TIDMICGT
4 October 2018
ICG ENTERPRISE TRUST PLC
UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHSED 31 JULY 2018
PROFIT GROWTH AND EXIT ACTIVITY CONTINUES TO DRIVE STRONG PERFORMANCE
-- NAV per share of 1,026p - total return of 8.1% in the six months
-- Well ahead of the FTSE-All Share, which returned 5.0%
-- Strong underlying profit growth and realisations at significant uplifts
-- 7.9% constant currency return on the investment Portfolio; 10.4%
return in Sterling
-- 14% aggregate LTM1 earnings growth from largest 30 Companies; 47%
of the portfolio
-- Realisations at 31% uplift; 2.3x multiple of cost
-- Highly cash generative Portfolio - GBP85m of proceeds received
-- Continued focus on deploying capital into highly defensive businesses
-- GBP76m of new investments made; 61% of capital deployed into high
conviction assets of ICG funds, co-investments and secondary fund
investments
-- Four co-investments and one secondary investment completed
-- High conviction investments now 44% of the Portfolio; weighted
towards largest 30 Companies
-- Six new primary commitments
-- GBP102m of new commitments to six funds
-- Two new US relationships - The Jordan Company and Tailwind Capital
-- Strategic benefits of the scale and resources of ICG's global platform
continue to add significant value
-- GBP20m of co-investment alongside ICG; ICG managed investments
represent 22% of the Portfolio
-- Proprietary opportunities sourced through the ICG network are
proving to be particularly attractive
-- Portfolio more geographically diverse; US exposure 24% of the
Portfolio
-- Portfolio well-positioned to continue to generate significant shareholder
value
-- High quality Portfolio with strong underlying profit growth
-- Weighted towards companies that primarily have non-cyclical growth
drivers
-- Attractive and well-balanced maturity; balancing near term
realisation prospects and medium-longer term growth
-- Quarterly dividend of 5p per share
-- Total dividends for Q1 and Q2 of 10p per share
-- Continued short, medium and long-term outperformance of public markets
Performance to
31 July 2018 6 months 1 year 3 year 5 year 10(2) year
--------------- -------------- --------- --------- --------- ----------
Net asset value per
share (total
return) +8.1% +11.9% +55.4% +66.8% +126.4%
Share price (total
return) +5.5% +17.3% +55.4% +97.3% +142.2%
FTSE All-Share Index
(total return) +5.0% +9.2% +30.2% +44.9% +113.9%
Emma Osborne, ICG, commented:
"The Portfolio continues to deliver, with underlying profit growth and
realisation activity driving strong returns. As our managers continue to
take advantage of the favourable environment to sell companies, we
remain disciplined and selective when deploying capital, focusing on
defensive companies in sectors with non-cyclical growth drivers, such as
education and healthcare.
"We have a high quality Portfolio, a strong pipeline of opportunities
and we believe the Portfolio is well-positioned to continue to generate
significant shareholder value."
Enquiries
Analyst / Investor enquiries:
Emma Osborne, Portfolio Manager, ICG +44 (0) 20 3201 7700
Ian Stanlake, Head of Finance and Investor Relations, ICG
+44 (0) 20 3201 7700
Media
Alicia Wyllie, Co-Head of Corporate Communications, ICG
+44 (0) 20 3201 7917
Vikki Kosmalska, Associate Partner, Maitland AMO
+44 (0) 20 7379 5151
Financials
Six months to/as at 12 months to/as at
31 July 2018 31 January 2018
NAV per share 1,026p 959p
NAV total return 8.1% 12.5%
Sterling return on investment
Portfolio 10.4% 15.3%
Constant currency return on
investment Portfolio 7.9% 16.4%
Realisations GBP85m GBP227m
Cash proceeds as a % of opening
portfolio value 14% 37%
Realisations -- uplift to
carrying value 31% 40%
Realisations -- multiple of cost 2.3x 2.7x
Capital deployed GBP76m GBP142m
% of Capital deployed into high
conviction companies 61% 42%
High conviction investments as a
% of the Portfolio 44% 42%
New primary fund commitments GBP102m GBP110m
Dividend 10p 21p
Notes
We assess performance using a variety of measures that are not
specifically defined under IFRS and are therefore termed as Alternative
Performance Measures ("APMs"). APMs have been used if considered by the
Board and the Manager to be the most relevant basis for shareholders in
assessing the overall performance of the Company, and for comparing the
performance of the Company to its peers and its previously reported
results. The Portfolio is an APM and is defined as the aggregate of the
investment portfolios of the Company and of its subsidiary limited
partnerships. The Glossary includes further details of APMs and
reconciliations to IFRS measures, where appropriate. The rationale for
the APMs is discussed in detail in the Manager's Review.
In the Chairman's Foreword, Manager's Review and Supplementary
Information, all performance figures are stated on a total return basis
(i.e. including the effect of re-invested dividends).
ICG Alternative Investment Limited, a regulated subsidiary of
Intermediate Capital Group plc, acts as the Manager of the Company.
Disclaimer
This report may contain forward looking statements. These statements
have been made by the Directors in good faith based on the information
available to them up to the time of their approval of this report and
should be treated with caution due to the inherent uncertainties,
including both economic and business risk factors, underlying such
forward looking information.
These written materials are not an offer of securities for sale in the
United States. Securities may not be offered or sold in the United
States absent registration under the US Securities Act of 1933, as
amended, or an exemption therefrom. The issuer has not and does not
intend to register any securities under the US Securities Act of 1933,
as amended, and does not intend to offer any securities to the public in
the United States. No money, securities or other consideration from any
person inside the United States is being solicited and, if sent in
response to the information contained in these written materials, will
not be accepted. This report contains information which, prior to this
announcement, was inside information.
Chairman's Foreword(3)
I am delighted to report another period of strong performance, with net
assets increasing from GBP664m to GBP711m or 1,026p per share, a total
return of 8.1% over the six months(4) , well ahead of the FTSE All-Share,
which returned 5.0%.
Our high-quality Portfolio continues to deliver strong underlying profit
growth and realisations at significant uplifts. The Portfolio remains
highly cash generative, with GBP85m of proceeds received in the six
months. In an environment of increasing geopolitical uncertainty and
where pricing for new investments is high, the investment team remain
cautious in deploying capital, focusing on high quality defensive
businesses. New investments totalled GBP76m with 61% of capital deployed
into high conviction companies, taking advantage of third party
co-investment opportunities and the proprietary deal flow from ICG.
We know that a reliable source of income is an important consideration
for shareholders so last year we committed to a progressive annual
dividend policy and quarterly payments. In line with this policy, a
quarterly dividend of 5p was paid on 7 September 2018 and a further
quarterly dividend of 5p will be paid on 7 December 2018.
We continue to make progress against our strategic goals, benefitting
from the scale and resources of ICG's global platform. Our
differentiated portfolio and highly selective investment approach have
created significant shareholder value over multiple cycles. Both the
share price and NAV growth continue to outperform the FTSE All-share
over the short, medium and long term and we believe your Company is well
positioned to continue to deliver strong returns for shareholders.
Jeremy Tigue
Chairman
3 October 2018
Manager's Review
Strategy overview
Our strategy balances high conviction investments with a diversified
portfolio of third party funds
We focus on the buyout segment of the private equity market, in which
target companies are almost invariably established, profitable and cash
generative, which we believe will generate the most consistently strong
returns.
We invest in companies managed by ICG and other leading private equity
managers, in both cases through specialist funds as well as directly.
This approach allows us to proactively increase exposure to companies
that we have a high conviction will outperform, enabling us to strike
the right balance between concentration and diversification. While
diversification at both the manager and company level reduces risk,
concentration in our high conviction investments enhances returns and
allows individual winners to make a difference to performance.
Portfolio of leading private equity funds provides a base of strong
diversified returns
Our third-party funds portfolio makes up 56% of the Portfolio and
underpins our strategy providing a base of strong diversified returns
and deal flow for the third-party direct co-investments and secondary
investments in our high conviction portfolio.
The underlying funds have a bias to mid-market and large-cap European
and US private equity managers and over the last five years this
portfolio has generated a constant currency return of 13% p.a.
High conviction portfolio of actively sourced investments enhance
returns
Our high conviction portfolio includes investments managed directly by
the four ICG investment teams that we partner with as well as our third
party co-investments and secondary funds. The common theme in our high
conviction portfolio is that we have selected the underlying companies
and this approach is in contrast to a conventional fund of funds in
which the third party managers make all the underlying investment
decisions.
Our high conviction portfolio is weighted towards investments in our 30
largest underlying companies and has generated a constant currency
return of 18% p.a. over the last five years. We have a strategic goal of
increasing the weighting to these investments to 50% - 60% of the
Portfolio.
Portfolio overview
The Portfolio has investments in 84 funds, managed by 38 leading private
equity managers and at 31 July 2018, was valued at GBP654m (31 Jan 18:
GBP601m), of which third party funds were valued at GBP367m of the
Portfolio (31 Jan 18: GBP349m), with high conviction investments valued
at GBP287m (31 Jan 18: GBP252m).
31 July
2018 31 January 2018
Investment category % of portfolio % of portfolio
------------------------------------ -------------- ---------------
High conviction investments
ICG managed investments 22 18
Third party co-investments 17 17
Third party secondary investments 5 7
Total High conviction investments 44 42
Third party funds' portfolio
Graphite Capital primary funds 14 15
Third party primary funds 42 43
Total diversified fund investments 56 58
------------------------------------ -------------- ---------------
Total 100 100
------------------------------------- -------------- ---------------
Performance overview
Operating performance and realisation activity continue to drive strong
returns
Strong operating performance and realisations at significant uplifts to
carrying value have generated a constant currency return of 7.9% during
the six months, or 10.4% in Sterling, further extending the average
14.8% p.a. constant currency growth that the Portfolio has generated
over the last five years. Almost a quarter of the underlying Portfolio
gain in the six months came from exit activity.
Six months Year ended
Movement in the portfolio to 31 July 31 January
GBPm 2018 2018
------------------------------------------------------ ---
Opening Portfolio* 600.7 594.4
Third-party funds portfolio drawdowns 29.8 82.3
High conviction investments -- ICG funds, secondary
investments and co-investments 46.7 59.6
Total new investment 76.5 141.9
Realisation Proceeds (84.9) (226.6)
Net cash (inflow)/outflow (8.4) (84.7)
Underlying Valuation Movement** 47.5 97.7
Currency movement 14.7 (6.7)
Closing Portfolio* 654.5 600.7
-------- --------
% underlying Portfolio growth (local currency) 7.9% 16.4%
% currency movement 2.5% (1.1%)
% underlying Portfolio growth (Sterling) 10.4% 15.3%
* Refer to the Glossary for reconciliation to the
portfolio balance presented in the unaudited results.
** 94% of the Portfolio is valued using 30 June 2018
(or later) valuations (31 Jan 18: 94%).
High quality portfolio with top 30 companies reporting double digit
earnings and revenue growth
Our largest 30 underlying companies, which represent 47% of the
Portfolio by value (31 Jan 18: 47%) and are dominated by our high
conviction companies, continue to perform well, reporting aggregate LTM
earnings growth of 14% and revenue growth of 13%. It is particularly
encouraging that around a third of these companies are generating LTM
earnings growth in excess of 20%, driven by both organic growth and M&A
activity. Over the six months, valuation multiples increased marginally
to 10.8x from 10.6x, a reflection of the change of mix and weightings in
the largest 30 underlying companies rather than an increase in aggregate
multiples overall. The net debt/EBITDA ratio has fallen marginally from
4.2x to 4.0x. As we look across the Portfolio, the growth and valuation
trends are similar.
Realisation activity(5)
Continued strong realisation activity at significant uplifts to carrying
value and cost
The Portfolio remains highly cash generative. After record realisations
in the year to 31 January 2018, our underlying managers continued to
take advantage of the favourable exit environment generating proceeds of
GBP85m, or 14% of the opening Portfolio value, in the six months to 31
July 2018.
The sales of 34 companies were completed at an average uplift of 31%(6)
to the previous carrying value, which is broadly in line with the
average uplift over the preceding five years. The average return
multiple of 2.3x cost was in-line with the average of 2.2x(7) over the
last five financial years, reflecting a number of highly successful
investments realised in the period with almost half by number being sold
for more than 2.5x cost.
Four of the largest 30 underlying companies were realised: The Laine
Pub Company and Swiss Education Group, high conviction co-investments
managed by Graphite Capital and Invision Capital respectively, as well
as CeramTec and TMF from our third party funds portfolio, including a
secondary investment in the latter company.
New investment activity
Selective investment into high conviction opportunities
We continue to be selective in our investment approach and, with a focus
on the highest quality defensive businesses, we completed four
co-investments and one small secondary in the six months. These,
together with investments made by ICG funds, drove high conviction
investments to 61% of the GBP76m of capital deployed, up from 42% in the
year to January 2018. This increase in high conviction investments was
primarily driven by an increase in investments sourced through the ICG
network which accounted for 46% of new investment, as the strategic
benefits of the move to ICG in 2016 continue to add value. The larger
investments made in the period were:
-- Minimax (a global provider of fire protection systems and services),
alongside ICG Europe, in which we invested GBP12m. ICG has a 12 year
history with this business and is the sole institutional equity provider
in the most recent management buyout transaction.
-- PSB Academy (one of the largest tertiary education institutions in Asia)
alongside ICG Asia Pacific, in which we co-invested GBP7m, increasing our
total investment in this company to GBP8m.
-- Endeavor Schools (a US schools operator) alongside education investment
specialist Leeds Private Equity, in which we invested GBP8m.
-- Abode Healthcare (a provider of hospice and home health services in the
US), GBP5m investment alongside US mid-market manager Tailwind Capital.
All of these businesses have highly defensive business models, with
demonstrated resilience to economic cycles and high cash flow conversion,
as well as strong growth drivers and clear value creation plans.
Additionally, the two ICG co-investments feature a combination of
subordinated debt and equity investments giving an element of structural
downside protection. On a blended basis these investments are targeting
returns in line with our usual equity investments, but the subordinated
debt element significantly reduces the overall risk. This is a feature
of the vast majority of our investments with both the ICG Europe and ICG
Asia Pacific strategies.
Six new commitments to both existing and new manager relationships
We completed four new third party fund commitments and committed to two
ICG managed funds resulting in a total of GBP102m(8) of new primary fund
commitments in the six months. Of the four new third party fund
commitments, two are to European managers we have invested with for many
years (Graphite Capital (GBP30m) and Bain Capital Europe (EUR8m)), and
two new US managers were added to the Portfolio (The Jordan Company and
Tailwind Capital).
The commitment to Graphite IX continues our strong relationship with our
former manager, Graphite Capital. The fund builds on Graphite's more
than 30 year successful track record of investing in mid-market buyouts
in the UK, and held a final close at GBP470m which was in line with both
its target and the predecessor fund.
ICG's latest European fund, ICG Europe VII, closed EUR3.7bn of
commitments in May 2018. This strategy invests in subordinated debt and
equity in European buyouts, usually with ICG as the sole institutional
investor. The fund targets gross annualised returns of 15%-20% with low
downside risk and its first investment, Minimax, was also a
co-investment in the six months. We have invested successfully in this
strategy for almost 30 years and our EUR40m commitment to ICG Europe VII
takes the total exposure to this strategy to GBP143m (including undrawn
commitments).
We also committed $10m to the latest ICG US mezzanine fund, North
American Private Debt II, which raised $1.35bn. This fund invests in
subordinated debt and equity of US private equity-backed mid-market
companies, targeting gross annualised returns of 13%-17% with low
downside risk. The commitment is consistent with two of our strategic
objectives of increasing exposure to the US market and to in-house
strategies that fit our investment criteria. We also expect it to
broaden and deepen our US middle market third-party manager
relationships.
Commitments to The Jordan Company and Tailwind Capital, of $15m each,
further increase our focus on the US mid-market. Both of these managers
have long track records of investing and adding value through cycles.
Tailwind has already generated an attractive co-investment in Abode
Healthcare and we expect both funds will generate additional high
conviction investments.
Portfolio analysis(9)
Focus on mid-market and large companies
The Portfolio is biased towards the mid-market (48%) and large deals
(44%), which we view as more defensive than smaller deals, benefiting
from experienced management teams and often leading market positions.
Portfolio becoming more geographically diverse
The Portfolio is focused on developed private equity markets: primarily
continental Europe (40%), the UK (32%) and the US (24%), with almost no
emerging markets exposure. In line with one of our strategic objectives,
our weighting to the US has increased from 14% at the time of the move
to ICG in 2016 and we have a target to increase the US focus to 30% --
40% of the Portfolio. Over the same period, the UK bias has reduced from
45%. We expect both of these trends to gather pace as the benefits of
being part of ICG's global alternative asset manager platform are
further realised.
Sector bias towards sectors with non-cyclical growth drivers
The Portfolio is weighted towards sectors that primarily have
non-cyclical growth drivers, such as demographics, with 24% of the
Portfolio invested in healthcare and education and 15% in business
services. The remainder of the portfolio is broadly spread across the
industrial (19%), consumer goods and services (15%), leisure (10%) and
TMT (10%) sectors.
Attractive and well-balanced vintage year exposure
The Portfolio's maturity profile balances near-term realisation
prospects with a strong pipeline of medium to longer-term growth.
Investments completed in 2014 or earlier, which are more likely to
generate gains from realisations in the shorter-term, represent 37% of
the Portfolio. Against this, 63% of value is in investments made in 2015
or later, providing the Portfolio with medium to longer term growth
potential as value created within these businesses translates into
gains.
Balance sheet and financing
Strong balance sheet and positive financing outlook
With the portfolio generating a net cash inflow of GBP8m, and after
allowing for dividends and expenses, cash fell marginally from GBP78m to
GBP72m in the half year.
Undrawn commitments of GBP394m provide the Company with a robust
medium-term investment pipeline. With total liquidity of GBP177m,
including the undrawn bank facility, commitments therefore exceeded
liquidity by 30% of net asset value.
GBPm 31 July 2018 31 Jan 2018
----------------------------------------------- -------------- -------------
Portfolio* 654 601
Cash 72 78
Net obligations* (15) (15)
-----------------------------------------------
Net assets 711 664
-----------------------------------------------
* Refer to the Glossary for reconciliation to the
portfolio balance presented in the unaudited results
and definition of net obligations.
Outstanding commitments 394 321
Total available liquidity (including facility) (177) (182)
Overcommitment (including facility) 217 139
Overcommitment % of net asset value 30% 21%
Commitments are typically drawn down over a period of four to five years
with approximately 10%--15% retained at the end of the investment period
to fund follow-on investments and expenses. If outstanding commitments
were to follow a linear investment pace to the end of their respective
remaining investment periods, we estimate that approximately GBP90m
would be called over the next 12 months. This leaves significant
available capital for high conviction investments over and above those
that will be made by our underlying funds.
In managing the Company's balance sheet our objective is to be broadly
fully invested through the cycle while ensuring that we have sufficient
liquidity to be able to take advantage of attractive investment
opportunities as they arise. We do not intend to be geared other than,
potentially, for short-term working capital purposes.
Outlook
Continued investment activity and a strong pipeline of new opportunities
Since the period end, the Portfolio has continued to benefit from the
favourable exit environment, with GBP19m of proceeds received in the two
months to 30 September 2018. Against this, we have paid GBP16m of
capital calls and completed a GBP12m secondary in Jordan Resolute Fund
II. We have a strong pipeline of further opportunities for the remainder
of the year, both new funds and high conviction investments.
Portfolio well positioned to generate significant shareholder value
We have a high quality Portfolio with strong underlying profit growth
and realisation activity continuing to drive performance. Against the
current backdrop of high valuations for new investments and continuing
geopolitical uncertainties, we remain cautious in re-deploying cash
generated by the Portfolio. Our flexible mandate allows us to adapt the
mix of new investment to evolving market conditions and where we see the
best relative value. The proprietary opportunities sourced through the
ICG network are proving to be particularly attractive and these are
becoming a more significant part of the portfolio. We believe the
Portfolio is well positioned to continue to generate shareholder value.
ICG Private Equity Funds Investment Team
Principal risks and uncertainties
The principal risks and uncertainties associated with the Company's
business can be divided into the following areas:
-- Investment performance;
-- Valuation;
-- Political and macroeconomic uncertainty;
-- Private equity sector;
-- Regulatory, legislative and taxation compliance;
-- People;
-- The Manager and other third party advisers;
-- Information security;
-- Foreign exchange; and
-- Financing.
The principal risks and uncertainties facing the Company for the second
half of the financial year are substantially the same as those disclosed
in the Strategic Report and in the notes to the Financial Statements in
the Company's latest Annual Report for the year ended 31 January 2018.
Supplementary information
This section presents unaudited supplementary information regarding the
Portfolio (see Manager's Review and the Glossary for further details and
definitions).
The 30 largest underlying companies
The table below presents the 30 companies in which ICG Enterprise had
the largest investments by value at 31 July 2018. These investments may
be held directly or through funds, or in some cases in both ways. The
valuations are gross and are shown as a percentage of the total
investment Portfolio.
Year of Value as a %
Company Manager investment Country of Portfolio
------------------------------------------------------------ --------------- ----------- ------------ --------------
1 DomusVi+
Operator of retirement homes ICG 2017 France 3.2%
2 City & County Healthcare Group
Graphite
Provider of home care services Capital 2013 UK 3.2%
3 Visma+
Provider of accounting software and accounting outsourcing
services Cinven & ICG 2014 & 2017 Europe 2.6%
4 Minimax+^
Supplier of fire protection systems and services ICG 2018 Germany 2.5%
5 David Lloyd Leisure+
Operator of premium health clubs TDR Capital 2013 UK 2.3%
6 Roompot+
Operator and developer of holiday parks PAI Partners 2016 Netherlands 2.0%
7 Froneri+^
Manufacturer and distributor of ice cream products PAI Partners 2013 UK 1.9%
8 nGAGE
Graphite
Provider of recruitment services Capital 2014 UK 1.9%
9 Ceridian+
Thomas H Lee
Provider of payment processing services Partners 2007 USA 1.8%
10 Education Personnel+^
Provider of temporary staff for the education sector ICG 2014 UK 1.8%
11 Gerflor^
Manufacturer of vinyl flooring ICG 2011 France 1.8%
12 Yudo+
Designer and manufacturer of hot runner systems ICG 2018 South Korea 1.6%
13 ICR Group
Provider of repair and maintenance services to the Graphite
energy industry Capital 2014 UK 1.6%
14 PetSmart+
Retailer of pet products and services BC Partners 2015 USA 1.6%
15 Cambium^
Provider of educational solutions and services ICG 2016 USA 1.6%
16 System One+
Thomas H Lee
Provider of specialty workforce solutions Partners 2016 USA 1.5%
17 Frontier Medical+
Manufacturer of medical devices Kester Capital 2013 UK 1.5%
18 Beck & Pollitzer
Provider of industrial machinery installation and Graphite
relocation Capital 2016 UK 1.5%
19 Skillsoft+
Provider of off the shelf e-learning content Charterhouse 2014 USA 1.4%
20 PSB Academy+
Provider of private tertiary education ICG 2018 Singapore 1.3%
21 Endeavor Schools+
Leeds Equity
Operator of schools Partners 2018 USA 1.2%
22 YSC
Provider of leadership consulting and management assessment Graphite
services Capital 2017 UK 1.0%
23 New World Trading Company
Graphite
Operator of distinctive pub restaurants Capital 2016 UK 1.0%
24 U-POL^
Manufacturer and distributor of automotive refinishing Graphite
products Capital 2010 UK 0.9%
25 Cognito+
Graphite
Supplier of communications equipment, software & services Capital 2002 UK 0.9%
26 Compass Community
Provider of fostering services and children residential Graphite
care Capital 2017 UK 0.8%
27 Abode Healthcare+
Tailwind
Provider of hospice and healthcare Capital 2018 USA 0.8%
28 Random42
Graphite
Provider of medical animation and digital media services Capital 2017 UK 0.8%
29 Odgers+
Graphite
Provider of recruitment services Capital 2009 UK 0.6%
30 Syneos Health
Advent/Thomas
H Lee
Provider of commercial solutions for healthcare companies Partners 2016 USA 0.6%
------------------------------------------------------------- -------------- ----------------
Total of the 30 largest underlying investments 47.2%
------------------------------------------------------------- -------------------------------------------
All or part of this investment is held directly as
a co-investment or other direct investment.
^ All or part of this investment was acquired as part
of a secondary purchase.
The 30 largest fund investments
The table below presents the 30 largest funds by value at 31 July 2018.
The valuations are net of any carried interest provision.
Outstanding
Value commitment
Fund Year of commitment Country/ region GBPm GBPm
------------------------- ------------------- ------------------- --------- -----------
1 Graphite Capital Partners VIII *
Mid-market buyouts 2013 UK 78.7 26.6
2 ICG Europe VI **
Mezzanine and equity in
mid-market buyouts 2015 Europe 24.7 2.3
3 BC European Capital IX **
Large buyouts 2011 Europe/USA 19.7 0.7
4 CVC European Equity Partners VI
Large buyouts 2013 Europe/USA 15.2 2.3
5 One Equity Partners VI
Mid-market buyouts 2016 USA/Europe 13.6 0.6
6 CVC European Equity Partners V **
Large buyouts 2008 Europe/USA 13.4 0.5
7 ICG Strategic Secondaries Fund II
Secondary fund
recapitalisations 2016 USA/Europe 13.2 12.8
8 PAI Europe VI
Mid-market and large
buyouts 2013 Europe 13.1 3.4
9 Graphite Capital Partners VII * / **
Mid-market buyouts 2007 UK 12.5 4.7
10 Activa Capital Fund III
Mid-market buyouts 2013 France 11.5 3.9
11 Fifth Cinven Fund
Large buyouts 2012 Europe 11.3 1.2
12 ICG Velocity Partners Co-Investor **
Mid-market buyouts 2016 USA 11.0 0.9
Thomas H Lee Equity Fund
13 VII
Mid-market and large
buyouts 2015 USA 10.3 5.2
14 Permira V
Large buyouts 2013 Europe/USA 10.2 1.4
Nordic Capital Partners
15 VIII
Mid-market and large
buyouts 2013 Europe 9.9 1.6
16 IK VII
Mid-market buyouts 2013 Europe 8.8 0.4
17 ICG Asia Pacific Fund III
Mezzanine and equity in
mid-market buyouts 2016 Asia Pacific 8.4 4.5
18 ICG Europe V **
Mezzanine and equity in
mid-market buyouts 2012 Europe 8.4 0.9
19 Hollyport Secondary Opportunities V
Tail-end secondary
portfolios 2015 Global 8.2 2.3
Bowmark Capital Partners
20 V
Mid-market buyouts 2013 UK 8.0 1.9
21 Thomas H Lee Parallel Fund VI
Mid and large buyouts 2007 USA 7.9 1.0
22 Deutsche Beteiligungs Fund VI
Mid-market buyouts 2012 Germany 7.9 1.0
23 TDR Capital III
Mid-market and large
buyouts 2013 Europe 7.8 3.1
24 Gridiron Capital Fund III
Mid-market buyouts 2016 USA 7.4 5.7
Egeria Private Equity
25 Fund IV
Mid-market buyouts 2012 Netherlands 7.3 0.5
Bowmark Capital Partners
26 IV
Mid-market buyouts 2007 UK 7.1 0.0
27 Advent Global Private Equity VIII
Large buyouts 2016 Europe/USA 6.9 6.8
ICG European Fund 2006 B
28 **
Mezzanine and equity in
mid-market buyouts 2014 Europe 6.3 2.2
29 Bain Capital Europe IV
Mid-market buyouts 2014 Europe 5.7 2.8
30 Silverfleet II
Mid-market buyouts 2014 Europe 5.6 6.9
Total of the largest 30
fund investments 380.0 108.1
Percentage of total
investment Portfolio 58.1%
-------------------------- --------------------------------------- -----------
* Includes the associated
Top Up funds.
** All or part of an interest acquired through a secondary
fund purchase.
Portfolio analysis
Closing Portfolio by value at 31 July 2018
31 July 31 January
2018 2018
% of value of % of value of
underlying underlying
Portfolio by investment type investments investments
----------------------------- ---------------- ----------------
Mid-market buyouts 48.4% 48.1%
Large buyouts 43.8% 42.4%
Small buyouts 4.7% 8.2%
Other 3.1% 1.3%
------------------------------
Total 100.0% 100.0%
------------------------------
Portfolio by 31 July 31 January
calendar year 2018 2018
of investment % of value of underlying investments % of value of underlying investments
-------------- ------
2018 11.8% 2.1%
2017 20.1% 19.3%
2016 19.6% 20.9%
2015 11.3% 12.9%
2014 14.2% 17.8%
2013 11.4% 12.4%
2012 2.9% 3.3%
2011 2.0% 2.4%
2010 2.0% 2.2%
2009 1.1% 1.2%
2008 0.4% 2.1%
2007 2.0% 1.3%
2006 and before 1.2% 2.1%
-----------------------
Total 100.0% 100.0%
-----------------------
31 July 31 January
Portfolio by 2018 2018
sector % of value of underlying investments % of value of underlying investments
---------------- --------------------------------------- ---------------------------------------
Healthcare and
education 23.5% 22.4%
Industrials 19.4% 17.4%
Business services 14.8% 15.6%
Consumer goods
and services 14.8% 14.7%
Leisure 10.4% 12.1%
TMT 9.6% 10.2%
Financials 4.9% 4.9%
Other 2.6% 2.7%
Total 100.0% 100.0%
----------------- --------------------- --------------- --------------------- ---------------
31 July 31 January
2018 2018
% of value of % of value of
Portfolio by geographic distribution based on location underlying underlying
of company headquarters investments investments
Europe 39.7% 40.0%
UK 32.0% 35.2%
North America 24.0% 21.8%
Rest of world 4.3% 3.0%
-------------------------------------------------------
Total 100.0% 100.0%
-------------------------------------------------------
Commitments analysis
The following tables analyse commitments at 31 July 2018. Original
commitments are translated at 31 July 2018 exchange rates.
Total undrawn commitments
Original Outstanding Average
commitment commitment drawdown % of
GBP'000 GBP'000 percentage commitments
--------------------- ----------- ----------- ------------- --------------
Investment period not
commenced 30,000 30,000 0.0% 7.6%
Funds in investment
period 545,165 307,269 43.6% 78.0%
Funds post investment
period 732,667 56,719 92.3% 14.4%
--------------------- ----------- -----------
Total 1,307,832 393,988 69.9% 100.0%
--------------------- ----------- -----------
Movement in outstanding commitments in 6 months ended
31 July 2018 GBPm
--------------------------------------------------------- ---------
As at 1 February 2018 321.2
New primary commitments 101.7
New commitments relating to co-investments and secondary
purchases 1.6
Drawdowns (42.7)
Currency and other movements 12.2
---------------------------------------------------------
As at 31 July 2018 394.0
---------------------------------------------------------
New commitments during the six months to 31 July 2018
Fund Strategy Geography GBPm
--------------------------- ---------------------------- -------------- -----
Primary commitments
Bain V Mid-market buyouts Europe 7.0
Graphite IX Mid-market buyouts UK 30.0
ICG Europe Fund VII Mid-market buyouts Europe 34.6
ICG North American Private Subordinated debt and
Debt Fund II mezzanine North America 7.4
Resolute IV Mid-market buyouts USA 11.4
Tailwind III Mid-market buyouts USA 11.3
-----
Total primary commitments 101.7
Commitments relating to co-investments and secondary
investments 1.6
Total new commitments 103.3
=====
31 July 31 July 31 January 31 January
2018 2018 2018 2018
Outstanding commitments GBPm % GBPm %
------------------------- ------- ------- ---------- ----------
-- Sterling 89.5 22.7 63.2 19.7
-- Euro 194.0 49.2 170.0 52.9
-- US Dollar 108.6 27.6 86.1 26.8
-- Other European 1.9 0.5 1.9 0.6
------------------------- ------- ------- ---------- ----------
Total 394.0 100.0 321.2 100.0
------------------------- ------- ------- ---------- ----------
Currency exposure
31 July 31 July 31 January 31 January
2018 2018 2018 2018
Portfolio(1) GBPm % GBPm %
----------------- -------- -------- ---------- ----------
Sterling 237.7 36.4 235.8 39.3
Euro 185.5 28.3 174.3 29.0
US Dollar 150.8 23.0 119.6 19.9
Other European 48.4 7.4 49.8 8.3
Other 32.1 4.9 21.2 3.5
----------------- -------- -------- ---------- ----------
Total 654.5 100.0 600.7 100.0
----------------- -------- -------- ---------- ----------
(1) Currency exposure is calculated by reference to
the location of the underlying Portfolio companies'
headquarters.
Realisation and new investment activity
Largest underlying realisations in the six months
to 31 July 2018
----------------------------------------------------------------------------
Year of Realisation
Investment Manager investment type Proceeds GBPm
------------- ------------- ------------- -------------- -------------
The Laine Pub Graphite
Company Capital 2014 Trade 10.7
Doughty Financial
TMF Hanson 2008 buyer 8.3
Swiss Invision Financial
Education Capital 2015 buyer 6.5
Corporate
Risk
Holdings ICG 2017 Trade 4.0
Financial
CeramTec Cinven 2013 buyer 3.8
Sky Betting
and Gaming CVC 2015 Trade 3.7
Financial
Ufinet Cinven 2014 buyer 3.2
Financial
Royal Sanders Egeria 2015 buyer 2.8
Financial
Intervias TDR Capital 2014 buyer 2.7
Infobase Financial
Publishing ICG 2016 buyer 2.3
Total of 10 largest underlying realisations 48.0
Total realisations 84.9
Largest underlying new investments in the six months
to 31 July 2018
------------------------------------------------------------------------
Investment Description Manager Country Cost* GBPm
Provider of
fire
protection
systems and
Minimax services ICG Germany 12.2
Endeavour Operator of
Schools schools Leeds Equity USA 8.1
Operator of
tertiary
PSB education
Academy** institutions ICG Singapore **6.8
Abode Provider of Tailwind
Healthcare hospice care Capital USA 5.2
Provider of
waste
collection and
environmental
GFL services BC Partners Canada 1.5
Distributor of
gas and
Naturgy electricity CVC Spain 1.4
Provider of
drinks
bottling
Refresco services PAI Partners Netherlands 1.4
Provider of
personal
protective and
road safety
RSEA equipment ICG Australia 1.3
Provider of car
insurance
Active broking
Assurances services Activa France 1.2
Provider of
internet
services to
student
Ask4 accommodation Bowmark UK 1.1
----------- --------------- ------------- ------------- ----------
Total of 10 largest
underlying new investments 40.2
----------------------------- ------------- ------------ ------------
Total new
investment 76.5
* Represents ICG's indirect exposure (share of fund
cost) plus any amounts paid for co-investments in
the period.
** Represents a new co-investment during the period.
PSB Academy was already in the portfolio as at 31
January 2018 via a primary holding in ICG Asia Pacific
III.
Interim financial statements
Income statement
Half year to 31 July 2018 Half year to 31 July 2017 Year to 31 January 2018
(unaudited) (unaudited) (audited)
Revenue Capital Revenue Capital Revenue Capital
return return Total return return Total return return Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ----- ------------ -------- -------- ------------ -------- -------- ---------- ---------- ----------
Investment
returns
Income, gains
and losses
on
investments 5,746 52,121 57,867 16,536 38,588 55,124 22,257 60,124 82,381
Deposit
interest 65 - 65 22 - 22 59 -- 59
Other income 2 - 2 - - - 70 -- 70
Foreign
exchange
gains and
losses - 1,364 1,364 - 1,194 1,194 -- 826 826
5,813 53,485 59,298 16,558 39,782 56,340 22,386 60,950 83,336
Expenses
Investment
management
charges 8 (958) (2,872) (3,830) (899) (2,697) (3,596) (1,791) (5,374) (7,165)
Other
expenses (1,051) (516) (1,567) (1,042) (541) (1,583) (1,659) (1,075) (2,734)
(2,009) (3,388) (5,397) (1,941) (3,238) (5,179) (3,450) (6,449) (9,899)
Profit before
tax 3,804 50,097 53,901 14,617 36,544 51,161 18,936 54,501 73,437
Taxation (341) 341 - (2,086) 2,086 - (2,435) 2,294 (141)
Profit for
the period 3,463 50,438 53,901 12,531 38,630 51,161 16,501 56,795 73,296
Attributable
to:
------------ -------- -------- ------------ -------- -------- ---------- ---------- ----------
Equity
shareholders 3,463 50,438 53,901 12,531 38,630 51,161 16,501 56,795 73,296
Basic and diluted earnings per share 77.82p 73.52p 105.56p
The columns headed 'Total' represent the income statement for the
relevant financial years and the columns headed 'Revenue return' and
'Capital return' are supplementary information, in line with the
Statement of Recommended Practice for Financial Statements of Investment
Trust Companies and Venture Capital Trusts issued by the Association of
Investment Companies. There is no Other Comprehensive Income.
The notes on pages 22 to 26 form an integral part of the interim
financial statements.
Balance sheet
31 July 31 July 31 January
2018 2017 2018
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
------------------------------- ----- ------------ ------------ ----------
Non-current assets
Investments held at fair value
Unquoted investments 7 504,685 482,442 478,362
Quoted investments 7 1,719 2,475 1,733
Subsidiary investments 7 124,941 91,889 96,392
------------ ------------ ----------
631,345 576,806 576,487
------------ ------------ ----------
Current assets
Cash and cash equivalents 72,116 73,609 78,389
Receivables 7,985 3,276 10,410
------------ ------------ ----------
80,101 76,885 88,799
------------ ------------ ----------
Current liabilities
Payables 841 3,031 963
------------ ------------ ----------
Net current assets 79,260 73,854 87,836
------------ ------------ ----------
Total assets less current
liabilities 710,605 650,660 664,323
------------ ------------ ----------
Capital and reserves
Share capital 5 7,292 7,292 7,292
Capital redemption reserve 2,112 2,112 2,112
Share premium 12,936 12,936 12,936
Capital reserve 681,176 614,109 630,738
Revenue reserve 7,089 14,211 11,245
------------ ------------ ----------
Total equity 710,605 650,660 664,323
------------ ------------ ----------
Net asset value per share 1,026.0p 936.7p 959.1p
(basic and diluted)
The interim financial statements on pages 18 to 26 were approved by the
Board of Directors on 3 October 2018 and signed on its behalf by:
Jeremy Tigue
Director
3 October 2018
The notes on pages 22 to 26 form an integral part of the interim
financial statements.
Cash flow statement
Half year to Half year to Year to
31 July 31 July 31 January
2018 2017 2018
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
----------------------------- ------------ ------------ -------------
Operating activities
Sale of portfolio
investments 48,700 77,077 147,888
Purchase of portfolio
investments (49,547) (42,242) (99,601)
Interest income received
from portfolio investments 3,752 12,329 15,967
Dividend income received
from portfolio investments 2,023 4,185 6,230
Other income received 67 22 129
Investment management
charges paid (3,673) (3,630) (7,090)
Other expenses paid (847) (805) (1,456)
Net cash inflow from
operating activities 475 46,936 62,067
Financing activities
Bank facility fee (381) (876) (1,320)
Purchase of shares into
treasury -- (5,207) (7,810)
Equity dividends paid (7,619) (6,960) (13,896)
Net cash outflow from
financing activities (8,000) (13,043) (23,026)
Net (decrease)/ increase in
cash and cash equivalents (7,525) 33,893 39,041
Cash and cash equivalents at
beginning of period 78,389 38,522 38,522
Net (decrease) / increase in
cash and cash equivalents (7,525) 33,893 39,041
Effect of changes in foreign
exchange rates 1,252 1,194 826
Cash and cash equivalents at
end of period 72,116 73,609 78,389
The notes on pages 22 to 26 form an integral part of the interim
financial statements.
Statement of changes in equity
Capital Total
Share capital redemption reserve Share premium Capital reserve Revenue reserve shareholders' equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- ------------- --------------------- ------------- --------------- ------------------- ----------------------------------
Half year to 31 July 2018 (unaudited)
Opening balance at 1 February
2018 7,292 2,112 12,936 630,738 11,245 664,323
Profit for the period and total
comprehensive income -- -- -- 50,438 3,463 53,901
Dividends paid or approved -- -- -- -- (7,619) (7,619)
Closing balance at 31 July 2018 7,292 2,112 12,936 681,176 7,089 710,605
------------- --------------------- ------------- --------------- ----------- ------ ------------------------- -------
Capital Total
Share capital redemption reserve Share premium Capital reserve Revenue reserve shareholders' equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- ----------------- ------------------- ------------- ----------------- ------------------- --- -----------------------------
Half year to 31 July 2017 (unaudited)
Opening balance at 1 February
2017 7,292 2,112 12,936 581,753 8,640 612,733
Profit for the period and total
comprehensive income -- -- -- 38,630 12,531 51,161
Dividends paid or approved -- -- -- -- (6,960) (6,960)
Purchase of shares into treasury -- -- -- (6,274) -- (6,274)
Closing balance at 31 July 2017 7,292 2,112 12,936 614,109 14,211 650,660
Capital Total
Share capital redemption reserve Share premium Capital reserve Revenue reserve shareholders' equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- ----------------- ------------------- ------------- --------------- ------------------- -------------------------
Year to 31 January 2018 (audited)
Opening balance at 1 February
2017 7,292 2,112 12,936 581,753 8,640 612,733
Profit for the year and total
comprehensive income -- -- -- 56,795 16,501 73,296
Dividends paid or approved -- -- -- -- (13,896) (13,896)
Purchase of shares into treasury -- -- -- (7,810) -- (7,810)
Closing balance at 31 January
2018 7,292 2,112 12,936 630,738 11,245 664,323
----------------- -------------------- ------------- ---------------- ------------------ ----------------- ------
The notes on pages 22 to 26 form an integral part of the interim
financial statements.
Notes to the financial statements (unaudited)
1) General information
ICG Enterprise Trust plc ("the Company") is registered in England and
Wales and domiciled in England. The registered office is Juxon House,
100 St Paul's Churchyard, London EC4M 8BU. The Company's objective is to
provide shareholders with long term capital growth through investment in
unquoted companies, mostly through private equity funds but also
directly.
2) Unaudited interim report
This interim financial report does not comprise statutory accounts
within the meaning of section 434 of the Companies Act 2006. Statutory
accounts for the year to 31 January 2018 were approved by the Board of
Directors on 25 April 2018 and delivered to the Registrar of Companies.
The report of the auditors on those accounts was unqualified, did not
contain an emphasis of matter paragraph and did not contain any
statements under section 498(2) or (3) of the Companies Act 2006.
This financial report has not been audited.
3) Basis of preparation
The Company applies International Financial Reporting Standards
("IFRSs") as adopted by the European Union and the Association of
Investment Companies Statement of Recommended Practice (issued in
November 2014 and updated in February 2018 with consequential
amendments) in preparing its annual financial statements for the year to
31 January 2018. The interim financial report, comprising the interim
financial statements has therefore been prepared in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the Financial
Conduct Authority and with IAS 34 Interim Financial Reporting, as
adopted by the European Union. These interim financial statements do
not include all the information and disclosures required in the annual
financial statements, and should be read in conjunction with the annual
financial statements for the year to 31 January 2018.
The accounting policies applied are consistent with those as described
in the annual financial statements. The Company has adopted both "IFRS 9
- Financial Instruments" and "IFRS 15 - Revenue from Contracts with
Customers" from 1 February 2018 and as detailed in the annual financial
statements there is no impact on the interim financial statements
following the adoption of these standards. There were no new key
judgments required by the directors in applying IFRS 9 and IFRS 15. The
Company has considered other new and forthcoming standards (including
IFRS 16 Leases which will become applicable for periods beginning on or
after 1 January 2019) and determined there will be no impact on the
Company. There is only one reportable segment under IFRS 8.
4) Dividends
Half year to Half year to Year ended
31 July 31 July 31 January
2018 2017 2018
GBP'000 GBP'000 GBP'000
----------------------------------------------------- ------------ ------------ -----------
Interim in respect of year ended 31 January: 5.0p
(PY: 10.0p) per share 3,463 - 6,936
Final in respect of year ended 31 January: 6.0p (PY:
10.0p) per share 4,156 6,960 6,960
------------ ------------
Total 7,619 6,960 13,896
------------ ------------ -----------
The Company paid an interim dividend of 5p per share (totalling
GBP3.463m) in September 2018 in respect of the quarter to 30 April 2018.
The Board has approved a further interim dividend for the quarter to 31
July 2018 of 5p per share (totalling GBP3.463m) which will be paid on 7
December 2018 to shareholders on the register on 16 November 2018.
5) Share capital
At 31 July 2018, 72,913,000 shares had been allocated, called up and
fully paid. Of this total, the Company held 3,650,945 shares in treasury
(31 July 2017: 3,450,945 and 31 January 2018: 3,650,945) leaving
69,262,055 (31 July 2017: 69,462,055 and 31 January 2018: 69,262,055)
shares outstanding, all of which have equal voting rights.
Notes to the financial statements (unaudited)
6) Earnings per share
Half year to Half year to Year ended
31 July 31 July
2018 2017 31 January 2018
-------------------------- ------------ ------------ ---------------
Revenue return per
ordinary share 5.00p 18.01p 23.76p
Capital return per
ordinary share 72.82p 55.51p 81.80p
Earnings per ordinary
share (basic and diluted) 77.82p 73.52p 105.56p
Weighted average number of
shares 69,262,055 69,585,722 69,435,737
The earnings per share figures are based on the weighted average numbers
of shares set out above.
7) Fair Values estimation
IFRS 7 requires disclosure of fair value measurements of financial
instruments categorised according to the following fair value
measurement hierarchy:
-- Quoted prices (unadjusted) in active markets for identical assets or
liabilities (level 1).
-- Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (level 2).
-- Inputs for the asset or liability that are not based on observable market
data (that is, unobservable inputs) (level 3).
The valuation techniques applied to level 1 and level 3 assets are
described in note 1 of the annual financial statements. No investments
were categorised as level 2.
The following tables present the assets that are measured at fair value.
The Company had no financial liabilities measured at fair value at these
dates.
Level 1 Level 2 Level 3 Total
31 July 2018 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- ------- ------- ------- -------
Investments held at fair value
Unquoted investments -- indirect -- -- 393,539 393,539
Unquoted investments -- direct -- -- 111,146 111,146
Quoted investments -- direct 1,719 -- -- 1,719
Subsidiary undertakings -- -- 124,941 124,941
-------
Total investments held at fair
value 1,719 -- 629,626 631,345
------- ------- ------- -------
Level 1 Level 2 Level 3 Total
31 July 2017 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ ------- ------- ------- -------
Investments held at fair value
Unquoted investments -- indirect -- -- 370,079 370,079
Unquoted investments -- direct -- -- 112,363 112,363
Quoted investments -- direct 2,475 -- -- 2,475
Subsidiary undertakings -- -- 91,889 91,889
Total investments held at fair value 2,475 -- 574,331 576,806
------- ------- ------- -------
Notes to the financial statements (unaudited)
7) Fair Values estimation (continued)
Level 1 Level 2 Level 3 Total
31 January 2018 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ ------- ------- ------- -------
Investments held at fair value
Unquoted investments -- indirect -- -- 379,921 379,921
Unquoted investments -- direct -- -- 98,441 98,441
Quoted investments -- direct 1,733 -- -- 1,733
Subsidiary undertakings -- -- 96,392 96,392
Total investments held at fair value 1,733 -- 574,754 576,487
------- ------- ------- -------
All unquoted and quoted investments are valued at fair value in
accordance with IFRS 13. The following tables present the changes in
level 3 instruments.
Unquoted investments (indirect) at fair value through Unquoted investments (direct) at fair value through Subsidiary
profit or loss profit or loss undertakings Total
Six months to 31 July 2018 (unaudited) GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------------- ------------------------------------------------------- ----------------------------------------------------- ------------ ----------
Opening balance at 1 February 2018 379,921 98,441 96,392 574,754
Additions 33,474 15,715 19,066 68,255
Disposals (52,886) (12,631) -- (65,517)
Gains and losses recognised in profit or loss 33,030 9,621 9,483 52,134
------------
Closing balance at 31 July 2018 393,539 111,146 124,941 629,626
------------
Total gains included in income statement for assets
held at the end of the period 13,659 7,353 9,483 30,495
------------
Unquoted investments (indirect) at fair value through Unquoted investments (direct) at fair value through Subsidiary
profit or loss profit or loss undertakings Total
Six months to 31 July 2017 (unaudited) GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------------- ------------------------------------------------------- ----------------------------------------------------- ------------ ----------
Opening balance at 1 February 2017 383,068 108,031 80,718 571,817
Additions 32,149 9,617 6,161 47,927
Disposals (73,884) (9,989) -- (83,873)
Gains and losses recognised in profit or loss 28,746 4,704 5,010 38,460
------------
Closing balance at 31 July 2017 370,079 112,363 91,889 574,331
------------
Total (losses)/ gains included in income statement
for assets held at the end of the period (1,087) 7,356 5,010 11,279
------------
Notes to the financial statements (unaudited)
7) Fair Values estimation (continued)
Unquoted investments (indirect) at fair value through Unquoted investments (direct) at fair value through Subsidiary
profit or loss profit or loss undertakings Total
Year to 31 January 2018 (audited) GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------------------- ------------------------------------------------------- ----------------------------------------------------- ------------ -----------
Opening balance at 1 February 2017 383,068 108,031 80,718 571,817
Additions 81,122 16,853 11,029 109,004
Disposals (128,941) (36,933) -- (165,874)
Transfer of instrument to level 1 -- (469) -- (469)
Gains and losses recognised in profit or loss 44,672 10,959 4,645 60,276
------------
Closing balance at 31 January 2018 379,921 98,441 96,392 574,754
------------
Total (losses)/ gains for the year included in income
statement for assets held at the end of the reporting
period (53,072) (7,277) 4,645 (55,704)
------------
1. Related party transactions
The investment management charges of GBP3.8m (31 July 2017: GBP3.6m; 31
January 2018: GBP7.2m) were paid to ICG Alternative Investment Limited
(the "Manager"). The Manager is a related party.
Management fees amounted to 1.11% (31 July 2017: 1.14%; 31 January 2018
1.12%) of the average net assets in the period. The management fee
charged by the Manager is unchanged, at 1.4% of the fair value of
invested assets and 0.5% of outstanding commitments to funds in their
investment period, in both cases excluding funds managed by Graphite
Capital Management LLP and ICG. This arrangement ensures management fees
are not borne twice in respect of its investments in funds managed by
the Manager. No fee is charged on cash or liquid asset balances.
The table below sets out the management charges that the Company has
borne in respect of its investments in funds managed by the Manager on
an arms-length basis.
Half year to Half year to Year ended
31 July 31 July 31 January
2018 2017 2018
GBP'000 GBP'000 GBP'000
------------------------------- ------------ ------------ ----------
ICG Europe Fund V 44 55 100
ICG Europe Fund VI 122 161 234
ICG Europe Fund 2006B 23 26 54
ICG Strategic Secondaries Fund
II 155 341 469
ICG Velocity Partners
Co-Investor 76 81 143
ICG Asia Pacific III 29 97 272
ICG Recovery Fund 2008B 32 25 59
ICG Cross Border 12 -- --
ICG Europe Fund VII 103 -- --
596 786 1,331
------------ ------------ ----------
Notes to the financial statements (unaudited)
1. Related party transactions (continued)
Further transactions between the Company and its subsidiaries are shown
below:
Half
year
Half year to to Year ended
31 July 31 July 31 January
2018 2017 2018
Subsidiary Nature of transaction GBP'000 GBP'000 GBP'000
--------------------------------- ------------------------------ --------------------- ------- ----------
ICG Enterprise Trust Limited (Decrease)/ increase in
Partnership amounts owed to subsidiaries (269) 6,383 7,623
Income allocated 167 1,140 1,205
ICG Enterprise Trust (2) Limited Increase in amounts owed
Partnership to subsidiaries 3,505 2,303 11,192
Income allocated 841 1,021 1,719
ICG Enterprise Trust Co - Increase in amounts owed by
Investment Limited Partnership subsidiaries 23,831 15,446 30,441
Income allocated 88 8 426
Amounts owed by subsidiaries Amounts owed to subsidiaries
31 July 31 July 31 January 31 July 31 July 31 January
2018 2017 2018 2018 2017 2018
Subsidiary GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- ------------- -------------- ------------ ------- ------- ------------
ICG Enterprise Trust Limited
Partnership -- -- -- 36,063 35,092 36,332
ICG Enterprise Trust (2) Limited
Partnership 39,736 36,939 36,939 20,438 5,247 14,136
ICG Enterprise Trust Co -
Investment Limited Partnership 69,263 30,437 45,432 -- -- --
Amounts owed by subsidiaries represent funding provided by the Company
to its subsidiaries to allow them to make investments. The balances will
be repaid out of proceeds from their portfolios.
The value of the subsidiaries is shown net of an accrual for the
interests of the co-investors (ICG and certain of its executives, and,
in respect of certain historic investments, the executives and connected
parties of the Graphite Capital, the former manager) in the
co-investment incentive scheme. As at 31 July 2018, GBP24.4m was accrued
(31 July 2017:GBP21.6m; 31 January 2018: GBP22.5m), an increase of
GBP1.8m in the period. During the half year, co-investors invested
GBP0.3m (period to 31 July 2017: GBP0.2m; year to 31 January 2018:
GBP0.6m). Payments received by co-investors amounted to GBP2.5m or 2.9%
of GBP84.9m of proceeds received in the half year (period to 31 July
2017: GBP3m or 2.5% of GBP117.1m proceeds received; year to 31 January
2018: GBP6.5m or 2.9% of GBP220.6m proceeds received).
On 1 August 2018, ICG Europe Fund V exited its investment in Minimax.
Concurrently, ICG Europe Fund VI and ICG Europe Fund VII acquired a
holding in Minimax of EUR150m and EUR562.5m respectively. The
transaction was conducted on an arm's length basis.
Statement of Directors' Responsibilities
Statement of Directors' Responsibilities
The directors confirm that the interim financial statements have been
prepared in accordance with IAS 34 'Interim Financial Reporting' as
adopted by the European Union and that the business review includes a
fair review of the information required by DTR 4.2.7 and DTR 4.2.8,
namely:
-- an indication of important events that have occurred during the first six
months of the financial year and their impact on the interim financial
statements, and a description of the principal risks and uncertainties
for the remaining six months of the financial year; and
-- material related-party transactions in the first six months of the
financial year and any material changes in the related-party transactions
described in the last annual report.
The directors of ICG Enterprise Trust plc are listed in the ICG
Enterprise Trust plc Annual Report & Accounts for the year ended 31
January 2018, with the exception of Peter Dicks who stepped down from
the Board at the AGM on 18 June 2018, and Alastair Bruce who was
appointed as a Director, following his election at the AGM on 18 June
2018: A list of current directors is maintained on the ICG Enterprise
Trust plc website:
https://www.globenewswire.com/Tracker?data=-WuRzaKg0PAmwiQQY4Fxm6FjHZDqROVmdkg9J_Uum0upbgwsoWZa7jGsLed1Gc6evMZ8OeyfcfaT_6bFJ6YazzPuhUnWLgya6XfCKfkUYl0qbl8IGrbJoCk1v7ARe828VgvhGNcj6Iiw7zbrLHTQ8zWHWFokwOT0-cWQRAe3N_s=
http://www.icg-enterprise.co.uk/about-us/the-board.
Going Concern
The factors likely to affect the Company's ability to continue as a
going concern were set out in the Report and Accounts for the year ended
31 January 2018. As at 31 July 2018, there have been no significant
changes to these factors. Having reviewed the Company's forecasts and
other relevant evidence, the directors have a reasonable expectation
that the Company has adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to
adopt the going concern basis in preparing the interim financial
statements.
On behalf of the Board
Jeremy Tigue, Chairman
3 October 2018
Independent review report to ICG Enterprise Trust plc
Report on the interim results
Our conclusion
We have reviewed ICG Enterprise Trust plc's interim results (the
"interim financial statements") in the half-yearly financial report of
ICG Enterprise Trust plc for the 6 month period ended 31 July 2018.
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with International Accounting Standard
34, 'Interim Financial Reporting', as adopted by the European Union and
the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
-- the Balance Sheet as at 31 July 2018;
-- the Income Statement for the period then ended;
-- the Cash Flow Statement for the period then ended;
-- the Statement of Changes in Equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the half-yearly financial
report have been prepared in accordance with International Accounting
Standard 34, 'Interim Financial Reporting', as adopted by the European
Union and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
As disclosed in note 3 to the interim financial statements, the
financial reporting framework that has been applied in the preparation
of the full annual financial statements of the Company is applicable law
and International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The half-yearly financial report, including the interim financial
statements, is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
Our responsibility is to express a conclusion on the interim financial
statements in the half-yearly financial report based on our review. This
report, including the conclusion, has been prepared for and only for the
company for the purpose of complying with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority and for no other purpose. We do not, in giving this
conclusion, accept or assume responsibility for any other purpose or to
any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
What a review of interim financial statements involves
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 Auditing Practices Board for use in the United Kingdom. A review
of interim financial information consists of making enquiries, 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.
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
interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
3 October 2018
Glossary
Term Short Definition
form
-------------- -------- ----------------------------------------------------------------
Alternative APMs APMs are a term defined by the European Securities
Performance and Markets Authority as "financial measures of historical
Measures or future performance, financial position, or cash
flows, other than a financial measure defined or specified
in the applicable financial reporting framework".
APMs are used in this report if considered by the
Board and the Manager to be the most relevant basis
for shareholders in assessing the overall performance
of the Company and for comparing the performance of
the Company to its peers, taking into account industry
practice. Definitions and reconciliations to IFRS
measures are provided in the main body of the report
or in this Glossary, where appropriate.
-------------- -------- ----------------------------------------------------------------
Buyout funds Funds that acquire controlling interests in companies
with a view towards later selling those companies
or taking them public.
-------------- -------- ----------------------------------------------------------------
Compound CAGR Represents the annual growth rate of an investment
Annual Growth over a specified period of time longer than one year.
Rate
-------------- -------- ----------------------------------------------------------------
Carried Equivalent to a performance fee, this represents a
interest share of the profits that will accrue to the underlying
private equity managers, after achievement of an agreed
preferred return.
-------------- -------- ----------------------------------------------------------------
Co-investment Investments in a single underlying company alongside
a private equity fund.
-------------- -------- ----------------------------------------------------------------
Co-investment The estimated value of interests in the co-investment
incentive incentive scheme operated by the Company. At both
scheme 31 July 2018 and 31 January 2018, the accrual was
accrual estimated as the theoretical value of the interests
if the Portfolio had been sold at its carrying value
at those dates.
-------------- -------- ----------------------------------------------------------------
Commitment The amount of capital that each limited partner agrees
to contribute to the fund which can be drawn at the
discretion of the general partner.
-------------- -------- ----------------------------------------------------------------
Direct Investments in a single underlying company.
investment
-------------- -------- ----------------------------------------------------------------
Discount Arises when the Investment trust shares trade at a
discount to NAV. In this circumstance, the price that
an investor pays or receives for a share would be
less than the value attributable to it by reference
to the underlying assets. The discount is the difference
between the share price and the NAV, expressed as
a percentage of the NAV. For example, if the NAV was
100p and the share price was 90p, the discount would
be 10%.
-------------- -------- ----------------------------------------------------------------
Drawdowns Amounts invested by the Company into funds when called
by underlying managers in respect of an existing commitment.
-------------- -------- ----------------------------------------------------------------
Earnings EBITDA Stands for earnings before interest, tax, depreciation
before and amortisation, which is a widely used performance
interest, tax, measure in the private equity industry.
depreciation
and
amortisation
-------------- -------- ----------------------------------------------------------------
Enterprise EV The aggregate value of a company's entire issued share
value capital and net debt.
-------------- -------- ----------------------------------------------------------------
FTSE All-Share The change in the level of the FTSE All-Share Index,
Index Total assuming that dividends are re-invested on the day
return that they are paid.
-------------- -------- ----------------------------------------------------------------
Full Exit events (e.g. trade sale, sale by public offering,
realisations or sale to a financial buyer) following which the
residual exposure to an underlying company is zero
or immaterial.
-------------- -------- ----------------------------------------------------------------
Funds in Funds which are able to make new platform investments
investment under the terms of their fund agreements, usually
period up to five years after the initial commitment.
-------------- -------- ----------------------------------------------------------------
General GP The entity managing a private equity fund that has
Partner been established as a limited partnership. This is
commonly referred to as the Manager.
-------------- -------- ----------------------------------------------------------------
Hedging An investment technique designed to offset a potential
loss on one investment by purchasing a second investment
that is expected to perform in the opposite way.
-------------- -------- ----------------------------------------------------------------
High Co-investments, ICG managed funds and secondary fund
conviction investments.
-------------- -------- ----------------------------------------------------------------
Indirect Investments held in a private equity fund structure.
investments
-------------- -------- ----------------------------------------------------------------
Initial Public IPO An offering by a company of its share capital to the
Offering public with a view to seeking an admission of its
shares to a recognised stock exchange.
-------------- ------ ------------------------------------------------------------------
Internal Rate IRR The annualised rate of return received by an investor
of Return in a fund. It is calculated from cash drawn from and
returned to the investor together with the residual
value of the investment.
-------------- ------ ------------------------------------------------------------------
Last Twelve LTM The time frame of the immediately preceding 12 months
Months in reference to a financial metric used to evaluate
the company's performance.
-------------- ------ ------------------------------------------------------------------
Limited LP An institution or individual who commits capital to
Partner a private equity fund established as a limited partnership.
These funds are generally protected from legal actions
and any losses beyond the original investment.
-------------- ------ ------------------------------------------------------------------
Limited One or more general partners, who have responsibility
Partnership for managing the business of the partnership and have
unlimited liability, and one or more limited partners,
who do not participate in the operation of the partnership
and whose liability is ordinarily capped at their
capital and loan contribution to the partnership.
In typical fund structures, the general partner receives
a priority profit share ahead of distributions to
limited partners.
-------------- ------ ------------------------------------------------------------------
Management MBI A change of ownership, where an incoming management
Buyin team raises financial backing, normally a mix of equity
and debt, to acquire a business.
-------------- ------ ------------------------------------------------------------------
Management MBO A change of ownership, where the incumbent management
Buyout team raises financial backing, normally a mix of equity
and debt, to acquire a business it manages.
-------------- ------ ------------------------------------------------------------------
Net asset NAV The value of the Company's assets attributable to
value per per one Ordinary share. It is calculated by dividing 'shareholders'
share share funds' by the total number of Ordinary shares in issue.
Shareholders' funds are calculated by deducting current
and long-term liabilities, and any provision for liabilities
and charges, from the Company's total assets.
-------------- ------ ------------------------------------------------------------------
Net asset The change in the Company's net asset value per share,
value per assuming that dividends are re-invested at the end
share Total of the quarter in which the dividend was paid.
Return
-------------- ------ ------------------------------------------------------------------
Net debt The total short term and long-term debt in a business,
less cash and cash equivalents.
-------------- ------ ------------------------------------------------------------------
Net The net amount due; comprised of receivables, assets
obligations due from subsidiaries and co-investment incentive
scheme accrual.
-------------- ------ ------------------------------------------------------------------
Overcommitment Where private equity fund investors make commitments
exceeding the amount of cash immediately available
for investment. When determining the appropriate level
of overcommitment, careful consideration needs to
be given to the rate at which commitments might be
drawn down, and the rate at which realisations will
generate cash from the existing portfolio to fund
new investment.
-------------- ------ ------------------------------------------------------------------
Portfolio The aggregate of the investment Portfolios of the
Company and of its subsidiary limited partnerships.
This is consistent with the commentary in previous
annual and interim reports. The Board and the Manager
consider that this is the most relevant basis for
shareholders to assess the overall performance of
the Company and comparison with its peers.
The closest equivalent amount reported on the balance
sheet is "investments at fair value". A reconciliation
of these two measures is presented below.
-------------- ------ ------------------------------------------------------------------
Receivables
Investments Cash held by from Co-investment incentive scheme
GBPm per balance sheet subsidiaries subsidiaries accrual Portfolio
----- ------------------ -------------- --------------- ------------------------------ ---------
31
July
2018 631.3 (0.2) (1.0) 24.4 654.5
31
Jan
2018 576.5 -- 1.7 22.5 600.7
Post-crisis Investments completed in 2009 or later.
investments
----------- --- ---------------------------------------------------------------
Pre-crisis Investments completed in 2008 or before, based on
investments the date the original deal was completed, which may
differ from when the Company invested if acquired
through a secondary.
----------- --- ---------------------------------------------------------------
Preferred The preferential rate of return on an individual investment
return or a portfolio of investments, which is typically
8% per annum.
----------- --- ---------------------------------------------------------------
Premium The share price is higher than the NAV and investors
would therefore be paying more than the value attributable
to the shares by reference to the underlying assets.
----------- --- ---------------------------------------------------------------
Public to P2P The purchase of all of a listed company's shares using
private a special-purpose vehicle funded with a mixture of
debt and unquoted equity.
----------- --- ---------------------------------------------------------------
Quoted Any company whose shares are listed or traded on a
company recognised stock exchange.
----------- ----- -------------------------------------------------------------
Realisation Amounts received by the Company in respect of the
proceeds Portfolio, which may be in the form of capital proceeds
or income such as interest or dividends.
----------- ----- -------------------------------------------------------------
Secondary These occur when a Company purchases existing private
investments equity fund interests and commitments from an investor
seeking liquidity.
----------- ----- -------------------------------------------------------------
Share price The change in the Company's share price, assuming
Total that dividends are re-invested on the day that they
Return are paid.
----------- ----- -------------------------------------------------------------
Total A performance measure that assumes the notional re-investment
Return of dividends. This is a measure commonly used by the
listed private equity sector and listed companies
in general.
The tables below set out the share price and the net
asset value per share growth figures for periods of
one, three, five and ten years to the balance sheet
date, on both an unadjusted basis (i.e. without dividends
re-invested) and on a Total Return basis.
----------- ----- -------------------------------------------------------------
Unadjusted
performance
in years to
31 July 2018 1 year 3 year 5 year 10 year*
------------- ------------------- ------------- --------- ----------
Net asset
value per
share +9.5% +46.5% +50.4% +97.1%
Share price +14.4% +44.4% +74.2% +102.9%
FTSE
All-Share
Index +5.1% +16.4% +21.2% +48.9%
Total return
performance
in years to
31 July 2018 1 year 3 year 5 year 10 year*
------------- ----------- -------------- ------------ --------------
Net asset
value per
share +11.9% +55.4% +66.8% +126.4%
Share price +17.3% +55.4% +97.3% +142.2%
FTSE
All-Share
Index +9.2% +30.2% +44.9% +113.9%
* As the Company changed its year end in 2010, the
ten year figures are for the 121 month period to 31
July 2018.
Underlying The change in the valuation of the Company's Portfolio,
valuation before the effect of currency movements.
movement
---------------- ----------------------------------------------------------
Undrawn Commitments that have not yet been drawn down (see
commitments definition of drawdowns).
---------------- ----------------------------------------------------------
Unquoted company Any company whose shares are not listed or traded
on a recognised stock exchange.
---------------- ----------------------------------------------------------
Uplift on exit The increase in gross value relative to the underlying
manager's most recent valuation prior to the announcement
of the disposal. Excludes a small number of investments
that were public throughout the life of the investment.
May differ from valuation gains in the reporting period
in certain instances due to timing differences.
---------------- ----------------------------------------------------------
Valuation Earnings or revenue multiples applied in valuing a
multiples business enterprise.
---------------- ----------------------------------------------------------
Venture capital Investing in companies at a point in that company's
life cycle that is either at the concept, start-up
or early stage of development.
---------------- ----------------------------------------------------------
(1) Last 12 months.
(2) As the Company changed its year end in 2010, the ten-year figures
are for the 121-month period to 31 July 2018.
(3) Refer to Financials section on highlights page for comparative
information.
(4) Including reinvested dividends paid in March 2018 and July 2018
totalling 11p. Please refer to the Glossary for definition of Total
Return.
(5) Refer to Financials section on highlights page for comparative
information.
(6) Uplift figure excludes publically listed companies that were exited
via sell downs of their shares.
(7) Average return from full exits on a primary investment basis,
weighted by cost.
(8) Refer to supplementary information at the end of this review for
breakdown of new commitments during the six months to 31 July 2018.
(9) Refer to supplementary information at the end of this review for
comparative information.
(END) Dow Jones Newswires
October 04, 2018 02:00 ET (06:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Icg Enterprise (LSE:ICGT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Icg Enterprise (LSE:ICGT)
Historical Stock Chart
From Apr 2023 to Apr 2024