TIDMFPEO
RNS Number : 6787I
F&C Private Equity Trust PLC
23 March 2018
To: Stock Exchange For immediate release:
23 March 2018
F&C Private Equity Trust plc
Preliminary Announcement for the Year to 31 December 2017
F&C Private Equity Trust plc today announces its unaudited
financial results for the year ended 31 December 2017.
Financial Highlights
-- Share price total return for the year of 19.2 per cent for the Ordinary Shares.
-- Net Asset Value total return for the year of 5.6 per cent for the Ordinary Shares.
-- Total dividends of 14.04p per Ordinary Share which represents
growth of 11.4 per cent in comparison to the previous year.
-- Dividend yield of 4.1 per cent based on the year-end share price.
Chairman's Statement
I am pleased to report that your Company has achieved a net
asset value ("NAV") total return for the year ended 31 December
2017 of 5.6 per cent. With the discount falling to 5.1 per cent as
at 31 December 2017 (2016: 15.8 per cent), the share price total
return for the year was 19.2 per cent. This compares to a total
return from the FTSE All-Share Index for the year of 13.1 per cent.
The share price at the year-end was 339.00p per share (2016:
295.50p), and NAV per share was 357.23p (2016: 350.98p). At times
during the year the share price traded at a premium to NAV, a
situation which has not occurred for many years.
During the year the Company made new investments either through
funds or as co-investments, totalling GBP69.9 million. Realisations
and associated income totalled GBP65.1 million. Outstanding undrawn
commitments at the year-end were GBP123.4 million of which GBP18.0
million was to funds where the investment period has 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 2017 was 13.2 per cent and, consequently,
a performance fee of GBP2.0 million is payable to the Manager,
F&C Investment Business Limited, in respect of 2017. This is
the fifth 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 your Board is fully
committed to maintaining this general approach for the foreseeable
future. One enhancement which the Board implemented during the year
was for the Company to move from the payment of semi-annual
dividends to quarterly dividends. This innovation regularises the
flow of income to shareholders.
The 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 no longer have an opportunity to approve a final
dividend at each Annual General Meeting, shareholders have been
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 3.57p per Ordinary
Share, payable on 30 April 2018 to shareholders on the register on
6 April 2018. Total dividends paid for the year therefore amount to
14.04p per Ordinary Share equivalent to a dividend yield of 4.1 per
cent at the year-end.
Financing
At 31 December 2017 the Company held cash balances in excess of
the EUR30.0 million term loan element of the GBP70.0 million total
loan facility. It is the Company's policy to employ moderate levels
of gearing to enhance returns to shareholders. The Company has a
very well diversified underlying portfolio of investments and this
provides a robust platform on which to base borrowings. As the
Manager takes advantage of new fund, co-investment and secondary
opportunities over the coming months, we expect that a moderate
level of gearing will be achieved.
Markets in Financial Instruments Directive ('MiFID') II
A significant regulatory task during the last year for the
investment management industry was the implementation of the
requirements of the revised European Union Markets in Financial
Instruments Directive, better known as MiFID II. The preparation of
a Key Information Document for the Company was the responsibility
of the investment manager. This document, which, to ensure
comparability, was prepared according to prescriptive guidelines
and rules laid down by the FCA is available on the Company's
website. However concerns have been raised, across the investment
trust sector, which your Board shares that the performance
scenarios disclosed in the document, which applies a methodology
based upon past performance, may provide results for future returns
which are too optimistic. Shareholders are reminded that past
performance does not guarantee future results.
Annual General Meeting
The Annual General Meeting will be held at 12 noon on 24 May
2018 at the offices of BMO Global Asset Management (EMEA), Exchange
House, Primrose Street, London EC2A 2NY. This will be followed by a
presentation by Hamish Mair, the Company's lead fund manager. This
is a good opportunity for shareholders to meet the Manager and the
Board and we would encourage you to attend.
Outlook
The private equity market internationally has raised record
amounts of equity capital and is well supported by debt from
diverse sources. Confidence levels amongst private equity
professionals and company management are high and this makes for a
healthy and active market in most geographies. The Company has many
relationships with some of the most successful private equity
investors and through partnership with them we have delivered good
growth in shareholder value for many years. This is evidenced by
the flow of exits which remains at impressive levels. We are also
re-investing for the future with new commitments to funds and
co-investments alongside experienced and motivated managers. The
Company remains one of the few vehicles which gives investors
exposure to predominantly European lower mid-market private equity
with an emphasis on emerging private equity firms. This remains a
broad and attractive sector in which to invest for the long
term.
Mark Tennant
Chairman
Manager's Review
Introduction
The Company's portfolio continued to make progress during the
year. Key influences were the overall positive tone in the private
equity market internationally and the specific contributions from
some of our larger investments. The majority of our holdings
increased in value over the year through fundamental growth in
profits or through achieving good exits. Towards the end of the
year a small number of investments encountered serious difficulties
and the associated write downs have led to the NAV growing less
strongly than originally expected. These issues are not linked nor
reflect any systemic weakness but are rather a coincidental outcome
of investing in a wide range of small private companies which
carries with it inescapable vulnerabilities. There are many
positives in the Company's portfolio and much of this is not yet
fully reflected in the portfolio valuation.
New Investments
In order to lay the foundations for future value growth it is
important that fresh commitments to funds and co-investments are
made. In the case of primary funds and co-investments there is
generally a lag before progress can be seen in the value of these
investments as it takes time for investments to be drawn down and
for profits to grow sufficiently to prove that the investment
thesis is working and to justify an uplift. It follows that a
substantial new investment programme can act in the short term as a
minor drag on performance but over the longer term it is essential
if returns are to be maintained and enhanced. During the year we
have made commitments to eight new funds and invested in nine new
co-investments. Each of these funds will in turn build a portfolio
of around ten investments. The co-investment portfolio now numbers
24 investments and accounts for nearly a third of the total
portfolio.
As it happens almost all of the new fund commitments are to
funds with their principal focus outside the UK and most of the
co-investments are UK focused. Whilst this is not a deliberate
result of our research process, it does give a helpful amount of
geographic diversification.
The only primarily UK fund added during the year was Apposite
Healthcare II to which GBP6 million was committed. This fund
focuses on UK lower mid-market companies in healthcare services,
digital health, social care and medical products and has the
flexibility to invest up to 30% in Western Europe. The fund is
managed by a very experienced team and already has made four
investments taking the fund to approximately 20% drawn. Also in the
healthcare sector, but with a broader geographic remit, is ArchiMed
II to which EUR5 million has been committed. Both funds were
selected following an extensive market mapping exercise looking at
opportunities in the healthcare and related sectors in Europe.
As previously noted we have renewed our commitment to leading
French mid-market investor Chequers through a EUR6 million
commitment to their Fund XVII. After a considerable period of
review of the Central and Eastern European private equity markets
we have committed EUR5 million to ARX CEE IV, a Czech Republic
based mid-market investor which was originally a spin-out from
DBAG. In Finland we have committed EUR6 million to Vaaka Partners
Buyout III, a lower mid-market buyout fund focusing on this small
but well defined market.
We have refreshed our North American exposure with three new
commitments. $8 million was committed to Blue Point Capital IV.
Blue Point is based in Cleveland Ohio and is a mid-market focused
fund which generally invests in the vicinity of its HQ and close to
its Seattle and Charlotte offices. Additionally, and unusually for
a mid-market firm, Blue Point has for many years successfully
developed the China angle of its US investee companies. This is the
fourth Blue Point fund we have backed with our original investment
dating back to 2002. We have committed $6 million to Graycliff
Private Equity Partners III which specialises in lower mid-market
buyouts. We have also committed $4 million to Stellex Capital
Partners, an investor in distressed situations and companies
requiring significant operational improvements primarily in the US
mid-market. This investment begins with three platform investments
in place and the fund 25% invested.
After the year end there are two further fund commitments. SEK
50 million was committed to Verdane Edda, a Nordic area focused
fund investing in technology and technology enabled companies. GBP5
million was committed to Apiary Capital Partners I, a new lower
mid-market UK fund focusing on B2B services, healthcare and
education sectors. The team which is comprised of managers from
Bowmark, Inflexion and August, will target control buyouts in the
size range of enterprise value GBP10-50 million. This lower
mid-market focus and their pricing disciplines match closely with
our preferences.
During 2017 we made six new co-investments in the UK. These are
in diverse sectors and are led by management teams with different
specialisms.
We have invested GBP5 million in TWMA, an Aberdeen based oil
services company involved in drilling waste management services.
The investment thesis is that TWMA's largely offshore-based
drilling waste solution, using a thermomechanical cylindrical mill,
can make a major contribution to reducing the total cost of
production for oil companies. Understandably, bringing costs down
remains a key focus while the oil price is depressed. Buckthorn,
which is an energy specialist, is the lead on the deal.
In the clothing sector, we have partnered with Total Capital
Partners to invest GBP6.2 million, through an integrated finance
structure, in Weird Fish. Its main products are active lifestyle
clothes such as T-shirts and 'macaroni' sweatshirts aimed at the
stable and affluent 35-55 age demographic. The company is both a
wholesaler and retailer with a limited estate of stores in outdoor
holiday areas in the UK.
We have committed to invest GBP3.0 million with Apposite Capital
in Swanton Care Group. The initial investment is GBP1.4 million
creating a platform for the company which is involved in
residential care homes and supported living for people with
learning disabilities and autism spectrum disorders. The company
already has 23 properties and the plan is to add to this through
acquisition during the holding period.
We have invested GBP2.8 million in CETA, a specialist insurance
broker, which concentrates on the caravan and leisure boat niches.
The company has set up a Managing General Agent (MGA) which will
allow it to capture more of the value chain in this sector. The
investment is led by Kester Capital.
We have invested GBP3.0 million in Walkers, a Leeds based
transport and logistics company which specialises in small pallet
loads and operates a distribution hub for one of the large pallet
networks. Pallet hubs are being utilised increasingly, in part due
to the increase in the popularity of online shopping and the
requirement for many small batch deliveries. This investment is led
by Total Capital Partners.
We have invested GBP4.0 million alongside leading venture
capitalist SEP in a specialist software company Dotmatics. This
company provides sophisticated software to the pharmaceutical
industry which is primarily used to facilitate research.
There has been one new co-investment in Continental Europe. EUR2
million was invested in December in RGI, an Italian based provider
of software solutions for the insurance industry. The deal is led
by Corsair Capital, a financial services focused private equity
house that spun-out of JP Morgan over a decade ago. The need for
digital solutions is reshaping insurers' business models generating
opportunities for third party software vendors. European insurers'
IT spend on external software is growing strongly driven by
insurers' need to replace legacy systems and keep up with
technological advances. The investment thesis is based upon
expanding from the company's base in Italy into adjacent markets of
France, Germany and Spain.
In North America at the start of the year $5 million was
invested in North Carolina based Sigma Electric Manufacturing, a
leading manufacturer of metal castings, precision machined
components and sub-assemblies for the US low voltage electrical
products market. The investment is led by Argand, a mid-market
specialist.
Near the end of 2017 $3 million was invested in Tier1 CRM, an
Ontario based cloud-based customer relationship management ('CRM')
software provider for financial services firms. The investment is
led by Wavecrest Growth Partners, a Boston based lower mid-market
growth equity firm focused on the software and tech enabled
services sector.
Drawdowns
During the year drawdowns from our portfolio of funds totalled
GBP38.8 million. Taking into account the co-investments as well
brings the total newly invested up to GBP69.9 million. This
represents around 27% of the Company's NAV at the start of the
period. The detail of many of the significant drawdowns has been
reported earlier in the year. The notable drawdowns in the final
quarter are described below.
In the UK our key mid-market investment partners were active.
Inflexion called a total of GBP2.3 million across its range of
funds for several different investments. Inflexion Enterprise IV,
their lower mid-market fund, invested GBP0.3 million into two new
deals; Virgin Experience Days and Alston Eliot (Sports television
graphics). Inflexion Buyout IV called GBP1.1 million for four
investments; Xtrac (transmissions systems for racing cars),
Bollington Wilson (commercial and personal insurance), PCMS
(commercial software mainly for the retail sector) and Atcore
(software for travel agents). August Equity Partners IV called
GBP1.3 million for three investments; Fosters (low cost funerals),
Zenergie (energy procurement) and Genesis (Dental Practices). RJD
Private Equity III invested GBP0.5 million in Class Tours (bespoke
school trips).
In Continental Europe Corpfin Capital IV invested GBP0.5 million
in Kids & Us, a leading provider of English learning services
in Spain operating more than 300 franchise centres with 115,000
students and GBP0.7 million in Marjal, one of the leading operators
of camping holiday resorts in Spain. In Germany DBAG VII invested
GBP0.7 million in More than Meals, a pan-European supplier of
private label chilled convenience foods. In France Astorg IV
invested GBP0.6 million in Audiotronix (digital sound mixing
consoles for professionals). In the USA Blue Point Capital III
invested GBP0.5 million in Italian Rose Garlic Products, a leading
manufacturer and distributor of premium salsa, dips, sauces and
spreads going into the retail and foodservice sectors.
Realisations
Over the fourth quarter realisations totalled GBP13.5 million
bringing the total for 2017 to GBP65.1 million, just below the
level achieved in 2016. There were several notable exits coming
from different parts of the portfolio.
In the UK August Equity Partners II sold fostering company,
Compass returning GBP2.5 million (2.2x, 15% IRR). Mezzanine
Management IV exited US robotics company PAR returning GBP0.9
million (2.3x, 13% IRR). Ticketscript and Weird Fish each returned
some capital through loan stock redemptions amounting to GBP0.6
million and GBP0.7 million respectively. SEP IV sold online
retailer Matchesfashion to Apax returning GBP1.2 million (8.5x, 55%
IRR).
In Europe Procuritas Capital IV exited Sonans, a Norwegian
schools chain returning GBP2.1 million (4.3x, 32% IRR).
In the USA Blue Point Capital II returned GBP1.3 million from
the exit of valves and pipes company Smith Cooper (2.9x, 24% IRR)
and final sale proceeds from the 2015 sale of AWP. Camden Partners
IV returned GBP2.1 million from the sale of healthcare software
company, Essence Group (3.2x, 21% IRR).
Valuation Changes
Over the course of the year there were dozens of notable changes
in valuation. These covered both the fund portfolio and the growing
co-investment portfolio.
The funds which contributed most over the year were from each
section of the portfolio. In the UK August Equity was notable with
uplifts of GBP1.5 million and GBP1.2 million respectively for their
Funds II and III. Part of this came from the exit after the year
end of Active Assistance which achieved 4.7x and an IRR of 28%.
August Equity Partners III benefitted from an uplift in the
carrying value of VetPartners (veterinary clinics) to 4.9x, in line
with the terms of a recapitalisation which took place in
January.
In Germany DBAG V and VI were uplifted by a combined GBP3.2
million reflecting a flow of good exits. Nordic based Procuritas
also had a good year with exits and trading related uplifts giving
a combined uplift of GBP3.1 million for Procuritas Capital IV and
V. Procuritas IV benefitted from the sale of Sonans noted above and
an uplift for Green Magnum, the ice-cream machine maker which has
since been sold to FSN achieving 6.5x and an IRR of 41%.
A number of funds were down over the year. These included RJD
Private Equity II (GBP1.5 million), Pinebridge New Europe II
(GBP0.9 million) and Primary Capital III (GBP0.6 million).
In our portfolio of co-investments there was a mixture of
excellent progress and some disappointments.
Over the year the total uplift for Ambio Holdings, our
co-investment in the peptide related active pharmaceutical
ingredient (API) sector, was GBP10 million. The company is growing
robustly and plans are afoot for an IPO possibly as early as the
end of this year. Collingwood Insurance Group, our co-investment in
Gibraltar based specialist motor insurer, has traded well and is
uplifted by GBP2.1 million.
David Phillips (furniture for rental properties) has been
reduced to zero from GBP4 million, as the company, which was in
breach of banking covenants, was sold as a going concern to a
consortium led by Epic Private Equity on 19 December. This repaid
the bank in full but did not yield any value for our equity. This
deal was led by FPE. Our initial investment was GBP2 million which
was supplemented by GBP0.6 million in a 'rescue' refinancing in
July 2017. Shortly after this it became clear that the forecasts on
which the refinancing was based were not being met and whilst
revenues were close to budget the business displayed a degree of
operational gearing which made small misses on revenue produce a
large adverse impact on EBITDA. FPE worked on a further refinancing
option but this was deemed unjustifiable and an accelerated M&A
process was initiated to meet the bank's requirements for full
recovery as soon as possible.
Burgess Marine was reduced from GBP0.9 million to zero. The
company went into administration in December and the administrators
sold the company's subsidiary Global. After collection of the
debtor book there may be a small recovery of our original
investment of GBP3.0 million. Burgess has struggled for a number of
reasons since our investment with RJD in January 2015. Competition
from East Coast yards, which had spare capacity in the wake of the
weak offshore market, eroded margins. In addition the MoD business
was smaller and later than expected and the workboat business
Meercat failed to convert prospects into orders. The proximate
cause of the demise was a cashflow crisis resulting from a major
yacht refit.
We have also recognised a large downgrade of GBP3.2 million for
the RJD led co-investment in debt management company Harrington
Brooks. The company has been badly impacted by the prolonged
process of becoming regulated by the FCA which has affected both
Harrington Brooks and the debt management sector as a whole.
Specifically the company struggles to find a reliable and cost
effective means of acquiring new customers as the smaller companies
who historically 'fed' customers to Harrington Brooks and others
have been very much reduced during the elongated process of
regulation.
The coincidence of these developments offset much of the
progress in the rest of the portfolio in the final quarter. However
our overall contribution from co-investments this year remains
strong and we expect this to continue.
Financing
The company is effectively ungeared at present and has all of
its GBP70 million borrowing facility available. The facility
expires at the end of June 2019 and we will commence discussions
with RBS and some alternative lenders later in the year with a view
to replacing the facility in due course.
Outlook
The downgrades in a few of the co-investments have complicated
origins and these provide useful learning for the future, but it is
clear that there do not appear to be systemic underlying factors.
On the contrary the general tenor of the European private equity
market is good with fundamental progress in profits across the
portfolio and a healthy two-way market of new deals and exits in
many sectors and geographies. As noted on several occasions before,
the price of new deals in the market in general is higher than in
recent years although most of the deals made by our investment
partners are below the market and not far away from our
historically observed norms. Maintaining buying discipline and
making realistic and conservative assumptions for their investment
theses is critical. As we move further into 2018 confidence levels
within the private equity market internationally are high and this
should allow us to deliver more growth for shareholders this
year.
Hamish Mair
Investment Manager
F&C Investment Business Limited
F&C Private Equity Trust plc
Statement of Comprehensive Income for the
year ended 31 December 2017
(Unaudited)
Revenue Capital Total
GBP'000 GBP'000 GBP'000
-------------------------------------------- --------- --------- ---------
Income
Gains on investments held at fair value - 21,216 21,216
Exchange losses - (1,019) (1,019)
Investment income 1,422 - 1,422
Other income 51 - 51
-------------------------------------------- --------- --------- ---------
Total income 1,473 20,197 21,670
-------------------------------------------- --------- --------- ---------
Expenditure
Investment management fee - basic fee (641) (1,922) (2,563)
Investment management fee - performance
fee - (2,037) (2,037)
Other expenses (830) - (830)
-------------------------------------------- --------- --------- ---------
Total expenditure (1,471) (3,959) (5,430)
-------------------------------------------- --------- --------- ---------
Profit before finance costs and taxation 2 16,238 16,240
Finance costs (428) (1,283) (1,711)
-------------------------------------------- --------- --------- ---------
(Loss)/profit before taxation (426) 14,955 14,529
Taxation - - -
(Loss)/profit for year/total comprehensive
income (426) 14,955 14,529
Return per Ordinary Share - Basic (0.58)p 20.23p 19.65p
-------------------------------------------- --------- --------- ---------
Return per Ordinary Share - Fully diluted (0.58)p 20.23p 19.65p
-------------------------------------------- --------- --------- ---------
F&C Private Equity Trust plc
Statement of Comprehensive Income for the
year ended 31 December 2016
(Audited)
Revenue Capital Total
GBP'000 GBP'000 GBP'000
-------------------------------------------- --------- --------- ---------
Income
Gains on investments held at fair value - 58,538 58,538
Exchange losses - (3,584) (3,584)
Investment income 1,386 - 1,386
Other income 54 - 54
-------------------------------------------- --------- --------- ---------
Total income 1,440 54,954 56,394
-------------------------------------------- --------- --------- ---------
Expenditure
Investment management fee - basic fee (582) (1,745) (2,327)
Investment management fee - performance
fee - (2,024) (2,024)
Other expenses (739) - (739)
-------------------------------------------- --------- --------- ---------
Total expenditure (1,321) (3,769) (5,090)
-------------------------------------------- --------- --------- ---------
Profit before finance costs and taxation 119 51,185 51,304
Finance costs (419) (1,257) (1,676)
-------------------------------------------- --------- --------- ---------
(Loss)/profit before taxation (300) 49,928 49,628
Taxation - - -
(Loss)/profit for year/total comprehensive
income (300) 49,928 49,628
Return per Ordinary Share - Basic (0.41)p 68.16p 67.75p
-------------------------------------------- --------- --------- ---------
Return per Ordinary Share - Fully diluted (0.41)p 67.53p 67.12p
-------------------------------------------- --------- --------- ---------
F&C Private Equity Trust plc
Balance Sheet
As at 31 As at 31
December December
2017 2016
(Unaudited) (Audited)
GBP'000 GBP'000
------------------------------------------ ------------- -----------
Non-current assets
Investments at fair value through profit
or loss 266,536 239,049
266,536 239,049
Current assets
Other receivables 232 26
Cash and cash equivalents 26,765 48,575
------------------------------------------ ------------- -----------
26,997 48,601
Current liabilities
Other payables (3,081) (3,057)
Net current assets 23,916 45,544
------------------------------------------ ------------- -----------
Total assets less current liabilities 290,452 284,593
------------------------------------------ ------------- -----------
Non-current liabilities
Interest-bearing bank loan (26,308) (25,070)
------------------------------------------ ------------- -----------
Net assets 264,144 259,523
------------------------------------------ ------------- -----------
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 213,100 203,679
Revenue reserve - 4,800
-----------
Shareholders' funds 264,144 259,523
------------------------------------------ ------------- -----------
Net asset value per Ordinary Share 357.23p 350.98p
F&C 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
2017 (unaudited)
Net assets at
1 January
2017 739 2,527 15,040 31,403 1,335 203,679 4,800 259,523
Profit/(loss)
for
the
year/total
comprehensive
income - - - - - 14,955 (426) 14,529
Dividends paid - - - - - (5,534) (4,374) (9,908)
Net assets at
31 December
2017 739 2,527 15,040 31,403 1,335 213,100 - 264,144
--------------- --------- ---------- -------------- -------------- ------------ ---------- ---------- --------
For the year ended 31 December
2016 (audited)
Net assets at
1 January
2016 720 - 15,040 31,403 1,335 158,002 9,625 216,125
Issue of
Ordinary
Shares 19 2,527 - - - - - 2,546
Profit/(loss)
for
the
year/total
comprehensive
income - - - - - 49,928 (300) 49,628
Dividends paid - - - - - (4,251) (4,525) (8,776)
Net assets at
31 December
2016 739 2,527 15,040 31,403 1,335 203,679 4,800 259,523
--------------- --------- ---------- -------------- -------------- ------------ ---------- ---------- --------
F&C Private Equity Trust plc
Statement of Cash Flows
Year ended Year ended
31 December 31 December
2017 2016
(Unaudited) (Audited)
GBP000 GBP000
---------------------------------------------- ------------- -------------
Operating activities
Profit before taxation 14,529 49,628
Adjustments for:
Gains on disposals of investments (32,637) (33,421)
Decrease/(increase) in holding gains 11,421 (25,117)
Exchange differences 1,019 3,584
Interest income (51) (54)
Interest received 51 54
Investment income (1,422) (1,386)
Investment income received 1,422 1,386
Finance costs 1,711 1,676
Decrease in other receivables 1 -
Increase in other payables 26 778
---------------------------------------------- ------------- -------------
Net cash outflow from operating activities (3,930) (2,872)
---------------------------------------------- ------------- -------------
Investing activities
Purchases of investments (69,546) (32,797)
Sales of investments 63,068 67,997
Net cash (outflow)/inflow from investing
activities (6,478) 35,200
---------------------------------------------- ------------- -------------
Financing activities
Shares issued (net of costs) - 2,546
Interest paid (1,497) (1,459)
Equity dividends paid (9,908) (8,776)
---------------------------------------------- ------------- -------------
Net cash outflow from financing activities (11,405) (7,689)
---------------------------------------------- ------------- -------------
Net (decrease)/increase in cash and
cash equivalents (21,813) 24,639
Currency gains/(losses) 3 (87)
---------------------------------------------- ------------- -------------
Net (decrease)/increase in cash and
cash equivalents (21,810) 24,552
Opening cash and cash equivalents 48,575 24,023
---------------------------------------------- ------------- -------------
Closing cash and cash equivalents 26,765 48,575
---------------------------------------------- ------------- -------------
Notes (unaudited)
1. The unaudited financial results, which were approved by the
Board on 22 March 2018, have been prepared in accordance with the
Companies Act 2006 and International Financial Reporting Standards
('IFRS') as adopted by the European Union. 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
IFRS, the Directors have sought to prepare the financial statements
on a basis compliant with the recommendations of the SORP.
The accounting policies adopted are consistent with those of the
previous financial year, except that the following new standard has
been adopted in the current year:
-- 'Disclosure Initiative - Amendments to IAS 7'. The adoption
of these amendments did not have any impact on the current period
or any prior period and are not likely to affect future
periods.
The following new standards have been issued but are not
effective for this accounting period and have not been adopted
early:
-- In July 2014, the IASB published the final version of IFRS 9
'Financial Instruments' which replaces the existing guidance in IAS
39 'Financial Instruments: Recognition and Measurement'. The IFRS 9
requirements represent a change from the existing requirements in
IAS 39 in respect of financial assets. The standard contains two
primary measurement categories for financial assets: amortised cost
and fair value. A financial asset would be measured at amortised
cost if it is held within a business model whose objective is to
hold assets in order to collect contractual cash flows, and the
asset's contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal outstanding. All other financial assets would be measured
at fair value. The standard eliminates the existing IAS 39
categories of held-to-maturity, available-for-sale and loans and
receivables.
For financial liabilities, IFRS 9 largely carries forward
without substantive amendment the guidance on classification and
measurement from IAS 39. The main change is that, in cases where
the fair value option is taken for financial liabilities, the part
of fair value change due to an entity's own credit risk is recorded
in other comprehensive income rather than in profit or loss.
The standard introduces new requirements for hedge accounting
that align hedge accounting more closely with risk management and
establishes a more principles-based approach to hedge accounting.
The standard also adds new requirements to address the impairment
of financial assets and means that a loss event will no longer need
to occur before an impairment allowance is recognised.
The standard will be effective for annual periods beginning on
or after 1 January 2018, and is required to be applied
retrospectively with some exemptions. There will be no material
impact for the Company as financial assets will continue to be
classified as fair value through profit and loss, financial
liabilities will continue to be held at amortised cost, the
expected credit loss model will not give rise to a material
increase in impairment and the Company does not apply hedge
accounting.
-- IASB has issued a new standard for the recognition of
revenue, IFRS 15 'Revenue from Contracts with Customers'. This will
replace IAS 18 which covers contracts for goods and services. The
new standard is based on the principle that revenue is recognised
when control of a good or service transfers to a customer - so the
notion of control replaces the existing notion of risks and
rewards. The standard permits a modified retrospective approach for
the adoption. Under this approach entities will recognise
transitional adjustments in retained earnings on the date of
initial application ie without restating the comparative period.
They will only need to apply the new rules to contracts that are
not completed as of the date of initial application. The standard
will be effective for annual periods beginning on or after 1
January 2018. The Company is yet to assess IFRS 15's full impact
but it is not currently anticipated that this standard will have
any material impact on the Company's financial statements as
presented for the current year.
The Company does not consider that the future adoption of any
new standards, in the form currently available, will have any
material impact on the financial statements as presented.
2. Returns per Ordinary Share are based on the following
weighted average number of shares in issue during the year:
Basic: 73,941,429 (2016: 73,249,836)
Diluted: 73,941,429 (2016: 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 (2016:
73,941,429)
During the year ended 31 December 2017, the Company issued nil
Ordinary Shares. During the previous year ended 31 December 2016,
the Company issued 1,959,156 Ordinary Shares of 1p each in the
capital of the Company, following the exercise of subscription
rights by holders of a corresponding number of management warrants
previously issued by the Company in the capital of the Company. No
warrants remain in issue.
3. The Board has proposed an interim dividend of 3.57p per
Ordinary Share, payable on 30 April 2018 to those shareholders on
the register on 6 April 2018.
4. This results announcement is based on the Company's unaudited
financial statements for the year ended 31 December 2017 which have
been prepared in accordance with International Financial Reporting
Standards as adopted by the EU ('IFRS').
5. This announcement is not the Company's statutory accounts.
The full audited accounts for the year ended 31 December 2016,
which were unqualified, have been lodged with the Registrar of
Companies. The statutory accounts for the year to 31 December 2017
(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 the offices of BMO Global
Asset Management (EMEA), Exchange House, Primrose Street, London,
EC2A 2NY on 24 May 2018 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.fcpet.co.uk
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
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEEFWEFASELD
(END) Dow Jones Newswires
March 23, 2018 03:00 ET (07:00 GMT)
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