TIDMBPET
RNS Number : 5542T
BMO Private Equity Trust PLC
26 March 2021
To: Stock Exchange For immediate release:
26 March 2021
BMO Private Equity Trust PLC
LEI: 2138009FW98WZFCGRN66
Preliminary Announcement for the Year to 31 December 2020
BMO Private Equity Trust PLC today announces its unaudited
financial results for the year ended 31 December 2020.
Financial Highlights
-- NAV of 486.17 per Ordinary Share reflecting a total return
for the year of 22.7% for the Ordinary Shares. *
-- Share price total return for the year of -14.2 per cent for the Ordinary Shares. *
-- Total quarterly dividends of 16.13p per Ordinary Share.
-- Dividend yield of 5.2 per cent based on the year-end share price. *
-- Co-investment in Dotmatics sale agreed at GBP37.7m value - 8.7x and IRR 83%
*see Alternative Performance Measures
Chairman's Statement
Fellow Shareholders,
I would first like to take this opportunity, on behalf of the
Board, to thank you for your continuing support during these
uncertain times. This has been a difficult period for many, but we
do hope that you have managed through as well as possible.
I am pleased to report that your Company has achieved a net
asset value ("NAV") total return for the year ended 31 December
2020 of 22.7 per cent. This compares to a total return from the
FTSE All-Share Index for the year of -9.8 per cent. The NAV per
share at the year-end was 486.17p (2019: 411.51p). The NAV total
return for the fourth quarter was an impressive 26.1 per cent.
The share price at the year-end was 307.50p per share (2019:
375.50p). During the year the share price discount widened
considerably. As at 31 December 2020 it was 36.8 per cent in
comparison to 8.8 per cent as at 31 December 2019. As a
consequence, the share price total return for the year was -14.2
per cent.
During the year the Company made new investments either through
funds or as co-investments, totalling GBP36.1 million. Realisations
and associated income totalled GBP37.6 million. Outstanding undrawn
commitments at the year-end were GBP125.1 million of which GBP21.2
million was to funds where the investment period had expired.
The Company's performance fee arrangements contain a hurdle
rate, calculated over rolling three-year periods, of an IRR of 8.0
per cent per annum. The annual IRR of the NAV for the three-year
period ended 31 December 2020 was 15.2 per cent and, consequently,
a performance fee of GBP3.0 million is payable to the Manager, BMO
Investment Business Limited, in respect of 2020. This is the eighth
consecutive year that a performance fee has been payable,
demonstrating consistent performance and providing Shareholders
with an attractive total return, which includes capital growth and
an above average dividend yield.
Dividends
Since 2012 your Company has paid a substantial dividend from
realised capital profits allowing Shareholders to participate, to
some degree, directly in the proceeds of the steady stream of
private equity realisations which the Company achieves. This policy
has been well received by Shareholders and provides for a steadily
growing dividend with downside protection. Your Board is fully
committed to maintaining this general approach for the foreseeable
future.
The Company's quarterly dividends are payable in respect of the
quarters ended 31 March, 30 June, 30 September and 31 December and
are paid in the following July, October, January and April
respectively. As Shareholders do not have an opportunity to approve
a final dividend at each Annual General Meeting, Shareholders are
asked to approve the Company's dividend policy at the forthcoming
Annual General Meeting.
In accordance with the Company's stated dividend policy, the
Board recommends a further quarterly dividend of 4.16p per Ordinary
Share, payable on 30 April 2021 to Shareholders on the register on
9 April 2021 and an ex-dividend date of 8 April 2021. Total
dividends paid for the year therefore amount to 16.13p per Ordinary
Share equivalent to a dividend yield of 5.2 per cent at the
year-end.
Financing
The Company is well placed financially. For 2020 there was a
near match between distributions and drawdowns at GBP37.6 million
and GBP36.1 million respectively. This absence of an adverse
imbalance despite the challenging background has meant that the
Company has operated comfortably within its banking facilities
throughout the year. Recognising that this cannot be guaranteed and
to ensure that the Company retains a strong capacity for new
investment, the Company has worked with its principal lender to
increase the size of its revolving credit facility by GBP20 million
to GBP95 million. This has been achieved through the introduction
of State Street as another lender alongside RBSI. There are no
changes to rates or covenants.
Directorate Change
On 4 June 2020, the Company was pleased to announce that Audrey
Baxter and Tom Burnet had been appointed to the Board. Their
appointments, which followed a thorough selection process involving
an external search company, were part of the Company's plan to
ensure an orderly succession as Directors retire.
Audrey Baxter has a distinguished career in business and public
life. Audrey is currently Chairman and CEO of W. A. Baxter &
Sons (Holdings) Ltd and has served previously on the boards of a
number of public and private companies, charities and voluntary
organisations.
Tom Burnet has held a number of senior roles in industry. Tom is
currently Chair of ITG, a significant provider of outsourced
marketing technology and services to many of the UK's and Europe's
leading retailers and household names. He is also Chair of Kainos
Group plc, the FTSE 250, Belfast headquartered, software company
and the Baillie Gifford US Growth Trust plc.
Annual General Meeting
The Annual General Meeting ("AGM") of the Company will be held
at 12.00 noon on 27 May 2021 at Quartermile 4, 7a Nightingale Way,
Edinburgh EH3 9EG. Mindful of the potential for travel and
gathering restrictions arising from the COVID-19 pandemic the Board
has again taken the disappointing decision to amend the format of
this year's AGM.
Due to the restrictions on gatherings and travel in place at the
time of this announcement, Shareholders will not be permitted to
attend this year's AGM in person but can be represented by the
Chairman of the meeting acting as their proxy. The AGM will be held
as a closed meeting with the minimum attendance required to form a
quorum.
To allow shareholder engagement despite these restricted
circumstances, Shareholders can attend an online presentation by
the Company's Chairman and Investment Manager, to be held at 12.00
noon on 27 May 2021, immediately prior to the formal business of
the AGM.
To foster better shareholder engagement in these restricted
circumstances, a special email account has been created and
Shareholders are requested to direct any questions they may have
about the resolutions proposed at the AGM or the performance of the
Company, in advance of the meeting to this address:
privateequitytrustagm@bmogam.com. The Board will endeavour to
ensure that all such questions are fully addressed during the
presentation or on the Company's website as described below.
The Manager's presentation will also be available on the
Company's website www.bmoprivateequitytrust.com as soon as possible
after the presentation accompanied with a regularly updated
Questions and Answers Schedule. Online access details for the
presentation will be included on the Form of Proxy or Form of
Direction.
The formal AGM, including voting on the resolutions at the
meeting will be held following the presentation as a closed
meeting. Accordingly, and to ensure that their votes will count
Shareholders are strongly encouraged to complete and submit their
Form of Proxy or Form of Direction appointing the Chairman of the
AGM as their proxy. Appointment of a proxy other than the Chairman
of the meeting will result in a Shareholder's vote not being
counted at the AGM as the person appointed as proxy will not be
admitted to the formal meeting. The results of voting on the
resolutions proposed at the AGM will be announced to the market as
soon as possible following the close of the meeting.
The Board acknowledges the evolving nature of the current
gathering and travel restrictions and will seek to change the
format of this year's AGM if they are able to do so in a safe and
compliant manner. If the Board does take such a decision,
Shareholders will be notified of any change of format by London
Stock Exchange Announcement and on the Company's website.
The Board has always valued the opportunity that the AGM
provided to meet the Company's Shareholders. The Board therefore
looks forward to a resumption of our normal practices in 2022 and
if possible, with the additional facility of online attendance for
those Shareholders unable to travel.
Outlook
The tone coming from our investment partners has improved
greatly since the advent of lockdown a year ago. The private equity
lead managers and company management have faced and tackled immense
challenges and in general this has allowed our portfolio companies
to cope well and come through the worst period with their business
models and long term plans largely intact. This has only been
possible because the private equity investment model allows
investors to intervene with a powerful combination of managerial
support and capital. There has been considerable sharing of best
practices across portfolios run by the same managers. Usually
private equity managers have a small number of problem cases per
portfolio but 2020 has been unique in presenting everyone with
major crises. As is evident from the manager's review, not all
companies are coming through the crisis unscathed and there have
been and there will be some failures. The impacts are unevenly and
unfairly felt and government support programmes such as furloughing
and CBILS, whilst welcome and essential, are not a complete
solution. That all said provided the vaccination
programmes proceed as planned over the next few months, the
Company's portfolio is well placed to respond positively building
on its recent resilience with future growth for our
Shareholders.
Mark Tennant
Chairman
Investment Manager's Review
Introduction
2020 has been a truly remarkable year where the dominant
influence has been the COVID-19 pandemic. The impacts are
widespread, various and uneven and some of the specific effects on
our portfolio are considered in more detail below. Having conducted
a triaging review during the first few months of the pandemic we
expected that the portfolio would come under pressure and that
there would be some calls for capital to support a number of the
investments both in the funds portfolio and in our co-investments.
Some of these capital calls have occurred and the first three
quarters of the year registered a decline in NAV. It is now clear
that the portfolio has proved more resilient than first feared and
so far the worst case scenarios have affected relatively few
companies with a collectively mild impact on the overall valuation.
The most recent year end valuation, which considers the year as a
whole and the managers' present outlook, has shown a clear rebound
in valuations. This reflects a much improved trading environment in
the latter part of the year as well as a more accurate
understanding of how the pandemic has affected the prospects and
value of individual businesses. At the time of writing nearly all
countries are in some form of second major lockdown and the
pressures for most companies remain. There is encouraging progress
with vaccination programmes, although at different rates
internationally, and most companies are planning for a degree of
normalisation taking place by the summer. Within this broad summary
there are widely differing experiences across the portfolio with
nearly every company being impacted to some degree. Some have
adapted successfully mitigating the worst effects. Some have seen
their business models and longer term prospects severely damaged
and a fortunate minority have actually benefitted from the
pandemic. Other businesses have been affected but their resilience
under extreme pressure has been demonstrated and sometimes this has
even led to revaluation.
Our portfolio is largely composed of private companies that are
considered to be part of the lower mid-market. The average
enterprise value of a company when we make an investment is around
GBP42 million and the current average enterprise value is around
GBP60 million. The acquisition price on entry for the current
portfolio expressed as the ratio of enterprise value to earnings
before interest, tax, depreciation and amortisation, or EBITDA, was
7.7x and the current valuation multiple is 9.9x. Whilst we do not
expect multiple expansion when we invest it often happens as a
business become larger and more profitable. Most of our portfolio
are management buy-outs or buy-ins and these usually have a fairly
highly geared structure. As the investments mature they tend to pay
down debt and so not all of the current portfolio is highly geared.
Indeed, the average company in the current portfolio has a debt to
EBITDA ratio of 2.8x. This implies that just over a quarter of the
value of the company is being funded by debt, which is quite
moderate for growing businesses. All of these statistics illustrate
that our portfolio is very squarely focused on the lower end of the
mid-market where it is possible to acquire businesses at attractive
prices leaving plenty of scope for growth in equity value. Whilst
this growth is amplified by gearing the companies are by no means
excessively indebted. Much of the resilience in the portfolio which
has been demonstrated throughout this uniquely challenging year is
grounded in sensible acquisition prices and manageable capital
structures.
This year has seen the private equity market's appetite for new
deals pivoting towards sectors which are seen as offering long term
growth which has been little impacted or even enhanced by COVID 19.
Specifically, information technology software and services accounts
for 20.6% of our portfolio. This sector has generally been boosted
by the working from home environment and the inability of people to
travel. Similarly, healthcare has been of particular focus given
its centrality to the pandemic and its role in management and
recovery. Our portfolio has 12.8% in healthcare equipment and
services and a further 6.8% in pharmaceuticals, biotechnology and
life sciences. There are clearly other sectors which contain
companies with secular growth characteristics, but these sectors
have been in distinctly high demand and our portfolio should
position us well to benefit over time.
Another trend which has been emphasised during 2020 has been the
importance of sustainability and the need to consider environmental
social and governance (ESG) characteristics and factors in
investment management. BMO Global Asset Management has given a high
priority to ESG for many years and for the last seven years has
conducted an annual survey of its private equity managers to
monitor and encourage consideration of ESG factors. Currently over
90% of the 100+ private equity managers we invest with have ESG
policies. This is up from just over half seven years ago.
BMO Global Asset Management Private Equity routinely considers
ESG factors as a compulsory part of its own investment process. As
we and our investment partners have become more aware and
conversant with ESG we have developed a better understanding of how
it influences investment decision-making. Increasingly active
consideration of ESG is regarded not just as a way of mitigating
risk but also as a means of optimising returns. ESG considerations
are considered by some enlightened managers to be a 'meta trend'
which is increasingly driving consumer behaviour. Accordingly, ESG
is playing as much a part in deal origination as it is due
diligence. There are a few striking statistics from our latest
survey which confirm its rising importance. 32% of the private
equity managers surveyed declined an investment opportunity within
the last year due to an identified ESG risk. 32% also see a
positive correlation between being ESG aware and investment
performance and a further 16% are unsure but think they see such a
correlation. By contrast none of the respondents saw a negative
correlation and only 19% saw no correlation. Lastly 58% of our
private equity managers aim to measure the positive social and/or
environmental impacts of their portfolio companies. This is up from
just 27% in the previous year. Obviously, there is much more that
could be done but there has clearly been a very encouraging change
in the mindset of the private equity sector.
New Investments
There were only two new investments made during the year both of
them pre-pandemic. EUR6 million was committed to Avallon Buy-out
Fund III, the second fund we have backed from this leading Polish
mid-market investor. EUR5 million was committed to Montefiore V, a
France based mid-market firm specialising in companies in the
services sector whom we have also backed before. Given the
considerable uncertainty which pertained throughout most of the
year we have deliberately held back from making new commitments to
funds or co-investments until very recently.
After the year end a fresh commitment of EUR5 million has been
made to Agilitas 2020 Fund. This is the second time we have backed
this dynamic European mid-market specialist in a buyout fund. We
have also successfully co-invested with them twice, most recently
through Recover Nordic. Our connection with the principals goes
back two decades through Stirling Square Capital Partners and
Candover. The fund has closed at its hard cap of EUR565 million.
From here we are expecting to resume a series of modest new
commitments to funds and to make a number of co-investments this
year.
The funds in our portfolio have been active throughout the year
with a further GBP6.7 million called for new investment in the
final quarter. This brings the total for new investment in 2020 to
GBP36.1 million. The new investments in the first three quarters
have been reported in the quarterly and interim reports. During the
final quarter the notable new investments and follow-on investments
were diverse in sector and geography.
The largest individual new investment was GBP0.8 million called
by Finnish fund Vaaka III for AINS Group, one of the largest
construction and engineering consultants in Finland. UK growth
equity specialist FPE called GBP0.7 million for two new
investments; MaxContact (call centre software) and Togetherall
(online mental health services). Lower mid-market fund Apiary
called GBP0.5 million for additional investment in two of its
holdings which have faced challenges. Roar B2B organises trade
exhibitions and TAG (The Appointments Group) organises travel for
the global live music and entertainment touring industry. Bencis V
called GBP0.4 million, the majority of which was for Pe-Pe Parts
(scooter and moped parts in the Netherlands). Life sciences
specialist Archimed called a combined GBP0.6 million for Zytomax
(cancer diagnostics) and Polyplus (transfective reagents for the
gene therapy). Inflexion Buyout Fund V was active with GBP0.5
million invested in Aspen (pumps for air conditioning) and Orcorian
(trust administration). Inflexion Partnership Capital II called
GBP0.3 million of additional capital for Marston (judicial
services). August Equity was also active with August Equity IV
calling GBP0.6 million for follow-ons for Fosters (funeral
directors), CODE (compliance software for dentists), Esland (high
acuity residential care) and Amtivo (ISO compliance services). In
August Equity V GBP0.3 million was invested in Air IT (cloud-based
IT managed services for UK SMEs). MVM V invested GBP0.3 million in
Paragon 28 (products for foot and ankle surgery). There were a few
other smaller investments. The theme is clear. Follow-ons for
companies deeply impacted by the pandemic and new investments in
companies with business models which are either unaffected or
boosted
by the pandemic.
Realisations
The final quarter saw an uptick in realisations with
distributions and associated income coming in at GBP16.8 million
compared with just GBP6.1 million in Q3. The total of realisations
for the year was GBP37.6 million which compares with GBP46.3
million in 2019. It is notable that even during the very quiet
period in the middle of the year realisations did not dry up
completely. The final quarter's total is broadly 'normal' implying
an annual rate of over GBP60 million.
The main realisations earlier in the year have been covered in
previous reports. In the final quarter the largest individual
realisation of GBP5.8 million was of our co-investment in Schaetti,
the Swiss based specialist chemicals company where Zurmont Madison
are the deal leader. Schaetti is a global niche player in
customised thermoplastic and thermo-fusible powders. This
investment has had an, at times, bumpy ride but the exit to
strategic buyer Arkema achieved 3.7x and an IRR of 20%, which is
quite respectable, and an excellent outcome given some earlier
challenges.
Procuritas VI, the Nordic fund exited Temporary Space Nordics
(TSN) in a sale to Algeco Scotsman. TSN provides temporary
accommodation for schools, offices and health centres. The
distribution of GBP1.7 million represented 2.3x cost and an IRR of
73% for this 23 month hold. Also, in the Nordics Finnish fund Vaaka
II distributed GBP1.5 million following the sale of Kokitaku, a
provider of facilities maintenance services for residential housing
companies. The company was sold to PHM Group, who are backed by
Nordic private equity house Norvestor, achieving an excellent
return of 7.3x cost and an IRR of 46%. Agilitas 2015 Fund
distributed GBP1.1 million from the sale of Exemplar Healthcare, a
provider of acute care for patients with complex physical and
mental health needs within private nursing homes in the UK, to Ares
Management. Over four years the company's profitability almost
doubled and the return of 6.0x cost and an IRR of 50%+ is
excellent.
In France Astorg VI exited Surfaces Group, a manufacturer of
abrasive tools, through a sale to US PE house TA Associates,
returning GBP0.8 million (2.7x cost and an IRR of 40%). Horizon
Capital 2013 Fund sold field services software company Totalmobile
to Bowmark returning GBP0.7 million, 4.6x cost, and an IRR of 38%.
Argan Capital made a distribution of GBP0.7 million following the
sale of the last of its shares in listed healthcare company Humana
AB. In the US Bluepoint III sold AWP Group, the largest traffic
control service provider in the US, returning GBP0.6 million, 2.7x
cost and an IRR of 20%. This was the second time BluePoint had sold
the company with the first time being an 11.2x exit in 2015. There
were several smaller distributions including one of GBP0.4 million
from Piper VI following the sale of healthy recipe box provider
Mindful Chef to Nestle. This represented 1.8x cost and an IRR of
37%.
Valuation Changes
For the year ended 31 December 2020 the uplift to valuation gave
a NAV total return of 22.7%. This is comparison to 10.6% for the
year ended 31 December 2019. The first nine months of the year saw
an overall decline in NAV, giving a total return of -2.7%. The
recovery had started in Q3 and it has accelerated in the final
quarter of the year with NAV total return rebounding by 26.1%.
There were many uplifts during the quarter which were offset
only partially by a handful of downgrades. The uplifts in many
cases reflected a more positive view on portfolio companies'
prospects and hence value in the light of a marked 'bounce back' in
economic activity from the middle of the year onwards. As can be
seen below, whilst there were casualties of the pandemic, there are
other companies which have demonstrated resilience and a limited
number where it has been beneficial. Subject to the current
lockdown unwinding gradually over the spring and summer there are
many companies which are back on track to resume the progress which
was interrupted a year ago.
The largest individual uplift was for our holding in the SEP led
software company Dotmatics which is up by GBP28.2 million,
reflecting the agreed sale price. This company which provides
software to the scientific research and pharmaceutical sector has
come through the pandemic successfully and it is involved in a
sector where there is strong investor appetite. Accordingly, the
lead manager SEP initiated a sales process towards the end of the
year and this resulted in an agreed sale to US company Insightful
Science. The exit which is expected to complete within the next few
weeks will achieve a money multiple of 8.7x cost and an IRR of 83%.
This is an exceptional exit by SEP whom we have backed continuously
since inception.
Our co-investment in casual clothing company Weird Fish is up by
GBP5.6 million reflecting a revaluation to just above cost. Having
been hit badly initially the company has re-oriented its business
very substantially towards its e-commerce offering and this has
boosted profitability in 2020 substantially. Aberdeen based energy
services company Coretrax has been uplifted by GBP4.6 million due
to an increase in multiple and a positive run rate and outlook.
Aliante III is up by GBP3.5 million reflecting the performance of
its holdings which are consumer staple oriented. Our investment in
Inflexion Strategic Partners is up by GBP3.4 million reflecting
good progress since our investment at the end of 2019. Agilitas
2015 is up by GBP2.1 million due to robust trading of its portfolio
companies. Our co-investment in Italian funeral homes company San
Siro is up by GBP1.9 million as a result of strong trading and
successful accretive acquisitions. South Eastern Europe large
format pet retailer Pet Network is up by GBP1.7 million having
traded well throughout the pandemic. Lastly our Silverfleet led
co-investment in STAXS, the Belgium based cleanroom consumables
company is up by GBP1.6 million reflecting exceptional trading
during the pandemic when its cleaning and PPE products have been in
high demand.
There have been a smaller number of downgrades. The largest
downgrade was GBP1.3 million for drilling waste management
solutions company TWMA which has seen a dip in profitability as a
result of the timing of major contracts being delayed. Our
co-investment in print managed services company DMC Canotec is down
by GBP0.7 million having experienced a difficult period with most
offices being empty for much of the year. Ambio, the active
pharmaceutical ingredient company, is down by GBP0.6 million with
the valuation at the latest funding round. Vaaka III is down by
GBP0.5 million largely due to Framery the office pods company
facing huge challenges. DBAG VII is down by GBP0.4 million due to
pressure on its holdings.
Outlook
The Company has entered 2021 with a portfolio that has proved
highly resilient during the pandemic even though nearly all of its
companies have been challenged acutely. There remains a high level
of investor appetite for private equity although the preferences
for individual sectors has rotated considerably. The advantages
derived from alignment of interest and the ability for investors to
intervene constructively have been clearly demonstrated and this
underpins support for the asset class. Our investment partners
cover a wide range of companies and this ensures a naturally
diverse portfolio. This unique period has illustrated the benefits
of diversification and this combined with the calibre of our
investment partners should sustain the growth of shareholder value
into the future.
Hamish Mair
Investment Manager
BMO Investment Business Limited
BMO Private Equity Trust PLC
Statement of Comprehensive Income for the
year ended 31 December 2020
(Unaudited)
Revenue Capital Total
GBP'000 GBP'000 GBP'000
-------------------------------------------- --------- --------- ---------
Income
Gains on investments held at fair value - 74,076 74,076
Exchange losses - (2,705) (2,705)
Investment income 4,988 - 4,988
Other income 8 - 8
-------------------------------------------- --------- --------- ---------
Total income 4,996 71,371 76,367
-------------------------------------------- --------- --------- ---------
Expenditure
Investment management fee - basic fee (294) (2,650) (2,944)
Investment management fee - performance
fee - (3,007) (3,007)
Other expenses (952) - (952)
-------------------------------------------- --------- --------- ---------
Total expenditure (1,246) (5,657) (6,903)
-------------------------------------------- --------- --------- ---------
Profit before finance costs and taxation 3,750 65,714 69,464
Finance costs (260) (2,337) (2,597)
-------------------------------------------- --------- --------- ---------
Profit before taxation 3,490 63,377 66,867
Taxation - - -
Profit for year/total comprehensive income 3,490 63,377 66,867
Return per Ordinary Share 4.72p 85.71p 90.43p
-------------------------------------------- --------- --------- ---------
BMO Private Equity Trust PLC
Statement of Comprehensive Income for the
year ended 31 December 2019
(Audited)
Revenue Capital Total
GBP'000 GBP'000 GBP'000
-------------------------------------------- --------- --------- ---------
Income
Gains on investments held at fair value - 30,687 30,687
Exchange gains - 2,352 2,352
Investment income 3,788 - 3,788
Other income 63 - 63
-------------------------------------------- --------- --------- ---------
Total income 3,851 33,039 36,890
-------------------------------------------- --------- --------- ---------
Expenditure
Investment management fee - basic fee (279) (2,509) (2,788)
Investment management fee - performance
fee - (1,878) (1,878)
Other expenses (844) - (844)
-------------------------------------------- --------- --------- ---------
Total expenditure (1,123) (4,387) (5,510)
-------------------------------------------- --------- --------- ---------
Profit before finance costs and taxation 2,728 28,652 31,380
Finance costs (181) (1,632) (1,813)
-------------------------------------------- --------- --------- ---------
Profit before taxation 2,547 27,020 29,567
Taxation - - -
Profit for year/total comprehensive income 2,547 27,020 29,567
Return per Ordinary Share 3.45p 36.54p 39.99p
-------------------------------------------- --------- --------- ---------
BMO Private Equity Trust PLC
Balance Sheet
As at 31 As at 31
December December
2020 2019
(Unaudited) (Audited)
GBP'000 GBP'000
------------------------------------------ ------------- -----------
Non-current assets
Investments at fair value through profit
or loss 426,249 348,644
426,249 348,644
Current assets
Other receivables 562 26
Cash and cash equivalents 8,344 6,509
------------------------------------------ ------------- -----------
8,906 6,535
Current liabilities
Other payables (4,492) (3,038)
Interest-bearing bank loan (49,666) (27,794)
(54,158) (30,832)
------------------------------------------ ------------- -----------
Net current liabilities (45,252) (24,297)
------------------------------------------ ------------- -----------
Total assets less current liabilities 380,997 324,347
------------------------------------------ ------------- -----------
Non-current liabilities
Interest-bearing bank loan (21,514) (20,070)
------------------------------------------ ------------- -----------
Net assets 359,483 304,277
------------------------------------------ ------------- -----------
Equity
Called-up ordinary share capital 739 739
Share premium account 2,527 2,527
Special distributable capital reserve 15,040 15,040
Special distributable revenue reserve 31,403 31,403
Capital redemption reserve 1,335 1,335
Capital reserve 308,439 253,233
Shareholders' funds 359,483 304,277
------------------------------------------ ------------- -----------
Net asset value per Ordinary Share 486.17p 411.51p
BMO Private Equity Trust PLC
Statement of Changes in Equity
Share Share Special Special Capital Capital Revenue Total
Capital Premium Distributable Distributable Redemption Reserve Reserve
Account Capital Revenue Reserve
Reserve Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- --------- --------- -------------- -------------- ------------ ---------- ---------- ---------
For the year ended 31 December
2020 (unaudited)
Net assets at
1 January
2020 739 2,527 15,040 31,403 1,335 253,233 - 304,277
Profit for the
year/total
comprehensive
income - - - - - 63,377 3,490 66,867
Dividends paid - - - - - (8,171) (3,490) (11,661)
Net assets at
31 December
2020 739 2,527 15,040 31,403 1,335 308,439 - 359,483
--------------- --------- --------- -------------- -------------- ------------ ---------- ---------- ---------
For the year ended 31 December
2019 (audited)
Net assets at
1 January
2019 739 2,527 15,040 31,403 1,335 234,587 - 285,631
Profit for the
year/total
comprehensive
income - - - - - 27,020 2,547 29,567
Dividends paid - - - - - (8,374) (2,547) (10,921)
Net assets at
31 December
2019 739 2,527 15,040 31,403 1,335 253,233 - 304,277
--------------- --------- --------- -------------- -------------- ------------ ---------- ---------- ---------
BMO Private Equity Trust PLC
Statement of Cash Flows
Year ended Year ended
31 December 2020 31 December
2019
(Unaudited) (Audited)
GBP000 GBP000
------------------------------------ ------------------ -------------
Operating activities
Profit before taxation 66,867 29,567
Adjustments for:
(Gains)/losses on disposals
of investments (8,954) 21,695
Increase in holding gains (65,122) (52,382)
Exchange differences 2,705 (2,352)
Interest income (8) (63)
Interest received 8 63
Investment income (4,988) (3,788)
Investment income received 4,988 3,788
Finance costs 2,597 1,813
(Increase)/decrease in other
receivables (536) 116
Increase/(decrease) in other
payables 1,299 (1,058)
------------------------------------ ------------------ -------------
Net cash outflow from operating
activities (1,144) (2,601)
------------------------------------ ------------------ -------------
Investing activities
Purchases of investments (36,117) (65,105)
Sales of investments 32,588 42,390
------------------------------------ ------------------ -------------
Net cash (outflow)/inflow from
investing activities (3,529) (22,715)
Financing activities
Drawdown of bank loans 20,208 35,574
Repayment of bank loans - (11,459)
Arrangement costs of loan facility - (1,245)
Interest paid (2,194) (1,744)
Equity dividends paid (11,661) (10,921)
------------------------------------ ------------------ -------------
Net cash inflow from financing
activities 6,353 10,205
Net increase/(decrease) in
cash and cash equivalents 1,680 (15,111)
Currency gains 155 285
------------------------------------ ------------------ -------------
Net increase/(decrease) in
cash and cash equivalents 1,835 (14,826)
Opening cash and cash equivalents 6,509 21,335
------------------------------------ ------------------ -------------
Closing cash and cash equivalents 8,344 6,509
------------------------------------ ------------------ -------------
Notes (unaudited)
1. The unaudited financial results, which were approved by the
Board on 25 March 2021, have been prepared in accordance with the
Companies Act 2006 and international accounting standards in
conformity with the requirements of the Companies Act 2006. Where
presentation guidance set out in the Statement of Recommended
Practice "Financial Statements of Investment Trust Companies and
Venture Capital Trusts" ('SORP') issued by the Association of
Investment Companies in November 2014 is consistent with the
requirements of international accounting standards in conformity
with the requirements of the Companies Act 2006, the Directors have
sought to prepare the financial statements on a basis compliant
with the recommendations of the SORP. The Directors have assessed
Going Concern and consider it the appropriate basis for the figures
presented in the announcement.
The accounting policies adopted are consistent with those of the
previous financial year.
Standards issued but not yet effective
There are no standards or amendments to standards not yet
effective that are relevant to the Company and should be
disclosed.
2. Returns per Ordinary Share are based on the following
weighted average number of shares in issue during the year:
73,941,429 (2019: 73,941,429)
The net asset value per Ordinary Share is based on the following
number of shares in issue at the year-end: 73,941,429 (2019:
73,941,429)
During the year ended 31 December 2020, the Company issued nil
Ordinary Shares. During the previous year ended 31 December 2019,
the Company issued nil Ordinary Shares.
3. The Board has proposed an interim dividend of 4.16 per
Ordinary Share, payable on 30 April 2021 to those Shareholders on
the register on 9 April 2021.
4. This results announcement is based on the Company's unaudited
financial statements for the year ended 31 December 2020 which have
been prepared in accordance with international accounting standards
in conformity with the requirements of the Companies Act 2006.
5. This announcement is not the Company's statutory accounts.
The full audited accounts for the year ended 31 December 2019,
which were unqualified and had no emphasis of matters, have been
lodged with the Registrar of Companies. The statutory accounts for
the year to 31 December 2020 (on which the audit report has not
been signed) will be delivered to the Registrar of Companies
following the Company's Annual General Meeting which will be held
at Quartermile 4, 7a Nightingale Way, Edinburgh, EH3 9EG on 27 May
2021 at 12 noon.
6. The Annual Report and Accounts for the year will be sent to
Shareholders and will be available for inspection at the Company's
registered office, Quartermile 4, 7a Nightingale Way, Edinburgh,
EH3 9EG and the Company's website www.bmoprivateequitytrust.com .
The Company intends to issue a subsequent annual financial report
announcement.
For more information, please contact:
Hamish Mair (Investment Manager) 0131 718 1000
Scott McEllen (Company Secretary) 0131 718 1000
hamish.mair@bmogam.com / scott.mcellen@bmogam.com
Appendix: Alternative Performance Measures
The Company uses the following Alternative Performance Measures
('APMs'):
Discount (or premium) - If the share price of an Investment
Trust is less than its Net Asset Value per share, the shares are
trading at a discount. If the share price is greater than the Net
Asset Value per share, the shares are trading at a premium.
31 December 31 December 2019
2020
----------------------------------- ----- ------------ -----------------
Net Asset Value per share (pence) (a) 486.17 411.51
Share price per share (pence) (b) 307.50 375.50
----------------------------------- ----- ------------ -----------------
Discount (c=(b-a)/a) (c) 36.8% 8.8%
----------------------------------- ----- ------------ -----------------
Dividend Yield - The dividends declared for the year divided by
the share price at the year end.
Gearing - This is the ratio of the borrowings less cash of the
Company to its total assets less current liabilities (excluding
borrowings and cash). Borrowings may include: preference shares;
debentures; overdrafts and short and long-term loans from banks;
and derivative contracts. If the Company has cash assets, these may
be assumed either to net off against borrowings, giving a "net" or
"effective" gearing percentage, or to be used to buy investments,
giving a "gross" or "fully invested" gearing figure. Where cash
assets exceed borrowings, the Company is described as having "net
cash". The Company's maximum permitted level of gearing is detailed
by its Articles and is described within the Strategic Report.
31 December 31 December
2020 2019
GBP'000 GBP'000
-------------------------------------------------- ----- ------------ ------------
Borrowings less cash (a) 62,836 41,355
-------------------------------------------------- ----- ------------ ------------
Total assets less current liabilities (excluding
borrowings and cash) (b) 422,319 345,632
-------------------------------------------------- ----- ------------ ------------
Gearing (c=a/b) (c) 14.9% 12.0%
-------------------------------------------------- ----- ------------ ------------
Ongoing Charges - All operating costs expected to be incurred in
future and that are payable by the Company expressed as a
proportion of the average Net Assets of the Company over the
reporting year. The costs of buying and selling investments are
excluded, as are interest costs, taxation, performance fees,
non-recurring costs and the costs of buying back or issuing
Ordinary Shares. Ongoing charges of the Company's underlying
investments are also excluded.
Year to Year to
31 December 31 December
2020 2019
----------------------------------------------- ------------- -------------
Ongoing charges (GBP'000) 3,896 3,607
Ongoing charges as a percentage of average
assets: 1.3% 1.2%
Ongoing charges (including performance
fees) (GBP'000) 6,903 5,485
Ongoing charges (including performance
fees) as a percentage of average net assets: 2.2% 1.9%
Average net assets (GBP'000) 307,068 289,507
----------------------------------------------- ------------- -------------
Total Return - The return to Shareholders calculated on a per
share basis by adding dividends paid in the period to the increase
or decrease in the Share Price or NAV. The dividends are assumed to
have been reinvested in the form of Ordinary Shares or Net
Assets.
Year to 31 Year to 31
December 2020 December 2019
---------------------------------------- --------------- ---------------
NAV per share at start of year (pence) 411.51 386.29
NAV per share at end of year (pence) 486.17 411.51
Change in year +18.1% +6.5%
Impact of dividend reinvestments +4.6% +4.1%
---------------------------------------- --------------- ---------------
Total NAV return for the year +22.7% +10.6%
---------------------------------------- --------------- ---------------
Year to 31 Year to 31
December 2020 December 2019
---------------------------------------------- --------------- ---------------
Share price per share at start of year
(pence) 375.50 317.00
Share price per share at end of year (pence) 307.50 375.50
Change in year -18.1% +18.5%
Impact of dividend reinvestments +3.9% +5.1%
---------------------------------------------- --------------- ---------------
Total share price return for the year -14.2% +23.6%
---------------------------------------------- --------------- ---------------
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