16 January 2018

ICG ENTERPRISE TRUST PLC

QUARTERLY UPDATE

FOR THE THREE MONTHS TO 31 OCTOBER 2017

Highlights

  • Realisation activity key driver of growth in the quarter - NAV per share of 930p

  • Highly cash generative portfolio

  • YTD distributions exceed total proceeds received in the previous two financial years

  • Continued progress against strategic goals

  • Selective investment in compelling opportunities and increased exposure to ICG managed assets

  • Move to progressive annual dividend policy and quarterly payments

  • NAV and share price continue to outperform FTSE All-Share over one, three, five and ten years

Realisation activity key driver of growth in the quarter

  • Net asset value per share of 930p

  • Total Return[1] of 0.4% for the quarter; 9.1% for the nine months

  • Investment portfolio valued at £578.4m, 89.7% of net assets

  • 1.2% return for the quarter; 2.5% on a constant currency basis

  • 11.1% return for the nine months; 11.3% on a constant currency basis

  • Portfolio continues to be highly cash generative

  • 19 full realisations in the quarter - £63.0m of proceeds received

    • Realisations at an 36% uplift to carrying value; 1.9x multiple of cost

    • Standard Brands largest exit generating proceeds of £16.1m

  • 47 full realisations in the nine months - £180.1m of proceeds received

    • 35% uplift to carrying value; 2.4x multiple of cost

Selective investment in compelling opportunities

  • Total new investment of £33.7m in the quarter; £98.5m in the nine months

  • Co-investment of £8.1m in Visma, provider of accounting software and business outsourcing services, alongside ICG Europe VI

  • Including previous co-investment alongside Cinven, Visma now the third largest portfolio company, valued at £14.7m

Continued progress against strategic goals

  • More fully invested - investment portfolio represents 89.7% of net assets

  • High conviction investments of ICG directly controlled investments, third-party co-investments and secondary investments represent 43% of investment portfolio

  • Four of the largest 10 companies managed by ICG with total weighting to ICG managed investments increasing to 17.0% of the portfolio, up from 10% at January 2017

  • Two co-investments alongside ICG Europe Fund VI completed in the nine months totalling £23.4m along with a £10.4m secondary in ICG Recovery 2008B

  • Increased exposure to US market - £31.8m committed to US opportunities in the nine months

  • 23.0% of the portfolio at October 2017

Progressive annual dividend policy and move to quarterly dividend payments

  • The Board anticipates paying a minimum dividend of 20.0p per share each year and, in the absence of unforeseen circumstances, intends to grow the annual dividend progressively
  • The Company to move to quarterly dividend payments, with a quarterly dividend of 5p payable on 2 March 2018. The ex-dividend date will be 8 February 2018 and the record date 9 February 2018 - Quarterly dividend, together with interim dividend of 10p paid in November takes dividend payments to 15p
- Final dividend will continue to be subject to shareholder approval

Strong balance sheet and continued buybacks of shares

  • High level of realisations increased cash and liquid assets by £8.7m during the quarter to £83.6m
  • Uncalled commitments of £319m
- £187.7m total liquidity (£83.6m of cash and £104.1m undrawn bank line)
  • 110,000 shares bought back at an average discount of 16%, adding 0.03% to net asset value per share in the quarter

Continued strong realisation activity and selective investment since October

  • £35.4m of proceeds received in the two months to 31 December 2017, taking total proceeds to £215.5m year-to-date

  • A record period for realisations - outweighing total proceeds received in the previous two financial years

  • £26.0m of new investments in the two months to 31 December 2017, taking total investments year-to-date to £124.5m, in-line with 12 months to January 2017

  • Focus on defensive businesses that are relatively uncorrelated to economic cycles and highly cash generative

  • £36.9m of new commitments made to two existing managers - PAI VII (£22.0m) and TH Lee (£14.9m)

  • £7.5m primary commitment signed to a new manager relationship, Leeds Equity Partners VI, a US based mid- market private equity firm focused on education, training, business services and information services and software industries

  • Co-investment of £7.5m signed alongside Leeds Equity Partners, expected to close prior to year-end

Consistent strong performance
The performance of the Company remains strong over the short, medium and long term, with the NAV and share price outperforming the FTSE All-Share Index over one, three, five and ten years.

Performance to 31 October 2017 3 months 9 months 1 year 3 years 5 years 10* years
Net asset value per share +0.4% +9.1% +16.8% +46.9% +73.4% +112.0%
Share price +12.5% +21.6% +30.7% +57.6% +123.4% +123.9%
FTSE All-Share Index +2.8% +10.1% +13.4% +31.0% +62.5% +78.4%


* As the Company changed its year end in 2010, the ten-year figures are for the 121 month period to 31 October 2017.

Emma Osborne, Head of Private Equity Fund Investments, ICG, commented:


'The portfolio remains highly cash generative with over £215m of realisations year-to-date, a record period for the portfolio, and outweighing total proceeds received in the previous two financial years.

'Pricing for new investments is high and there is intense competition for good quality assets. Our flexible investment strategy allows us to be nimble, giving us greater control and visibility on the portfolio and enabling us to increase exposure to companies we believe will outperform through the cycle. In the current market conditions, our focus has been on high quality, defensive direct co-investments and secondary investments in both Europe and the US. As always discipline is key.'

Enquiries


Emma Osborne, Head of Private Equity Fund Investments, ICG
Nikki Edgar, Finance and Investor Relations, ICG

Media:
Helen Gustard, Head of Corporate Communications, ICG +44 (0) 20 3201 7700
Vikki Kosmalska, Associate Partner, Maitland +44 (0) 20 7379 5151

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.

Supplementary information

The 30 largest underlying investments

The table below presents the 30 companies in which ICG Enterprise had the largest investments by value at 31 October 2017. 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.

Company Manager Year of investment Country Value as a % of Portfolio
1 City & County Healthcare Group
Provider of home care services Graphite Capital 2013 UK 3.4%
2 DomusVi+^
Operator of retirement homes ICG 2017 France 3.0%
3 Visma+
Provider of ERP software and BPO services business in the Nordic region ICG & Cinven 2014 & 2017 Europe 2.5%
4 Education Personnel+^
Provider of temporary staff for the education sector ICG 2014 UK 2.3%
5 Froneri+^
Manufacturer and distributor of ice cream products PAI Partners 2013 UK 2.2%
6 CPA Global+
Provider of patent and legal services Cinven 2012 UK 2.1%
7 David Lloyd Leisure+
Operator of premium health clubs TDR Capital 2013 UK 2.1%
8 nGAGE
Provider of recruitment services Graphite Capital 2014 UK 2.1%
9 Gerflor^
Manufacturer of vinyl flooring ICG 2011 France 2.1%
10 PetSmart+
Retailer of pet products and services BC Partners 2015 USA 2.0%
11 Skillsoft+
Provider of off the shelf e-learning content Charterhouse 2014 USA 1.7%
12 The Laine Pub Company+
Operator of pubs and bars Graphite Capital 2014 UK 1.6%
13 Frontier Medical+
Manufacturer of medical devices Kester Capital 2013 UK 1.6%
14 TMF^
Provider of management and accounting outsourcing services Doughty Hanson 2008 Netherlands 1.5%
15 System One+
Provider of specialty workforce solutions Thomas H Lee Partners 2016 USA 1.5%

16 Roompot+
Operator and developer of holiday parks PAI Partners 2016 Netherlands 1.4%
17 ICR Group
Provider of repair and maintenance services to the energy industry Graphite Capital 2014 UK 1.4%
18 Swiss Education+
Provider of hospitality training Invision Capital 2015 Switzerland 1.2%
19 Beck & Pollitzer
Provider of industrial machinery installation and relocation Graphite Capital 2016 UK 1.2%
20 New World Trading Company
Operator of distinctive pub restaurants Graphite Capital 2016 UK 1.1%
21 Cambium^
Provider of educational solutions and services ICG 2016 USA 1.1%
22 U-POL^
Manufacturer and distributor of automotive refinishing products Graphite Capital 2010 UK 1.1%
23 Cognito+
Supplier of communications equipment, software & services Graphite Capital 2002 UK 1.0%
24 Ceridian+
Provider of payment processing services Thomas H Lee Partners 2007 USA 0.9%
25 Random42
Provider of high-quality medical animation and digital media services to the healthcare and pharmaceutical industry Graphite Capital 2017 UK 0.9%
26 inVentiv Health
Provider of commercial solutions for healthcare companies Advent & Thomas H Lee Partners 2010 & 2016 USA 0.7%
27 AVS Group
Manufacturer of traffic safety products Fynamore Advisers 2013 Germany 0.7%
28 CeramTec
Manufacturer of high performance ceramics Cinven 2013 Germany 0.6%
29 Explore Learning
Provider of after-school tuition Graphite Capital 2012 UK 0.6%
30 Intervias
Operator of petrol station forecourts TDR Capital 2014 UK 0.6%
Total of the 30 largest underlying investments 46.2%
+ 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 30 largest funds by value at 31 October 2017 are:

Fund Year of commitment Country/ region Value £m Outstanding commitment £m
1 Graphite Capital Partners VIII *
Mid-market buyouts 2013 UK 61.8 33.7
2 ICG Europe VI **
Mezzanine and equity in mid-market buyouts 2015 Europe 21.6 3.6
3 BC European Capital IX **
Large buyouts 2011 Europe 20.3 1.1
4 Fifth Cinven Fund
Large buyouts 2012 Europe 14.8 1.6
5 Graphite Capital Partners VII * / **
Mid-market buyouts 2007 UK 14.4 4.7
6 Thomas H Lee Parallel Fund VI
Large buyouts 2007 USA 12.2 1.0
7 CVC European Equity Partners V **
Large buyouts 2008 Europe/USA 11.2 0.5
8 ICG Strategic Secondaries Fund II
Secondary fund restructurings 2016 North America 11.1 17.3
9 Thomas H Lee Equity Fund VII
Mid-market and large buyouts 2015 USA 10.7 5.9
10 ICG Velocity Partners Co-Investor **
Mid-market buyouts 2016 USA 10.6 2.1
11 Permira V
Large buyouts 2013 Europe 10.4 0.6
12 TDR Capital III
Mid-market and large buyouts 2013 Europe 10.3 3.1
13 CVC European Equity Partners VI
Large buyouts 2013 Global 9.8 7.8
14 Bowmark Capital Partners IV
Mid-market buyouts 2007 UK 9.6 -
15 IK VII
Mid-market buyouts 2013 Europe 9.4 0.4
16 PAI Europe VI
Mid-market and large buyouts 2013 Europe 9.1 7.1
17 Nordic Capital Partners VIII
Mid-market and large buyouts 2013 Nordic 9.1 2.6
18 One Equity Partners VI
Mid-market buyouts 2016 USA/Western Europe 9.0 3.1
19 Hollyport Secondary Opportunities V
Tail-end secondary portfolios 2015 Global 8.7 2.3
20 Doughty Hanson & Co V **
Mid-market and large buyouts 2006 Europe 8.6 6.7

21ICG Europe V **
Mezzanine and equity in mid-market buyouts 2012 Europe 8.5 0.8
22Graphite Capital Partners VI **
Mid-market buyouts 2003 UK 8.2 2.1
23Egeria Private Equity Fund IV
Mid-market buyouts 2012 Europe 8.2 2.6
24ICG European Fund 2006 B
Mezzanine and equity in mid-market buyouts 2014 Europe 7.5 2.1
25Deutsche Beteiligungs Fund VI
Mid-market buyouts 2012 Germany 7.4 1.3
26Steadfast Capital III
Mid-market buyouts 2011 Europe 6.9 0.2
27Gridiron Capital Fund III
Mid-market buyouts 2016 North America 6.5 5.9
28Activa Capital Fund III
Mid-market buyouts 2013 France 6.4 6.8
29Advent Global Private Equity VIII
Large buyouts 2016 Europe/North America 5.8 7.2
30Activa Capital Fund II
Mid-market buyouts 2007 France 5.7 1.9
Total of the largest 30 fund investments 353.8 136.1
Percentage of total investment Portfolio 61.2%
* Includes the associated Top Up funds.
** All or part of an interest acquired through a secondary fund purchase.

Portfolio analysis

Investment category % of portfolio
High conviction portfolio
ICG

17.0%

Third party co-investments 18.8%
Third party secondary investments 7.5%
Total High Conviction investments 43.3%
Third party funds' portfolio
Graphite Capital primary funds

13.8%

Third party primary funds
Total diversified fund investments		 42.9%
56.7%
Total 100.0%

Portfolio by investment type % of value of underlying investments
Large buyouts 41.1%
Mid-market buyouts 47.3%
Small buyouts 6.3%
Other 5.3%
Total 100.0%

Portfolio by calendar year of investment

% of value of underlying investments

2017 15.2%
2016 20.5%
2015 13.3%
2014 18.8%
2013 14.0%
2012 5.8%
2011 2.5%
2010 2.5%
2009 1.2%
2008 2.1%
2007 1.8%
2006 and before 2.3%
Total 100.0%

Portfolio by sector % of value of underlying investments
Healthcare and education 22.5%
Business services 17.2%
Industrials 15.5%
Consumer goods and services 14.8%
Leisure 11.8%
TMT 10.2%
Financials 5.2%
Other 2.8%
Total 100.0%

Portfolio by geographic distribution based on location of Company headquarters

% of value of underlying investments

UK 36.2%
North America 23.0%
Europe 39.4%
Rest of world 1.4%
Total 100.0%

Balance sheet information

Movement in liquid assets

£m 3 months
31 October 2017		 9 months 31 October 2017
Additions2 (36.4) (98.5)
Cash proceeds generated by the portfolio (including income)3 55.5 172.6
Net cash generated by the investment portfolio 19.1 74.1
Non-investment cash flows (0.4) (8.6)
Effect of changes in foreign exchange rates (1.1) 0.5
Cash inflow before shareholder distributions 17.6 66.0
Dividends paid to shareholders (6.9) (13.9)
Share buy-backs settled in the period (1.9) (7.1)
Net cash movement 8.8 45.0
Opening cash and liquid assets 74.8 38.6
Closing cash and liquid assets 83.6 83.6

Footnote

  1. All balance sheet data is presented on a look-through basis to the investment portfolio held by the Company, which is consistent with the commentary in previous annual and interim reports.

  2. Additions cash figure for quarter to 31 October includes £2.6m of drawdowns paid which were accrued at the prior quarter end.

  3. During the quarter ended 31 October a secondary disposal was completed which included £7.5m of deferred consideration. As a result cash proceeds do not equal total realisations in the period.

The summary balance sheet and commitment position at 31 October 2017 is set out below.

31 October 2017 % of net assets 31 January 2017 % of net assets
£m £m
Total portfolio 578.4 89.7% 594.4 97.0%
Cash and liquid assets 83.6 13.0% 38.6 6.3%
Other net current liabilities (16.9) (2.7%) (20.3) (3.3)%
Net assets 645.1 100.0% 612.7 100.0%

Uncalled commitment coverage

31 October 2017 31 January 2017
£m £m
Cash and liquid assets 83.6 38.6
Undrawn bank facility 104.1 103.0
Total liquidity 187.7 141.6
Outstanding commitments 319.0 300.3
Less: Total liquidity (187.7) (141.6)
Over-commitment 131.3 158.7
Over-commitment as % of net assets 20.4% 25.9%

[1] Including 10p interim dividend paid in November 2017


This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: ICG Enterprise Trust Plc via Globenewswire

ICG Enterprise Trust plc published this content on 16 January 2018 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 16 January 2018 07:04:01 UTC.

Original documenthttp://lt.morningstar.com/gus2uvapsy/stockreport/newsItem.aspx?id=397986702033257

Public permalinkhttp://www.publicnow.com/view/C4FBA79286AD39FEB0BF2FCBB9EC6BE915C40A9E