28th August 2015
Candover Investments plc
Interim results for the half year ended 30th June 2015
* Net assets per share of 370p (31st December 2014: 545p) a 32.1% decrease
over the six months to 30th June 2015.
* Candover's* investment portfolio decreased in value by £32.8 million, a
decrease of 24.2% since the year end.Constant currency valuations decreased
by £23.5 million and unfavourable currency movements on investments
amounted to £9.3 million as a result of the strength of Sterling.
* Expro's overall valuation reduced by £34.2 million as a consequence of weak
trading and, following Expro's refinancing, further dilution for Candover
where it was unable to fully follow-on its existing investment. Parques and
Technogym valuations benefitted from improved trading.
* Net debt increased to £32.3 million at 30th June 2015 (31st December 2014:£
27.3 million) reflecting operating and financing costs.Loan-to-value ratio
increased to 31.4% compared to 20.1% at the year end.
* US PP Notes due to mature in December 2015 were successfully refinanced
after the period end, strengthening the balance sheet and potentially
accelerating the timing of the initial capital return to shareholders.
* Partial realisation of Stork BV announced in July 2015 expected to complete
in Q4 and generate proceeds of approximately €9 million, once necessary
clearances have been obtained.
Malcolm Fallen, Chief Executive Officer, said:
"The impact of the drop in the oil price on Expro's prospects, and the need to
refinance its own balance sheet, has had a material adverse impact on our
portfolio valuation, offset only in part by improvement in our other
investments. Since the end of the period, we have strengthened Candover's
balance sheet and eliminated any debt maturity risk, were future portfolio
disposals to be delayed. This has also created a means to accelerate the timing
of the initial capital return to shareholders."
Ends.
* Candover means Candover Investments plc and/or one or more of its
subsidiaries
For further information, please contact:
Candover Investments plc
Malcolm Fallen, CEO +44 20 7489 9848
Business and financial review
Overview
Net assets per share decreased by 32.1% or 175p per share during the six months
to 30th June 2015 compared to an increase in the FTSE All-Share of 3.0% over
the same period. NAV growth is dependent upon the valuation of the portfolio
managed by Arle Capital Partners Limited ("Arle") increasing, thereby
offsetting the costs of running the business. The portfolio's aggregate value
decreased by £23.5 million, on a constant currency basis, which reflects a
material write down in the value of Expro of £33.6 million. This was partly
compensated by a combined increase in the values of Parques and Technogym of £
11.8 million. The impact of foreign currency movements reduced the valuation of
the portfolio by a further £9.3 million, reflecting the strength of Sterling
relative to both the Euro and the US Dollar.
The decline in Expro reflects the impact of continued weakness in the energy
services market which impacted adversely on Expro's trading. As a consequence
of this weakness, Expro completed a major refinancing to make its capital
structure more resilient to a prolonged downturn. This has resulted in further
dilution for Candover because it has not been able to make follow on
investments alongside the Candover 2008 Fund since January 2010. The uplift in
both Parques and Technogym reflects the continued improvement in the trading
performance of both businesses.
Candover's net debt increased to £32.3 million during the first six months,
compared to £27.3 million at the year end. The increase reflected the impact of
interest paid and operating expenses during a period in which no realisations
occurred. The loan-to-value ratio of the Company's net debt increased
correspondingly, from 20.1% at the year end to 31.4% at 30th June 2015.
In the Company's 2014 Annual Report and Accounts, the Board noted it was
actively considering alternative sources of funding ahead of the 31st December
2015 maturity of Candover's US private placement notes ("US PP Notes"). At
30th June 2015, $83.9 million (£53.1 million) of US PP Notes were outstanding.
The review of funding options was undertaken as the repayment of the Company's
debt is wholly dependent on the successful and timely realisation of the
investment portfolio by Arle.
On 13th July 2015 the Company announced that it had agreed a new term loan
facility with 17Capital LLP for up to €52 million (£37.1 million) that,
together with available cash balances of £20.8 million, would enable the
Company to repay the existing US PP Notes at par and meet future working
capital requirements. The US PP Notes were repaid on 13th August 2015.
The terms of the facility allow the Company to return up to £21.8 million
(equivalent to 100 pence per share) to shareholders, ahead of any repayment of
debt, following the realisation of assets. This is in contrast to the Company's
previous debt arrangements. This initial return of cash is subject to a
pre-distribution test that the portfolio value is at least twice the level of
debt. Debt repayments will commence after this initial return of capital to
shareholders, funded from the net proceeds of subsequent realisations.
The new debt facility has a five year maturity, which can be further extended
at the Company's option at no cost. The interest charge is payment-in-kind at
13% per annum, which will roll-up and be paid when the loan itself is repaid.
The loan is subject to a minimum repayment amount calculated as if the loan had
been outstanding for 2.75 years; however, this is reduced to 1.15 years for any
amounts repaid within the first 12 months, up to a maximum of €19.4 million.
The facility is denominated in Euros to match the assets in the investment
portfolio, the majority of which are valued in Euros.
Net asset value per share
Net assets per share decreased by 32.1% from 545p to 370p over the six months
to 30th June 2015. The decrease of 175p per share was split between a decrease
in constant currency investment values (107p), overall adverse currency
movements (43p), and the impact of on-going business costs (25p). In the first
half, these costs comprised loan note interest, the investment manager's fee
and general administration costs.
Table 1
£m p/share
Net asset value at 31st December 2014 as reported 119.2 545
Loss on financial instruments and other income1 (23.5) (107)
Recurring administrative expenses (1.8) (8)
Finance costs (2.4) (11)
Others (including tax) (1.3) (6)
Currency impact:
- Unrealised investments (9.3) (43)
- Retranslation of cash and cash equivalents (0.7) (3)
- Translation of loan 0.7 3
Net asset value at 30th June 2015 as reported 80.9 370
1 Stated before unfavourable currency impact of £9.3 million
Investments
The valuation of investments at 30th June 2015, including accrued loan note
interest, was £103.0 million. Valuations decreased for the period by £23.5
million, before currency effects, representing a decrease of 17.3% in the value
of these investments over their 31st December 2014 value. The overall decrease
in the valuation of the portfolio in the period was £32.8 million representing
a decrease of 24.2% which included £9.3 million of unfavourable foreign
currency movements. A reallocation of £1.7 million of funds invested by
Candover in Stork BV in 2013 was made to meet the Company's £1.9 million
co-investment alongside the Candover 2005 Fund in the Expro refinancing.
Table 2
£m
Investments at 31st December 2014 135.6
Disposals at valuation (1.7)
Additions at cost 1.9
Investments adjusted for additions and disposals 135.8
Revaluation of investments:
- Valuation movements before currency impact (23.5)
- Currency impact on unrealised investments (9.3)
Investments at 30th June 2015 103.0
Net debt position and loan-to-value covenant
Candover's net debt increased from £27.3 million as at 31st December 2014 to £
32.3 million as at 30th June 2015. This reflects the cash outflow relating to
interest paid and operating expenses in the period. The loan-to-value ratio of
the Company's net debt at 30th June 2015 was 31.4% compared to 20.1% at the
year end.
Table 3
30th June 31st December
2015 2014
£m £m
Loans and borrowings 52.6 52.8
Deferred costs 0.5 1.1
Value of bonds 53.1 53.9
Cash (20.8) (26.6)
Net debt 32.3 27.3
Profit before and after tax
Net profit before tax and exceptional non-recurring costs for the period was £
2.3 million compared to a profit of £8.7 million in the comparable period.
Including capital costs of £1.8 million (2014: £1.8 million), total
administrative and finance costs in the period were £4.2 million (2014: £4.5
million), which included £1.1 million (2014: £1.2 million) of management fees
payable to Arle, linked to the value of investments managed, and £2.4 million
of financing costs (2014: £2.4 million).
The exceptional non-recurring gain of £0.3 million (2014: loss £0.1 million)
comprises the effect of the reversal of part of the remaining property
provision. The balance of the provision at 30th June 2015 was £0.1 million.
Board
There were no changes to the Board during the period.
Dividend
The Board is not recommending a dividend payment, but the payments of dividends
in the future will be reviewed in the context of our focus on delivering a
progressive return of cash to shareholders over time.
Outlook
After a difficult first half, we move in to the second half with a little more
optimism, albeit mindful that the global economic outlook is fragile. Our
financing needs are now settled and the partial realisation of Stork BV
provides an initial step towards making the first return of cash to
shareholders possible. The improvement in the portfolio's trading performance,
other than Expro, is encouraging as our investment manager, Arle, continues to
focus on positioning the portfolio companies for realisation.
Manager's report
Arle Capital Partners Limited
Introduction
Arle is the private equity asset manager of the Candover 2005 Fund and Candover
2008 Fund (together 'the Candover Funds' or 'Funds'), as well as special
purpose vehicles.
Portfolio Overview
The Candover Funds portfolio has made steady progress in the first half of
2015. Technogym, Parques Reunidos ("Parques") and Stork BV reported strong
trading but this was more than offset by Expro International ("Expro"), whose
performance has suffered as a direct result of the drop in oil price and the
related industry downturn. Excluding Expro, last twelve months' revenues and
earnings across the portfolio increased by 3.2% and 8.0% respectively in the
six months to 30th June 2015. Including Expro, revenues were flat and earnings
down by 2.0% over the period.
Whilst the performance of the Candover Funds managed by Arle was down 4.0%, the
valuation of Candover's unrealised portfolio fell by 24.2%. This reflected
Candover's inability to follow-on its investment in Expro alongside the
Candover 2008 Fund since January 2010 and negative foreign currency movements
in the period as Candover reports in Sterling.
Whilst there were no realisations during the first half of the year, Arle
continues to make good progress in optimising the operational and financial
performance of its portfolio companies in readiness for exit. Post the period
end, Stork BV was partially realised with the sale of Fokker Technologies to
GKN Aerospace. Completion of the transaction is expected towards the end of
2015.
Expro International
Expro, the international oilfield services company, reported annual results to
31st March 2015 with headline revenue of $1.3 billion, down 5.6%, and earnings
down 15.1%, compared to the fiscal year ending 31st March 2014.
Whilst Expro has continued to win a number of valuable new contracts in the
first half of 2015 and has worked hard to proactively manage its cost base
through the oil sector downturn, trading continues to be weaker as a result of
the sharp fall in the price of Brent crude oil last year which has depressed
activity across the entire sector.
There were, however, some areas of revenue growth, such as the Middle East and
North Africa, which achieved record growth in revenue, up 13.3% on the back of
contracts awarded at the end of the last fiscal year. The company also
delivered a strong performance in Asia, with new contracts in Australia and
Brunei. Revenue earned by Production Testers International (PTI) business was
up on higher sales from early production facilities equipment.
In June, Expro raised $334 million of new equity funding to partially repay
borrowings under its existing mezzanine facility. This also provided $51
million of additional liquidity for investment in the company.
At the half year, Expro has been written down to reflect the current turbulent
market environment, the energy sector downgrade and depressed oil price. The
valuation has reduced by £33.6 million or 154p per share and suffered negative
currency effects of £0.6 million (total: -156p per share). Whilst the value
for the Candover Funds has been reduced by 38% over the period, for Candover
this fall is amplified to 78% because of the cumulative dilution suffered from
not following on part of its original investment made alongside the Candover
2008 Fund since January 2010.
Parques Reunidos
Parques, a global operator of attraction and water parks, enjoyed strong
trading in the first half of 2015, in particular due to renewed consumer
confidence in Spain and Italy and positive results from park upgrades.
In April, Parques reported strong results for the full year to 31st December
2014, reporting a 5.8% increase in revenues to €549 million, a 4% increase in
earnings to €172 million and a 5.8% increase in visitor numbers to 22.2 million
visitors in 2014. In the same month, Parques acquired Faunia in Madrid, having
operated the animal park under a management contract for a number of years
prior to acquisition.
The valuation has been written up by £5.7 million from 31st December 2014,
before negative currency movements of £3.7 million (total: +9p per share).
Stork BV
Stork BV comprises two discrete and separately financed entities: Stork and
Fokker Technologies.
Stork
Stork is a global provider of knowledge-based asset integrity services
focussing on the oil & gas, chemical and power markets. Stork's performance
continued to improve in the first half of 2015 with organic revenue growth of
5.9% reported (€745 million) and earnings growth of €8.7 million to €43.5
million compared to the same period in 2014. This marked the sixth consecutive
quarter of earnings growth. Stork reported a solid performance in Continental
Europe and particularly strong revenue growth in Colombia. Activities which
focus on maintenance, modifications and asset integrity services, have
demonstrated resilience in volatile market conditions. However, the UK and
Power Services markets continue to be challenging.
Fokker Technologies ("Fokker")
Fokker is an aerospace specialist which designs, develops and manufactures
highly engineered aircraft systems and components for aircraft manufacturers
and provides through-life aircraft fleet support services for the aerospace
industry. Fokker enjoyed positive revenue and earnings growth in the first
half of the year and for the year ended 31st December 2014 reported revenue of
€758 million, earnings of €76 million and operational EBIT of €53 million.
Post the period end, in July, Fokker was sold to GKN Aerospace for an
enterprise value of €706 million representing an exit multiple of 10.0x 2014
normalised earnings. Completion of the transaction is expected towards the end
of 2015.
Proceeds from the sale will retire the Fokker debt, repay debt held in Stork
BV, and return circa €90 million to Candover Fund investors.
The combined investment was written up by £0.3 million from 31st December 2014
before negative foreign currency movements of £2.9 million (total: -12.0p per
share).
Technogym
Technogym is the global leader in premium fitness equipment and wellness
solutions. It traded ahead of expectations during the first half of 2015.
The valuation was marked £6.1 million higher than at 31st December 2014, before
negative foreign currency movements of £1.6 million (total: +21p per share).
Hilding Anders
Hilding Anders, the leading manufacturer of beds and mattresses in Europe,
Russia and Asia, witnessed good trading across its regions during the year,
with Russia outperforming. However, the significant depreciation of the Rouble
has adversely impacted the company's earnings. Christer Aberg took up his new
role as CEO on 1st August 2015 following the resignation of Alex Myers who
returned to his former employer, the Getinge Group, as Group CEO. Christer
Aberg has the experience of working in both industrial and consumer oriented
environments. His previous role was CEO of Orkla Confectionary and Snacks with
seven companies in the Nordics and Baltics, and revenues of 5bn NOK.
The valuation was written down from 31st December 2014 by £2.0 million before
negative foreign exchange movements of £0.5 million (total: -11.0p per share).
Realisations
There were no realisations during the period. After the period end, a partial
realisation of Stork BV was announced following the sale of Fokker
Technologies. The transaction is expected to complete in the fourth quarter of
2015.
Valuations
The investments are largely based in Western Europe but their operations extend
into more than 150 countries. The investments are in the energy, services and
industrial sectors.
The co-investments managed by Arle on behalf of Candover are shown below.
Portfolio valuations
Residual Valuation Additions Valuation Valuation Valuation Valuation
cost1 at 31st and movement movement at 30th movement
December disposals excluding attributable June 2015 pence per
Portfolio 2014 FX2 to FX2 £m share2
company £m £m £m £m £m
Parques 31.8 39.9 - 5.7 (3.7) 41.9 9
Reunidos
Stork Group 43.8 30.9 (1.7) 0.3 (2.9) 26.6 (12)
Technogym 29.2 17.1 - 6.1 (1.6) 21.6 21
Expro 94.0 41.8 1.9 (33.6) (0.6) 9.5 (156)
International
Hilding 24.3 5.3 - (2.0) (0.5) 2.8 (11)
Anders
Alma 15.3 - - - - -
All 238.4 135.0 0.2 (23.5) (9.3) 102.4 (150)
investments
Other 18.0 0.6 - - - 0.6 -
investments3
Total 256.4 135.6 0.2 (23.5) (9.3) 103.0 (150)
1 Residual cost is original cost less realisations to date
2 Compared to the valuation at 31st December 2014 or acquisition date, if
later
3 Represents assets sold in H1 2015 and other co-investments
Outlook
During the remainder of 2015, Arle will continue to focus on optimising
performance across the portfolio, ensuring that each business is well
positioned to maximise growth. Arle will continue to work towards realising
the remaining investments in the Funds at the appropriate time.
Arle Capital Partners Limited
28th August 2015
Candover portfolio
Analysis by value at 30th June 2015
By valuation method By sector
1. Multiple of earnings 100% 1. Industrials 49.8%
2. Services 40.9%
3. Energy 9.3%
By region By age
1. Spain 40.9% 1. Greater than 5 years 100%
2. Benelux 26.0%
3. Italy 21.1%
4. United Kingdom 9.3%
5. Nordic 2.7%
Candover portfolio
at 30th June 2015
Movement Effective
Residual from equity % of
Date of cost of Directors' 31st Dec interest Candover's Basis of
Investment investment investment valuation 20141 (fully net assets valuation
£m £m £m diluted)
Parques Reunidos Mar-07 31.8 41.9 2.0 3.9 51.7 Multiple
Operator of of
attraction parks earnings
Stork Group Jan-08 43.8 26.6 (2.6) 4.6 32.9 Multiple
Engineering of
conglomerate earnings
Technogym Aug-08 29.2 21.6 4.5 3.2 26.7 Multiple
Premium fitness of
equipment and earnings
wellness products
Expro International Jul-08 94.0 9.5 (34.2) 4.7 11.7 Multiple
Oilfield services of
earnings
Hilding Anders Dec-06 24.3 2.8 (2.5) 4.3 3.5 Multiple
Bed and mattress of
manufacturer earnings
Alma Consulting Dec-07 15.3 - - 4.9 - Multiple
Group of
Cost consultancy earnings
1 Adjusted for additions and disposals in the period
Principal risks and uncertainties
Details of the principal risks and uncertainties facing the Group were set out
in the Risk review on pages 6 to 8 of the 2014 Report and Accounts, a copy of
which is available on our website (www.candoverinvestments.com).
The principal risks and uncertainties identified in the 2014 Report and
Accounts, and the policies and procedures for minimising these risks and
uncertainties, remain unchanged and each of them has the potential to affect
the Group's results during the remainder of 2015. Our views on the current
market conditions are reflected in the Business and financial review and the
Manager's report.
Statement of Directors' responsibilities
The Directors of Candover Investments plc confirm that, to the best of their
knowledge, the condensed set of financial statements in this interim report
have been prepared in accordance with International Accounting Standard 34
'Interim Financial Reporting' as adopted by the EU, and give a fair view of the
assets, liabilities, financial position and profit or loss of Candover
Investments plc, and the undertakings included in the consolidation as a whole,
and that the Manager's report includes a fair review of the information
required by DTR 4.2.7R and DTR 4.2.8R.
By order of the Board
Ipes (UK) Limited
Company Secretary
28th August 2015
Independent review report to the members of
Candover Investments plc
Introduction
We have reviewed the condensed set of financial statements in the half-yearly
financial report of Candover Investments plc for the six months ended 30th June
2015 which comprises the Group statement of comprehensive income, Group
statement of changes in equity, Group statement of financial position, Group
cash flow statement and the related notes. 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's members, as a body, 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'. Our review work has been undertaken so that we might state to
the Company's members those matters we are required to state to them 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 and the Company's members as a body, for our review work, for
this report, or for the conclusion 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 2, the annual financial statements of the Group are
prepared in accordance with International Financial Reporting Standards 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 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'. 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
Ireland) 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 30th June 2015 is 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 and Transparency Rules of the United Kingdom's Financial Conduct
Authority.
Grant Thornton UK LLP
Auditor
London
28th August 2015
Group statement of comprehensive income
for the period ended 30th June 2015
£ million Six months to 30th Six months to 30th Year to 31st
June 2015 June 2014 December 2014
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Unaudited unaudited audited
Gain/(loss) on financial
instruments
at fair value through profit
and loss
Realised gains/(losses) - 0.2 0.2 - 3.5 3.5 - 4.8 4.8
Unrealised (losses)/gains - (38.4) (38.4) - (10.3) (10.3) - (39.9) (39.9)
- (38.2) (38.2) - (6.8) (6.8) - (35.1) (35.1)
Revenue
Investment and other income 4.7 - 4.7 11.4 - 11.4 11.3 - 11.3
Recurring administrative (1.2) (0.6) (1.8) (1.5) (0.6) (2.1) (2.8) (1.3) (4.1)
expenses
Exceptional non-recurring 0.3 - 0.3 (0.1) - (0.1) (0.3) - (0.3)
gains/(losses)
Profit/(loss) before finance 3.8 (38.8) (35.0) 9.8 (7.4) 2.4 8.2 (36.4) (28.2)
costs and taxation
Finance costs (1.2) (1.2) (2.4) (1.2) (1.2) (2.4) (2.4) (2.4) (4.8)
Exchange movements on - 0.7 0.7 - 1.4 1.4 - (3.2) (3.2)
borrowings
Profit/(loss) before 2.6 (39.3) (36.7) 8.6 (7.2) 1.4 5.8 (42.0) (36.2)
taxation
Analysed between:
Profit/(loss) before 2.3 (39.3) (37.0) 8.7 (7.2) 1.5 6.1 (42.0) (35.9)
exceptional non-recurring
costs
Exceptional non-recurring 0.3 - 0.3 (0.1) - (0.1) (0.3) - (0.3)
gains/(losses)
Taxation (1.6) - (1.6) - - - (0.9) - (0.9)
Profit/(loss) after taxation 1.0 (39.3) (38.3) 8.6 (7.2) 1.4 4.9 (42.0) (37.1)
Total comprehensive income 1.0 (39.3) (38.3) 8.6 (7.2) 1.4 4.9 (42.0) (37.1)
Earnings per ordinary share:
Total earnings per share 5p (180p) (175p) 39p (32p) 7p 22p (192p) (170p)
- basic and diluted
Dividends paid (£ millions) - - - - - - - - -
The total column represents the Group statement of comprehensive income under
IFRS. The supplementary revenue and capital columns are presented for
information purposes as recommended by the Statement of Recommended Practice
issued by the Association of Investment Companies
All of the gain for the period and the total comprehensive income for the
period are attributable to the owners of the Company
No interim dividend is proposed
Group statement of changes in equity
for the period ended 30th June 2015
Unaudited Called Share Other Capital Capital Revenue Total
up premium reserves reserves reserves - reserve equity
share account - unrealised
capital £m £m realised £m £m £m
£m £m
Balance at 1st January 2015 5.5 1.2 (0.1) 310.4 (193.5) (4.3) 119.2
Net revenue after tax - - - - - 1.0 1.0
Unrealised loss on financial - - - - (38.4) - (38.4)
instruments
Realised gain/(loss) on - - - 0.2 - - 0.2
financial instruments
Exchange movements on - - - - 0.7 - 0.7
borrowing
Costs net of tax - - - (1.8) - - (1.8)
Profit/(loss) after tax - - - (1.6) (37.7) 1.0 (38.3)
Total comprehensive income - - - (1.6) (37.7) 1.0 (38.3)
Balance at 30th June 2015 5.5 1.2 (0.1) 308.8 (231.2) (3.3) 80.9
Unaudited
Balance at 1st January 2014 5.5 1.2 (0.1) 318.1 (159.2) (9.2) 156.3
Net revenue after tax - - - - - 8.6 8.6
Unrealised (loss) on financial - - - - (10.3) - (10.3)
instruments
Realised (loss)/gain on - - - (7.3) 10.8 - 3.5
financial instruments
Exchange movements on - - - - 1.4 - 1.4
borrowing
Costs net of tax - - - (1.8) - - (1.8)
Profit/(loss) after tax - - - (9.1) 1.9 8.6 1.4
Total comprehensive income - - - (9.1) 1.9 8.6 1.4
Balance at 30th June 2014 5.5 1.2 (0.1) 309.0 (157.3) (0.6) 157.7
Audited
Balance at 1st January 2014 5.5 1.2 (0.1) 318.1 (159.2) (9.2) 156.3
Net revenue after tax - - - - - 4.9 4.9
Unrealised (loss) on financial - - - - (39.9) - (39.9)
instruments
Realised (loss)/gain on - - - (4.0) 8.8 - 4.8
financial instruments
Exchange movements on - - - - (3.2) - (3.2)
borrowing
Costs net of tax - - - (3.7) - - (3.7)
Profit/(loss) after tax - - - (7.7) (34.3) 4.9 (37.1)
Total comprehensive income - - - (7.7) (34.3) 4.9 (37.1)
Balance at 31st December 2014 5.5 1.2 (0.1) 310.4 (193.5) (4.3) 119.2
Group statement of financial position
at 30th June 2015
£ million Notes 30th June 2015 30th June 2014 31st December
unaudited unaudited 2014
audited
Non-current assets
Financial investments designated at
fair value through profit and loss
Investee companies 4 102.4 173.8 135.0
Other financial investments 4 0.6 2.5 0.6
103.0 176.3 135.6
Trade and other receivables 9.3 9.0 8.5
Deferred tax asset 0.5 3.0 2.1
112.8 188.3 146.2
Current assets
Trade and other receivables 0.1 0.2 0.1
Current tax asset 0.1 0.1 0.1
Cash and cash equivalents 20.8 18.9 26.6
21.0 19.2 26.8
Current liabilities
Trade and other payables (0.2) (0.6) (0.5)
Provisions (0.1) (1.4) (0.5)
Loans and borrowings (52.6) - (52.8)
(52.9) (2.0) (53.8)
Net current (liabilities)/assets (31.9) 17.2 (27.0)
Total assets less current 80.9 205.5 119.2
liabilities
Non-current liabilities
Loans and borrowings - (47.8) -
Net assets 80.9 157.7 119.2
Equity attributable to equity
holders
Called up share capital 5.5 5.5 5.5
Share premium account 1.2 1.2 1.2
Other reserves (0.1) (0.1) (0.1)
Capital reserve - realised 308.8 309.0 310.4
Capital reserve - unrealised (231.2) (157.3) (193.5)
Revenue reserve (3.3) (0.6) (4.3)
Total equity 80.9 157.7 119.2
Net asset value per share
Basic 370p 722p 545p
Diluted 370p 722p 545p
Group cash flow statement
for the period ended 30th June 2015
£ million Notes Six months to Six months to Year to
30th June 2015 30th June 2014 31st December
unaudited unaudited 2014
audited
Cash flows from operating activities
Cash flow from operations 3 (3.0) 0.4 3.6
Interest paid (1.9) (2.0) (3.9)
Net cash outflow from operating (4.9) (1.6) (0.3)
activities
Cash flows from investing activities
Purchase of financial investments (1.9) - -
Sale of financial investments 1.7 17.9 24.2
Net cash (outflow)/inflow from (0.2) 17.9 24.2
investing activities
Cash flows from financing activities
Loan notes issued - - -
Loan notes repaid - - -
Net cash outflow from financing - - -
activities
(Decrease)/increase in cash and cash (5.1) 16.3 23.9
equivalents
Opening cash and cash equivalents 26.6 3.0 3.0
Effect of exchange rates and (0.7) (0.4) (0.3)
revaluation on cash and cash
equivalents
Closing cash and cash equivalents 20.8 18.9 26.6
Notes to the financial statements
for the period ended 30th June 2015
Note 1 General information
This condensed consolidated half-year financial information does not comprise
statutory accounts within the meaning of Section 434 of the Companies Act 2006.
Statutory accounts for the year ended 31st December 2014 were approved on 26th
March 2015. Those accounts, which contained an unqualified audit report under
Section 498 of the Companies Act 2006 and which did not make any statements
under Section 498 of the Companies Act 2006, have been delivered to the
Registrar of Companies in accordance with Section 441 of the Companies Act
2006.
Note 2 Basis of accounting
The Group financial statements are prepared under International Financial
Reporting Standards ('IFRS') as adopted by the European Union. This statement
has been prepared using accounting policies and presentation consistent with
those applied in the preparation of the accounts for the Group for the year
ended 31st December 2014, and in accordance with IAS 34 'Interim Financial
Reporting' (Revised).
Note 3 Reconciliation of operating income to net cash flow from operating
activities
£ million Six months to Six months to Year to
30th June 2015 30th June 2014 31st December
unaudited unaudited 2014
audited
Total income 4.7 11.4 11.3
Administrative expenses (1.8) (2.3) (4.1)
Operating profit 2.9 9.1 7.2
Increase in trade and (5.6) (7.8) (1.3)
other receivables1
Decrease in trade and (0.3) (0.9) (2.3)
other payables
Net cash (outflow)/inflow (3.0) 0.4 3.6
from operating activities
1 Includes accrued portfolio income recognised within Financial investments
shown under Non-current assets on the Group statement of financial position.
Note 4 - Financial investments designated at fair value through profit and loss
£ million Six months to Six months to Year to
30th June 2015 30th June 2014 31st December
unaudited unaudited 2014
audited
Opening valuation 135.6 191.2 191.2
Disposals at valuation (1.7) (16.1) (24.2)
Additions at cost 1.9 - -
Valuation movements (32.8) 1.2 (31.4)
Closing valuation 103.0 176.3 135.6
Note 5 Related party transactions
The nature of the Company's interest in the Candover 2005 and 2008 Funds is
disclosed in note 9 on page 64 of the 2014 Report and Accounts.
As at 30th June 2015, Candover's investments as a Special Limited Partner in
the Candover 2005 Fund were valued at £0.4 million (31st December 2014: £0.4
million).
Note 6 Outstanding commitments
At 30th June 2015, the Company had no outstanding commitment in the Candover
2005 Fund (31st December 2014: £nil).
Note 7 Subsequent events
The partial realisation of Stork BV was announced on 28th July 2015 following
the disposal of Fokker Technologies BV. The transaction, subject to concluding
the necessary employee consultation processes and receipt of requisite
regulatory clearances, is expected to complete in the fourth quarter of 2015.
Proceeds are estimated to be €9 million.
On 13th August 2015 the Company utilised €49 million from aggregate facilities
of €52 million provided by 17 Capital LLP, together with the Company's surplus
cash balances, to repay the US PP Notes in full.