TIDMELTA
RNS Number : 2653U
Electra Private Equity PLC
23 October 2017
Electra Private Equity PLC
Result of Strategic Review - Phase II
London 23 October 2017
The Board of Electra Private Equity PLC (the "Company") today
announces the outcome of the second phase ("Phase II") of its
strategic review as first announced on 25 January 2016 ("the
Review"). The commencement of Phase II was announced on 1 June
2017, following assumption of responsibilities from the former
manager.
The principal objective of the Review is to maximise long-term
shareholder value by assessing the Company's investment strategy
and policy and its structure.
The key outcomes of activity undertaken since Phase I of the
Review was announced in October 2016 have been:
-- The Company has completed the handover of the investment
portfolio and operational responsibilities from its former external
manager.
-- The resources required to pursue the strategy announced today
are now in place.
-- Recurring annual management expenses have been reduced from
approximately GBP33 million to approximately GBP5 million.
-- The Company has completed the disposal of all of its Funds,
Secondaries, Debt, and Listed assets. Certain of these disposals
are signed but not yet closed. A portfolio update based on
published 31 March 2017 valuations is shown below.
-- A robust and sustainable corporate governance structure has
been implemented with the Board responsible for continued delivery
for shareholders.
-- Since the resumption of distributions to shareholders in
2015, including today's announced dividend the Company has
distributed GBP1.9 billion (approximately GBP49.50 per share) to
shareholders.
Strategic Review: Phase II
The key outcomes of Phase II of the Strategic Review are:
-- The Board intends to continue its strategy of focusing on
optimising return on shareholder capital. The Board considers that
current market conditions do not support new investment. However,
should conditions change the Board will consider further
investment.
-- In line with this capital allocation strategy, the Board is
today declaring a further special dividend of GBP350 million, or
914p per share. This is to be paid on 1 December 2017 to
shareholders on the register of members at the close of business on
3 November 2017.*
-- Subject to shareholder and regulatory approval the Company
will update its investment policy to reflect a focus on shareholder
returns and will explore options for reclassification of its
current listing.
-- Taxation benefits related to the realisation of assets
currently provided through the Company's Investment Trust Company
tax status are expected to be obtained through the Substantial
Shareholding Exemption (SSE) should its listing classification
change.
-- Actions will be taken to further simplify the Group's
corporate and underlying partnership structures realising cost and
efficiency benefits.
-- The Company intends to change its name to remove the words
"Private Equity" to better reflect its revised strategic focus.
-- The Board intends to convene a general meeting in due course
to allow shareholders to vote on these proposals.
Current Pro Forma Composition of Net Asset Value
(Based on Unaudited 31 March 2017 valuations)
Pro Forma as at 23 October 2017(1)
-------------------------------------------------
Attributable NAV per
Investment Carried Net Asset Share
(GBP millions) Value Interest Value (pence)
----------- ------------- ---------- ---------
TGI Fridays(2) 156.6 (17.3) 139.3 364p
Hotter Shoes 43.0 (6.1) 36.9 96p
----------- ------------- ---------- ---------
Subtotal Buyouts 199.6 (23.5) 176.1 460p
Photobox 103.8 (4.6) 99.2 259p
Knight Square 26.5 (3.8) 22.7 59p
Sentinel 3.0 (0.4) 2.6 7p
Other Co-investments 2.8 (0.5) 2.3 6p
----------- ------------- ---------- ---------
Subtotal Co-investments 136.1 (9.3) 126.8 331p
Investment Portfolio 335.6 (32.7) 302.9 791p
Cash and Cash Equivalents(3) 435.1 1,137p
Assets Sold but
not Yet Closed 42.4 111p
Other Net Assets/(Liabilities) (4.0) (10p)
---------- ---------
Net Asset Value 776.5 2,028p
Giving effect to the 914p dividend declared by the Company on 23
October 2017, pro forma net asset value would be GBP426.6 million
(1,114p per share), comprised of net investments of GBP302.9
million, net cash balances of GBP81.2 million, and assets sold but
not yet closed of GBP42.4 million.
(1) Carrying values as at 31 March 2017 pending
completion of year-end audit; reflects purchase
of the former manager's 1% interest following
termination
(2) Gives effect to additional GBP35
million invested to support refinancing
(3) Prior to payment of dividend announced
23 October 2017
Updated valuations as at 30(th) September 2017 will be published
with the Group's results to 30(th) September 2017 in December.
Neil Johnson, Chairman of Electra Private Equity PLC, said
today:
"I am pleased to present the findings of Phase II of the
strategic review to shareholders. Having had the opportunity to
review the portfolio fully for the first time, the Board remains
firm in its conviction that the changes identified and implemented
through the review process have been essential to driving
shareholder returns both at the present time and in the future. Our
analysis of the portfolio has also highlighted opportunities to
create genuine value as opposed to transient shifts in valuation or
financial engineering.
The Company has the required operational resources in place
while benefitting significantly from the sizeable reduction in
costs. Consistent with our stated aim to return excess capital to
shareholders, I am delighted to announce a further special dividend
taking total distributions to GBP1.9 billion since the resumption
of distributions to shareholders in 2015. We will continue to
manage the Company's capital needs closely with a view to
optimising returns for shareholders.
We are also taking the first steps towards migration of the
Company from a listed investment trust to a structure that we
believe represents a more flexible platform for the future. At the
same time we will change our name to remove the words "Private
Equity" from our name to more accurately reflect the nature of the
business in this exciting phase of its development and I look
forward to discussing these and other matters with our shareholders
in due course."
* The special dividend will not fall within the Dividend
Reinvestment Plan.
- Ends -
Electra Private Equity PLC will host a meeting with investors
and analysts at 10:00am BST today at Brunswick Group, 16 Lincoln's
Inn Fields, London, WC2A 3ED. Participants wishing to join by
telephone can use the dial-in details as follows:
Participant Dial-in: +44 (0) 14 5255 5566
Conference ID: 3295239
A Company presentation for investors is available at
www.electraequity.com.
For further information:
Gavin Manson +44 (0) 20 3874 8300
Chief Financial Officer
Brunswick Group LLP +44 (0) 20 7404 5959
Gill Ackers/Rowan Brown Electra@brunswickgroup.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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