TIDMELTA
RNS Number : 1745Z
Electra Private Equity PLC
16 May 2019
The information contained in this announcement is restricted and
is not for release, publication or distribution, directly or
indirectly, nor does it constitute an offer of securities for sale,
in the United States, Canada, Japan, Australia, New Zealand or
South Africa.
Electra Private Equity PLC
Unaudited Results Announcement for the Half Year ended 31 March
2019
Half Year results reflect good progress in implementation of
strategy approved by over 99% of shareholders in October 2018
Highlights from the Half Year to 31 March 2019
-- NAV at 31 March 2019 of GBP195 million (509.4 pence per share)
-- NAV increase of 7.1% in the period (after adjusting for dividends)
-- Receipt of GBP119 million from the disposal of Photobox and Knight Square
-- GBP160 million paid as Special Dividends, made up of 365p per
share paid on 14 December 2018 and 54p per share paid on 12 April
2019 (reflected in the 31 March 2019 NAV)
-- Combined LTM maintainable EBITDA of GBP32 million from fully
controlled assets: TGI Fridays, Hotter Shoes and Special Product
Company ("SPC") with Net Debt of GBP43 million - including cash
held centrally (post dividend).
-- Strategy adopted to conduct a managed wind-down of the
portfolio over a period of time, allowing optimisation of returns,
the return of cash to shareholders, and ultimately winding-up of
the Company in the medium term
-- Operating costs and Board composition reduced to reflect the
reduced scale and activities of the Company.
Portfolio Performance
-- TGI Fridays (NAV: March 2019: GBP132 million; September 2018:
GBP125 million). UK casual dining market continues to be
challenging however LFL sales performance has improved consistently
from September 2018
-- Hotter Shoes (NAV: March 2019: GBP28 million; September 2018:
GBP7 million). LTM EBITDA recovered by 30% from September 2018 with
new CEO appointed in March 2019. GBP7.5 million invested in Q1 2019
(reflected in September valuation) in order to accelerate pace of
strategic change
-- SPC (NAV: March 2019: GBP7 million; September 2018: GBP7
million). Continues to perform strongly in US cable and telecom
infrastructure market with focus on new product development and
widening customer base
-- Sentinel (NAV: March 2019: GBP2 million; September 2018: GBP4
million) Following a difficult end to 2018 conditions in the UK
building products sector continue to be challenging
-- Tail assets continue to provide expected value.
Composition of NAV
31 March 2019
NAV NAV
GBPm pence per share
------------------------------ ----------------------------------- ----------------------------------------
TGI Fridays 131.9 345
Hotter Shoes 27.9 73
SPC 7.3 19
Sentinel 2.3 6
Other 5.8 15
Cash and cash equivalents 42.0* 110*
Other assets / (liabilities) (22.2)* (58)*
------------------------------ ----------------------------------- ----------------------------------------
Net asset value 195.0 509
------------------------------ ----------------------------------- ----------------------------------------
*Before GBP20.8m (54p per share) dividend paid on 12 April 2019
Commenting, Neil Johnson, Chairman of Electra Private Equity,
said:
"Having doubled shareholder value between 2015 and 2017, 2018
was a year in which we reflected on the future, made the decision
to adopt the realisation strategy approved by shareholders in
October 2018, and embarked on the optimisation of our remaining
assets.
We have adjusted our cost base to better reflect the size of the
remaining business and are working with our portfolio companies to
grow value. Our portfolio has further significant value creation
opportunities and we are confident that we will continue to provide
shareholders with attractive returns in the period up until our
wind-down, which will follow realisation of our existing
investments in the medium term."
For further information:
Gavin Manson, Chief Financial Officer, Electra Private Equity
PLC 020 3874 8300
The financial information set out below does not constitute the
Company's statutory accounts for the half year ended 31 March 2019
or 2018 but is derived from those accounts. Statutory accounts for
the year to 30 September 2018 were approved by the Board of
Directors on 10 December 2018, published on 28 January 2019 and
delivered to the Registrar of Companies. References in this
announcement to Electra Private Equity PLC and its subsidiaries
have been abbreviated to 'Electra' or the 'Company' or the
'Group'.
Chairman's Statement
Having doubled shareholder value between 2015 and 2017, 2018 was
a year in which we reflected on the future, made the decision to
adopt the realisation strategy approved by shareholders in October
2018, and embarked on the optimisation of our remaining assets.
We have adjusted our cost base to better reflect the size of the
remaining business and are working with our portfolio companies to
grow value. Our portfolio has further significant value creation
opportunities and we are confident that we will continue to provide
shareholders with attractive returns in the period up until our
wind-down, which will follow realisation of our existing
investments in the medium term.
We have made progress in the first half of the year and our net
asset value ("NAV") as at 31 March of GBP195 million represents an
uplift of 7.1% from 30 September 2018 (adjusted for the dividends
paid in December 2018 and April 2019). As at 31 March the NAV
included GBP3 million of cash and GBP39 million of money market
funds, of which GBP21 million was paid to shareholders on 12 April
as a Special Dividend.
With the realisation of our investments in Photobox and Knight
Square in the first quarter of our financial year 2019, 97% of our
remaining portfolio is fully controlled by the Company. This value
is concentrated primarily in three investments: TGI Fridays, Hotter
Shoes and Special Product Company."
Larger controlled assets: TGI Fridays (GBP132 million), Hotter
Shoes (GBP28 million) and Special Product Company (GBP7
million)
With TGI Fridays and Hotter Shoes representing over 95% of
current portfolio value and both having significant exposure to the
UK retail environment, 2018 was a challenging year. Whilst market
conditions remain difficult, we are working with both businesses to
make them more resilient and to accelerate evolution to reflect
permanent changes in their respective markets. Progress is being
made in each of our controlled businesses with improvement
reflected in the KPIs and in EBITDA recovery.
-- TGI Fridays continues to be a profitable and cash generative
business with a track record of outperforming its peers across the
economic cycle. Demand in the casual dining sector remains strong,
however cost pressure combined with over-supply has led to a
challenging environment sustained over the last 18 months. Having
resisted the lure of heavy discounting, TGI's focus for recovery
and growth is on ensuring continued delivery of a high quality and
relevant customer experience across its target customers,
geographies and trading periods
-- Hotter Shoes had a very difficult 2018. The challenging UK
retail market was compounded by adverse weather over the key
seasonal transition periods and the business struggled to adapt.
Changes have been made to increase resilience, to focus on the core
activities of the business and to accelerate the rate of planned
change. With Ian Watson joining as CEO in March 2019, whilst there
is still much to do, we are confident that the business is
addressing its challenges and provides opportunity for value
creation
-- Special Product Company has been owned by Electra for over 20
years and for much of that period has been a challenging
investment. Renewed focus over the last two years has seen the
business recover to profitability and make crucial strategic
progress in diversifying its product range and customer base.
Non-controlled and other assets: Sentinel (GBP2 million) and
others (GBP6 millions)
-- Sentinel performed strongly in early 2018 as its strategic
direction began to bear fruit, however it has subsequently been
impacted by weakness in the building products sector compounded by
distributors adjusting inventory levels. The business has both
challenges and opportunities which we continue to monitor
-- Others includes a number of property, debt, fund and small
corporate investments. Whilst not individually material, with focus
these investments will be realised satisfactorily.
Dividends
Having paid Special Dividends of GBP140 million in December 2018
and GBP21 million in April 2019, the Board does not intend to
resume normal dividend payments with these interim results. It
remains our intention to distribute the proceeds of asset
realisations as they occur and to consider recommencing regular
normal dividends following our full year results.
Finally, I should like to thank all those loyal and hardworking
Electra Private Equity PLC colleagues who have left the business as
we have downsized our central overhead. These include two
Non-Executive Directors and a large number of other staff. It would
be invidious to mention them all by name but a special thank you is
appropriate to Roger Perkin who served on the Board of Electra
Private Equity PLC and as Chair of the Audit and Risk Committee for
nine years.
Neil Johnson
Chairman
15 May 2019
Portfolio Review
Portfolio Movement
Electra's investment portfolio decreased from GBP267 million to
GBP175 million during the six months to 31 March 2019. The decrease
resulted from net investments and realisations of GBP110 million,
offset by a portfolio gain of GBP18 million.
2019 2018 2017 2016
Six months ended 31 March GBPm GBPm GBPm GBPm
------------------------------ ------------------ ----------------- ------------------ -----------------
Opening investment portfolio 267 358 1,696 1,630
Investments 8 11 4 158
Realisations (118) (36) (1,067) (384)
Investment return 18 (2) 246 299
------------------------------ ------------------ ----------------- ------------------ -----------------
Closing investment portfolio 175 331 879 1,703
------------------------------ ------------------ ----------------- ------------------ -----------------
Investment Net investments/ Investment Investment
fair value as at (realisations) return fair value as at
30 Sept 2018 31 Mar 2019
GBPm GBPm GBPm GBPm
------------------------ ------------------ -------------------------- ------------------------ ------------------
Buyouts and
Co-investments
TGI Fridays 125 1 6 132
Hotter Shoes 7 7 14 28
Photobox Group 96 (96) - -
Knight Square 21 (21) - -
Sentinel Performance
Solutions 4 - (2) 2
Special Product Company 7 - - 7
Other 4 (1) - 3
------------------------ ------------------ -------------------------- ------------------------ ------------------
Total Buyouts and
Co-investments 264 (110) 18 172
------------------------ ------------------ -------------------------- ------------------------ ------------------
Secondaries 1 - - 1
Debt 1 - - 1
Funds 1 - - 1
------------------------ ------------------ -------------------------- ------------------------ ------------------
Total Non-core
Investments 3 - - 3
------------------------ ------------------ -------------------------- ------------------------ ------------------
Total Portfolio
Investments 267 (110) 18 175
------------------------ ------------------ -------------------------- ------------------------ ------------------
Investment Portfolio - Age Analysis
2019 2018
At 31 March % %
-------------------- ----- -----
Less than one year - -
One - two years - -
Three - five years 91 73
Over five years 9 27
-------------------- ----- -----
Realisations
Total realisations for the six months amounted to GBP118 million
compared with GBP36 million in the corresponding period of the
previous year.
Realisations GBPm
-------------------- -----
Photobox 96
Knight Square 21
Other 1
-------------------- -----
Total Realisations 118
-------------------- -----
Key Investments Background
TGI Fridays
The UK franchise of an American themed restaurant chain
providing a high energy and fun environment, with a wide
demographic appeal.
Date of initial investment: December 2014
Type of deal: Buyout
Electra ownership: 99%
Cost: GBP143 million
Valuation: GBP132 million
Valuation method: Based on multiple of earnings
Multiple of cost: 0.9x
Year ended 31 December
2018* 2017 2016
GBPm GBPm GBPm
----------------------------------- ------ ------ ------
Sales 208.8 216.0 211.0
Operating Profit 14.2 22.3 21.0
EBITDA 25.3 33.3 31.0
Return on Capital Employed (ROCE) 13.1% 11.0% 9.6%
------------------------------------- ------ ------ ------
* Based on full year unaudited management accounts
Demand in the casual dining market continues to grow and offers
attractive opportunities for those brands that keep up with
changing consumer expectations. TGI Fridays continually seeks to
improve its proposition, updating its menus, refreshing its stores
and developing its staff, as it aims to provide an experience that
is valued by its customers. Over the last year, new healthier menu
items and an updated ordering platform have been introduced.
The business continues to pursue a strategy of sustainable
growth through highly selective store expansion and has a strong
pipeline of future stores, but with the flexibility to take
advantage of opportunities in the market. Recent acquisitions have
provided a high return on investment of around 35%, providing
confidence in the company's expansion plans.
In summer 2018 the combination of exceptional weather with the
football World Cup compounded what was already a market challenged
with over-supply and widespread discounting to be a difficult
period for TGI - although it remained profitable and cash
generative. Since autumn 2018 the trajectory has been one of
gradual recovery and the business is now well placed to continue
its recovery over the summer months.
Hotter Shoes
The UK's largest shoe manufacturer with a strong focus on
comfort and service.
Date of initial investment: January 2014
Type of deal: Buyout
Electra ownership: 98%
Cost: GBP125 million
Valuation: GBP28 million
Valuation method: Based on multiple of earnings
Multiple of cost: 0.2x
Year ended 31 January
2019* 2018 2017
GBPm GBPm GBPm
------------------ ------ ------ -----
Sales 93.0 100.8 98.0
Operating Profit 0.6 5.0 4.3
EBITDA 3.5 9.5 9.0
ROCE 3.4% 5.9% 2.2%
------------------- ------ ------ -----
* Based on full year unaudited management accounts
Hotter operates in the comfort footwear market primarily in the
UK and US, where demographic changes offer significant
opportunities for growth over the long term. Following Electra's
purchase of the founder's interest during 2018, the company has
been able to invest in necessary initiatives to enable future
growth. These are aimed at developing the brand and product to
remain relevant to customers whilst investing in key operational
areas to increase the efficiency and flexibility of the cost
base.
2018 was a very challenging year for the business in which the
well-documented challenges facing the UK retail market were
compounded by adverse weather over the key seasonal change periods
in spring and autumn. Although the direct-to-consumer channel
remains strong the business as a whole was not as resilient or
flexible as was needed in 2018 and steps are being taken to
accelerate the strategic change already planned. Ian Watson joined
as CEO in March to lead this change and trading recovery.
The strategy in the short-term is to optimise the retail estate,
renew focus on the core customers in the UK direct business,
increase return from the US business and make the cost base more
flexible. This is likely to result in a smaller but more resilient
business which represents a solid foundation for growth.
Sentinel Performance Solutions ("Sentinel")
A leading UK manufacturer of products to improve the performance
of residential heating and hot water systems.
Date of initial investment: February 2011
Type of deal: Buyout
Electra ownership: 55%
Cost: GBP17 million
Valuation: GBP2 million
Valuation method: Based on transaction risk adjusted multiple of
earnings
Multiple of cost: 0.1x
Innovation has been an important part of Sentinel's recent
recovery with strong international growth driven by new products,
primarily its line of next generation filters which are tailored
for country specific requirements. Partner deals with original
equipment manufacturers have also improved, with legislation in
certain countries dictating that system checks must be carried out
by an independent third party, creating opportunity for follow-on
sales.
Trading in 2018 started strongly but was impacted in the latter
part of the year by a reduction in the stock held by a few of the
company's larger customers. The company is confident that continued
investment in research and development will lead to further growth
across its markets.
Special Product Company ("SPC")
A US based manufacturer of industrial cabinets, serving the
telecom and cabling sectors.
Date of initial investment: March 1999
Type of deal: Buyout
Electra ownership: 60%
Cost: GBP9 million
Valuation: GBP7 million
Valuation method: Based on multiple of earnings
Multiple of cost: 0.8x
SPC's strategy is to continue to develop strong relationships
with each of the main US cable and telecom companies and work with
customers through collaborative research and development activity
to meet their specific product requirements.
Recent trading has been strong due to a number of additional
contracts with new customers. Customisation of new product releases
has helped demonstrate its customer service and strengthened key
relationships as a consequence. SPC is currently developing the
next generation of products to support the advancement of new
technology in the cable market.
CFO Review
"Having determined our future strategy and completed
satisfactory exits from our main non-controlled corporate assets
early in the current financial year, our focus going forward is on
working with management to create value in the remaining controlled
portfolio and in completing the realisation of our non-core assets.
This focus is supported by the greatly simplified corporate and
operating structures we now have in place and through the continued
active reduction of our cost base."
Investing activities
As required by the revised Investment Objective and Policy
approved by shareholders in October 2018, the investing activities
of the Company going forward will be limited to supporting the
optimisation of value creation from the existing portfolio. An
investment of GBP7.5 million was made in Hotter Shoes in early 2019
to support working capital and strategic delivery. The likelihood
of this investment was known in advance and was reflected in our
September 2018 valuation. In the period, work was undertaken to
re-align portfolio company management incentives at both Hotter and
TGI to strategic plans consistent with the delivery of Electra's
strategy. This resulted in some minor investment costs. There
remains significant uncertainty around the likely terms of the
post-Brexit arrangements between the UK and the EU, as well as
possible transitional arrangements. However, the Board of Directors
does not believe there will be a significant impact on the
valuations or operations of its portfolio companies.
Operating Costs
Following adoption of our realisation strategy and the disposal
of Photobox and Knight Square, the Company undertook action to
reduce its recurring operating costs by approximately 50% to
approximately GBP3 million p.a. These costs will be reduced further
in the event that the Company is able to exit its office lease.
The organisational changes implemented to reduce costs resulted
in exceptional redundancy and related costs of GBP1 million and a
further GBP1 million was incurred in the now advanced corporate
rationalisation activity.
The adoption of the revised Investment Objective and Policy
triggered a 'Corporate Event' in respect of the 2017 LTIP. The
resultant share awards were fully hedged - however the Corporate
Event resulted in a GBP0.7 million non-cash expense in the Income
Statement due to acceleration charges under IFRS 2. The Share of
Value Plan ("SoVP") was unaffected.
In light of the adoption of a wind-down strategy, we have
considered the need for the provision of closure / wind-up costs
under IAS 37, and have concluded that any such costs are unlikely
to be material and that as we anticipate continuing to generate
shareholder value, until the targeted medium-term realisation of
our portfolio investments is complete our operating costs should be
reported normally.
Analysis of Movement in NAV per share and TSR
The Special Dividends of 365p and 54p paid on 14 December 2018
and 12 April 2019 (but reflected in the 31 March 2019 NAV) are the
most significant factors in the reduction of NAV per share from
892p to 509p. The increases in valuation of TGI and Hotter
contribute to a net 7.1% uplift in the NAV (after adjusting for the
Special Dividends) over the period.
Total Shareholder Return ("TSR") for the six month period was
negative 24% reflecting the concentration of risk in the valuation
of TGI and Hotter and the impact of their September valuations,
released in the period. Over the three years since the strategic
change of direction of the Company, TSR has been % compared with
the FTSE 250's return of 23%, reflecting longer term
performance.
p
-------------------------- ------------------------------------------------------------------------------------------
NAV per share as at 1
October 2018 892
Capital gains and income 47
Expenses, foreign
exchange losses and tax (6)
Exceptional expenses (5)
Dividend paid (419)
NAV per share as at 31 509
March 2019
-------------------------- ------------------------------------------------------------------------------------------
Net Liquid Resources
As at 31 March 2019 the Company had GBP3 million of cash and
GBP39 million of money market fund investments. GBP21 million of
these funds were utilised to pay the Special Dividend in April
2019, leaving cash and cash equivalents of GBP21 million on a pro
forma basis.
Gearing
At 31 March 2019, Electra was ungeared at the Group level.
Certain companies of the portfolio are funded in part by third
party debt.
Gavin Manson
Chief Financial Officer
15 May 2019
Consolidated Income Statement (unaudited)
2019 2018
Revenue Capital Total Revenue Capital Total
Note For the six months ended 31 March GBPm GBPm GBPm GBPm GBPm GBPm
----- --------------------------------------- -------- ----------- -------- -------------- ----------- --------
1 Investment income - 17 17 4 11 15
2 Other expenses (5) - (5) (3) - (3)
Reclassification of (losses)/gains on
foreign exchange translation
previously recognised in
equity reserves - (1) (1) - 31 31
Gain on revaluation of foreign
currencies - - - - 2 2
3 Income reversal - - - (17) - (17)
4 Incentive schemes - - - - 22 22
----- --------------------------------------- -------- ----------- -------- -------------- ----------- --------
Net Profit before Taxation (5) 16 11 (16) 66 50
Taxation - - - 2 (2) -
----- --------------------------------------- -------- ----------- -------- -------------- ----------- --------
Profit on Ordinary Activities after
Taxation attributable to owners of the
Group (5) 16 11 (14) 64 50
5 Basic Earnings per Ordinary Share (14.24) 41.03 26.79 (40.27) 168.36 128.09
(pence)
----- --------------------------------------- -------- ----------- -------- -------------- ----------- --------
5 Diluted Earnings per Ordinary Share (14.24) 41.03 26.79 (40.27) 168.36 128.09
(pence)
----- --------------------------------------- -------- ----------- -------- -------------- ----------- --------
The 'Total' columns of this statement represent the Group's
Consolidated Income Statement prepared in accordance with
International Financial Reporting Standards adopted by the EU
("IFRS"). The supplementary Revenue and Capital columns are both
prepared under guidance published by the Association of Investment
Companies.
Consolidated Statement of Comprehensive Income (unaudited)
2019 2018
For the six months ended 31 March GBPm GBPm
---------------------------------------------------------------- ----- -------------
Profit for the period 11 50
Items that are reclassified to profit or loss 1 (3)
----- -------------
Reclassification adjustments on foreign operations
---------------------------------------------------------------- ----- -------------
Total Comprehensive Income attributable to owners of the Group 12 47
---------------------------------------------------------------- ----- -------------
The accompanying Notes on pages 13 to 23 are an integral part of
the Half Year Report.
Consolidated Statement of Changes in Equity (unaudited)
Called Share Capital Own Translation Realised Unrealised Revenue Total
up premium redemption shares reserve capital capital reserve equity
share reserve held reserve reserve
capital
Note For the six GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
months ended 31
March 2019
----- ----------------- -------- -------- ----------- ------- ------------ --------- ----------- -------- -------
Opening balance
at 1 October
2018 9 123 35 (1) 5 248 (137) 60 342
Net revenue loss
added to the
reserves - - - - - - - (5) (5)
6 Net profits on - - - - - (1) - - (1)
realisation of
investments
during the
period
6 Increase in - - - - - - 18 - 18
value of
non-current
investments
Investments sold
during the
6 period - - - - - 8 (8) - -
Reclassification
of losses on
foreign exchange
translation
previously
recognised in
equity
reserves - - - - 1 (1) - - -
----- ----------------- -------- -------- ----------- ------- ------------ --------- ----------- -------- -------
Total
comprehensive
income - - - - 1 6 10 (5) 12
7 Ordinary shares - - - 1 - - - - 1
held under share
incentive plans
8 Dividends - - - - - (160) - - (160)
----- ----------------- -------- -------- ----------- ------- ------------ --------- ----------- -------- -------
As at 31 March
2019 9 123 35 - 6 94 (127) 55 195
----- ----------------- -------- -------- ----------- ------- ------------ --------- ----------- -------- -------
Called Share Capital Own Translation Realised Unrealised Revenue Total
up premium redemption shares reserve capital capital reserve equity
share reserve held reserve reserve
capital
Note For the six GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
months ended 31
March 2018
----- ----------------- -------- -------- ----------- ------- ------------ --------- ----------- -------- -------
Opening balance
at 1 October
2017 9 123 35 (1) 12 616 (120) 84 758
Net revenue loss
added to the
reserves - - - - - - - (14) (14)
6 Net profits on - - - - - 5 - - 5
realisation of
investments
during the
period
6 Increase in - - - - - - 6 - 6
value of
non-current
investments
Investments sold
during the
6 period - - - - - 10 (10) - -
Decrease in
incentive
4 provisions - - - - - - 22 - 22
Reclassification
of gains on
foreign exchange
translation
previously
recognised in
equity
reserves - - - - (31) 31 - - -
Other
comprehensive
income - foreign
currency
translation
differences - - - - (3) - - - (3)
----- ----------------- -------- -------- ----------- ------- ------------ --------- ----------- -------- -------
Total
comprehensive
income - - - - (34) 46 18 (14) 16
8 Dividends - - - - - (349) - - (349)
----- ----------------- -------- -------- ----------- ------- ------------ --------- ----------- -------- -------
As at 31 March
2018 9 123 35 (1) (22) 313 (102) 70 425
----- ----------------- -------- -------- ----------- ------- ------------ --------- ----------- -------- -------
The accompanying Notes on pages 13 to 23 are an integral part of
the Half Year Report.
Consolidated Balance Sheet (unaudited)
31 March 30 September 31 March
2019 2018 2018
Note GBPm GBPm GBPm
----- ------------------------------------------------- ------------ ------------- -----------
Non-Current Assets
6 Investments held at fair value 175 150 320
----- ------------------------------------------------- ------------ ------------- -----------
175 150 320
----- ------------------------------------------------- ------------ ------------- -----------
Current Assets
6 Investments held at fair value 39 72 75
6 Assets held for sale - 117 11
Trade and other receivables - 1 -
Current tax asset 1 2 1
Cash and cash equivalents 3 3 22
----- ------------------------------------------------- ------------ ------------- -----------
43 195 109
----- ------------------------------------------------- ------------ ------------- -----------
Current Liabilities
9 Trade and other payables (23) (2) (2)
----- ------------------------------------------------- ------------ ------------- -----------
(23) (2) (2)
----- ------------------------------------------------- ------------ ------------- -----------
Total Assets less Current Liabilities 195 343 427
----- ------------------------------------------------- ------------ ------------- -----------
Non-Current Liabilities
10 Provisions for liabilities and charges - (1) (1)
Deferred tax liability - - (1)
----- ------------------------------------------------- ------------ ------------- -----------
- (1) (2)
----- ------------------------------------------------- ------------ ------------- -----------
Net Assets 195 342 425
----- ------------------------------------------------- ------------ ------------- -----------
Capital and Reserves
11 Called up share capital 9 9 9
Share premium 123 123 123
Capital redemption reserve 35 35 35
Own shares held - (1) (1)
Translation reserve 6 5 (22)
Realised capital reserve 94 248 313
Unrealised capital reserve (127) (137) (102)
Revenue reserve 55 60 70
----- ------------------------------------------------- ------------ ------------- -----------
Total Equity 195 342 425
----- ------------------------------------------------- ------------ ------------- -----------
12 Basic Net Asset Value per Ordinary Share (pence) 509.43 892.40 1,109.27
----- ------------------------------------------------- ------------ ------------- -----------
11 Number of Ordinary Shares in Issue 38,282,763 38,282,763 38,282,763
----- ------------------------------------------------- ------------ ------------- -----------
The accompanying Notes on pages 13 to 23 are an integral part of
the Half Year Report.
Approved by the Board of Directors and signed on its behalf
by:
Neil Johnson Gavin Manson
Chairman Chief Financial Officer
15 May 2019 15 May 2019
Electra Private Equity PLC
Company Number: 00303062
Consolidated Cash Flow Statement (unaudited)
For the six months ended 31 March 2019 2018
-------------------------------------------
GBPm GBPm
------------------------------------------- ------ ------
Operating activities
Purchase of trading investments (123) (50)
Sales of investments 258 377
Dividends and distributions received 1 1
Interest income received 8 1
Amounts paid under incentive schemes - (6)
Expenses paid (5) (5)
------------------------------------------- ------ ------
Cash generated from operations 139 318
Taxation repaid/(paid) 1 (1)
------------------------------------------- ------ ------
Net cash inflow from operating activities 140 317
------------------------------------------- ------ ------
Financing activities
Dividends paid (140) (349)
------------------------------------------- ------ ------
Net cash used in financing activities (140) (349)
------------------------------------------- ------ ------
Net decrease cash and cash equivalents - (32)
Cash and cash equivalents at 1 October 3 54
Cash and cash equivalents at 31 March 3 22
------------------------------------------- ------ ------
The accompanying Notes on pages 13 to 23 are an integral part of
the Half Year Report.
Notes to the Accounts
1 Segmental Analysis
The Group operates a single business segment for reporting
purposes and is managed as a single investment company, with
multiple investment categories including Buyouts and
Co-investments, Secondaries, Debt and Funds. Reporting provided to
the Board of Directors is on an aggregated basis. These investments
are located across multiple geographic regions and total investment
income is allocated as follows:
For the six months ended 31 March 2019 2018
GBPm GBPm
----------------------------------- ------ ------
United Kingdom 17 7
Continental Europe - 7
US - 1
----------------------------------- ------ ------
Total investment income 17 15
----------------------------------- ------ ------
2 Other Expenses
For the six months ended 31 March 2019 2018
GBPm GBPm
----------------------------------- ------ ------
Administrative expenses 3 2
Exceptional expenses (see below) 2 1
----------------------------------- ------ ------
Total other expenses 5 3
----------------------------------- ------ ------
GBP0.3 million (2018: GBP0.3 million) of operating lease
expenses were included in the administrative expenses.
Exceptional expenses 2019 2018
for the six months ended 31 March GBPm GBPm
------------------------------------ ------ ------
Strategic review 1 1
Corporate rationalisation 1 -
------------------------------------ ------ ------
Total exceptional expenses 2 1
------------------------------------ ------ ------
Corporate rationalisation also includes redundancy costs
incurred on downsizing the Company's head office.
3 Income Reversal
Accrued income is recognised when the value of investment is
greater than the value of any loan note associated with the
investment. Income reversal is the reversal of accrued income
recognised in previous periods arising from changes in valuation
investments. The amount for the six months ended 31 March 2018
related to accrued income reversed on the Company's loan investment
in TGI Fridays. There were no income reversals for the six months
ended 31 March 2019.
4 Incentive Schemes
Incentive schemes income for six months ended 31 March 2018
related to the release of carried interest provisions. There are no
further income or expenses relating to carried interest on
historical incentive schemes.
5 Earnings Per Share
Basic and Diluted
For the six months ended 31 March 2019 2018
--------------------------------------- --------- ---------
Net revenue losses (GBPm) (5) (14)
Net capital gains (GBPm) 16 64
--------------------------------------- --------- ---------
Total earnings 11 50
--------------------------------------- --------- ---------
Revenue loss per ordinary share (p) (14.24) (40.27)
Capital return per ordinary share (p) 41.03 168.36
--------------------------------------- --------- ---------
Total earnings per ordinary share (p) 26.79 128.09
--------------------------------------- --------- ---------
The weighted average number of undiluted and diluted ordinary
shares in issue was 38,282,763 (2018: 38,282,763). There were no
dilutive potential shares during the six months ended 31 March 2019
and 31 March 2018.
6 Financial Instruments
The Group's activities expose it to a variety of financial
risks: market risk (including foreign currency risk, interest risk
and price risk), credit risk and liquidity risk.
The condensed consolidated half year accounts do not include all
financial risk management information and disclosures required in
the annual financial statements; they should be read in conjunction
with the Group's annual financial statements as at 30 September
2018. There have been no changes in the risk management policies
and procedures since the year end.
The unlisted financial assets held at fair value are valued in
accordance with the Principles of Valuation of Unlisted Equity
Investments as detailed in Basis of Accounting and Significant
Accounting Policies (Note 16).
Fair Value Hierarchy
Fair value is the amount for which an asset could be exchanged
between knowledgeable willing parties in an arm's length
transaction.
The Group complies with IFRS 13 in respect of disclosures about
the degree of reliability of fair value measurements. This requires
the Group to classify, for disclosure purposes, fair value
measurements using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
The levels of fair value measurement bases are defined as
follows:
Level 1: fair values measured using quoted prices (unadjusted)
in active markets for identical assets or liabilities.
Level 2: fair values measured using valuation techniques for all
inputs significant to the measurement other than quoted prices
included within Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices).
Level 3: fair values measured using valuation techniques for
which any significant input to the valuation is not based on
observable market data (unobservable inputs).
The determination of what constitutes 'observable' requires
significant judgement by the Directors. The Group considers
observable data to be market data that is 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 tables represent the Group's assets by hierarchy
levels, and all fair value measurements disclosed are recurring
fair value measurements.
Financial assets at fair value through profit or loss
Level 1 Level 2 Level 3 Total
As at 31 March 2019 GBPm GBPm GBPm GBPm
------------------------------------------------- -------- -------- -------- ------
Listed and unlisted investments 39 - 175 214
------------------------------------------------- -------- -------- -------- ------
Total held at fair value through profit or loss 39 - 175 214
------------------------------------------------- -------- -------- -------- ------
Level 1 Level 2 Level 3 Total
As at 31 March 2018 GBPm GBPm GBPm GBPm
------------------------------------------------- -------- -------- -------- ------
Listed and unlisted investments 75 - 320 395
Investments held for sale - - 11 11
------------------------------------------------- -------- -------- -------- ------
Total held at fair value through profit or loss 75 - 331 406
------------------------------------------------- -------- -------- -------- ------
Financial instruments that trade on quoted market in active
markets are classified within Level 1 and the Group does not adjust
the quoted price for these instruments. Investments classified
within Level 1 are liquidity funds.
Financial instruments that trade in markets that are not
considered to be active but are valued based on quoted market
prices, dealer quotations or alternative pricing sources supported
by observable inputs are classified within Level 2.
Investments classified within Level 3 make use of significant
unobservable inputs in deriving fair value, as they trade
infrequently. As observable prices are not available for these
securities, the Group has used valuation techniques to derive the
fair value. Investments classified within Level 3 consist of
private equity direct investments and fund and secondary
positions.
6 Financial Instruments (continued)
The main inputs into the Group's valuation models for private
equity investments are EBITDA multiples (based on a rolling
12-month basis of the issuer and equivalent corresponding EBITDA
multiples of comparable listed companies), quality of earnings
assessments, assessments of third party external debt,
comparability difference adjustments, cost of capital adjustments
and probabilities of default. The Group also considers the original
transaction prices, recent transactions in the same or similar
instruments and completed third-party transactions in comparable
companies' instruments and adjusts the model as deemed
necessary.
In determining the valuation for the Group's equity instruments,
comparable trading multiples are used in arriving at the valuation
for private equity investments. In accordance with the Group's
policy, appropriate comparable public companies based on industry,
size, developmental stage, revenue generation and strategy are
determined and a trading multiple for each comparable company
identified is then calculated. The multiple is calculated by
dividing the enterprise value of the comparable group by its
EBITDA. The trading multiple is then adjusted for points of
difference such as illiquidity, the markets in which the company
operates, its competitive position and other differences,
advantages and disadvantages between the Group's portfolio company
and the comparable public companies based on company specific facts
and circumstances.
The value of private equity funds is primarily based on the
latest available financial/capital account statement of the private
equity fund. The Company may make adjustments to the value as set
out in Basis of Accounting and Significant Accounting Policies.
As at 31 March 2019, 1% (2018: 4%) of financial assets at fair
value consists of investments in private equity funds. The private
equity funds are not publicly traded and prior to maturity an exit
can only be made by the Company through a sale of its investment
and commitment through a secondary market. The carrying values of
the private equity funds may be significantly different from the
values ultimately realised on an exit via a secondary market
sale.
The following table presents the movement of assets measured at
fair value, based on fair value measurement levels.
Level 1 Level 3
2019 2018 2019 2018
----------------------------------
GBPm GBPm GBPm GBPm
---------------------------------- ------ ------ ------ --------
Opening balance 72 389 267 349
Purchases 114 39 8 11
Realisations (147) (354) (118) (26)
Increase/(decrease) in valuation - 1 18 (3)
---------------------------------- ------ ------ ------ --------
As at 31 March 39 75 175 331
---------------------------------- ------ ------ ------ --------
Increases or decreases in valuation are recognised as part of
the investment income in the Consolidated Income Statement. There
has been no transfer between levels for the six months ended 31
March 2019 or 31 March 2018.
The tables below present those investments in portfolio
companies whose fair values are recognised in whole or in part
using valuation techniques based on assumptions that are not
supported by prices or other inputs from observable current market
transactions in the same instrument and the effect of changing one
or more of those assumptions behind the valuation techniques
adopted based on reasonable possible alternative assumptions.
The changes in valuations disclosed in the table below show the
relative increase or decrease in the input variables deemed to be
subject to the most judgement and the respective impact on the fair
value presented in the accounts. Increase in the EBITDA multiple
would each lead to an increase in estimated value. However, an
increase in the comparability difference adjustment would lead to a
decrease in value.
Description Fair value as Valuation Unobservable Weighted Reasonable Change in
at technique inputs average input possible shift valuation +/-
Mar 2019 +/- GBPm
GBPm
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
Comparable
Consumer goods trading EBITDA
and services 160 multiples multiple 10.2x 1x 22/(22)
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
Comparability
difference
adjustment 26% 5% (15)/15
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
Property 3 Yield Yield % 8% 1% -
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
Comparable
Business trading EBITDA
services multiples multiple 14.1x 1x 1/(1)
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
Comparability
difference
11 adjustment 55% 5% (1)/1
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
Private equity
funds 1 NAV valuation NAV n/a 5% -
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total 175
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
6 Financial Instruments (continued)
Description Fair value as Valuation Unobservable Weighted Reasonable Change in
at technique inputs average input possible shift valuation +/-
Mar 2018 +/- GBPm
GBPm
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
Comparable
Consumer goods trading EBITDA
and services multiples multiple 10.1x 1x 46/(46)
---------------- --------------- --------------- --------------- --------------- ---------------
Comparability
difference
271 adjustment 24% 5% (29)/29
---------------- ---------------
Property 4 Yield Yield % 8% 1% -
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
Comparable
Business trading EBITDA
services multiples multiple 12.2x 1x 4/(4)
---------------- --------------- --------------- --------------- --------------- ---------------
Comparability
difference
43 adjustment 41% 5% (5)/5
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
Private equity
funds 13 NAV valuation NAV n/a 5% 1/(1)
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total 331
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
7 Share Based Payments
The Group operates two long-term incentive plans, the Long-Term
Incentive plan ("LTIP") and Share of Value Plan ("SOVP"). The
schemes are designed to provide long-term incentives for senior
management and Executive Directors of the Group to deliver
long-term shareholder returns.
The LTIP was introduced in July 2017. The SOVP scheme was
introduced in April 2018 to be a one-off award and, in respect of
its participants, will replace the LTIP and the Annual Bonus Plan
for future awards for the duration of the performance period. Both
plans are recognised as equity settled share-based payments in
accordance with IFRS 2. However, awards can be settled in cash
equivalents at the discretion of the Group Remuneration Committee.
The share-based payment schemes are recognised as equity settled on
the basis that the Group has no present obligation for settling
awards in cash, contractually or constructively i.e. as a result of
past practices.
The cost of share-based payment is recognised as an expense with
a corresponding increase in the share-based payment reserve.
Expenses are recognised over the period in which vesting conditions
are fulfilled. No expense is recognised for
awards that do not ultimately vest.
The Group Remuneration Committee determined that the approval of
the Group's new Investment Objective and Policy by shareholders at
the General Meeting on 30 October 2018, and the consequent payment
of the first Special Dividend of FY19 in December 2018 were a
"Corporate Event", as defined in the rules of the LTIP. This
Corporate Event triggered the early vesting of all outstanding
options under the LTIP to all participants, including Gavin Manson,
who has agreed to be bound by the 24-month holding period for the
shares from the vesting date. Vesting of the LTIP resulted in an
accelerated charge of GBP0.7 million in the Consolidated Income
Statement for the six months ended 31 March 2019 and the total
share-based payment charge for the period was GBP1.2 million,
recognised in the "Other expenses" of the Consolidated Income
Statement (2018: GBP0.2 million).
Details of the SOVP scheme are as follows:
Grant Date 12 April 2018
---------------------------------------------------------
Number of Unit Awards
granted 100,000
---------------------- ---------------------------------------------------------
Fair Value on Grant
Date GBP1,999,000
---------------------- ---------------------------------------------------------
Performance period Three years
---------------------- ---------------------------------------------------------
1. Continued services over the vesting period.
2. NAV growth in excess of NAV threshold plus cumulative
distributions over a normal measurement period of
Vesting conditions 1 January 2018 to 31 December 2020.
---------------------- ---------------------------------------------------------
Change in corporate All unvested awards shall vest on date of such event,
control and other at the discretion of the Group Remuneration Committee.
corporate events
---------------------- ---------------------------------------------------------
Equity settled, with option of cash alternative
Settlement method determined by the Group Remuneration Committee.
---------------------- ---------------------------------------------------------
In determining the fair value of the SOVP scheme on grant date,
the Group employed the stochastic model, with five identified key
variables which underpin the valuation of the Group investment
portfolio. The key variables are volatilities of EBITDA and EBITDA
multiples, net debt, book value and ownership percentages. The
probability of achieving the performance condition is calculated
based on the average of 100,000 simulations produced by the model
as a percentage of the maximum value that can be delivered under
the SOVP.
7 Share Based Payments (continued)
Analysis of movements in the number of options for the Group is
set out below:
Number of outstanding options 2019 2018
------------------------------- ---------- -------
As at 30 September 120,486 47,783
Granted during the period - 45,828
Vested during the period (120,486) -
As at 31 March - 93,611
--------------------------------- ---------- -------
8 Dividends
2019 2018
For the six months ended 31 March GBPm GBPm
------------------------------------------------- ----- -----
Second Special Dividend of FY19 (54p per share) 21 -
First Special Dividend of FY19 (365p per share) 140 -
Third Special Dividend of FY17 (914p per share) - 349
161 349
------------------------------------------------- ----- -----
9 Trade and other payables
The amount as at 31 March 2019 includes the GBP21 million second
Special Dividend of FY19 paid on 12 April 2019.
10 Provision for Liabilities and Charges
The amount of outstanding provisions as at 31 March 2019 is
GBP0.3 million (2018: GBP0.5 million), which includes liabilities,
such as rental incentives received upfront, recognised as deferred
income, and National Insurance contributions provided on the
incentive schemes operated by the Company. GBP0.2 million of
provisions relating to LTIPs and deferred bonuses at 30 September
2018 were utilised, as triggered by the "Corporate Event" (Note 7)
in October 2018.
11 Called up Share Capital and Reserves
2019 2018
GBPm GBPm
--------------------------------------------------------------------------------------------- ----- -----
Opening allotted, called-up and fully paid 38,282,763 (2017: 38,282,763) ordinary shares of
25p each 9 9
Closing allotted, called-up and fully paid 38,282,763 (2018: 38,282,763) ordinary shares of
25p each 9 9
--------------------------------------------------------------------------------------------- ----- -----
Own Shares Held
Own shares held are shares purchased by the Company's Employee
Benefit Trust (the "Trust") in relation to incentive schemes
operated by the Company. 90,481 shares were held by the Trust as at
31 March 2019 (2018: 107,369).
Translation Reserve
The translation reserve is used to record exchange differences
arising from the translation of the financial statements of foreign
subsidiaries.
Realised Capital Reserve
The realised capital reserve is the gains and losses on the
realisation of investments.
Unrealised Capital Reserve
The unrealised capital reserve is the changes in the value of
financial instruments measured at fair value which have been taken
through profit and loss.
Revenue Reserve
Revenue reserve is the net revenue profit and losses.
Other reserves
The share based payment reserve of GBP0.7 million as at 31 March
2019 is included in the other reserve balance (2018: GBP0.2
million).
12 NAV per Ordinary Share
The basic NAV per share is calculated by dividing the NAV of
GBP195 million (2018: GBP425 million) by the number of ordinary
shares in issue amounting to 38,282,763 (2018: 38,282,763). There
were no dilutive potential shares during the six months ended 31
March 2019 and 31 March 2018.
13 Related Party Transactions
Balances and transactions between the Company and its
subsidiaries for Group are eliminated on consolidation. Details of
transactions between the Company and other related parties are
disclosed below.
Sherborne
Sherborne Investors Management LP ("Sherborne") serves as an
adviser to the Group on research and formulation as well as making
of proposals to the Group Board of Directors. Edward Bramson, a
Director of the Company, is the managing member of Sherborne. Under
the terms of the contract, Sherborne is not entitled to a fee but
is entitled to be reimbursed for all reasonable expenses. In the
six months ended 31 March 2019, the Group paid Sherborne GBP24,043
(2018: GBP41,962) as reimbursement for travel and subsistence
costs. The outstanding amount payable by the Group to Sherborne as
at 31 March 2019 is GBP16,263 (2018: GBPnil).
14 Capital Commitments and Contingencies
There are no outstanding capital commitments or contingent
liabilities as at 31 March 2019.
15 Post Balance Sheet Event
The second Special Dividend of FY19 of GBP21 million was paid on
12 April 2019. There have been no other events with material impact
on the Company since the balance sheet date.
16 Basis of Accounting and Significant Accounting Policies
The Half Year Report is unaudited and does not constitute
financial statements within the meaning of Section 434 of the
Companies Act 2006.
The statutory financial statements for the year ended 30
September 2018, which were prepared in accordance with
International Financial Reporting Standards, as endorsed by the
European Union ("IFRS") and with those parts of the Companies Act
2006 applicable to companies reporting under IFRS, have been
delivered to the Registrar of Companies. The Auditor's opinion on
those financial statements was unqualified and did not contain a
statement made under Section 498(2) or Section 498(3) of the
Companies Act 2006.
The condensed consolidated interim financial statements comprise
the Consolidated Balance Sheets as at 31 March 2019, 30 September
2018 and 31 March 2018; the Consolidated Income Statement,
Consolidated Statement of Comprehensive Income, Consolidated
Statement of Changes in Equity and Consolidated Cashflow Statement
for the six months ended 31 March 2019 and 31 March 2018, and the
related Notes hereinafter collectively referred to as "financial
information".
The condensed consolidated interim financial statements have
been prepared in accordance with the Disclosure and Transparency
Rules of the Financial Conduct Authority, IAS34 and the principal
accounting policies and key estimates set out in the Annual Report
for the year ended 30 September 2018 which is available on
Electra's website (www.electraequity.com).
Following the announcement in October 2018 to conduct a managed
wind-down of the Group's portfolio, and consistent with the
financial statements for the year ended 30 September 2018, the
condensed consolidated interim financial statements for the six
months ended 31 March 2019 have been prepared on a basis other than
that of a going concern. However, there have been no changes to the
basis of recognition, which remains as historical cost basis of
accounting, modified to include the revaluation of certain assets
at fair value, as disclosed in the Principles of Valuation of
Investments (Note 16). The Group continues to value its financial
assets on the basis disclosed in this Note. The timeframe envisaged
for the managed wind-down of the portfolio does not affect the
valuation of assets or liabilities on the Company's balance sheet.
As at 31 March 2019, no contractual commitments had become onerous
and therefore no provisions for wind-down costs have been made. Any
future costs relating to terminating the business of the entity
will be provided for when the entity becomes obligated to make such
payments.
Application of New Standards
The following new IFRSs have become effective for annual periods
beginning on or after 1 January 2018 and have now been adopted by
the Group from its accounting period beginning on 1 October
2018.
16 Basis of Accounting and Significant Accounting Policies
(continued)
Application of New Standards (continued)
IFRS 9 Financial Instruments
There have been no changes to the measurement and classification
of the Group's investment assets and non-investment assets and
liabilities, which continue to be measured, respectively at fair
value through profit and loss and amortised cost.
The Group does not undertake any hedge accounting
activities.
In relation to the non-investment assets, an expected credit
loss method has been implemented by the Group. As at 31 March 2019,
the Group's non-investment assets consist of only GBP0.3 million
prepaid expenses and therefore no impairment provisions have been
provided.
Therefore, adoption of IFRS 9 had no material impacts on the
Group.
IFRS 15 Revenue from Contracts with Customers
The main revenue generating assets held by the Group are
classified as financial assets within the scope of IFRS 9 Financial
Instruments. On this basis, the Group's main revenue stream will be
outside the scope of IFRS 15. Sundry income generated by the Group
during the six months ended 31 March 2019 amounted to less than
GBP0.1 million and is expected to stay at similar levels in future
periods.
Therefore, adoption of IFRS 15 had no material impacts on the
Group.
The following new IFRS has been issued by the IASB, effective
for annual periods beginning on or after 1(st) January 2019, which
the Group plans to adopt from its accounting period beginning on 1
October 2019.
IFRS 16 Leases
The Group only has one leased property, which will have less
than three years left until the end of the lease agreement from the
effective date of IFRS 16. A full impact assessment, including all
transitional options has been performed by the Group as detailed in
the Annual Report and Financial Statements for the year ended 30
September 2018 and no material impacts are expected as a result of
the adoption.
Investments
Purchases and sales of listed investments are recognised on the
trade date where a contract exists whose terms require delivery
within a time frame determined by the relevant market. Purchases
and sales of unlisted investments are recognised when the contract
for acquisition or sale becomes unconditional. Investments are
designated at fair value through profit or loss (as detailed in the
financial statements as investments held at fair value) and are
subsequently measured at reporting dates at fair value. The fair
value of direct unquoted investments is calculated in accordance
with the Principles of Valuation of Investments below.
Principles of Valuation of Investments
(i) General
The Group estimates the fair value of each investment at the
reporting date in accordance with IFRS 13 and the International
Private Equity and Venture Capital Valuation ("IPEV")
Guidelines.
Fair value is the price for which an asset could be exchanged
between knowledgeable and willing parties in an arm's length
transaction. In estimating fair value, the Manager applies a
valuation technique which is appropriate in light of the nature,
facts and circumstances of the investment and uses reasonable
current market data and inputs combined with judgement and
assumptions. Valuation techniques are applied consistently from one
reporting date to another except where a change in technique
results in a better estimate of fair value.
The Group tests its valuation techniques using a tool known as
"calibration". This compares the inputs and assumptions used in
estimating fair value on the reporting date to those used on
previous reporting dates and to those underlying the initial entry
price of an investment in order to ensure that the inputs and
assumptions used on the reporting date are consistent with those
used previously.
In general, the Group will determine the enterprise value of the
investee company in question using one of a range of valuation
techniques; adjust the enterprise value for factors that would
normally be taken into account such as surplus assets, excess
liabilities or other contingencies or relevant factors; and
apportion the resulting amount between the investee company's
relevant financial instruments according to their ranking and
taking into account the effect of any instrument that may dilute
the economic entitlement of a given instrument.
16 Basis of Accounting and Significant Accounting Policies
(continued)
Principles of Valuation of Investments (continued)
(ii) Unlisted Equity Investments
In respect of each unlisted investment the Group selects one or
more of the following valuation techniques:
-- a market approach, based on the price of the recent
investment, earnings multiples or industry valuation
benchmarks;
-- an income approach, employing a discounted cash flow technique; and
-- a replacement cost approach valuing the net assets of the portfolio company.
In assessing whether a methodology is appropriate the Group
maximises the use of techniques that draw heavily on observable
market-based measures of risk and return.
Price of Recent Investment
Where the investment being valued was itself made recently, its
cost may provide a good indication of fair value. Using the Price
of Recent Investment technique is not a default and at each
reporting date the fair value of recent investments is estimated to
assess whether changes or events subsequent to the relevant
transaction would imply a change in the investment's fair
value.
Multiple
Typically, the Group uses an earnings multiple technique. This
involves the application of an appropriate and reasonable multiple
to the maintainable earnings of an investee company.
The Group usually derives a multiple by reference to current
market-based multiples, reflected in the market valuations of
quoted comparable companies or the price at which comparable
companies have changed ownership. Differences between these
market-based multiples and the investee company being valued are
reflected by adjusting the multiple for points of difference which
might affect the risk and earnings growth prospects which underpin
the earnings multiple. Such points of difference might include the
relative size and diversity of the entities, rate of earnings
growth, reliance on a small number of key employees, diversity of
product ranges, diversity and quality of customer base, level of
borrowing and any other reason the quality of earnings may
differ.
In respect of maintainable earnings, the Group usually uses
earnings for the most recent 12-month period adjusted if necessary,
to represent a reasonable estimate of maintainable earnings. Such
adjustments might include exceptional or non-recurring items, the
impact of discontinued activities and acquisitions, or forecast
material changes in earnings.
In some circumstances the Group may apply a multiple to the net
assets of a business, typically where the business's value derives
mainly from the underlying fair value of its assets rather than its
earnings, such as property holding companies.
Discounted Cash Flow
The Discounted Cash Flow technique involves deriving the value
of a business or an investment by calculating the present value of
the estimated future cash flows from that business or investment
using reasonable assumptions and estimations of expected future
cash flows, the terminal value or maturity amount and date, and the
appropriate risk-adjusted rate that captures the risk inherent to
the business or investment. The Group usually uses the Discounted
Cash Flow technique in respect of certain debt investments or where
the realisation of an investment is imminent with the pricing of
the relevant transaction being substantially agreed such that the
technique is likely to be the most appropriate one.
(iii) Listed Investments
The fair value of financial instruments traded in active markets
is based on quoted market prices at the reporting date. A market is
regarded as active if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing
service or regulatory agency, and transactions for an asset take
place with sufficient frequency and volume to provide pricing
information on an on-going basis. The quoted market price used for
listed financial instruments held by the Group is the bid price on
the reporting date.
(iv) Fund Investments
In determining the fair value of investments in funds, the net
asset value of the fund as reported by the manager is used as the
starting point. The Group may make adjustments to the reported net
asset value to reflect, for example, purchases and sales occurring
between the fund's measurement date and the reporting date, or any
other facts or circumstances which might impact the fair value of
the fund.
(v) Money Market Investments
Investments in money market funds are held at the current fair
value of the units invested.
(vi) Accrued Income
Accrued income is included within investment valuations.
16 Basis of Accounting and Significant Accounting Policies
(continued)
Cash and Cash Equivalents
Cash comprises cash at bank and is measured at amortised
cost.
Foreign Currencies
The Group's and Company's presentational and functional currency
is Pounds Sterling ("sterling"), since that is the currency of the
primary economic environment in which the Group operates.
Transactions in currencies other than sterling are recorded at the
rates of exchange prevailing on the dates of the transactions.
Foreign currency assets and liabilities are translated into the
functional currencies of the Group's respective entities at rates
prevailing at the balance sheet date. Foreign currency revenue and
expenses are translated into the functional currencies of the
Group's respective entities at the month end rate for the period
the transaction occurred. Exchange differences arising are
recognised through the Consolidated Income Statement.
At each balance sheet date, assets and liabilities of foreign
operations are translated into sterling at the rates prevailing on
the balance sheet date. Foreign exchange differences arising on
retranslation of the equity and reserves of subsidiaries with
functional currencies other than sterling, are recognised directly
in the Translation Reserve in equity. Foreign exchange differences
arising on the retranslation of non-monetary items carried at fair
value are included in the Consolidated Income Statement.
Investment Income
Dividends receivable from equity shares are accounted for on the
ex-dividend date or, where no ex-dividend date is quoted, are
accounted for when the Group's right to receive payment is
established. Fixed returns on non-equity shares and debt securities
are recognised on a time apportionment basis so as to reflect the
effective yield when it is probable that economic benefit will flow
to the Group. Where income accruals previously recognised, but not
received, are no longer considered to be reasonably expected to be
received, either through investee company restructuring or doubt
over its receipt, then these amounts are reversed through expenses.
Income distributions from limited partnership funds are recognised
when the right to distribution is established.
Other Income
Interest income received from money market funds are accounted
for as the interest is accrued on an effective interest rate
basis.
Expenses
Expenses are charged through the revenue column of the
Consolidated Income Statement.
Exceptional expenses
Exceptional expenses are those items that are material either
because of their size or their nature and are presented within
their relevant Consolidated Income Statement category, disclosed
separately in the Note 2.
Operating Lease Expense
Payments made under operating leases are recognised in the
Consolidated Income Statement on a straight-line basis over the
term of the lease. Lease incentives received are recognised in the
Consolidated Income Statements as an integral part of the total
lease expense and are therefore also recognised on a straight-line
basis over the term of the lease.
Defined Contribution Plan
The Group operates a defined contribution pension plan under
which the Group pays fixed contributions. Pension contributions are
recognised as expenses in the Consolidated Income Statement, as
incurred.
Taxation
The tax effect of different items of income/gain and
expense/loss is allocated between capital and revenue on the same
basis as the particular item to which it relates, using the
Company's effective rate of tax for the accounting year.
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from profit before tax as reported in
the Consolidated Income Statement because it excludes items of
income or expense that are taxable or deductible in other years and
it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit and is accounted for using the
balance sheet liability method.
16 Basis of Accounting and Significant Accounting Policies
(continued)
Deferred tax (continued)
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates
except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future. Deferred tax
assets arising from deductible temporary differences associated
with such investments and interests are only recognised to the
extent that it is probable that there will be sufficient taxable
profits against which to utilise the benefits of the temporary
differences and they are expected to reverse in the foreseeable
future.
Deferred tax is not recognised if the temporary difference
arises from the initial recognition of assets and liabilities in a
transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the year when the liability is settled, or the asset is
realised based on tax laws and rates that have been enacted or
substantively enacted at the balance sheet date. Deferred tax is
charged or credited in the income statement, except when it relates
to items charged or credited in other comprehensive income, in
which case the deferred tax is also dealt with in other
comprehensive income.
The measurement of deferred tax liabilities and assets reflects
the tax consequences that would follow from the manner in which the
Group expects, at the end of the reporting year, to recover or
settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
Provisions
Provisions are recognised when the Group has a present
obligation of uncertain timing or amount as a result of past events
and it is probable that the Group will be required to settle that
obligation and a reliable estimate of that obligation can be made.
The provisions are measured at the Directors' best estimate of the
amount to settle the obligation at the balance sheet date. Changes
in provisions are recognised in the Consolidated Income
Statement.
Revenue and Capital Reserves
Net capital return is added to the Capital Reserve in the
Consolidated Statement of Changes in Equity, while the net revenue
return is added to the Revenue Reserve.
Receivables and Payables
Receivables and payables are typically settled in a short time
frame and are carried at the amount due to be settled. As a result,
the fair value of these balances is considered to be materially
equal to the carrying value, after taking into account potential
impairment losses.
Share Capital
Ordinary shares issued by the Group are recognised at the
proceeds or fair value received with the excess of the amount
received over nominal value being credited to the share premium
account. Direct issue costs net of tax are deducted from
equity.
Share Based Payments
The Company operates two long-term incentive plans, both of
which meet the definition of share-based payments under IFRS 2.
Where appropriate, share-based payments are measured at fair value
on grant date, which is estimated using commonly used and accepted
models. The cost of share-based payments is spread over the period
until the awards vest and is recognised as an expense in the Income
Statement with a corresponding increase in the equity reserves.
Where share-based payments have market vesting conditions, the full
charge is recognised irrespective of the conditions being met,
provided all other performance and/or service conditions are
satisfied.
16 Basis of Accounting and Significant Accounting Policies
(continued)
Critical Accounting Judgements and Key Sources of Estimation
Uncertainty
Critical accounting judgements and key sources of estimation
uncertainty used in preparing the financial information are
continually evaluated and are based on historical experience and
other factors, including expectations of future events that are
believed to be reasonable. The resulting judgements and estimates
will, by definition, seldom equal the related actual results. In
the course of preparing the financial statements, no judgements
have been made in the process of applying the Group's accounting
policies.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources
of estimation uncertainty in the reporting year, that may have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year,
are discussed below.
Financial assets fair value measurements
Unquoted assets are measured at fair value in accordance with
IFRS 13 and the IPEV Guidelines for financial reporting purposes.
Judgement is required in order to determine the appropriate
valuation methodology and subsequently in determining the inputs
into the valuation model used. These judgements include making
assessments of the future earnings potential of portfolio
companies, appropriate earnings multiples to apply, and adjustments
to comparable multiples. The Group's Board of Directors has set up
a Valuations Committee, which is chaired by a Non-Executive
Director, to determine the appropriate valuation techniques and
inputs for fair value measurements.
In estimating the fair value of an asset, the Group uses
market-observable data to the extent it is available. Where Level 1
inputs are not available, the Group uses internal experts to
perform the valuation. The Valuations Committee works closely with
the internal expert and G10 Capital Limited to establish the
appropriate valuation techniques and inputs to the model.
The Chairman of the Valuations Committee reports its findings to
the Group's Board of Directors every six months to explain the
cause of fluctuations in the fair value of the assets and
liabilities.
Sensitivity analysis on key sources of estimation has been
disclosed in Note 6. Information about the valuation techniques and
inputs used in determining the fair value of various assets and
liabilities are disclosed above in this Note.
Independent Review Report to Electra Private Equity PLC
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 March 2019 which comprises the Consolidated
Income Statement, the Consolidated Statement of Comprehensive
Income, the Consolidated Statement of Changes in Equity, the
Consolidated Balance Sheet, the Consolidated Statement of Cash
Flows and the related notes 1 to 16. We have read the other
information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council. Our work has been undertaken so that we might
state to the Company those matters we are required to state to it
in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company, for our review
work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in Note 16, the annual financial statements of the
Company are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34 "Interim
Financial Reporting" as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
March 2019 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
Emphasis of matter - Financial statements prepared other than on
a going concern basis
We draw attention to Note 16 in the financial statements, which
indicates that the financial statements have been prepared on a
basis other than that of a going concern. Our conclusion is not
modified in respect of this matter.
Deloitte LLP
Statutory Auditor
London, United Kingdom
15 May 2019
Half Year Report
Current and Future Development
A review of the main features of the six months to 31 March 2019
is contained in the Chairman's Statement and Portfolio Review.
Performance
A detailed review of performance during the six months to 31
March 2019 is contained in the Portfolio Review.
Risk Management
The Company has put in place an Investment Management Agreement
with G10 for the provision of risk management services as required
by the AIFMD rules. The Manager has oversight of risk management
and the ongoing process of identifying, evaluating, monitoring and
managing the risks facing the Company in accordance with AIFMD.
The principal risks facing the Company are considered by the
Board to be Portfolio Diversification Risk, Strategy Implementation
Risk, Investment Risk, Solvency and Liquidity Risk, Macroeconomic
Risk, Valuation Risk, Operational Risk, Gearing Risk, Foreign
Currency Risk, and Cash Drag Risk, as set out in the Company's
Annual Report and Financial Statements for the year ended 30
September 2018 along with the risks detailed in Note 18 of the
Notes to the Financial Statements for the same year. The principal
risks have not changed significantly since the year end.
Related Party Transactions
Details of related party transactions for the six months ended
31 March 2019 are disclosed in Note 13.
Going Concern
Consistent with the year ended 30 September 2018, the Half Year
Report is prepared on a basis other than going concern.
Forward Looking Statement
Certain statements in this Half Year Report are forward-looking.
Although the Company believes that the expectations in these
forward-looking statements are reasonable, it can give no assurance
that these expectations will prove to have been correct. Because
these statements involve risks and uncertainties, actual results
may differ materially from those expressed or implied by these
forward-looking statements. The Company undertakes no obligation to
update any forward-looking statements whether as a result of new
information, future events or otherwise.
Responsibility Statement
The Directors confirm to the best of their knowledge that:
a) The condensed consolidated interim financial statements have
been prepared in accordance with IAS 34 as adopted by the European
Union.
b) The Half Year Report includes a fair review of the information required by:
(i) DTR 4.2.7 of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed
set of financial statements; and a description of the principal
risks and uncertainties for the remaining six months of the year;
and
(ii) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first six
months of the current financial year and that have materially
affected the financial position or performance of the Company
during that period; and any changes in the related party
transactions described in the last annual report that could do
so.
Approved by the Board of Directors and signed on its behalf
by
Neil Johnson
Chairman
15 May 2019
Information for Shareholders
Financial Calendar for 2018/19
Half Year Results announced May 2019
Annual Results announced December 2019
Annual General Meeting March 2020
Website and Electra News via Email
For further information on share prices, regulatory news and
other information, visit www.electraequity.com.
If you would like to receive updates from us, please visit the
Electra website at www.electraequity.com and click on the
"Subscribe to receive news alerts" logo on the home page.
Registering for email alerts will not stop you receiving Annual
Reports or any other documents you have selected to receive by post
or electronically.
Shareholder Enquiries
In the event of queries regarding your ordinary shareholding,
contact the Company's registrar, Equiniti Limited, who will be able
to assist you with:
-- Registered holdings
-- Balance queries
-- Lost certificates
-- Change of address notifications
Equiniti Limited's full details are provided on page 31 or
please visit www.equiniti.com.
If you are an existing shareholder and wish to buy more/sell
your shares in Electra:
An internet and telephone dealing service has been arranged
through Equiniti, which provides a simple way for UK shareholders
of Electra to buy or sell Electra's shares. For full details and
terms and conditions simply log onto www.shareview.co.uk/dealing or
call 0371 384 2351. Please note that lines are open 8.30am to
5.30pm (UK time) Monday to Friday (excluding public holidays in
England and Wales).
The service is only available to shareholders of Electra who
hold shares in their own name, with a UK registered address, who
are aged 18 and over.
Shareview Dealing is provided by Equiniti Financial Services
Limited. Equiniti Financial Services Limited is authorised and
regulated by the Financial Conduct Authority of 12 Endeavour
Square, London E20 1JN (FCA reference 468631). Equiniti Financial
Services Limited is registered in England and Wales with number
6208699.
If you are not an existing shareholder:
We recommend you seek your own personal financial advice from an
appropriately qualified independent adviser or alternatively
contact your own broker. Electra Private Equity PLC's shares are
listed on the London Stock Exchange as ELTA.
Please note: The above information is not a recommendation to
buy or sell shares. The value of shares and any income from them
can fluctuate and you may get back less than the amount invested.
If you have any doubt over what action you should take, please
contact an authorised financial adviser.
Trading Information - Ordinary Shares
Listing London Stock Exchange
ISIN GB0003085445
SEDOL 0308544
Ticker/EPIC code ELTA
Bloomberg ELTALN
Reuters ELTAL
Share Fraud Warning
We are aware that in the past a number of shareholders have
received unsolicited phone calls or correspondence concerning
investment matters. These are typically from overseas based brokers
who target UK shareholders, offering to sell them what often turn
out to be worthless or high-risk shares. These operations are
commonly known as Boiler Room scams.
Please be very wary of any such calls or correspondence. Ask for
the name and organisation of the person calling you and check if
they can be found on the FCA Register. If they are not listed,
please report it directly to the FCA using their consumer helpline
(0800 111 6768). You may also wish to advise us by telephoning 020
3874 8300 or emailing IR@electrapeplc.com.
It is very unlikely that either the Company or the Company's
Registrars, Equiniti, would make unsolicited telephone calls to
shareholders. Such calls would only relate to official
documentation already circulated to shareholders and never be in
respect of investment advice.
Please remember that if you use an unauthorised firm to buy or
sell shares, you will not be eligible to receive payment under the
Financial Services Compensation Scheme if things go wrong.
Other Useful Websites
LPEQ
LPEQ is a group of private equity investment trusts and similar
vehicles listed on the London Stock Exchange and other major
European stock markets, formed to raise awareness and increase
understanding of listed private equity.
LPEQ provides information on private equity in general, and the
listed sector in particular, undertaking and publishing research
and working to improve levels of knowledge about private equity
among investors and their advisers.
For further information visit www.lpeq.com
Association of Investment Companies ("AIC")
The AIC is the trade organisation for closed-ended investment
companies. The AIC represents a broad range of closed-ended
investment companies, including investment trusts, offshore
investment companies and venture capital trusts which are traded on
the London Stock Exchange, Alternative Investment Market, Special
Financials Market, Euronext and the Channel Islands Stock
Exchange.
For further information visit www.theaic.co.uk
British Private Equity & Venture Capital Association
("BVCA")
The BVCA is the industry body and public policy advocate for the
private equity and venture capital industry in the UK. The BVCA's
aim is to aid understanding around the activities of its members,
promote the private equity and venture capital industry to
entrepreneurs and investors as well as to the Government, the EU,
trade unions, international media and the general public. It
communicates the industry's impact and reinforces the crucial role
its members play in the global economy as a catalyst for change and
growth.
For further information visit www.bvca.co.uk
Glossary
AIF
Alternative Investment Fund. Electra Private Equity PLC is an
AIF.
AIFM
The Alternative Investment Fund Manager (AIFM) for Electra
Private Equity PLC is G10.
AIFMD
Alternative Investment Fund Managers Directive 2011/61/EU of the
European Parliament.
Commitments
Legal obligation to provide capital for future investment in a
private equity fund or in relation to a single investment.
Earnings Multiple
This is normally referred to as a price earnings (P/E) ratio. It
is the ratio of a company's valuation compared to its earnings.
EBITDA
Earnings Before Interest, Tax, Depreciation and Amortisation.
Often used to compare the profitability of similar companies.
EBITA
Earnings Before Interest, Tax and Amortisation.
EBITDA Margin
EBITDA expressed as a percentage derived by dividing EBITDA by
net sales.
EV (enterprise value)
This is the aggregate value of a company's entire issued share
capital and net debt.
Gearing
This is the level of a company's debt related to its equity
capital and is usually expressed in percentage form. It shows the
extent to which a company is funded by lenders as opposed to
shareholders.
Investment Return
This is the aggregate of income and capital profits and losses
from the investment portfolio. This is sometimes disclosed as
portfolio return. This is a common measure used by investment
companies.
IRR (internal rate of return)
This is the annualised return on an investment calculated from
the cash flows arising from that investment taking account of the
timing of each cash flow. It is derived by computing the discount
rate at which the present value of all subsequent cash flows
arising from an investment are equal to the original amount
invested. Where an IRR is stated to be net, this denotes that it
has been calculated net of investment management fees (PPS and
carried interest).
Listed Company
Any company where the shares are freely tradable and are listed
or traded on a recognised stock exchange.
NAV
This is the value of all the Company's assets minus current and
long-term liabilities. Can also be referred to as "shareholders'
funds".
NAV per share
This is the value of the Company's assets attributable to one
ordinary share. It is calculated by dividing "shareholders' funds"
by the total number of ordinary shares in issue. This is a common
measure used by investment companies.
NAV Total Return
The total return to shareholders is the aggregate of income and
capital profits of the investment portfolio for the period less all
costs. It can be expressed as a percentage of the opening position.
This is a common measure used by investment companies.
Six months to 31 March Three years to 31 March
Reported under IFRS 2019 2018 2019 2018
------------------------------------ ---------------- ----------------- ----------------- --------------
Dividend per share (pence) 419 914 5,038 4,710
Decrease in NAV per share (pence) (383) (872) (3,896) (2,439)
------------------------------------ ---------------- ----------------- ----------------- --------------
Total return (pence) 36 42 1,142 2,271
Opening NAV per share (pence) 892 1,981 4,405 3,548
------------------------------------ ---------------- ----------------- ----------------- --------------
NAV total return 4% 2% 26% 64%
------------------------------------ ---------------- ----------------- ----------------- --------------
NAV Uplift
This is the closing NAV divided by adjusted opening NAV. This is
a common measure used by investment companies.
Reported
under
IFRS 2019 2018
----------- ------------------------------------------------------------------------------------- ------------------
Opening
NAV
(GBPm) 342 758
Dividends
during
the
period
(GBPm) (160) (349)
----------- ------------------------------------------------------------------------------------- ------------------
Adjusted
opening
NAV
(GBPm) 182 409
Closing
NAV
(GBPm) 195 425
----------- ------------------------------------------------------------------------------------- ------------------
NAV Uplift
(GBPm) 13 16
NAV Uplift
% 7.1% 3.9%
----------- ------------------------------------------------------------------------------------- ------------------
Calculation of Diluted and Basic NAV
The unaudited NAV per share at 31 March 2019 and audited NAV per
share at 30 September 2018 are both calculated on the basis of the
38,282,763 ordinary shares in issue.
Return on Capital Employed ("ROCE")
ROCE is the EBITA divided by capital employed. ROCE has been
used to compare the efficiency with which the portfolio companies
employ their capital.
Total Shareholder Return ("TSR")
TSR is the percentage increase in share price over the period,
where the closing price is multiplied by an adjustment factor for
each dividend paid in the year ("dividend adjusted closing
price").
To calculate the dividend adjusted closing price, the closing
price is multiplied by an adjustment factor for each dividend paid
in the year. The adjustment factor is the share price on the day
prior to the ex-dividend date divided by the amount of the dividend
subtracted from that prior day's price. Where there are multiple
dividends in the year, the cumulative adjustment factor is the
product of the adjustment factor for each dividend paid.
Share price (p) Dividend adjustment factor Dividend adjusted share price (p)
------------------------------ ---------------- --------------------------- ----------------------------------
30/09/2018 879 - 879
31/03/2019 325 2.07 671
------------------------------ ---------------- --------------------------- ----------------------------------
Total Shareholder Return (%) (24)%
------------------------------ ---------------- --------------------------- ----------------------------------
Dividend per share (p) Share price prior to ex-div date Adjustment factor
(p)
------------------------------ ----------------------- --------------------------------- ------------------
15/11/2018 365 834 1.78
14/03/2019 54 388 1.16
------------------------------ ----------------------- --------------------------------- ------------------
Cumulative Adjustment Factor 2.07
------------------------------ ----------------------- --------------------------------- ------------------
Unlisted Company
Any company whose shares are not listed or traded on a
recognised stock exchange.
Contact Details
Electra Private Equity PLC
Board of Directors
Neil Johnson (Executive Chairman)
Gavin Manson (Chief Financial Officer)
Edward Bramson
Paul Goodson
David Lis
Linda Wilding
Telephone +44 (0)20 3874 8300
www.electraequity.com
Company Secretary and Administrator
Frostrow Capital LLP
25 Southampton Buildings, London, England, WC2A 1AL
Telephone +44 (0)20 3008 4910
Registered Office
(Registered in England: Company No. 00303062)
First Floor, 50 Grosvenor Hill, London, England, W1K 3QT
Investor Relations
Gavin Manson
Telephone +44 (0)20 3874 8300
Email IR@electrapeplc.com
Registered Independent Auditors
Deloitte LLP
Statutory Auditor
Hill House, 1 Little New Street, London, England, EC4A 3TR
Alternative Investment Fund Manager
G10 Capital Limited
136 Buckingham Palace Road, London, England, SW1W 9SA
Joint Stockbrokers
HSBC
8 Canada Square, Canary Wharf, London, England, E14 5HQ
Morgan Stanley Investment Management Limited
25 Cabot Square, Canary Wharf, London, England, E14 4QA
Depositary
Ipes Depositary (UK) Limited
9th Floor, No 1 Minster Court, Mincing Lane, London, England,
EC3R 7AA
Registrar and Transfer Office
Equiniti Limited
Aspect House, Spencer Road, Lancing, West Sussex, England, BN99
6DA
Telephone (UK) 0371 384 2351 *
Textel/hard of hearing line (UK) 0371 384 2255 *
Telephone (overseas) +44 121 415 7047
* Lines open 8.30am to 5.30pm (UK time), Monday to Friday
(excluding public holidays in England and Wales).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BLGDUXDBBGCU
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