fitch Ratings 3 According to EY's Private Equity Capital Briefing (June 2017)
OCI NAV Overview
During the period, the NAV increased by GBP34.2 million to GBP472.6 million, an increase of 8% since 31 December 2016.
Movement in Net Asset Value
Hot Features
Premium
31 Dec 30 Jun
2016 2017
GBPm GBPm
----------------------------- ------- -------
Opening Net Asset Value
at start of period 382.2 438.4
----------------------------- ------- -------
Gross revenue 11.7 4.8
----------------------------- ------- -------
Other expenditure (4.5) (4.1)
----------------------------- ------- -------
Net foreign currency
gains/(losses) 4.7 2.0
----------------------------- ------- -------
Realised gain on investments 8.5 6.2
----------------------------- ------- -------
Net change in unrealised
appreciation/(depreciation)
on investments 46.2 2.0
----------------------------- ------- -------
Treasury shares bought (1.9) -
----------------------------- ------- -------
Treasury shares sold - 23.3
----------------------------- ------- -------
Dividend (8.5) -
----------------------------- ------- -------
Closing Net Asset Value
at end of period 438.4 472.6
----------------------------- ------- -------
Number of shares in issue 189.8 204.8
----------------------------- ------- -------
NAV per share GBP2.31 GBP2.31
----------------------------- ------- -------
Net earnings were GBP10.9 million for the period, comprising:
-- Gross revenue of GBP4.8 million from interest income earned on the debt facilities provided to portfolio companies and the Funds.
-- Net other expenditure of GBP2.1 million, consisting of GBP4.1 million of expenses during the period partly offset by GBP2.0 million gains arising from the weakening of Sterling against the Euro.
-- Realised gains of GBP6.2 million and net change in unrealised gain of GBP2.0 million, driven predominantly by the uplift in the valuations of the underlying portfolio companies in the Oakley Funds.
GBP23.3 million was received by the Company from the sale of the treasury shares in January. The Company now holds no treasury shares and does not intend to issue equity or sell stock from treasury at a discount to NAV going forward.
OCI Investment Activity
The six month transactional activity for the Company's investment portfolio is summarised below:
31 Dec 30 Jun
2016 2017
Fair value Fair value
Investment GBPm GBPm
--------------------------- ----------- -----------
Investment in Oakley Funds 211.3 263.3
--------------------------- ----------- -----------
211.3 263.3
--------------------------- ----------- -----------
Co-Investments
--------------------------- ----------- -----------
Co-Investment Fund * - 57.0
--------------------------- ----------- -----------
Equity securities 43.9 42.3
--------------------------- ----------- -----------
Debt securities 85.8 88.8
--------------------------- ----------- -----------
129.6 188.1
--------------------------- ----------- -----------
Total Investments 340.9 451.4
--------------------------- ----------- -----------
The following pages explain movements in the underlying portfolios and their respective investments.
* Being OCPE Education (Feeder) L.P., a newly established limited partnership whose Limited Partners comprise of OCI and a small number of Oakley Fund I Limited Partners who rolled their Oakley Fund I interests. This entity holds the investment in Inspired.
Overview of OCI's underlying investments
Year Residual Fair
of cost value
Fund Investments Sector Location Investment GBPm GBPm
-------------- ---------------- ---------- ------------ ------------ -------- ------
Fund
I Time Out Consumer Global 2010 44.9 38.5
-------------- ---------------- ---------- ------------ ------------ -------- ------
OCI's proportionate allocation
of Fund I investments (on a look
through basis) 38.5
---------------------------------------------------------------------------------- ------
Other assets and liabilities (0.3)
---------------------------------------------------------------------------------- ------
OCI's investment in Oakley Fund
I 38.3
---------------------------------------------------------------------------------- ------
Fund North
II Sails Consumer Global 2014 30.5 34.0
-------------- ---------------- ---------- ------------ ------------ -------- ------
Fund
II Inspired Education Global 2014 25.3 36.1
-------------- ---------------- ---------- ------------ ------------ -------- ------
Fund
II Facile Consumer Italy 2014 13.5 45.4
-------------- ---------------- ---------- ------------ ------------ -------- ------
Fund
II Damovo TMT Germany 2015 3.1 7.8
-------------- ---------------- ---------- ------------ ------------ -------- ------
Parship
Fund Elite
II Group Consumer Germany 2015 0.0 29.9
-------------- ---------------- ---------- ------------ ------------ -------- ------
Fund
II Daisy Consumer UK 2015 10.8 16.8
-------------- ---------------- ---------- ------------ ------------ -------- ------
Fund
II Verivox Consumer Germany 2015 6.0 11.0
-------------- ---------------- ---------- ------------ ------------ -------- ------
OCI's proportionate allocation
of Fund II investments (on a look
through basis) 180.9
---------------------------------------------------------------------------------- ------
Other assets and liabilities (17.3)
---------------------------------------------------------------------------------- ------
OCI's investment in Oakley Fund
II 163.5
---------------------------------------------------------------------------------- ------
Fund
III Casa/atHome Consumer Germany 2017 43.0 43.0
-------------- ---------------- ---------- ------------ ------------ -------- ------
Fund
III Plesk TMT Switzerland 2017 10.9 9.9
-------------- ---------------- ---------- ------------ ------------ -------- ------
Fund Business
III TechInsights Services Canada 2017 18.8 18.0
-------------- ---------------- ---------- ------------ ------------ -------- ------
OCI's proportionate allocation
of Fund III investments (on a look
through basis) 71.0
---------------------------------------------------------------------------------- ------
Other assets and liabilities (9.4)
---------------------------------------------------------------------------------- ------
OCI's investment in Oakley Fund
III 61.6
---------------------------------------------------------------------------------- ------
Co-Investment Inspired Education Global 2017 39.2 57.0
-------------- ---------------- ---------- ------------ ------------ -------- ------
Co-Investment Daisy Consumer UK 2015 28.2 33.5
-------------- ---------------- ---------- ------------ ------------ -------- ------
North
Co-Investment Sails Consumer Global 2014 22.0 25.6
-------------- ---------------- ---------- ------------ ------------ -------- ------
Co-Investment Time Out Consumer Global 2010 47.2 42.3
-------------- ---------------- ---------- ------------ ------------ -------- ------
Co-Investment Fund Facilities n/a n/a n/a 29.6
-------------- ---------------- ---------- -------------------------- -------- ------
Total Co-Investments 188.1
---------------------------------------------------------------------------------- ------
Total OCI Investments 451.4
---------------------------------------------------------------------------------- ------
The OCI look-through values are calculated using the OCI attributable proportion (determined as the ratio which OCI's commitments to the respective Fund bear to total commitments to that Fund) applied to each investment's fair value as held in the relevant Oakley Fund, net of any accrued performance fees relating to that investment, and converted using the period end EUR:GBP exchange rate.
Outstanding Commitments of OCI
The period ended with liquid resources of GBP71.8 million supported by the capacity to obtain debt of up to a maximum amount of 25% of the Company's NAV (this would amount to GBP118.1 million at the period end).
Outstanding commitments as at 30 June 2017 were GBP242.5 million as shown below. Oakley anticipates the majority of these outstanding commitments to be drawn over the next 24 months, as Fund III continues to deploy capital. A total of 26% has been called to date from Fund III Limited Partners, which together with the EUR114.5 million borrowed under a capital call facility have been used to fund the acquisitions.
The table below illustrates the Company's outstanding commitments to the Oakley Funds, and their respective percentage of the June NAV. It is anticipated that outstanding commitments are likely to be partly financed by future cash flows from portfolio realisations.
Outstanding Outstanding
at at
30 Jun 30 Jun
2017 2017 %
Original
Fund commitment
Fund vintage (EURm) (EURm) (GBPm) of NAV
----- --------- ----------- ----------- ----------- -------
Fund
I 2007 188.4 2.6 2.3 0
----- --------- ----------- ----------- ----------- -------
Fund
II 2013 200.0 33.0 29.0 6
----- --------- ----------- ----------- ----------- -------
Fund
III 2016 325.0 240.5 211.2 45
----- --------- ----------- ----------- ----------- -------
276.1 242.5 51
--------------- ----------- ----------- ----------- -------
Cash and cash equivalents 71.8
------------------------------------------ ----------- -------
Net outstanding commitments
unfunded by cash resources 170.7 36
------------------------------------------ ----------- -------
Maximum allowable external
debt 118.1
------------------------------------------ ----------- -------
Net outstanding commitments
unfunded by liquid resources
and external debt 52.7 12
------------------------------------------ ----------- -------
Portfolio Review: Oakley Fund I Investment Activity
The investment portfolio of Oakley Fund I is summarised in the table below. Oakley Fund I is denominated in Euros, and the period-end exchange rate was used, where applicable. The Company holds a 65.5% stake in Oakley Fund I.
31 Dec 30 Jun
2016 2017
Fair value Fair value
OAKLEY FUND I EURm EURm
-------------------------- ----------- -----------
Inspired 64.3 -
-------------------------- ----------- -----------
Time Out 60.5 67.0
-------------------------- ----------- -----------
Other 0.7 0.7
-------------------------- ----------- -----------
Total current investments 125.5 67.6
-------------------------- ----------- -----------
Realisations during Realised
2017: Proceeds gain
-------------------- -------- --------
Inspired 69.7 46.6
-------------------- -------- --------
Total realisations 69.7 46.6
-------------------- -------- --------
There was an overall decrease of EUR57.9 million in the fair value of Oakley Fund I's portfolio during the period. This is due to the realisation of Fund I's holding in Inspired.
In June 2017, with Oakley Fund I approaching the end of its life-cycle, it has taken the opportunity to exit its holding in Inspired. Oakley Fund I offered Limited Partners the option of either a cash or share distribution. OCI and a small number of other Limited Partners retained the majority of their interests in order to benefit from the next phase of growth of Inspired by purchasing Oakley Fund I's interest in OCPE Education L.P. Oakley Fund I received proceeds of EUR69.7 million for the sale of their stake in Inspired.
Time Out is a listed company and its fair value is determined by a mark-to-market valuation, based on the 30 June 2017 share price of GBP1.35. Time Out released its trading update for the first half of the year reporting that revenue is expected to increase year on year with Time Out Digital revenue showing strong growth. E-commerce and Time Out Markets are also performing well. During the period, Oakley Fund I injected a further EUR9.8 million into Time Out (Bermuda) Limited in order to repay the outstanding OCI mezzanine loan.
As at 30 June 2017, Oakley Fund I had called EUR198.8 million (GBP174.6 million) from the Company, including recycling of EUR13.0 million (GBP11.4 million).
Portfolio Review: Oakley Fund II Investment Activity
The investment portfolio of Oakley Fund II is summarised in the table below. Oakley Fund II is denominated in Euros, and the period-end exchange rate was used, where applicable. The Company holds a 38.1% stake in Oakley Fund II.
31 Dec 30 Jun
2016 2017
Fair value Fair value
OAKLEY FUND II EURm EURm
-------------------- ----------- -----------
Facile 137.0 155.3
-------------------- ----------- -----------
Inspired 109.8 114.0
-------------------- ----------- -----------
North Sails 101.9 102.3
-------------------- ----------- -----------
Parship Elite Group 84.4 108.5
-------------------- ----------- -----------
Host Europe Group 41.4 0.0
-------------------- ----------- -----------
Daisy 33.9 53.0
-------------------- ----------- -----------
Verivox 32.0 35.2 -------------------- ----------- ----------- Damovo 18.4 26.0 -------------------- ----------- ----------- Total investments 558.8 594.3 -------------------- ----------- ----------- Realisations during Realised 2017: Proceeds gain -------------------- -------- -------- Host Europe Group 42.3 22.3 -------------------- -------- -------- Total realisations 42.3 22.3 -------------------- -------- --------
During the period, there was an overall increase of EUR35.5 million in the fair value of Oakley Fund II's portfolio companies. This increase is net of the realisation of Host Europe Group, which completed in April 2017, and returned proceeds of EUR42.3 million to Oakley Fund II, representing a gross money multiple of 2.1x and gross IRR of 40% to Oakley Fund II. OCI received proceeds of EUR14.6 million (GBP12.0 million) from this transaction.
The fair value uplift is primarily attributable to the strong performances from Facile and Parship Elite Group which drove the valuation uplifts at 30 June 2017. Also, Daisy's valuation now factors in the synergies being realised following the acquisition and integration of Alternative Networks, a UK based IT and telecoms provider.
There was further capital of EUR12.8 million invested by Oakley Fund II during the period; EUR10.3 million in North Sails to fund the development of North Sails Apparel, and EUR2.5 million in Inspired to facilitate the acquisition of two more schools.
As at 30 June 2017, Oakley Fund II had called EUR167.0 million (GBP146.7 million) from the Company, representing 83.5% of its total capital commitment.
Portfolio Review: Oakley Fund III Investment Activity
The investment portfolio of Oakley Fund III is summarised in the table below. Oakley Fund III is denominated in Euros, and the period-end exchange rate was used, where applicable. The Company held a 47.0% stake in Oakley Fund III at 30 June 2017.
31 Dec 30 Jun
2016 2017
Fair value Fair value
OAKLEY FUND III EURm EURm
------------------ ----------- -----------
Casa/atHome - 104.3
------------------ ----------- -----------
Plesk - 24.1
------------------ ----------- -----------
TechInsights - 43.6
------------------ ----------- -----------
Total investments - 172.0
------------------ ----------- -----------
Oakley Fund III has had a very active start to 2017 with the completion of three transactions investing capital of EUR104.3 million in Casa/atHome, net of refinancing of EUR32.0 million, EUR25.2 million in Plesk and EUR44.6 million in TechInsights. These three new investments have been held at cost for the period to 30 June 2017, with only translation differences being reflected in the fair value at the period end. These investments build on Oakley's experience and success in the TMT and Digital Consumer subsectors. Oakley's investment strategy remains focused on actively seeking new investments where it can leverage its sector expertise and detailed knowledge base, building strong relationships with founders and management, and believes that it is well positioned to identify opportunities that can deliver long term capital appreciation to investors.
Following the period end, two further acquisitions have since been completed by Oakley Fund III. In July, Schülerhilfe was acquired with Oakley Fund III investing capital of EUR85.9 million, and in August, AMOS Sport Business School was acquired as the first investment in a higher education roll-up planned with our Operating Partner in Inspired, with Oakley Fund III investing capital of EUR16.9 million.
In August 2017, total commitments to Oakley Fund III increased from EUR691.4 million to EUR763.6 million. As a result, the Company's interest in Oakley Fund III has been diluted from 47.0% to 42.6%.
In August 2017, the acquisition cost of TechInsights was re-financed, with a net distribution paid to Limited Partners of EUR32.0 million. The Company received EUR13.6 million (GBP12.6 million) from this transaction. Therefore, Oakley Fund III's invested cost in TechInsights is EUR11.9 million, post refinancing.
As at 30 June 2017, Oakley Fund III had called EUR84.5 million (GBP74.2 million) from the Company, representing 26% of the Company's total capital commitment.
Portfolio Review: Co-Investment Activity
The co-investment portfolio as at 30 June 2017 is summarised in the table below:
31 Dec 30 Jun
2016 2017
Fair value Fair value
Co-Investments: GBPm GBPm
------------------------ ----------- -----------
Co-Investment Fund
------------------------ ----------- -----------
OCPE Education (Feeder)
LP - 57.0
------------------------ ----------- -----------
Equity Securities
------------------------ ----------- -----------
Time Out 43.9 42.3
------------------------ ----------- -----------
Debt Securities
------------------------ ----------- -----------
Time Out 9.5 -
------------------------ ----------- -----------
North Sails 22.0 25.6
------------------------ ----------- -----------
Daisy 31.6 33.6
------------------------ ----------- -----------
Fund Facilities 22.6 29.6
------------------------ ----------- -----------
Total Investments 129.6 188.1
------------------------ ----------- -----------
Co-Investment Fund
In November 2016, the interests held by both Oakley Fund I and Oakley Fund II in Inspired were restructured into a new holding entity, OCPE Education L.P. ("OCPEE LP"). At December 2016, the Company held an indirect interest in Inspired through both Oakley Fund I and Fund II's respective interest in OCPEE L.P. This entity at 30 June 2017 held a 50.49% interest in Educas LP Inc, which in turn owned 72.1% of Inspired Education Holdings Limited.
Inspired has grown rapidly both through acquisition and greenfield development since Oakley Fund I's first investment in July 2013. Having built up its pipeline, reputation in the market and its integration and M&A capabilities over recent years, Inspired is expected to continue its expansion in the short to medium term through further acquisitions. With Oakley Fund I well into its realisation phase it is not in a position to continue to participate in Inspired's expansion. In view of future growth prospects for Inspired, the Board offered to acquire Oakley Fund I's interest in OCPEE L.P.
The Company acquired 99.2% of Oakley Fund I's stake in Inspired, with the remaining 0.8% being held by a small number of Oakley Fund I Limited Partners who rolled their interests. A new vehicle was set up to hold this investment, OCPE Education (Feeder) L.P. Together with its interest through Oakley Fund II, the Company held an indirect 22.4% stake in Inspired at 30 June 2017.
Following the period end, Inspired received a significant strategic growth investment from TA Associates, a leading global growth private equity firm. In order to facilitate TA Associates' entry into the capital structure, OCPEE LP agreed to sell-down part of its holding in Inspired. The addition of such a high quality investor to Inspired's shareholder base, and the new investment being made by TA Associates in growth funding, should underpin Inspired's ambitious plans.
After dilution by TA Associates, OCPEE LP holds an indirect interest of 22.3% in Inspired. The Company received net cash proceeds of EUR10.3 million from the acquisition of the Oakley Fund I interest and TA Associates transaction.
Equity and debt securities
Time Out is a listed company and its fair value is determined by a mark-to-market valuation, based on the 30 June 2017 share price of GBP1.35. The half year trading update for Time Out is positive and has demonstrated further progress with regards to the Group's digital strategy. Revenue growth, in particular the digital and e-commerce revenue have grown 25% and 51% year on year respectively.
The Company provides debt facilities to certain underlying portfolio companies, and to Oakley Funds. These debt facilities are provided on an arm's length basis with competitive market interest rates. The interest income generated from these facilities exceeds the interest earned on the Company's bank deposits, allowing the Company to earn higher returns on part of its cash reserves. During the period to 30 June 2017, the Company has earned GBP4.5 million interest from the debt facilities provided.
During the period, a new debt facility of GBP2.3 million was provided to North Sails. This loan was used to fund the acquisition of Hall Spars, a rigging company and competitor to Southern Spars, a division of North Sails.
Also, during the period, the loan provided by the Company as part of the acquisition of Oakley Fund I's interest in Time Out in 2015, was repaid, providing proceeds to the Company of GBP9.8 million, including accrued interest.
The Company also provides revolving credit facilities to the Oakley Funds. Each drawing under these facilities is for no more than one year. The loans are used to fund short-term cash requirements. As at 30 June 2017, the Company had outstanding debt facilities of GBP29.6 million to the Oakley Funds, including accrued interest.
Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2017
Unaudited Unaudited
six months six months
ended ended
30 Jun 30 Jun
2017 2016
Notes GBP'000 GBP'000
------------------------------- ----- ----------- -----------
Income
------------------------------- ----- ----------- -----------
Interest income 4,544 7,144
------------------------------- ----- ----------- -----------
Net realised gains/(losses)
on investments at fair
value through profit
and loss 6 6,168 (858)
------------------------------- ----- ----------- -----------
Net change in unrealised
gains/(losses) on investments
at fair value through
profit and loss 6 1,999 17,832
------------------------------- ----- ----------- -----------
Net foreign currency
gains/(losses) 1,965 6,568
------------------------------- ----- ----------- -----------
Other income 246 100
------------------------------- ----- ----------- -----------
Total income 14,922 30,786
------------------------------- ----- ----------- -----------
Expenses 9 (4,008) (3,615)
------------------------------- ----- ----------- -----------
Operating profit 10,914 27,171
------------------------------- ----- ----------- -----------
Finance cost (30) -
------------------------------- ----- ----------- -----------
Profit attributable
to equity shareholders/
total comprehensive
income 10,884 27,171
------------------------------- ----- ----------- -----------
Earnings per share
------------------------------- ----- ----------- -----------
Basic and diluted earnings
per share 12 0.05 0.14
------------------------------- ----- ----------- -----------
Consolidated Balance Sheet
for the six months ended 30 June 2017
Unaudited
six months Unaudited
ended Audited six months
30 Jun year ended ended
2017 31 Dec 2016 30 Jun 2016
Notes GBP'000 GBP'000 GBP'000
---------------------------- ----- ----------- ------------ ------------
Assets
---------------------------- ----- ----------- ------------ ------------
Non-current assets
---------------------------- ----- ----------- ------------ ------------
6,
Investments 7 451,394 340,869 328,829
---------------------------- ----- ----------- ------------ ------------
451,394 340,869 328,829
---------------------------- ----- ----------- ------------ ------------
Current assets
---------------------------- ----- ----------- ------------ ------------
Trade and other receivables 743 673 114
---------------------------- ----- ----------- ------------ ------------
Cash and cash equivalents 71,767 106,509 80,941
---------------------------- ----- ----------- ------------ ------------
72,510 107,182 81,055
---------------------------- ----- ----------- ------------ ------------
Total assets 523,904 448,051 409,884
---------------------------- ----- ----------- ------------ ------------
Liabilities
---------------------------- ----- ----------- ------------ ------------
Current liabilities
---------------------------- ----- ----------- ------------ ------------
Trade and other payables 51,297 9,619 2,417
---------------------------- ----- ----------- ------------ ------------
Total liabilities 51,297 9,619 2,417
---------------------------- ----- ----------- ------------ ------------
Net assets attributable
to shareholders 472,607 438,432 407,467
---------------------------- ----- ----------- ------------ ------------
Equity
---------------------------- ----- ----------- ------------ ------------
Share capital 14 2,048 2,069 2,069
---------------------------- ----- ----------- ------------ ------------
Share premium 14 244,533 246,245 246,245
---------------------------- ----- ----------- ------------ ------------
Treasury shares 14 - (25,024) (25,024)
---------------------------- ----- ----------- ------------ ------------
Retained earnings 226,026 215,142 184,177
---------------------------- ----- ----------- ------------ ------------
Total shareholders'
equity 472,607 438,432 407,467
---------------------------- ----- ----------- ------------ ------------
Net asset per ordinary
share
---------------------------- ----- ----------- ------------ ------------
Basic and diluted net
assets per share 13 GBP2.31 GBP2.31 GBP2.15
---------------------------- ----- ----------- ------------ ------------
Ordinary shares in
issue 204,804 189,804 189,804
---------------------------- ----- ----------- ------------ ------------
Consolidated Statement of Changes in Equity
for the six months ended 30 June 2017
Total
Share Share Treasury Retained shareholders'
capital premium shares earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- -------- --------- --------------
For the six months
ended 30 June 2017
-------------------------- -------- -------- -------- --------- --------------
Balance at 1 January
2017 2,069 246,245 (25,024) 215,142 438,432
-------------------------- -------- -------- -------- --------- --------------
Profit for the period/
total
comprehensive income - - - 10,884 10,884
-------------------------- -------- -------- -------- --------- --------------
Ordinary shares
issued - - - - -
-------------------------- -------- -------- -------- --------- --------------
Purchase of treasury
shares - - - - -
-------------------------- -------- -------- -------- --------- --------------
Sale of treasury
shares - (259) 23,550 - 23,291
-------------------------- -------- -------- -------- --------- --------------
Cancellation of
treasury shares (21) (1,453) 1,474 - -
-------------------------- -------- -------- -------- --------- --------------
Dividends - - - - -
-------------------------- -------- -------- -------- --------- --------------
Total transactions
with equity shareholders (21) (1,712) 25,024 - 23,291
-------------------------- -------- -------- -------- --------- --------------
Balance at 30 June
2017 2,048 244,533 - 226,026 472,607
-------------------------- -------- -------- -------- --------- --------------
For the six months
ended 30 June 2016
-------------------------- -------- -------- -------- --------- --------------
Balance at 1 January
2016 2,069 246,245 (23,170) 157,006 382,150
-------------------------- -------- -------- -------- --------- --------------
Profit for the period/
total
comprehensive income - - - 27,171 27,171
-------------------------- -------- -------- -------- --------- --------------
Ordinary shares
issued - - - - -
-------------------------- -------- -------- -------- --------- --------------
Purchase of treasury
shares - - (1,854) - (1,854)
-------------------------- -------- -------- -------- --------- --------------
Sale of treasury
shares - - - - -
-------------------------- -------- -------- -------- --------- --------------
Dividends - - - - -
-------------------------- -------- -------- -------- --------- --------------
Total transactions
with equity shareholders - - (1,854) - (1,854)
-------------------------- -------- -------- -------- --------- --------------
Balance at 30 June
2016 2,069 246,245 (25,024) 184,177 407,467
-------------------------- -------- -------- -------- --------- --------------
Consolidated Statement of Cash Flows
for the six months ended 30 June 2017
Unaudited Unaudited
six months six months
ended ended
30 Jun 30 Jun
2017 2016
Notes GBP'000 GBP'000
--------------------------- ----- ----------- -----------
Cash flows from operating
activities
--------------------------- ----- ----------- -----------
Purchases of investments (103,888) (88,141)
--------------------------- ----- ----------- -----------
Sales of investments 51,016 56,464
--------------------------- ----- ----------- -----------
Interest income received 4,548 14,185
--------------------------- ----- ----------- -----------
Expenses paid (3,350) (1,901)
--------------------------- ----- ----------- -----------
Finance cost paid (30) -
--------------------------- ----- ----------- -----------
Other income received 246 100
--------------------------- ----- ----------- -----------
Net cash provided by/(used
in) operating activities (51,458) (19,293)
--------------------------- ----- ----------- -----------
Cash flows from financing
activities
--------------------------- ----- ----------- -----------
Proceeds from issue
of ordinary shares 14 - -
--------------------------- ----- ----------- -----------
Proceeds from treasury
shares sold 14 23,291 -
--------------------------- ----- ----------- -----------
Payment for treasury
shares purchased 14 - (1,854)
--------------------------- ----- ----------- -----------
Dividends paid (8,540) -
--------------------------- ----- ----------- -----------
Net cash provided by/(used
in) financing activities 14,751 (1,854)
--------------------------- ----- ----------- -----------
Net increase in cash
and cash equivalents (36,707) (21,147)
--------------------------- ----- ----------- -----------
Cash and cash equivalents
at beginning of the
period 106,509 95,520
--------------------------- ----- ----------- -----------
Effect of foreign exchange
rate changes 1,965 6,568
--------------------------- ----- ----------- -----------
Cash and cash equivalents
at end of the period 71,767 80,941
--------------------------- ----- ----------- -----------
Notes to the Consolidated Interim Financial Statements
for the six months ended 30 June 2017
1. Reporting entity
Oakley Capital Investments Limited (the "Company") is a closed-end investment company incorporated under the laws of Bermuda on 28 June 2007. The principal objective of the Company is to achieve capital appreciation through investments in a diversified portfolio of private mid-market businesses, primarily in the UK and Europe. The Company currently achieves its investment objective primarily through its investments in the following four private equity funds (the "Funds"): Oakley Capital Private Equity L.P. ("Fund I"), Oakley Capital Private Equity II-A L.P., which together with Oakley Capital Private Equity II-B L.P., Oakley Capital Private Equity II-C L.P. (collectively the "Fund II Feeder Funds") and OCPE II Master L.P. (the "Fund II Master") collectively comprise "Fund II", Oakley Capital Private Equity III-A L.P., which together with Oakley Capital Private Equity III-B L.P., Oakley Capital Private Equity III-C L.P. (collectively the "Fund III Feeder Funds") and OCPE III Master L.P. (the "Fund III Master") collectively comprise "Fund III" and OCPE Education (Feeder) L.P., which together with OCPE Education L.P. collectively comprise "OCPE Education". All constituent limited partnerships comprising the Funds are exempted limited partnerships established in Bermuda.
The defined term "Company" shall, where the context requires for the purposes of consolidation, include the Company's sole and wholly owned subsidiary, OCIL Financing (Bermuda) Limited ("OCI Financing").
The Company listed on the AIM market of the London Stock Exchange on 3 August 2007, with "OCI" as its listed ticker.
2. Basis of preparation
The condensed consolidated interim financial statements of the Company have been prepared on a going concern basis and under the historical cost convention, except for financial instruments at fair value through profit and loss, which are measured at fair value.
2.1 Basis for compliance
The condensed consolidated interim financial statements have been prepared in accordance with IAS 34 'Interim financial reporting' and should be read in conjunction with the latest annual report and financial statements as at and for the year ended 31 December 2016, which were prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU. They do not include all the information required for a complete set of IFRS financial statements. However, the explanatory notes are included to explain events and transactions that are significant to an understanding of changes in the Company's financial position and performance since the last annual consolidated financial statements.
The condensed consolidated interim financial statements were authorised for issue on 11 September 2017 by the Company's Board of Directors.
2.2 Functional and presentation currency
The condensed consolidated interim financial statements are presented in British Pounds, which is the Company's functional currency.
3. Significant accounting policies
During the period ended 30 June 2017, there were no relevant standards, amendments and interpretations that became effective for the first time that have had a material impact on the Company.
The accounting policies used are consistent with those applied in the last annual consolidated financial statements.
A number of standards have been issued but are not yet effective as at period end. The most significant of these is IFRS 9 Financial Instruments. The Company is currently in the process of analysing the impact of these new standards, amendments to existing standards and annual improvements to IFRS in detail but these are not expected to have a material effect on the consolidated annual financial statements of the Company.
4. Critical accounting estimates, assumptions and judgment
The preparation of condensed consolidated interim financial statements requires the Board of Directors to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
In preparing the condensed consolidated interim financial statements, the significant judgments made by applying the Company's accounting policies and the key sources of estimation uncertainty were consistent with those applied to the annual consolidated financial statements as at and for the year ended 31 December 2016.
(a) Fair valuation of investments
The fair values assigned to investments held at fair value through profit and loss are based upon the latest available information and do not necessarily represent amounts which might ultimately be realised. Because of the inherent uncertainty of valuation, these estimated fair values may differ significantly from the values that would have been used had a ready market for the investments existed, and those differences could be material.
Investments held at fair value through profit and loss are valued by the Company in accordance with IAS 39 and IFRS 13 and the IPEV valuation guidelines. Judgment is required in order to determine the appropriate valuation methodology under this standard and subsequently in determining the inputs into the valuation models used. These judgments include making assessments of the future earnings potential of portfolio companies, appropriate earnings multiples to apply, estimating future cash flows and determining appropriate discount rates.
(b) Assessment as an investment entity
Entities that meet the definition of an investment entity within IFRS 10 are required to account for investments in controlled entities, as well as investments in associates and joint ventures, at fair value through profit and loss.
The Board of Directors has concluded that the Company meets the definition of an investment entity as its strategic objective is to invest in portfolio investments on behalf of its investors for the purpose of generating returns in the form of investment income and capital appreciation.
5. Financial risk management
The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including interest rate risk, currency risk and price risk).
There have been no changes to the membership of the risk committee nor to any of the Company's risk policies since 31 December 2016 and as a result the condensed consolidated interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements. The condensed consolidated interim financial statements should be read in conjunction with the Company's annual consolidated financial statements as at 31 December 2016.
6. Investments
Investments as at 30 June 2017:
Change
31 Dec in 30 Jun
2016 Purchases Realised Interest unrealised 2017
Fair / capital Total gains/ and gains/ Fair
value calls sales* (losses) other (losses) value
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Oakley funds
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Fund I 64,906 12,309 (17,847) - - (21,121) 38,247
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Fund II 144,015 12,319 (12,029) 6,168 - 13,051 163,524
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Fund III 2,333 65,326 - - - (6,097) 61,562
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Total Oakley
funds 211,254 89,954 (29,876) 6,168 - (14,167) 263,333
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Co-Investment funds
------------------------------- ---------- -------- --------- -------- ----------- --------
OCPE Education
(Feeder) LP - 39,222 - - - 17,738 56,960
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Total Co-Investment
funds - 39,222 - - - 17,738 56,960
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Total funds 211,254 129,176 (29,876) 6,168 - 3,571 320,293
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Quoted equity
securities
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Time Out Group
plc 43,854 - - - - (1,572) 42,282
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Total quoted
equity securities 43,854 - - - - (1,572) 42,282
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Unquoted debt
securities
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Bellwood Holdings
Ltd - 1,878 - - 62 - 1,940
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Daisy Group
Holdings Limited 17,202 - - - 1,254 - 18,456
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Ellisfield (Bermuda)
Limited 14,530 - - - 514 - 15,044
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Fund I 12,256 3,000 (10,557) - 438 - 5,137
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Fund II 4,337 15,658 (2,332) - 532 - 18,195
--------------------- -------- ---------- -------- --------- -------- ----------- --------
NSG Apparel
BV 21,978 - - - 1,295 - 23,273
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Oakley Capital
II Limited 768 - (769) - 1 - -
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Oakley Capital
III Limited 5,210 - (1,001) - 203 - 4,412
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Oakley NS (Bermuda)
LP - 2,240 - - 122 - 2,362
--------------------- -------- ---------- -------- --------- -------- ----------- --------
OCPE Education
LP - 1,426 (1,432) - 6 - -
--------------------- -------- ---------- -------- --------- -------- ----------- --------
TO (Bermuda)
Limited 9,480 - (9,826) - 346 - -
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Total unquoted
debt securities 85,761 24,202 (25,917) - 4,773 - 88,819
--------------------- -------- ---------- -------- --------- -------- ----------- --------
Total investments 340,869 153,378 (55,793) 6,168 4,773 1,999 451,394
--------------------- -------- ---------- -------- --------- -------- ----------- --------
* Total sales includes redemptions, loan repayments and transfers
Investments as at 30 June 2016:
Change
31 Dec Purchases in 30 Jun
2015 / Realised Interest unrealised 2016
Fair capital Total gains/ and gains/ Fair
value calls sales* (losses) other (losses) value
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- --------- -------- --------- -------- ----------- --------
Funds
--------------------- -------- --------- -------- --------- -------- ----------- --------
Fund I 56,318 - - - - 3,209 59,527
--------------------- -------- --------- -------- --------- -------- ----------- --------
Fund II 102,051 - - - - 23,839 125,890
--------------------- -------- --------- -------- --------- -------- ----------- --------
Fund III - 5,934 - - - (1,429) 4,505
--------------------- -------- --------- -------- --------- -------- ----------- --------
Total Funds 158,369 5,934 - - - 25,619 189,922
--------------------- -------- --------- -------- --------- -------- ----------- --------
Quoted equity
securities
--------------------- -------- --------- -------- --------- -------- ----------- --------
Time Out Group
plc - 47,155 - - - (7,074) 40,081
--------------------- -------- --------- -------- --------- -------- ----------- --------
Total quoted
equity securities - 47,155 - - - (7,074) 40,081
--------------------- -------- --------- -------- --------- -------- ----------- --------
Unquoted equity
securities
--------------------- -------- --------- -------- --------- -------- ----------- --------
Flypay Limited 7,115 - (6,990) - - (125) -
--------------------- -------- --------- -------- --------- -------- ----------- --------
Time Out Group
HC Limited 13,271 4,000 (15,635) (2,165) 529 - -
--------------------- -------- --------- -------- --------- -------- ----------- --------
Time Out Mercado
Limited 5,564 2,754 (9,530) 747 574 (109) -
--------------------- -------- --------- -------- --------- -------- ----------- --------
Total unquoted
equity securities 25,950 6,754 (32,155) (1,418) 1,103 (234) -
--------------------- -------- --------- -------- --------- -------- ----------- --------
Unquoted debt
securities
--------------------- -------- --------- -------- --------- -------- ----------- --------
Bellwood Holdings
Ltd 2,805 - (2,818) - 13 - -
--------------------- -------- --------- -------- --------- -------- ----------- --------
BH(B) 55 Limited 10,948 - (11,175) - 227 - -
--------------------- -------- --------- -------- --------- -------- ----------- --------
Daisy Group
Holdings Limited 14,061 - - - 2,036 - 16,097
--------------------- -------- --------- -------- --------- -------- ----------- -------- Damoco Holdco Ltd 4,212 - (4,300) - 88 - - --------------------- -------- --------- -------- --------- -------- ----------- -------- Ellisfield (Bermuda) Limited 25,711 - - - 864 - 26,575 --------------------- -------- --------- -------- --------- -------- ----------- -------- Fund I 10,550 - (504) - 334 - 10,380 --------------------- -------- --------- -------- --------- -------- ----------- -------- Fund II - 3,630 - - 70 - 3,700 --------------------- -------- --------- -------- --------- -------- ----------- -------- NSG Apparel BV 10,066 10,000 - - 684 - 20,750 --------------------- -------- --------- -------- --------- -------- ----------- -------- Oakley Capital II Limited 2,895 - (1,000) - 61 - 1,956 --------------------- -------- --------- -------- --------- -------- ----------- -------- Oakley Capital III Limited - 5,500 (529) - 76 - 5,047 --------------------- -------- --------- -------- --------- -------- ----------- -------- Parship GmbH - 5,172 - - 30 - 5,202 --------------------- -------- --------- -------- --------- -------- ----------- -------- Time Out Group BC Limited 4,032 - (4,211) - 179 - - --------------------- -------- --------- -------- --------- -------- ----------- -------- Time Out Group HC Limited - 2,000 (2,053) - 53 - - --------------------- -------- --------- -------- --------- -------- ----------- -------- TO (Bermuda) Limited 11,222 - (2,652) - 549 - 9,119 --------------------- -------- --------- -------- --------- -------- ----------- -------- TONY MC LLC 8,395 - (9,089) 560 613 (479) - --------------------- -------- --------- -------- --------- -------- ----------- -------- Total unquoted debt securities 104,897 26,302 (38,331) 560 5,877 (479) 98,826 --------------------- -------- --------- -------- --------- -------- ----------- -------- Total investments 289,216 86,145 (70,486) (858) 6,980 17,832 328,829 --------------------- -------- --------- -------- --------- -------- ----------- --------
* Total sales includes redemptions, loan repayments and transfers
7. Disclosure about fair value of financial instruments
The Company has adopted IFRS 13 in respect of disclosures about the degree of reliability of fair value measurements. These fair value measurements are categorised into different levels in the fair value hierarchy based on the inputs to valuation techniques used. The Company classifies financial instruments measured at fair value in the investment portfolio according to the following hierarchy:
-- Level I: Quoted prices (unadjusted) in active markets for identical instruments that the Company can access at the measurement date. Level I investments include quoted equity instruments.
-- Level II: Inputs other than quoted prices included within Level I that are observable for the instrument, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
-- Level III: Inputs that are not based on observable market data. Level III investments include private equity funds, unquoted equity and debt securities.
The level in the fair value hierarchy within which the fair value measurement is categorised is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the instrument. The determination of what constitutes 'observable' requires significant judgment by the Company. The Company considers observable data to be market data that are readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.
The following table analyses the Company's investments measured at fair value as of 30 June 2017 by the level in the fair value hierarchy into which the fair value measurement is categorised:
Level Level
I III Total
GBP'000 GBP'000 GBP'000
------------------------- -------- -------- --------
Funds - 320,293 320,293
------------------------- -------- -------- --------
Quoted equity securities 42,282 - 42,282
------------------------- -------- -------- --------
Unquoted debt securities - 88,819 88,819
------------------------- -------- -------- --------
Total investments
measured at fair value 42,282 409,112 451,394
------------------------- -------- -------- --------
The following table analyses the Company's investments measured at fair value as of 30 June 2016 by the level in the fair value hierarchy into which the fair value measurement is categorised:
Level Level
I III Total
GBP'000 GBP'000 GBP'000
------------------------- -------- -------- --------
Funds - 189,922 189,922
------------------------- -------- -------- --------
Quoted equity securities 40,081 - 40,081
------------------------- -------- -------- --------
Unquoted debt securities - 98,826 98,826
------------------------- -------- -------- --------
Total investments
measured at fair value 40,081 288,748 328,829
------------------------- -------- -------- --------
Level I
Quoted equity investment values are based on quoted market prices in active markets, and are therefore classified within Level I investments. The Company does not adjust the quoted price for these investments.
Level II
The Company did not hold any Level II investments as of 30 June 2017 or 30 June 2016.
Level III
The Company has determined that Funds and unquoted debt securities fall into the category Level III. Funds and unquoted debt securities are measured in accordance with the IPEV Guidelines with reference to the most appropriate information available at the time of measurement. The condensed consolidated interim financial statements as of 30 June 2017 include Level III investments in the amount of GBP409,112,256; representing approximately 86.56% of equity (2016: GBP288,747,235; 70.86%) which includes the new fund OCPE Education, a co-investment vehicle through which the Company invests in Inspired Education Holdings Limited ("Inspired"), the holding company for the private schools business, previously referred to as Educas, which has a value of GBP56,959,939.
Funds
The Company primarily invests in portfolio companies via the Funds. The Funds are unquoted equity securities that invest in unquoted securities. The Company's investments in unquoted equity securities are recognised in the consolidated balance sheet at fair value, in accordance with IPEV Valuation Guidelines and IFRS 13 and are considered Level III investments.
The valuation of unquoted fund investments is generally based on the latest available net asset value ("NAV") of the fund as reported by the corresponding general partner or administrator, provided that the NAV has been appropriately determined using fair value principles in accordance with IFRS 13.
The NAV of a fund is calculated after determining the fair value of a fund's investment in any portfolio company. This value is generally obtained by calculating the Enterprise Value ("EV") of the portfolio company and then adding excess cash and deducting financial instruments, such as external debt, ranking ahead of the fund's highest ranking instrument in the portfolio company.
A common method of determining the EV is to apply a market-based multiple (e.g. an average multiple based on a selection of comparable quoted companies) to the 'maintainable' earnings or revenues of the portfolio company. This market-based approach presumes that the comparator companies are correctly valued by the market. A discount is sometimes applied to market based multiples to adjust for points of difference between the comparators and the company being valued.
As at 30 June 2017, the value of the Funds' investments, other assets and liabilities attributable to the Company based on its respective percentage interest in each Fund was as follows:
Fund Fund Fund OCPE
I II III Education
EUR'000 EUR'000 EUR'000 EUR'000
----------------------- -------- -------- -------- ----------
Investments 44,267 226,672 80,864 65,578
----------------------- -------- -------- -------- ----------
Loans (3,831) (34,152) (53,635) -
----------------------- -------- -------- -------- ----------
Provisional profit
allocation - (20,754) - -
----------------------- -------- -------- -------- ----------
Other net assets 3,116 14,437 42,872 (718)
----------------------- -------- -------- -------- ----------
Total value of
the Fund attributable
to the Company 43,552 186,203 70,101 64,860
----------------------- -------- -------- -------- ----------
GBP'000 GBP'000 GBP'000 GBP'000
----------------------- -------- -------- -------- ----------
Total value of
the Fund attributable
to the Company 38,247 163,524 61,562 56,960
----------------------- -------- -------- -------- ----------
As at 30 June 2016, the value of the Funds' investments, other assets and liabilities attributable to the Company based on its respective percentage interest in each Fund was as follows:
Fund Fund Fund OCPE
I II III Education
EUR'000 EUR'000 EUR'000 EUR'000
----------------------- -------- -------- -------- ----------
Investments 73,967 191,162 - -
----------------------- -------- -------- -------- ----------
Loans (8,134) (33,532) - -
----------------------- -------- -------- -------- ----------
Provisional profit
allocation - (6,742) - -
----------------------- -------- -------- -------- ----------
Other net assets 5,389 (265) 5,390 -
----------------------- -------- -------- -------- ----------
Total value of
the Fund attributable
to the Company 71,222 150,623 5,390 -
----------------------- -------- -------- -------- ----------
GBP'000 GBP'000 GBP'000 GBP'000
----------------------- -------- -------- -------- ----------
Total value of
the Fund attributable
to the Company 59,527 125,890 4,505 -
----------------------- -------- -------- -------- ----------
The Company does not utilise valuation models to calculate the fair value of its Fund investments. The NAV as reported by the Funds' general partner or administrator is considered to be the key unobservable input. In addition, the Company has the following control procedures in place to evaluate whether the NAV of the underlying fund investments is calculated in a manner consistent with IFRS 13:
- Thorough initial due diligence process and the Company's Risk Committee and/or the Board performing ongoing monitoring procedures, primarily discussions with Oakley Capital Limited, the Administrative Agent's investment adviser;
- Comparison of historical realisations to last reported fair values; and - Review of the auditor's report of the respective Fund.
Unquoted equity securities
In estimating the fair value of unquoted equity securities, the Company considers the transaction price as a reasonable estimate of fair value at initial recognition. Subsequently, the Company applies the most appropriate market valuation techniques in determining fair value. Inputs considered by the Company are mainly comparable company valuation multiples.
Unquoted debt securities
The fair values of the Company's investments in unquoted debt securities are derived from a discounted cash flow calculation based on expected future cash flows to be received, discounted at an appropriate rate. Expected future cash flows include interest received and principal repayment at maturity.
Unobservable inputs for Level III investments
Funds
In arriving at the fair value of the unquoted fund investments, the key input used by the Company is the NAV as provided by the general partner or administrator. It is recognised by the Company that the NAV of the Funds are sensitive to movements in the fair values of the underlying portfolio companies.
The underlying portfolio companies owned by the Funds may include both quoted and unquoted companies. Quoted portfolio companies are valued based on market prices and no unobservable inputs are used. Unquoted portfolio companies are valued based on a market approach for which significant judgment is applied.
For the purposes of sensitivity analysis, the Company considers a 10% adjustment to the fair value of the unquoted portfolio companies of the Funds as reasonable. For the period ending 30 June 2017 a 10% adjustment to the fair value of the unquoted portfolio companies held by the Funds would result in a 6.9% movement in net assets attributable to shareholders (2016: 4.7%).
Unquoted equity securities
The Company held no unquoted equity securities as of 30 June 2017 and 30 June 2016.
Unquoted debt securities
In arriving at the fair value of the unquoted debt securities, the key inputs used by the Company are future cash flows expected to be received until maturity of the debt securities and the discount factor applied. The discount factor applied is considered to be an unobservable input and range between 6.5% and 15%.
For the purposes of sensitivity analysis, the Company considers a 1% adjustment to the discount factor applied as reasonable. For the period ending 30 June 2017 a 1% adjustment would result in a 0.3% movement in net assets attributable to shareholders (2016: 0.5%).
Transfers between levels
There were no transfers between the Levels during the period ended 30 June 2017.
The following table presents the transfers between Levels for the period ended 30 June 2016:
Level Level
I III
GBP'000 GBP'000
------------------------- -------- --------
Funds - -
------------------------- -------- --------
Quoted equity securities 47,155 -
-------------------------- -------- --------
Unquoted equity
securities - (32,155)
-------------------------- -------- --------
Unquoted debt securities - (15,000)
-------------------------- -------- --------
Total transfers
between Level I
and Level III 47,155 (47,155)
-------------------------- -------- --------
On 14 June 2016, the Time Out unquoted debt and equity securities classified as Level III were exchanged for listed shares of Time Out Group as part of the reorganisation and Initial Public Offering of the Time Out Group. Transfers are recognised at the date of transfer.
Level I and Level III reconciliation
The changes in investments measured at fair value, for which the Company has used Level I and Level III inputs to determine fair value as of 30 June 2017 and 2016, are as follows:
As at As at
30 Jun 30 Jun
2017 2016
Level I Investments: GBP'000 GBP'000
------------------------------- -------- --------
Quoted equity securities
------------------------------- -------- --------
Fair value at beginning
of the period 43,854 -
------------------------------- -------- --------
Shares transferred from
unquoted debt and equity
securities - 47,155
------------------------------- -------- --------
Net change in unrealised
gains/(losses) on investments (1,572) (7,074)
------------------------------- -------- --------
Fair value of Level I
investments at end of
the period 42,282 40,081
------------------------------- -------- --------
Unquoted Unquoted
equity debt
Funds securities securities Total
Level III Investments: GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- ----------- ----------- --------
For the six months ended
30 June 2017
------------------------------- -------- ----------- ----------- --------
Fair value at beginning
of the period 211,254 - 85,761 297,015
------------------------------- -------- ----------- ----------- --------
Purchases 129,176 - 24,202 153,378
------------------------------- -------- ----------- ----------- --------
Proceeds on disposals
(including interest) (29,876) - (25,917) (55,793)
------------------------------- -------- ----------- ----------- --------
Realised gain on sale 6,168 - - 6,168
------------------------------- -------- ----------- ----------- --------
Interest income and
other fee income - - 4,773 4,773
------------------------------- -------- ----------- ----------- --------
Net change in unrealised
gains/(losses) on investments 3,571 - - 3,571
------------------------------- -------- ----------- ----------- --------
Fair value at end of
the period 320,293 - 88,819 409,112
------------------------------- -------- ----------- ----------- --------
Unquoted Unquoted
equity debt
Funds securities securities Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- ----------- ----------- --------
For the six months ended
30 June 2016
------------------------------- -------- ----------- ----------- --------
Fair value at beginning
of the period 158,369 25,950 104,897 289,216
------------------------------- -------- ----------- ----------- --------
Purchases 5,934 6,754 26,302 38,990
------------------------------- -------- ----------- ----------- --------
Proceeds on disposals
(including interest) - - (23,331) (23,331)
------------------------------- -------- ----------- ----------- --------
Realised gain on sale - - - -
------------------------------- -------- ----------- ----------- --------
Accrued interest capitalised
in debt for share conversion - 1,103 - 1,103
------------------------------- -------- ----------- ----------- --------
Net realised loss on
debt for share conversion - (1,418) 560 (858)
------------------------------- -------- ----------- ----------- --------
Transferred to quoted
equity securities (Level
I) - (32,155) (15,000) (47,155)
------------------------------- -------- ----------- ----------- --------
Interest income and
other fee income - - 5,877 5,877
------------------------------- -------- ----------- ----------- --------
Net change in unrealised
gains/(losses) on investments 25,619 (234) (479) 24,906
------------------------------- -------- ----------- ----------- --------
Fair value at end of
the period 189,922 - 98,826 288,748
------------------------------- -------- ----------- ----------- --------
Financial instruments not carried at fair value
Financial instruments, other than financial instruments at fair value through profit and loss, where carrying values are equal to fair values:
As at As at
30 Jun 30 Jun
2017 2016
GBP'000 GBP'000
---------------------------- -------- --------
Cash and cash equivalents 71,767 80,941
---------------------------- -------- --------
Trade and other receivables 743 114
---------------------------- -------- --------
Trade and other payables 51,297 2,417
---------------------------- -------- --------
Trade and other payables includes a balance of GBP49,490,150 in relation to capital calls payable to Fund II and Fund III. Capital calls payable were settled by the respective due dates post 30 June 2017 (refer to Note 17).
8. Segment information
The Company has two reportable segments, as described below. For each of them, the Board of Directors receives detailed reports on at least a quarterly basis. The following summary describes the operations in each of the Company's reportable segments:
- Fund investments: includes commitments/investments in four private equity funds.
- Direct investments and loans: includes direct investments, loans to the Funds' portfolio companies, loans to the Funds and other loans.
Balance sheet and income and expense items which cannot be clearly allocated to one of the segments are shown in the column "Unallocated" in the following tables.
The reportable operating segments derive their revenue from investments by seeking to achieve an attractive return in relation to the risk being taken. The return consists of interest, dividends and/or unrealised and realised capital gains.
The financial information provided to the Board of Directors with respect to total assets and liabilities is presented in a manner consistent with the annual consolidated financial statements. The assessment of the performance of the operating segments is based on measurements consistent with IFRS. Liabilities are not considered to be segment liabilities but rather managed at the corporate level.
There have been no transactions between the reportable segments during the period ended 30 June 2017 and 2016.
The segment information for the period ended 30 June 2017 is as follows:
Direct Total
Fund Investments operating
investments and loans segments Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ------------ ------------ ---------- ----------- --------
Net realised gains
on financial assets
at fair value through
profit and loss 6,168 - 6,168 - 6,168
----------------------- ------------ ------------ ---------- ----------- --------
Net unrealised
gains/(losses)
on financial assets
at fair value through
profit and loss 3,571 (1,572) 1,999 - 1,999
----------------------- ------------ ------------ ---------- ----------- --------
Interest income - 4,527 4,527 17 4,544
----------------------- ------------ ------------ ---------- ----------- --------
Net foreign currency
gains/(losses) - - - 1,965 1,965
----------------------- ------------ ------------ ---------- ----------- --------
Other income - 246 246 - 246
----------------------- ------------ ------------ ---------- ----------- --------
Expenses - - - (4,008) (4,008)
----------------------- ------------ ------------ ---------- ----------- --------
Finance cost - - - (30) (30)
----------------------- ------------ ------------ ---------- ----------- --------
Profit/(loss) for
the period 9,739 3,201 12,940 (2,056) 10,884
----------------------- ------------ ------------ ---------- ----------- --------
Total assets 320,293 131,101 451,394 72,510 523,904
----------------------- ------------ ------------ ---------- ----------- --------
Total liabilities - - - (51,297) (51,297)
----------------------- ------------ ------------ ---------- ----------- --------
Net assets 320,293 131,101 451,394 21,213 472,607
----------------------- ------------ ------------ ---------- ----------- --------
Total assets include:
----------------------- ------------ ------------ ---------- ----------- --------
Financial assets
at fair value through
profit and loss 320,293 131,101 451,394 - 451,394
----------------------- ------------ ------------ ---------- ----------- --------
Cash and other - - - 72,510 72,510
----------------------- ------------ ------------ ---------- ----------- --------
The segment information for the period ended 30 June 2016 is as follows:
Total
Fund Direct investments operating
investments and loans segments Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ------------ ------------------ ---------- ----------- --------
Net realised gains
on financial assets
at fair value through
profit and loss - (858) (858) - (858)
----------------------- ------------ ------------------ ---------- ----------- --------
Net unrealised
gains/(losses)
on financial assets
at fair value through
profit and loss 25,619 (7,787) 17,832 - 17,832
----------------------- ------------ ------------------ ---------- ----------- --------
Interest income - 6,887 6,887 257 7,144
----------------------- ------------ ------------------ ---------- ----------- --------
Net foreign currency
gains/(losses) - - - 6,568 6,568
----------------------- ------------ ------------------ ---------- ----------- --------
Other income 93 93 7 100
----------------------- ------------ ------------------ ---------- ----------- --------
Expenses - - - (3,615) (3,615)
----------------------- ------------ ------------------ ---------- ----------- --------
Finance cost - - - - -
----------------------- ------------ ------------------ ---------- ----------- --------
Profit/(loss) for
the period 25,619 (1,665) 23,954 3,217 27,171
----------------------- ------------ ------------------ ---------- ----------- -------- Total assets 189,922 138,907 328,829 81,055 409,884 ----------------------- ------------ ------------------ ---------- ----------- -------- Total liabilities - - - (2,417) (2,417) ----------------------- ------------ ------------------ ---------- ----------- -------- Net assets 189,922 138,907 328,829 78,638 407,467 ----------------------- ------------ ------------------ ---------- ----------- -------- Total assets include: ----------------------- ------------ ------------------ ---------- ----------- -------- Financial assets at fair value through profit and loss 189,922 138,907 328,829 - 328,829 ----------------------- ------------ ------------------ ---------- ----------- -------- Cash and other - - - 81,055 81,055 ----------------------- ------------ ------------------ ---------- ----------- --------
9. Expenses
Six months Six months
ended ended
30 Jun 30 Jun
2017 2016
Notes GBP'000 GBP'000
------------------------- ----- ---------- ----------
Management fees 10 535 2,304
------------------------- ----- ---------- ----------
Operational and advisory
fees 11 1,227 -
------------------------- ----- ---------- ----------
Professional fees 963 572
------------------------- ----- ---------- ----------
Performance fees 10,11 1,079 607
------------------------- ----- ---------- ----------
Other expenses 204 132
------------------------- ----- ---------- ----------
4,008 3,615
------------------------- ----- ---------- ----------
10. Management and performance fees
The Company had appointed Oakley Capital (Bermuda) Limited (the "Manager") to provide management services. On 31 March 2017, the management agreement was terminated.
Management fees for the period 1 January 2017 to 31 March 2017 totalled GBP535,090 (1 January 2016 to 30 June 2016: GBP2,304,173) and are presented in the consolidated statement of comprehensive income. There were no management fees payable to the Manager at 30 June 2017 (2016: GBP849,061).
No performance fees were paid for the period 1 January 2017 to 31 March 2017 (1 January 2016 to 30 June 2016: GBP606,701). There were no performance fees payable to the Manager at 30 June 2017 (2016: nil).
11. Operational, advisory and performance fees
Pursuant to an operational services agreement dated 1 April 2017 (the "Operational Services Agreement"), the Company appointed Oakley Capital Manager Limited (the "Administrative Agent") to provide operational assistance and services to the Board with respect to the Company's investments and its general administration.
Under the Operational Services Agreement, the Administrative Agent receives an operational services fee equal to 2% per annum of the net asset value of all investments, except Fund I, Fund II and Fund III, held by the Company (before deduction of any accrued performance fees). The fee is pro-rata for partial periods and payable quarterly in arrears.
The operational services fee for the period ending 30 June 2017 totalled GBP544,011 (2016: nil) and is presented in the consolidated statement of comprehensive income. The amount outstanding as at 30 June 2017 was GBP544,011 (2016: nil) and is included in trade and other payables in the consolidated balance sheet.
Under the Operational Services Agreement, the Administrative Agent receives an advisory fee based on the successful buy-side or sell-side transactions of the Company for any equity investment. The advisory fee is 2% of the equity transaction value unless otherwise agreed between the parties.
Advisory fees for the period ended 30 June 2017 totalled GBP683,419 (2016: nil) and are presented in the consolidated statement of comprehensive income. The amount outstanding as at 30 June 2017 was GBP237,114 (2016: nil) and is included in trade and other payables in the consolidated balance sheet.
The Administrative Agent also receives a performance fee of 20% of the excess of the amount earned by the Company over and above an 8% hurdle rate in respect of the realisation or partial realisation of each co-investment. The operational services fee received and receivable by the Administrative Agent, the attributable proportion of all other expenses incurred by the Company in respect of the co-investments and the cost of the co-investment will be deducted from proceeds received in the calculation of the performance fee.
Performance fees for the period ended 30 June 2017 totalled GBP1,079,313 (2016: nil) and are presented in the consolidated statement of comprehensive income. The amount outstanding as at 30 June 2017 was GBP599,836 (2016: nil) and is included in trade and other payables in the consolidated balance sheet.
Under the Operational Services Agreement, the Administrative Agent may also recharge costs incurred, either directly or indirectly by its contracted advisors, on behalf of the Company. For the period ending 30 June 2017, the Administrative Agent recharged such other costs to the Company totalling GBP218,829 (2016: nil) and is included in other expenses in Note 9.
The Administrative Agent has entered into an Investment Adviser Agreement with Oakley Capital Limited (the "Investment Adviser") to advise on the investment of the assets of the Company. The Investment Adviser does not receive any management or performance fees from the Company. Any fees earned by the Investment Adviser are paid by the Administrative Agent.
12. Earnings per share
The earnings per share calculation uses the weighted average number of shares in issue during the period.
Six months Six months
ended ended
30 Jun 30 Jun
2017 2016
-------------------------------- ---------- ----------
Basic and diluted earnings
per share GBP0.05 GBP0.14
-------------------------------- ---------- ----------
Profit for the period (GBP'000) GBP10,884 GBP27,171
-------------------------------- ---------- ----------
Weighted average number
of shares outstanding ('000) 202,898 190,000
-------------------------------- ---------- ----------
13. Net asset value per share
The net asset value per share calculation uses the number of shares in issue at the end of the period.
As at As at
30 Jun 30 Jun
2017 2016
---------------------------- ---------- ----------
Basic and diluted net asset
value per share GBP2.31 GBP2.15
---------------------------- ---------- ----------
Net assets attributable
to shareholders (GBP'000) GBP472,607 GBP407,467
---------------------------- ---------- ----------
Number of shares in issue
at period end ('000) 204,804 189,804
---------------------------- ---------- ----------
14. Share capital
a) Authorised and issued share capital
The authorised share capital of the Company is 280,000,000 ordinary shares at a par value of GBP0.01 each. Ordinary shares are listed and traded on AIM of the London Stock Exchange. Each share confers the right to one vote and shareholders have the right to receive dividends.
As at 30 June 2017, the Company's issued and fully paid share capital was 204,804,036 ordinary shares (2016: 189,804,036).
As at As at
30 Jun 30 Jun
2017 2016
'000 '000
---------------------------- ------- -------
Ordinary shares outstanding
at the beginning of the
period 189,804 191,078
---------------------------- ------- -------
Ordinary shares issued
and fully paid - -
---------------------------- ------- -------
Treasury shares purchased - (1,274)
---------------------------- ------- -------
Treasury shares sold 15,000 -
---------------------------- ------- -------
Ordinary shares outstanding
at the end of the period 204,804 189,804
---------------------------- ------- -------
b) Treasury shares
During the period ended 30 June 2017, the Company sold 15,000,000 (2016: nil) ordinary shares at a share price of GBP1.57 per share and a total net cash consideration of GBP23,290,950 (2016: GBPnil). No treasury shares were purchased during the period (2016: 1,274,279 ordinary shares for a total cash consideration of GBP1,853,928). On 24 January 2017, the Company cancelled its remaining 2,108,843 treasury shares.
As at 30 June 2017, the Company holds no treasury shares (2016: 17,108,843). The Company adopted a policy regarding share buy backs as part of discount control management and will not in the future sell stock from treasury nor issue new shares at material discounts to NAV.
15. Commitments
The Company had the following capital commitments in Euros as at the period end:
As at As at
30 Jun 30 Jun
2017 2016
EUR'000 EUR'000
-------------------------------- -------- --------
Fund I
-------------------------------- -------- --------
Total capital commitment
(2017: GBP165,450; 2016:
GBP157,458) 188,398 188,398
-------------------------------- -------- --------
Called capital, beginning
of the period 178,978 178,978
-------------------------------- -------- --------
Capital calls during the
period (2017: 3.6%; 2016:
0%) 6,783 -
-------------------------------- -------- --------
Called capital, end of
the period (2017: GBP163,134;
2016: GBP149,585) 185,761 178,978
-------------------------------- -------- --------
Unfunded capital commitment
(2017: GBP2,316; 2016:
GBP7,873) 2,637 9,420
-------------------------------- -------- --------
Aggregate recycled commitment 12,999 5,652
-------------------------------- -------- --------
Fund II
-------------------------------- -------- --------
Total capital commitment
(2017: GBP175,639; 2016:
GBP167,154) 200,000 200,000
-------------------------------- -------- --------
Called capital, beginning
of the period 153,000 114,000
-------------------------------- -------- --------
Capital calls during the
period (2017: 7%; 2016:
0%) 14,000 -
-------------------------------- -------- --------
Called capital, end of
the period (2017: GBP146,659;
2016: GBP95,278) 167,000 114,000
-------------------------------- -------- --------
Unfunded capital commitment
(2017: GBP28,980; 2016:
GBP71,876) 33,000 86,000
-------------------------------- -------- --------
Fund III
-------------------------------- -------- --------
Total capital commitment
(2017: GBP285,413; 2016:
GBP208,943) 325,000 250,000
-------------------------------- -------- --------
Called capital, beginning
of the period 9,750 -
-------------------------------- -------- --------
Capital calls during the
period (2017: 23%; 2016:
3%) 74,750 7,500
-------------------------------- -------- --------
Called capital, end of
the period (2017: GBP74,207;
2016: GBP6,268) 84,500 7,500
-------------------------------- -------- --------
Unfunded capital commitment
(2017: GBP211,206; 2016:
GBP202,675) 240,500 242,500
-------------------------------- -------- --------
Total unfunded capital
commitments (2017: GBP242,502;
2016: GBP282,424) 276,137 337,920
-------------------------------- -------- --------
The Company had the following loan commitments at the period end:
As at As at
30 Jun 30 Jun
2017 2016
GBP'000 GBP'000
--------------------------------- -------- --------
Total revolving loan facility
commitments:
--------------------------------- -------- --------
Fund I 5,000 5,000
--------------------------------- -------- --------
Fund II 20,000 15,000
--------------------------------- -------- --------
Fund III 20,000 -
--------------------------------- -------- --------
Oakley NS (Bermuda) LP 3,000 -
--------------------------------- -------- --------
48,000 20,000
--------------------------------- -------- --------
Total unfunded loan commitments:
--------------------------------- -------- --------
Fund I - 4,532
--------------------------------- -------- --------
Fund II 2,227 11,370
--------------------------------- -------- --------
Fund III 20,000 -
--------------------------------- -------- --------
Oakley NS (Bermuda) LP 700 -
--------------------------------- -------- --------
22,927 15,902
--------------------------------- -------- --------
16. Related parties
Balances and transactions between the Company and its subsidiary have been eliminated on consolidation and are not disclosed in this note. Related parties as disclosed below are not part of the consolidation and for this reason are not eliminated.
The Manager, subsequently the Administrative Agent, and the Investment Adviser are considered related parties to the Company due to the direct and indirect control and transactions with them.
Management fees and performance fees paid are detailed in Notes 9 and 10. Operational fees, advisory fees and performance fees paid to the Administrative Agent are detailed in Notes 9 and 11. The agreements between the
Company and these service providers are based on normal commercial terms.
During the period ended 30 June 2017 the Investment Adviser recharged staff costs of GBP409,722 (2016: GBP129,002) and overheads of GBP2,343 (2016: GBP35,914) to the Company, and is included in other expenses in Note 9.
Fund I is considered a related party due to the investment the Company has in Fund I. During the period ended 30 June 2017, the Company acquired an interest in OCPE Education L.P. from Fund I Limited Partners and paid EUR23,492,217 (GBP20,795,311) for such additional interests in OCPE Education L.P. As at 30 June 2017, the Company owned 99.2% of OCPE Education (Feeder) L.P. which in turn owned 38.16% of OCPE Education L.P. As at 30 June 2017, OCPE Education L.P. held an indirect 36.4% stake in Inspired.
17. Events after balance sheet date
The Board of Directors has evaluated subsequent events from the period ended 30 June 2017 to 11 September 2017, which is the date the condensed consolidated interim financial statements were approved. The following events have been identified for disclosure:
On 5 July 2017, the Company settled its capital calls payable to Fund II of EUR14,000,000 (GBP12,268,200) and Fund III of EUR42,250,000 (GBP37,023,675). The capital calls payable were included in Trade and other payables as at 30 June 2017. Fund II used the proceeds from the capital call to repay debt. Fund III used the proceeds from the capital call to complete its fourth acquisition, purchasing the business and operations of ZGS Verwaltungs GmbH ("Schülerhilfe").
On 1 August 2017, Fund III increased its total capital commitments from EUR691,400,000 to EUR763,550,000. The final closing of Fund III will take place by the end of September 2017. The increased commitment dilutes the Company's holding in Fund III Master from 47.0% to 42.6%.
On 2 August 2017, the Company received a distribution from Fund II of EUR8,419,200 (GBP7,545,287) arising from the partial realisation of Fund II's indirect interest in Inspired through its holding in OCPE (Education) Feeder L.P.
On 14 August 2017, the Company received a distribution from OCPE Education (Feeder) L.P. of EUR26,067,316 (GBP23,674,336) arising from the partial realisation of OCPE Education L.P. indirect interest in Inspired.
On 21 August 2017, the Company received a distribution from Fund II of EUR13,451,338 (GBP12,386,293) arising from the repayment of capital by Facile, and dividend proceeds from Parship Elite Group.
On 6 September 2017, the Company received a distribution from Fund III of EUR12,481,093 (GBP11,400.917) arising from the refinancing of capital by TechInsights.
On 11 September 2017, the Board of Directors declared and approved an interim dividend of 2.25 pence per ordinary share which will result in a dividend payment of GBP4,608,091 payable on 26 October 2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BFLLFDKFBBBL
(END) Dow Jones Newswires
September 12, 2017 02:00 ET (06:00 GMT)
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