REG - Bridgepoint Group - Half-year Report
26/07/2022 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220726:nRSZ7374Ta&default-theme=true
RNS Number : 7374T Bridgepoint Group plc 26 July 2022
Bridgepoint Group plc
Strong first half performance and outlook for FY 2022 unchanged
Bridgepoint today announces strong first half trading performance, ahead of
expectations, and confirms full year guidance which remains in line with
current expectations:
Key highlights include:
Fundraising
• Good progress with fund raising: Bridgepoint Europe VII held first close at
€4 billion in Q2 2022. Further closes held since then and fund now in
final third of €7 billion target fund raising;
• Transition to BE VII has been formalised with a May 2022 transition date to be
confirmed on receipt of competition clearance for BE VI's final investment at
which point the Fund will start to contribute revenue as Fee Paying AUM;
• Bridgepoint Direct Lending III fund raise progressing in line with
expectations and Bridgepoint Credit performing to plan;
Financials
• Revenues and underlying EBITDA increased by 15% and 17% respectively compared
with 2021 half-year;
• Performance driven by income from recently raised funds and strong investment
performance in H1 2022;
• Capital deployment in line with 2021, taking advantage of market conditions:
€2.7 billion invested in H1 2022 in line with €2.7 billion in H1 2021;
• Total Assets Under Management (AUM) of €37.1 billion, an increase of 13%
from year end and 30% from H1 2021. This is net of AUM decline from
successfully exited investments, being more than offset by capital raising
activity and increases in underlying asset valuations;
• Fee paying AUM of €18.8 billion (prior to fees being charged on BE VII)
representing a 6% increase from H1 2021;
Fund performance
• Underlying fund performance ahead of expectations, benefitting from strong
exits and continued organic growth, with Bridgepoint Europe VI in particular,
maturing quickly;
• BE VI and BDC III posted valuation uplifts at 30 June 2022 and as a result Net
IRRs are now 35% and 45% respectively before accrued carried interest. BE V
was flat vs Q1 2022 after posting very strong exits in the first quarter. Over
the last 18 months the average BE exit premium to unrealised valuation six
months previously has been +65%, up from the five year average of +40%;
• Interim dividend of 4.0 pence per share, a ten percent increase from the 2021
final dividend; and
• Bridgepoint remains well positioned to deliver 2022 financial performance in
line with expectations
Commenting on this performance, William Jackson, Chairman, said:
"Our results for H1 2022 reflect the resilience and continued strong progress
of our business despite a much more volatile market backdrop than expected at
the start of the year.
"Bridgepoint has delivered continued growth in profits in H1 2022 reflecting
the strength of our middle market business model. Every Bridgepoint fund is
deliberately diversified by year, sector and geography. Core to our investment
performance is disciplined portfolio construction, sensible use of leverage
and asset selection focused on high margin, cash generative businesses with
low exposure to consumer discretionary spend.
"Our capital raising plans for Bridgepoint Europe VII and Direct Lending
remain unchanged despite the congested fundraising markets that we flagged at
the start of our fund raising programmes late last year..
"In this context Bridgepoint Europe VII has already attracted a significant
amount of capital, holding a first close of €4 billion in Q2 2022. Since
then, the fund has enjoyed further closings and it is now in the final third
of its fund raising programme with the process likely to formally complete in
H1 2023.
"Looking forward, we expect market volatility and inflation pressures to
continue and have positioned our investment activity accordingly. We will not
be immune to macroeconomic events but believe our funds are well positioned
for current conditions as reflected by the progress being made in raising
capital for BE VII.
"We are excited by the strategic growth prospects for the Group as we continue
to progress our business development plans and remain confident in
Bridgepoint's ability to deliver attractive returns for our fund investors and
our shareholders alike."
Presentation and Q&A
The 2022 Interim Accounts along with
presentation slides will be available on the Bridgepoint website:
https://www.bridgepointgroupplc.com/results-reports-and-presentations
(https://www.bridgepointgroupplc.com/results-reports-and-presentations)
Additionally, management will hold a webcast to answer questions from analysts
and investors at 8.30am UK time on Tuesday 26(th) July:
Join via weblink:
https://www.lsegissuerservices.com/spark/BRIDGEPOINTGROUP/events/a37bb5d0-055d-4dc1-8674-9aa161772b16
(https://www.lsegissuerservices.com/spark/BRIDGEPOINTGROUP/events/a37bb5d0-055d-4dc1-8674-9aa161772b16%20)
Register for conference call:
https://cossprereg.btci.com/prereg/key.process?key= P33N76TCP
(https://cossprereg.btci.com/prereg/key.process?key=%20P33N76TCP%20)
INTERIM DIVIDEND PAYMENT TIMETABLE
The timetable for the payment of the interim dividend of 4.0 pence per share
announced today is as follows:
Ex-dividend date: 18 August 2022
Record date: 19 August 2022
Payment date: 26 September 2022
ENQUIRIES
Bridgepoint
Analysts and investors Media
Adam Key Christian Jones / James Murray
Adam.Key@bridgepoint.eu (mailto:Adam.Key@bridgepoint.eu) Christian.jones@bridgepoint.eu (mailto:Christian.jones@bridgepoint.eu)
+44 7833 748010 James.murray@bridgepoint.eu (mailto:James.murray@bridgepoint.eu)
+44 20 7034 3500
Finsbury Glover Hering (Public Relations Adviser to Bridgepoint)
Charles O'Brien / +44 20 7251 3801 / +44 7825 043656
Anjali Unnikrishnan / +44 20 7251 3801 / +44 7826 534233
Bridgepoint@Finsbury.com (mailto:Burgundy@Finsbury.com)
Abbreviated income statement
£ million Six months ended Six months ended 31 December 2021 Six months ended Change Change
30 June
30 June
H1 22 vs H2 21 (%)
H1 22 vs H1 21 (%)
2022
2021
Management fees 100.9 101.4 96.3 (0.5)% 4.8%
Investment income 38.7 45.7 25.5 (15.3)% 51.8%
Total operating income 140.1 148.4 122.2 (5.6)% 14.6%
Total expenses (79.0) (114.9) (70.4) (31.2)% 12.2%
Total expenses (excluding exceptional expenses) (78.3) (87.5) (69.2) (10.5)% 13.2%
EBITDA 61.1 33.5 51.8 82.4% 18.0%
Underlying EBITDA 61.8 60.9 53.0 1.5% 16.6%
Underlying FRE 23.1 21.0 27.5 10.0% (16.0)%
Depreciation and amortisation expense (9.1) (8.7) (6.3) 4.6% 44.4%
Underlying operating profit 54.2 53.7 48.3 0.9% 12.2%
Reported operating profit 52.0 24.8 45.5 109.7% 14.3%
Net finance expense (3.7) (2.6) (5.1) 42.3% (27.5)%
Net finance expense (excluding exceptional net income) (2.3) (5.5) (6.0) (58.2)% (61.7)%
Underlying profit before tax 51.9 48.2 42.3 7.7% 22.7%
Reported profit before tax 48.3 22.2 40.4 117.6% 19.6%
Tax (3.4) (1.8) (3.0) 88.9% 13.3%
Reported profit after tax 44.9 20.4 37.4 120.1% 20.1%
Consolidated balance sheet
Summarised consolidated balance sheet As at As at Change
30 June
31 December
(%)
£ million
2022
2021
Assets
Non-current assets 592.6 567.9 4.3%
Current assets 975.2 712.2 36.9%
Total Assets 1,567.8 1,280.1 22.5%
Liabilities
Non-current liabilities 741.7 432.3 71.6%
Current liabilities 95.3 131.5 (27.5)%
Total Liabilities 837.0 563.8 48.5%
Net Assets 730.8 716.3 2.0%
Share capital and premium 289.9 289.9 0.0%
Other reserves 11.3 13.8 (18.1)%
Retained earnings 429.6 412.6 4.1%
Total Equity 730.8 716.3 2.0%
Key metrics
£ million Six months ended Six months ended 31 December 2021 Six months ended Change Change
30 June
30 June
H1 22 vs H2 21
H1 22 vs H1 21
2022
2021
(%)
(%)
Total AUM (€bn) 37.1 32.9 28.5 12.8% 30.2%
Fee paying AUM (€bn) 18.8 18.3 17.7 2.7% 6.2%
Management fee margin on fee paying AUM 1.22% 1.23% 1.23% (0.01)ppt (0.01)ppt
Management fees (£m) 100.9 101.4 96.3 (0.5)% 4.8%
Investment income (£m) 38.7 45.7 25.5 (15.3)% 51.8%
Total expenses (excluding exceptional items) (78.3) (87.5) (69.2) (10.5)% 13.2%
Underlying EBITDA (£m) 61.8 60.9 53.0 1.5% 16.6%
Underlying EBITDA margin 44.1% 41.0% 43.4% 3.1 ppt 0.7 ppt
Underlying FRE (£m) 23.1 21.0 27.5 10.0% (16.0)%
Underlying FRE margin 22.8% 19.4% 28.4% 3.4 ppt (5.6) ppt
Underlying profit before tax (£m) 51.9 48.2 42.3 7.7% 22.7%
Reported profit before tax (£m) 48.3 22.2 40.4 117.6% 19.6%
Reported profit after tax (£m) 44.9 20.4 37.4 120.1% 20.1%
Reported pro forma basic and diluted EPS (pence) 5.5 2.5 4.5 120.1% 20.1%
Adjusted pro forma basic and diluted EPS (pence) 5.9 5.6 4.8 4.5% 23.4%
Reconciliation between statutory and underlying income statements
Six months ended 30 June 2022 Six months ended 30 June 2021
£m Underlying Excluded items Reported Underlying Excluded items Reported
Management fees 100.9 - 100.9 96.3 - 96.3
Profits from fair value remeasurement of co-investments and carried interest 38.7 - 38.7 25.5 - 25.5
Other operating income 0.5 - 0.5 0.4 - 0.4
Total operating income 140.1 - 140.1 122.2 - 122.2
Personnel expenses (60.9) (0.6) (61.5) (55.5) (0.9) (56.4)
Other Expenses (18.0) (0.1) (18.1) (14.7) (0.3) (15.0)
Foreign exchange gains/(losses) 0.6 - 0.6 1.0 - 1.0
Total Expenses (78.3) (0.7) (79.0) (69.2) (1.2) (70.4)
EBITDA 61.8 (0.7) 61.1 53.0 (1.2) 51.8
EBITDA Margin 44.1% 43.6% 43% 42%
FRE 23.1 (0.7) 22.4 27.5 (1.2) 26.3
FRE Margin 22.8% 22.1% 28% 27%
Depreciation and amortisation expense (7.6) (1.5) (9.1) (4.7) (1.6) (6.3)
Net finance expense (2.3) (1.4) (3.7) (6.0) 0.9 (5.1)
Profit Before Tax 51.9 (3.6) 48.3 42.3 (1.9) 40.4
Tax (3.4) - (3.4) (3.0) - (3.0)
Profit After Tax 48.5 (3.6) 44.9 39.3 (1.9) 37.4
EXECUTIVE CHAIRMAN'S STATEMENT
I am pleased to be sharing our results for H1 2022 which reflect the continued
progress of our business despite a much more volatile market backdrop than
expected at the start of the year.
Bridgepoint has delivered continued growth in revenues and profits in H1 2022
reflecting the strength of our middle market business model arising from
Bridgepoint's focus on building funds with conviction, asset selection and
disciplined vintage year deployment, combined with a substantially reduced
exposure to consumer discretionary spend.
We have taken advantage of market conditions to maintain our fund investment
activity in the first half of 2022 at a level in line with the first half of
2021. In line with expectations Bridgepoint Europe VI ("BE VI") is now fully
deployed having built a high quality portfolio of growth assets. The
transition to Bridgepoint Europe VII ("BE VII") has been formalised with a May
2022 transition likely. The exact date will be confirmed on receipt of
competition clearance for Bridgepoint Europe VI's final investment at which
point Bridgepoint Europe VII will start to contribute revenue as Fee Paying
AUM.
We have also made continued good progress with our capital raising over the
last six months with both equity and credit funds, BE VII and Bridgepoint
Direct Lending III ("BDL III"), likely to formally complete their fund raises
in H1 2023.
With this background and prior to any fees from BE VII, in the first half of
the year the business generated underlying EBITDA of £61.8 million, an
increase of 16.6 per cent from H1 2021 and underlying profit before tax of
£51.9 million, an increase of 22.7 per cent from H1 2021.
In summary, these results reflect a period of strong performance driven by
both our equity and debt strategies, with continued strong portfolio
realisations and valuation uplifts recorded in H1 2022.
Bridgepoint's investment thesis
Bridgepoint is a clear leader in middle market growth investing. We have over
180 investment professionals working in 10 offices in Europe and around the
globe. This is an unusually deep and highly experienced team of people for a
middle market firm. Of most relevance today, we have a very experienced
management team with deep experience of running private equity and credit
portfolios through macroeconomic cycles.
Bridgepoint operates from a scalable investment platform that exploits the
organisation's long standing sector knowledge as well as on the ground
presence in the markets where we commit capital. This local presence provides
real insight and expertise in those markets, drives high quality diversified
origination and is essential for building productive relationships with the
growth companies to which we provide support.
This platform is the foundation of our 30 year track record of delivering
strong and consistent investment performance through multiple economic cycles
and delivering compelling returns for our investors and consequently for
shareholders too. Importantly we construct portfolios that deliver both growth
and resilience - well suited and relevant to the economic and market
conditions we are experiencing.
We are, however, not immune to macro shocks or to inflationary pressures
within our portfolio companies and are extremely alert to the challenges of
current macroeconomic conditions. However, our funds have a low exposure to
businesses driven by discretionary spend (c.12 per cent of the portfolios as
at 30 June 2022) and with an average EBITDA margin of 28 per cent or more in
our last two flagship equity funds, our businesses are mainly price makers. We
expect that wage inflation will be a consideration this year but expect
portfolio company margins to absorb this pressure over time without materially
impacting their long term growth potential.
Capital raising
Our capital raising plans for Bridgepoint Europe VII and Direct Lending remain
unchanged despite the congested fundraising markets that we flagged at the
start of our fund raising programmes late last year.
Our equity funds invest in profitable growth companies in attractive 21st
century sectors, which combined with disciplined portfolio construction,
typically deliver strong absolute and risk adjusted returns. In this context
BE VII has been well placed to attract a significant amount of capital,
holding a first close of €4 billion in Q2 2022. Since then, the fund has
enjoyed further closes and it is now in the final third of its €7 billion
target fund raising programme. The fund is on track to hold its final close in
H1 2023.
Our performance track record has attracted a strong institutional following
over many years. At the end of H1 2022 we managed €37.1 billion of assets
under management ("AUM") for some 400 fund investors around the world.
Fund investment performance
Bridgepoint's investment performance is best illustrated by the success of
current funds: its most mature flagship equity fund, Bridgepoint Europe V ("BE
V"), which has a well balanced portfolio of investments assembled with good
vintage year diversity, is on track to deliver returns of over 2.5x invested
capital to its investors. It is a high quality return from a diversified
portfolio, by geography, sector and timing of investment. The fund has now
returned a large amount of original capital and gain to investors.
At the start of 2022, our equity funds capitalised upon attractive market
conditions to deliver some very strong exits ahead of originally planned
timing with the result that the distribution to paid in capital ratio ("DPI")
of BE V increased from 1.08x invested capital to 1.6x invested capital
securing returns ahead of recent valuation and currency rotations.
These exits, together with strong underlying trading across most of our
portfolio companies, have driven increases in underlying portfolio valuations
across our equity portfolios despite benchmark valuation multiples reducing.
This has delivered fund performance ahead of our original expectations in H1
2022.
At 30 June BE V valuations remained flat vs Q1 2022 reflecting the significant
returns of capital from the fund after posting very strong exits in the first
quarter. BE VI and BDC III posted material valuation uplifts at 30 June 2022
and as a result Net IRRs are now 35 per cent and 45 per cent respectively
before accrued carried interest. Over the last 18 months the average
Bridgepoint Europe fund exit premium to unrealised valuation has been +65 per
cent, up from the five year average of +40 per cent.
Private Equity
In the first six months of the year, Bridgepoint's private equity funds
committed €1.5 billion to new investments, completed six add-on acquisitions
and returned €1.4 billion to our fund investors.
Bridgepoint Europe had a strong start to the year with a series of favourable
exits across multiple sectors. The half-year saw €1.2 billion of capital
deployed in three new platform investments and four major bolt ons for the
existing portfolio. In total, BE returned over €1.2 billion of capital over
the last 6 months.
Bridgepoint Development Capital and Bridgepoint Growth also performed well,
continuing to deploy capital in new platform investments and returning some
£223.2 million of capital to investors in the first half of the year. Most
recently, BDC agreed to sell HKA in a transaction delivering a 7x money
multiple for BDC III and which will return 30 per cent of the fund's original
capital to fund investors.
With the number of initial public offerings ("IPOs") in public equity markets
severely curtailed so far this year, it is important to remember that
operating in the mid-market, we are not dependent on initial public offerings
as an exit route. Since 2000, we exited through IPO just twice in 84 exits.
Private Credit
Bridgepoint's second core strategy, Bridgepoint Credit, also enjoyed a strong
first half. €1.6 billion was deployed across Direct Lending and Credit
Opportunities compared to realisations of €1.3 billion.
Overall, credit strategies benefitted from more volatile lending markets and
increasing base rates with deployment in both Bridgepoint Direct Lending III
("BDL III") and Bridgepoint Credit Opportunities IV ("BCO IV") in line with
target investment pace. BDL III has now invested c. €1.5 billion across 22
investments while BCO IV has invested c. €250 million across 16 investments.
Company financial performance
The continued success of our funds and the strong financial performance in H1
2022 is testament to the full depth of business experience, resilience and
professionalism of our team against a backdrop of unexpected challenges in
geopolitics, supply chain issues and monetary policy responses to higher than
expected inflation.
In H1 2022, AUM increased by 13 per cent compared to H2 2021 and by 30 per
cent compared to H1 2021 to reach €37.1 billion. Across our equity and
credit funds, €3.1 billion was deployed in new and follow-on investments and
€3.0 billion of capital was realised during the period.
As noted above, at the start of 2022 our equity funds capitalised upon
attractive market conditions to deliver some very strong exits ahead of
originally planned timing. These exits, together with strong underlying
trading across most of our portfolio companies, have driven increases in
underlying portfolio valuations across our equity portfolios leading to fund
performance ahead of our original expectations.
With this background, our revenues and EBITDA increased by 15 per cent and 17
per cent respectively compared to H1 2021. This performance was driven by
income from recently raised funds and strong investment performance in H1
2022, positioning us well to achieve current full year expectations.
The right kind of returns
We always aim to be a responsible investor. As a growth investor our portfolio
companies create new jobs and we are focused on helping to build sustainable
business models which contribute to the communities in which they operate and
drive long term value.
Taking a proactive approach to societal and environmental issues is not just a
social responsibility; it is also a matter of good guardianship. Businesses
that do good grow both faster and sustainably. Our ambition is to create
lasting, sustainable and positive impacts so that our investors, shareholders
and employees are proud of how we generate returns.
Bridgepoint became carbon neutral in 2021 and all our offices now operate on
100% renewable electricity. We are a founding member of the Private Equity
Sustainable Markets Initiative and BE VII is aligned with SFDR article 8.
Furthermore, BE VII's financing facility will be sustainability linked. In the
first half of the year, we strengthened our team by appointing a new Head
of Sustainability, reporting directly to our Chief Investment Officer.
Corporate governance update
Bridgepoint has a strong Board, currently comprising four independent
directors appointed at the time of the IPO. I am pleased to report that the
Board is operating very effectively. As noted in our full year results in
March 2022, it is our intention to appoint two to three further non-executive
directors to the Board by the summer of 2023 broadening the Board's skill base
and adding further to our leadership team's diversity.
Outlook
Following a strong first half performance, in which a significant proportion
of our planned annual exit activity was completed, the Company is well
positioned to deliver 2022 financial performance in line with
current expectations.
Bridgepoint benefits from having a very experienced management and investment
team, the leadership of which has direct experience of operating in different
economic cycles. As a result, we remain very alert to the significant change
in macroeconomic outlook that has taken place in the last quarter and have
focused both on addressing inflation pressures within Bridgepoint as a company
and in our portfolio. We have also tilted our new investment strategy to take
advantage of changing market conditions.
As more challenging economic conditions persist it is worth noting that the
majority of our equity portfolio companies typically enjoy high margins with
strong cash generation and use modest leverage. Returns are driven by focused
domestic and international value creation strategies with exposure to multiple
geographies. Moreover some 98 per cent of Bridgepoint exits over the last 15
years have been by way of sale to strategic buyers with very little reliance
on IPOs for exits. During this period the vast majority of our exits have also
been delivered at higher valuation multiples than entry multiples, reflecting
a valuation re-rating related to company growth and repositioning rather than
sector valuation changes.
Looking forward, we expect market volatility and inflation pressures to
continue and have positioned our investment activity accordingly. We will not
be immune to macroeconomic events, but we are excited by the strategic growth
prospects for the Group as we continue to progress our business development
plans and remain confident in Bridgepoint's ability to deliver attractive
returns for our fund investors and our shareholders alike.
William Jackson
Executive Chairman
CFO STATEMENT
The Group's financial results to 30 June 2022 reflect the continuation of a
strong performance delivered in FY21.
Underlying EBITDA of £61.8 million is 16.6 per cent higher than the six month
period ended 30 June 2021 and underlying profit before tax of £51.9 million
compares favourably to the £42.3 million for the same period.
Revenues of £140.1 million compares to £122.2 million for the first half of
2021, with management fee income of £100.9 million 4.8 per cent higher than
the £96.3 million in the comparative period. BE VII fees will mark a step
change in both income and profitability, with the transition from BE VI to BE
VII expected to be formalised as at May 2022, subject to competition clearance
on BE VI's final investment.
Investment income of £38.7 million benefitted from strong exits in the first
six months of the year and represents more than half of expected investment
income for the full year.
Costs (excluding exceptional expenses and investment linked bonuses) of £78.3
million have fallen since the second half of 2021 reflecting some
non-recurring expenditure in that period, along with ongoing careful
management of costs in the first half of 2022. Some inflationary pressures are
anticipated in the second half of the year along with further hiring and costs
associated with the move to our new London office.
The Group's balance sheet remains well capitalised. At 30 June 2022 the Group
had a net cash position of £239.3 million, including term deposits with an
original maturity of more than 3 months, but excluding cash within
consolidated CLOs.
Guidance
· Transition to BE VII, subject to competition clearance, likely took
place in mid May 2022
· Additional income from BE VII in second half of 2022 to benefit
profits and margins
· Management fee rates expected to continue to remain stable across our
businesses
· Investment income guidance unchanged at ca. 20 to 25 per cent of
total operating income for the medium term
· Target of 2 to 3 per cent co-investments in future funds
· Expect modest growth in headcount and personnel costs (relative to
fee rate growth) over medium term
· Full year guidance for 2022 costs remains unchanged at high single
digit percentage growth
· FRE margin expected to reach 45 to 50 per cent in longer term
· Effective tax rate guidance remains unchanged at ca. 7.5 per cent
· Well placed to deliver current expectations for FY 2022
Financial summary
Throughout the course of this section reference is made to adjusted measures
which the Company considers to be alternative performance measures ("APMs") or
key performance indicators ("KPIs"). These are not defined or recognised
under International Financial Reporting Standards ("IFRS") but are used by the
Directors and management to analyse the business and financial performance,
track the Group's progress and help develop long-term strategic plans.
Pages 16 and 17 set out definitions of each of the APMs used within the
CFO Statement and how they can be reconciled back to the condensed
consolidated financial statements.
The analysis below includes two periods for comparison. First, the six months
ended 30 June 2021, which is required to be included within the condensed
financial information. In addition, the six months ended 31 December 2021 has
been included as it provides a helpful comparison to the performance in the
six months to 30 June 2022 because of underlying drivers such as invested
capital and headcount.
Six months ended Six months ended 31 December 2021 Six months ended Change Change
30 June
30 June
H1 22 vs H2 21 (%)
H1 22 vs H1 21 (%)
2022
2021
Total AUM (€bn) 37.1 32.9 28.5 12.8% 30.2%
Fee paying AUM (€bn) 18.8 18.3 17.7 2.7% 6.2%
Management fee margin on fee paying AUM 0.62% 0.66% 0.63% (0.04)ppt (0.01)ppt
Management fees (£m) 100.9 101.4 96.3 (0.5)% 4.8%
Investment income (£m) 38.7 45.7 25.5 (15.3)% 51.8%
Total expenses (excluding exceptional items) (78.3) (87.5) (69.2) (10.5)% 13.2%
Underlying EBITDA (£m) 61.8 60.9 53.0 1.5% 16.6%
Underlying EBITDA margin 44.1% 41.0% 43.4% 3.1ppt 0.7ppt
Underlying FRE (£m) 23.1 21.0 27.5 10.0% (16.0)%
Underlying FRE margin 22.8% 19.4% 28.4% 3.4ppt (5.6)ppt
Underlying profit before tax (£m) 51.9 48.2 42.3 7.7% 22.7%
Reported profit before tax (£m) 48.3 22.2 40.4 117.6% 19.6%
Reported profit after tax (£m) 44.9 20.4 37.4 120.1% 20.1%
Reported pro forma basic and diluted EPS (pence) 5.5 2.5 4.5 120.1% 20.1%
Adjusted pro forma basic and diluted EPS (pence) 5.9 5.6 4.8 4.5% 23.4%
Fundraising
Private equity AUM at 30 June 2022 amounted to €26.7 billion. Fundraising
for BE VII launched in the second half of 2021 and remains well placed to
attract a significant amount of capital, holding a first close of €4.0
billion in Q2 2022. Since then, the fund has enjoyed further closings and is
now in the final third of its fund raising programme with the process likely
to formally complete in H1 2023 in line with previous expectations. Credit AUM
as at 30 June 2022 was €10.4 billion. Bridgepoint Direct Lending III ("BDL
III") and Bridgepoint Credit Opportunities IV ("BCO IV") held second closings
in April and are progressing in line with plan.
Total AUM development
€ billion Private equity Credit Total
30 June 2021 20.7 7.8 28.5
31 December 2021 22.9 10.0 32.9
30 June 2022 26.7 10.4 37.1
Total AUM at 30 June 2022 was €37.1 billion compared to €32.9 billion at
the end of 2021. The 12.8 per cent increase is due to revaluation of fund
investments and ongoing fundraising for our credit and private equity
strategies, partially offset by strong levels of capital returned to
fund investors.
Fee paying AUM development
€ billion Private equity Credit Total
30 June 2021 13.7 4.0 17.7
31 December 2021 13.7 4.6 18.3
30 June 2022 13.3 5.5 18.8
Fee paying AUM at 30 June 2022 was €18.8 billion compared to €18.3 billion
at the end of 2021, with the 2.7 per cent increase primarily due to the
increase in invested capital in our credit strategies.
Abbreviated income statement
£ million Six months ended Six months ended 31 December 2021 Six months ended Change Change
30 June
30 June
H1 22 vs H2 21 (%)
H1 22 vs H1 21 (%)
2022
2021
Management fees 100.9 101.4 96.3 (0.5)% 4.8%
Investment income 38.7 45.7 25.5 (15.3)% 51.8%
Total operating income 140.1 148.4 122.2 (5.6)% 14.6%
Total expenses (79.0) (114.9) (70.4) (31.2)% 12.2%
Total expenses (excluding exceptional expenses) (78.3) (87.5) (69.2) (10.5)% 13.2%
EBITDA 61.1 33.5 51.8 82.4% 18.0%
Underlying EBITDA 61.8 60.9 53.0 1.5% 16.6%
Underlying FRE 23.1 21.0 27.5 10.0% (16.0)%
Depreciation and amortisation expense (9.1) (8.7) (6.3) 4.6% 44.4%
Underlying operating profit 54.2 53.7 48.3 0.9% 12.2%
Reported operating profit 52.0 24.8 45.5 109.7% 14.3%
Net finance expense (3.7) (2.6) (5.1) 42.3% (27.5)%
Net finance expense (excluding exceptional net finance expense) (2.3) (5.5) (6.0) (58.2)% (61.7)%
Underlying profit before tax 51.9 48.2 42.3 7.7% 22.7%
Reported profit before tax 48.3 22.2 40.4 117.6% 19.6%
Tax (3.4) (1.8) (3.0) 88.9% 13.3%
Reported profit after tax 44.9 20.4 37.4 120.1% 20.1%
Management fee income plus other operating income less costs is expressed as
Fee Related Earnings ("FRE"). Underlying FRE excludes exceptional expenses and
bonuses linked to investment returns. Profits from co-investment and carried
interest together with FRE form the EBITDA of the business.
Exceptional items are items of income or expense that are material by size
and/or nature, are not considered to be incurred in the normal course of
business and are not expected to reoccur. Exceptional items are disclosed
separately to give a clearer presentation of the Group's results.
Underlying operating profit excludes exceptional expenses within EBITDA and
the amortisation of intangible assets arising from the acquisition of EQT
Credit. Underlying profit before tax excludes the exceptional expenses and
amortisation of intangibles and also certain finance income and expenses which
have also been classified as exceptional. These relate to the acquisition of
EQT Credit and, in the six month periods ended 30 June 2021 and 31 December
2021, the investment by Dyal Capital Partners. Further explanation of these
items is included within note 4 of the condensed consolidated financial
statements (see page 28).
Total operating income
£ million Six months ended Six months ended 31 December 2021 Six months ended Change Change
30 June
30 June
H1 22 vs H2 21 (%)
H1 22 vs H1 21 (%)
2022
2021
Management fees 100.9 101.4 96.3 (0.5)% 4.8%
Carried interest 14.0 12.9 1.4 8.5% 900.0%
Income from the fair value remeasurement of investments 24.7 32.8 24.1 (24.7)% 2.5%
Other operating income 0.5 1.3 0.4 (61.5)% 25.0%
Total operating income 140.1 148.4 122.2 (5.6)% 14.6%
Total operating income for the six months to 30 June 2022 was £140.1 million,
slightly lower than the result for the six months ended 31 December 2021,
primarily reflecting lower but still strong levels of investment income.
In the period ended 30 June 2022 total management fees of £100.9 million
decreased by £0.5 million, or 0.5 per cent, from £101.4 million for the six
months ended 31 December 2021 and increased by £4.6 million, or 4.8 per cent,
relative to the six months ended 30 June 2021. This increase was primarily due
to the increase of invested capital in the Credit strategy. The small
reduction in private equity fees since the six month period ended 31 December
2021 relates to a reduction in the remaining invested capital of older funds,
which are in their divestment phase.
£ million Six months ended Six months ended 31 December 2021 Six months ended Change Change
30 June
30 June
H1 22 vs H2 21 (%)
H1 22 vs H1 21 (%)
2022
2021
Private equity 76.7 78.6 78.7 (2.4)% (2.5)%
Credit 22.7 20.4 17.5 11.3% 29.7%
Central 1.5 2.4 0.1 (37.5)% n/a
Total management fees 100.9 101.4 96.3 (0.5)% 4.8%
Income from the Group's share of carried interest of £14.0 million in the
first six months of 2022 was primarily driven by an increase in the value of
the BDC III portfolio and specifically the exit of HKA.
Income recognised as a result of increases in the value of co-investments of
£24.7 million in the six months ended 30 June 2022 was driven by the increase
in valuation of assets across the private equity fund range, but particularly
within the BE VI and BDC III portfolios.
Operating and other expenses
£ million Six months ended Six months ended 31 December 2021 Six months ended Change Change
30 June
30 June
H1 22 vs H2 21 (%)
H1 22 vs H1 21 (%)
2022
2021
Personnel expenses before exceptional expenses (60.9) (65.9) (55.5) (7.6)% 9.7%
Other expenses before exceptional expenses (18.0) (21.7) (14.7) (17.1)% 22.4%
Foreign exchange gains 0.6 0.1 1.0 500.0% (40.0)%
Total expenses before exceptional expenses (78.3) (87.5) (69.2) (10.5)% 13.2%
Exceptional expenses (0.7) (27.4) (1.2) (97.4)% (41.7)%
Total expenses (79.0) (114.9) (70.4) (31.2)% 12.2%
Personnel expenses (excluding exceptional expenses) reduced by 7.6 per cent,
from £65.9 million in the six months to 31 December 2021 to £60.9 million in
the six months to 30 June 2022.
The six months to 31 December 2021 included £5.8 million of bonuses linked to
the BE V carried interest income, which was recognised by the Group during the
second half of 2021. Excluding the impact of investment linked bonuses,
personnel expenses (excluding exceptional expenses) increased by £0.8
million, or 1.3 per cent from the six month period to 31 December 2021.
Personnel costs (excluding exceptional expenses) for the six month period 30
June 2022 increased by £5.4 million, or 9.7 per cent, compared to the six
month period to 30 June 2021, from £55.5 million to £60.9 million. The
increases, excluding exceptional expenses and investment linked bonuses
incurred in the latter half of 2021, reflect the impact of additional hiring
as part of investment in the Group's operating platform and pay rises, offset
by the impact of one-off costs incurred in the second half of 2021, including
accumulated holiday provisions.
Other expenses (excluding exceptional expenses) reduced by 17.1 per cent, from
£21.7 million in the six months ended 31 December 2021 to £18.0 million in
the six months ended 30 June 2022 reflecting costs incurred in 2021 relating
to the Group's exit from its current London premises and legal and regulatory
projects to support the Group's growth. Compared to the six month period ended
30 June 2021, other expenses (excluding exceptional expenses) increased by
£3.3 million or 22.4 per cent, reflecting increased premises and professional
costs.
Personnel expenses (excluding exceptional expenses) as a percentage of total
operating income was 43.5 per cent for the six months ended 30 June 2022,
slightly lower than the 44.4 per cent and 45.4 per cent for the six months
ended 31 December 2021 and 30 June 2021.
EBITDA
£ million Six months ended Six months ended 31 December 2021 Six months ended Change Change
30 June
30 June
H1 22 vs H2 21 (%)
H1 22 vs H1 21 (%)
2022
2021
Underlying EBITDA 61.8 60.9 53.0 1.5% 16.6%
Exceptional expenses (0.7) (27.4) (1.2) (97.4)% (41.7)%
EBITDA 61.1 33.5 51.8 82.4% 18.0%
Underlying EBITDA margin 44.1% 41.0% 43.4% 3.1 ppt 0.7 ppt
Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA"),
adjusted for exceptional expenses, increased in the six months ended 30 June
2022 compared with the six month periods ended 31 December 2021 and 30 June
2022 primarily as a result of higher investment related income.
Exceptional expenses of £0.7 million in the six months ended 30 June 2022
relate to costs associated with the acquisition of EQT Credit. Costs relating
to the Company's IPO represented the majority of the £27.4 million
exceptional expenses in the six months ended 31 December 2021.
EBITDA, including exceptional expenses, increased by 82.4 per cent compared to
the six months ended 31 December 2021, which included costs of the Company's
IPO.
Depreciation and amortisation expense
£ million Six months ended Six months ended 31 December 2021 Six months ended Change Change
30 June
30 June
H1 22 vs H2 21 (%)
H1 22 vs H1 21 (%)
2022
2021
Depreciation and amortisation expense (excluding amortisation of intangibles) (7.6) (7.2) (4.7) 5.6% 61.7%
Amortisation of intangibles (1.5) (1.5) (1.6) 0.0% (6.3)%
Total depreciation and amortisation expense (9.1) (8.7) (6.3) 4.6% 44.4%
Depreciation and amortisation expense increased by 5.6 per cent to £7.6
million compared to the six months ended 31 December 2021. Expenses increased
by 61.7 per cent compared to the six month period to 30 June 2021 which
related to the start of the lease of the Group's new London headquarters, 5
Marble Arch, in July 2021 and resulted in an increased depreciation charge
from that date onwards.
The amortisation of intangibles relates to the amortisation of assets acquired
with the EQT Credit business (fund customer relationships) which are being
expensed over seven years. The amortisation of intangibles is excluded from
the underlying profitability measures in order to enable a clearer analysis of
underlying profitability.
Total operating profit
£ million Six months ended Six months ended 31 December 2021 Six months ended Change Change
30 June
30 June
H1 22 vs H2 21 (%)
H1 22 vs H1 21 (%)
2022
2021
Underlying operating profit 54.2 53.7 48.3 0.9% 12.2%
Exceptional expenses (0.7) (27.4) (1.2) (97.4)% (41.7)%
Amortisation of intangibles (1.5) (1.5) (1.6) 0.0% (6.3)%
Reported operating profit 52.0 24.8 45.5 109.7% 14.3%
Underlying operating profit margin 38.7% 36.2% 39.5% 2.5ppt (0.8)ppt
Underlying operating profit for the six months ended 30 June 2022 was £54.2
million, 0.9 per cent higher than the six month period to 31 December 2021,
reflecting slightly increased investment income, and 12.2 per cent higher than
the six month period to 30 June 2021 where investment profits were the
lowest of the three periods.
Reported operating profit increased by 109.7 per cent from £24.8 million for
the six months to 31 December 2021 to £52.0 million due to exceptional costs
relating to the Company's IPO being incurred in the six months ended 31
December 2021.
The resulting underlying operating profit margin was 38.7 per cent, compared
to 36.2 per cent for the six months ended 31 December 2021.
Finance income and expense
£ million Six months ended Six months ended 31 December 2021 Six months ended Change Change
30 June
30 June
H1 22 vs H2 21 (%)
H1 22 vs H1 21 (%)
2022
2021
Net finance expense, excluding exceptional items (2.3) (5.5) (6.0) (58.2)% (61.7)%
Exceptional net finance (expense)/income (1.4) 2.9 0.9 (148.3)% (255.6)%
Net finance expense, including exceptional items (3.7) (2.6) (5.1) 42.3% (27.5)%
Net finance expenses, excluding exceptional items, reduced by £3.2 million to
£2.3 million, compared to the six months ended 31 December 2021. This
movement was due to lower amounts payable to related party investors in Opal
Investments LP, who have a 15 per cent interest in the profits of the vehicle.
The change from £6.0 million for the six months ended 30 June 2021 to £2.3
million for the six months ended 30 June 2022 was due to reduced interest
expense from borrowings under the Group's revolving credit facility, which was
repaid in July 2021 following the IPO, commencement of finance charges
relating to the 5 Marble Arch lease liability from July 2021 and lower amounts
payable to the third party investors in Opal Investments LP.
In the six months ended 30 June 2022 the exceptional net finance expense
reflects the impact of the remeasurement, unwind of discount and
re-translation of the deferred contingent consideration payable to EQT AB in
relation to the acquisition of the EQT Credit business. In the six months
ended 31 December 2021 and six months ended 30 June 2021 the exceptional net
finance income includes the deferred contingent consideration payable to EQT
AB, as referenced above, as well as the unwind of the discount applied to
amounts due following the investment by Dyal Capital Partners prior to receipt
of the final deferred investment proceeds in December 2021.
Profit before tax
£ million Six months ended Six months ended 31 December 2021 Six months ended Change Change
30 June
30 June
H1 22 vs H2 21 (%)
H1 22 vs H1 21 (%)
2022
2021
Underlying profit before tax 51.9 48.2 42.3 7.7% 22.7%
Exceptional expenses (0.7) (27.4) (1.2) (97.4)% (41.7)%
Exceptional net finance (expense)/income (1.4) 2.9 0.9 (148.3)% (255.6)%
Amortisation of intangible assets (1.5) (1.5) (1.6) 0.0% (6.3)%
Reported profit before tax 48.3 22.2 40.4 117.6% 19.6%
Underlying profit before tax margin 37.0% 32.5% 34.6% 4.5ppt 2.4ppt
Underlying profit before tax of £51.9 million represents a 37.0 per cent
margin, which compares to 32.5 per cent for the six months ended 31 December
2021. Underlying profit before tax is £9.6 million higher than the six month
period to 30 June 2021, reflecting higher investment income and higher
management fees.
Reported profit before tax increased by 117.6 per cent compared to the six
month period ended 31 December 2021, which reflects the impact of IPO costs in
that period, and was 19.6 per cent higher than in the six month period to 30
June 2021, a period without material exceptional expenses.
Profit after tax
£ million Six months ended Six months ended 31 December 2021 Six months ended Change Change
30 June
30 June
H1 22 vs H2 21 (%)
H1 22 vs H1 21 (%)
2022
2021
Reported profit before tax 48.3 22.2 40.4 117.6% 19.6%
Tax (3.4) (1.8) (3.0) 88.9% 13.3%
Reported profit after tax 44.9 20.4 37.4 120.1% 20.1%
Tax of £3.4 million represents an effective tax rate of 7.0 per cent compared
to 7.7 per cent for the year ended 31 December 2021. The Group has a
structurally lower effective tax rate than the UK statutory rate. This is
largely driven by significant tax loss carry-forwards in the UK where certain
forms of income benefit from tax exemptions.
Profit after tax rose from £20.4 million for the six months ended 31 December
2021 to £44.9 million for the six months ended 30 June 2022, reflecting
higher underlying profit before tax.
Earnings per share and dividend per share
£ pence Six months ended Six months ended 31 December 2021 Six months ended Change Change
30 June
30 June
H1 22 vs H2 21 (%)
H1 22 vs H1 21 (%)
2022
2021
Reported pro forma Earnings per share(1) 5.5 2.5 4.5 120.1% 20.1%
Adjusted pro forma Earnings per share(1) 5.9 5.6 4.8 4.5% 23.4%
Dividend per share1 4.0 3.6 n/a 10.0% n/a
1. Earnings per share and dividend per share as at 30 June 2021 are presented
on a pro forma basis using the number of shares in issue after the IPO,
consistent with the shares in issue at 31 December 2021 and 30 June 2022.
Adjusted pro forma earnings per share grew by 0.3 pence per share compared to
the six months ending 31 December 2021 and by 1.1 pence per share compared to
the six months ending 30 June 2021, reflecting the increase in profit after
tax generated by the Group.
The Directors have announced an interim dividend of £33.0 million, or 4.0
pence per share, in respect of the first half of 2022.
In 2021 the Directors proposed a final dividend of £30.0 million, or 3.6
pence per share, that was paid in the first six months of 2022. A further
£30.0 million dividend was paid prior to the Company's IPO and is not
included in the table above.
Balance sheet
Summarised consolidated balance sheet As at As at
30 June
31 December
£ million
2022
2021 Change
(%)
Assets
Non-current assets 592.6 567.9 4.3%
Current assets 975.2 712.2 36.9%
Total assets 1,567.8 1,280.1 22.5%
Liabilities
Non-current liabilities 741.7 432.3 71.6%
Current liabilities 95.3 131.5 (27.5)%
Total liabilities 837.0 563.8 48.5%
Net assets 730.8 716.3 2.0%
Share capital and premium 289.9 289.9 0.0%
Other reserves 11.3 13.8 (18.1)%
Retained earnings 429.6 412.6 4.1%
Total equity 730.8 716.3 2.0%
Net assets principally comprise the fair value of investments and carried
interest receivable from private equity and credit funds, goodwill arising
from the acquisition of the EQT Credit business, cash and cash equivalents and
term deposits.
The Group's total assets and liabilities increased by 22.5 per cent and 48.5
per cent respectively due to the consolidation of additional CLOs into the
Group as described in note 1 to the condensed consolidated financial
statements on page 25.
Non-current assets increased by 4.3 per cent from £567.9 million at 31
December 2021 to £592.6 million at 30 June 2022, predominantly due to
increases in the value of existing and new investment into Bridgepoint funds.
Current assets increased by 36.9 per cent from £712.2 million at 31 December
2021 to £975.2 million at 30 June 2022 primarily due to increases in CLO
current assets offset by bonuses and dividends paid in cash during the period.
Current liabilities decreased by 27.5 per cent from £131.5 million at 31
December 2021 to £95.3 million at 30 June 2022, mostly due to the payment of
annual bonuses in March 2022. Non-current liabilities of £741.7 million
increased by 71.6 per cent almost wholly due to the consolidation of
additional CLOs.
Total equity of £716.3 million at 31 December 2021 increased to £730.8
million at 30 June 2022 reflecting year-to-date profits, offset by the 2021
final dividend of £30.0 million paid in May 2022.
At 30 June 2022, the Group had no debt, but still has in place the £125.0
million revolving credit facility, which remains available to draw until
October 2023. The Group's liquidity requirements arise primarily in relation
to the funding of operations and the Group's plans in connection with its
expansion and diversification strategy. The Group funds its business using
cash from its operations (retained profits), capital from shareholders and,
from time to time, third-party debt.
The consolidated balance sheet includes the assets and liabilities of certain
CLOs which are required under IFRS to be presented gross on the balance sheet.
This could distort how a reader of the financial statements interprets the
balance sheet of the Group. The Group's maximum exposure to loss associated
with its interest in the CLOs is limited to its investment in the relevant
CLOs which at 30 June 2022 was £47.4 million (31 December 2021: £12.3
million).
Summarised consolidated balance sheet As at As at Change
30 June
31 December
(%)
(excluding third party CLO assets and liabilities, non-statutory)
2022
2021
£ million
Total Assets (excluding third party CLO assets) 986.0 1,001.4 (1.5)%
Total Liabilities (excluding third party CLO liabilities) (255.2) (285.1) (10.5)%
Net Assets 730.8 716.3 2.0%
Cash flows
Summarised consolidated cash flow statement As at As at Change
30 June
30 June
(%)
£ million
2022
2021
Net cash (outflow)/inflow from operating activities (33.7) 1.9 n/a
Net cash outflow from investing activities (65.5) (141.9) (53.8)%
Net cash (outflow)/inflow from financing activities (38.2) 63.4 (160.3)%
Net decrease in cash and cash equivalents (137.4) (76.6) 79.4%
Cash and cash equivalents at beginning of the period 327.3 157.1 108.3%
Effect of exchange rate changes on cash and cash equivalents 1.0 (7.5) (113.3)%
Cash and cash equivalents at the end of the period 190.9 73.0 161.5%
of which: cash and cash equivalents at the end of the period (for use within 139.3 43.0 224.0%
the Group)
of which: CLO cash (restricted) 51.6 30.0 72.0%
Total cash at the end of the period 190.9 73.0 161.5%
Cash flows from operating activities for the six months ended 30 June 2022 was
an outflow of £33.7 million. The outflow includes the payment of annual
bonuses in March 2022 and other working capital movements, which are expected
to unwind over the remainder of the year.
Cash flows from investing activities contain investments in the Bridgepoint
funds. The timing of investments and divestments in Bridgepoint funds, which
impact carried interest and investment income, depend on the investment
activity of the Bridgepoint funds.
For the six months ended 30 June 2022, net cash outflows from investing
activities also contain £100.0 million of investments into term deposits with
an original maturity of more than three months that are not considered to be
cash and cash equivalents under IFRS, and cash in consolidated CLOs of £56.8
million.
Cash outflows from financing activities for the six months ended 30 June 2022
of £38.2 million primarily resulted from the payment of the final dividend
for 2021 of £30.0 million in May 2022.
At 30 June 2022, the Group had total net cash of £239.3 million, including
cash and cash equivalents for use within the Group (£139.3 million) and cash
held in term deposits with an original maturity of more than three months
(£100.0 million), but excluding £51.6 million recorded on the balance sheet
as CLO cash, held by the consolidated CLO vehicles, which is legally
ringfenced and not available for use by the Group.
The consolidated cash flow statement includes the gross cash inflows and
outflows for the period and cash held at 30 June 2022 for those CLOs which are
required to be consolidated. This could distort how a reader of the financial
statements interprets the cash flows of the Group, therefore a summarised cash
flow statement without the consolidated CLO vehicles is presented below.
Summarised consolidated cash flow statement (excluding cash flows relating to As at As at Change
consolidated CLOs, non-statutory)
30 June
30 June
(%)
2022
2021
£ million
Net cash (outflow)/inflow from operating activities (excluding consolidated (33.7) 1.9 n/a
CLOs)
Net cash (outflow)/inflow from investing activities (excluding consolidated (117.3) 2.8 n/a
CLOs)
Net cash outflow from financing activities (excluding consolidated CLOs) (33.8) (0.6) n/a
Net (decrease)/increase in cash and cash equivalents (excluding consolidated (184.8) 4.1 n/a
CLOs)
Cash and cash equivalents at beginning of the period (excluding consolidated 323.1 42.3 663.8%
CLOs)
Effect of exchange rate changes on cash and cash equivalents (excluding 1.0 (3.4) (129.4)%
consolidated CLOs)
Cash and cash equivalents at the end of the period (excluding consolidated 139.3 43.0 224.0%
CLOs)
ALTERNATIVE PERFORMANCE MEASURES (APMS)
The use of APMs
This interim report includes several measures which are not defined or
recognised under IFRS, including financial and operating measures relating to
the Group which the Group considers to be APMs. These are reconciled to the
IFRS results for the six month period in the table below.
EBITDA Earnings before interest, taxes, depreciation and amortisation. It is
calculated by reference to total operating income and deducting from it, or
adding to it, as applicable, personnel expenses and other expenses as well as
foreign exchange gains/(losses).
Underlying EBITDA Calculated by excluding exceptional items from EBITDA. Exceptional items are
items of income or expense that are material by size and/or nature, are not
considered to be incurred in the normal course of business and are not
expected to reoccur. A breakdown is included within note 4 of the condensed
consolidated financial statements.
£ million Six months ended 30 June 2022 Six months ended 30 June 2021
EBITDA 61.1 51.8
Add back: exceptional items 0.7 1.2
Underlying EBITDA 61.8 53.0
Underlying EBITDA margin Underlying EBITDA as a percentage of total operating income.
Underlying FRE Underlying EBITDA less carried interest and income from the fair value
remeasurement of investments and adding back the cost of bonuses linked to
investment profits.
£ million Six months ended 30 June 2022 Six months ended 30 June 2021
Underlying EBITDA 61.8 53.0
Less: carried interest and income from fair value of investments (38.7) (25.5)
Add back: investment linked bonuses - -
Underlying FRE 23.1 27.5
Underlying FRE margin Underlying FRE as a percentage of total operating income, excluding carried
interest and income from the fair value remeasurement of investments and
adding back the cost of bonuses linked to investment profits.
Underlying operating profit Calculated by excluding exceptional items and the amortisation of intangible
assets from within operating profit.
£ million Six months ended 30 June 2022 Six months ended 30 June 2021
Operating profit 52.0 45.5
Add back: exceptional items within EBITDA 0.7 1.2
Add back: amortisation of intangible assets 1.5 1.6
Total underlying operating profit 54.2 48.3
Underlying operating profit margin Underlying operating profit as a percentage of total operating income.
Underlying profit before tax Calculated by excluding exceptional items and the amortisation of intangible
assets from within profit before tax.
Underlying profit before tax margin Underlying profit before tax as a percentage of total operating income.
Underlying profit after tax Calculated by excluding exceptional items and the amortisation of intangible
assets from within profit after tax.
£ million Six months ended 30 June 2022 Six months ended 30 June 2021
Profit before tax 48.3 40.4
Add back: exceptional items within EBITDA 0.7 1.2
Add back: amortisation of intangible assets 1.5 1.6
Add back/(less): exceptional net finance cost/(income) 1.4 (0.9)
Total underlying profit before tax 51.9 42.3
Underlying profit after tax margin Underlying profit after tax as a percentage of total operating income.
Underlying pro forma basic and diluted earnings per share Calculated by dividing underlying profit after tax gross of non-controlling
interests by the number of shares in issue after the IPO.
£ million Six months ended 30 June 2022 Six months ended 30 June 2021
Profit after tax 44.9 37.4
Add back: exceptional items within EBITDA 0.7 1.2
Add back: amortisation of intangible assets 1.5 1.6
Add back: exceptional net finance cost 1.4 (0.9)
Total underlying profit after tax 48.5 39.3
Pro forma number of shares (m) 823.3 823.3
Underlying pro forma basic and diluted EPS (pence) 5.9 4.8
Fee paying AUM Assets under management, excluding CLOs, upon which management fees are
charged by the Group. For all funds with private equity strategies and the
Bridgepoint Credit Opportunities funds I to III, Fee Paying AUM is either
based on total commitments (during the commitment period) or on net invested
capital (normally during the post-commitment period). For the Bridgepoint
Direct Lending funds and Bridgepoint Syndicated Debt funds as well as expected
future Bridgepoint Credit Opportunities funds, Fee Paying AUM is based on net
invested capital throughout the life of the fund.
Total AUM The total value of unrealised assets as of the relevant date (as determined
pursuant to the latest quarterly or semi-annual valuation for each Bridgepoint
fund conducted by the Group) plus undrawn commitments managed by the Group.
The valuations for Total AUM come from the Group's valuations of the
investments of the Bridgepoint funds. The Group values all investments of the
Bridgepoint funds at least twice a year, but in most cases four times a year.
Each investment undergoes the same detailed valuation process, in accordance
with the Group's valuation policies and in line with fund requirements.
Completed valuations are presented and discussed at the relevant Bridgepoint
valuation committee and are audited at year end by the relevant fund auditor.
REQUIRED DISCLOSURES
Principal risks
The Group believes that risk management is a fundamental part of robust
corporate governance and our ongoing success.
Details of the Group's response to risk management is set out within pages 68
to 75 of the 2021 Annual Report and Accounts, which is available in the
shareholder section of the Bridgepoint Group plc website:
www.bridgepointgroupplc.com (http://www.bridgepointgroupplc.com)
The principal risks within the 2021 Annual Report and Accounts include:
fundraising challenges, increased competition, reputational damage, fund
under-performance, decreased pace or size of investments made by Bridgepoint
funds, personnel and key people, information technology and cyber security,
inadequate control systems, third-party service providers, and increased law
and regulation. The directors do not consider there to have been any material
changes to the principal risks and uncertainties since the 2021 Annual Report
and Accounts were published.
Directors
The directors of Bridgepoint Group plc at 26 July 2022 are:
William Jackson
Archie Norman
Adam Jones
Angeles Garcia-Poveda
Carolyn McCall
Tim Score
Statement of directors' responsibilities
The directors confirm that, to the best of their knowledge, the interim
condensed consolidated financial statements have been prepared in accordance
with IAS 34 "Interim Financial Reporting" and that the interim report includes
a fair review of the information required by the Financial Conduct Authority's
Disclosure and Transparency Rules 4.2.7 and 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 current
financial year and any material changes to the related party transactions
described in the last Annual Report and Accounts.
On behalf of the Board
Adam Jones
Director
26 July 2022
INDEPENDENT REVIEW REPORT TO BRIDGEPOINT GROUP PLC
Conclusion
We have been engaged by Bridgepoint Group plc (the "Company") to review the
financial information for the six months ended 30 June 2022 which comprises
the condensed consolidated statement of profit or loss, the condensed
consolidated statement of comprehensive income, the condensed consolidated
statement of financial position, the condensed consolidated statement of cash
flows, the condensed consolidated statement of changes in equity and related
notes 1 to 12.
We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of consolidated financial statements in the
half year financial report for the six months ended 30 June 2022 is not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34 and the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom. A review of interim financial
information consists of making 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.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with UK adopted IFRSs. The condensed set of financial
statements included in this half year financial report has been prepared in
accordance with UK adopted International Accounting Standard 34, "Interim
Financial Reporting".
Conclusions relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis of Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE, however future events or conditions may cause the entity to cease
to continue as a going concern.
Responsibilities of directors
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with UK adopted
International Accounting Standard 34 and the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority, which
requires that the interim report must be prepared and presented in a form
consistent with that which will be adopted in the company's annual accounts
having regard to the accounting standards applicable to such annual accounts.
In preparing the interim financial report, the directors are responsible for
assessing the company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the company or
to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the interim report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statement in the half
year financial report. Our conclusion, including our Conclusions Relating to
Going Concern, are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of this report.
Use of the review report
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK) 2410 issued by the Financial Reporting
Council and our Engagement Letter dated 6 July 2022. Our work has been
undertaken so that we might state to the Company those matters we are required
to state to it in an independent review report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this report, or for
the conclusions we have formed.
Mazars LLP
Chartered Accountants
London
26 July 2022
Notes:
The maintenance and integrity of the Bridgepoint Group plc web site is the
responsibility of the directors; the work carried out by us does not involve
consideration of these matters and, accordingly, we accept no responsibility
for any changes that may have occurred to the interim report since it was
initially presented on the web site.
Legislation in the United Kingdom governing the preparation and dissemination
of financial information may differ from legislation in other jurisdictions.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidated Statement of Profit or Loss
Six months ended Note 30 June 2022 30 June 2021
£m
£m
Management fees 100.9 96.3
Carried interest 14.0 1.4
Fair value remeasurement of investments 24.7 24.1
Other operating income 0.5 0.4
Total operating income 140.1 122.2
Personnel expenses 3 (61.5) (56.4)
Other expenses (18.1) (15.0)
Foreign exchange gains 0.6 1.0
EBITDA* 61.1 51.8
Depreciation and amortisation expense 5 (9.1) (6.3)
Total operating profit 52.0 45.5
Finance income 6 0.5 1.5
Finance expenses 6 (4.2) (6.6)
Profit before tax* 48.3 40.4
Tax 7 (3.4) (3.0)
Profit after tax 44.9 37.4
Attributable to:
Equity holders of the parent 44.9 29.1
Non-controlling interests - 8.3
44.9 37.4
£ £
Basic and diluted earnings per share 8 0.05 9.06
Exceptional expenses of £0.7m (2021: £1.2m) are included in EBITDA. Profit
before tax includes exceptional expenses of £2.1m (2021: £1.7m) and no
exceptional income (2021: £1.4m). Details of exceptional items are included
in note 4.
Condensed Consolidated Statement of Comprehensive Income
Six months ended Note 30 June 2022 30 June 2021
£m
£m
Profit after tax 44.9 37.4
Items that may be reclassified to income statement in subsequent periods:
Exchange differences on translation of foreign operations 6.2 (1.9)
Change in the fair value of hedging instruments (11.3) 8.4
Reclassifications to income statement 2.2 (0.4)
Total tax on components of other comprehensive income 2.1 (1.4)
Other comprehensive income (0.8) 4.7
Total comprehensive income for the period, net of tax 44.1 42.1
Total comprehensive income attributable to:
Equity holders of the parent 44.1 32.7
Non-controlling interests - 9.4
44.1 42.1
Condensed Consolidated Statement of Financial Position
Note 30 June 31 December 2021
2022
£m
£m
Assets
Non-current assets
Property, plant and equipment 83.2 75.8
Goodwill and intangible assets 121.1 122.6
Carried interest receivable 9 52.9 38.9
Fair value of fund investments 10 (a) 319.6 313.7
Trade and other receivables 10 (a) 15.8 16.9
Total non-current assets 592.6 567.9
Current assets
Fair value of CLO assets* 10 (a) 577.5 286.8
Trade and other receivables 10 (a) 103.6 88.2
Derivative financial instruments 10 (a) 3.2 9.9
Cash and cash equivalents 10 (d) 139.3 323.1
Term deposits with original maturities of more than three months 10 (d) 100.0 -
CLO cash* 10 (d) 51.6 4.2
Total current assets 975.2 712.2
Total assets 1,567.8 1,280.1
Liabilities
Non-current liabilities
Trade and other payables 10 (e) 45.1 43.5
Other financial liabilities 10 (e) 54.2 46.9
Fair value of CLO liabilities* 10 (e) 542.1 241.4
Lease liabilities 10 (e) 82.4 80.8
Deferred tax liabilities 17.9 19.7
Total non-current liabilities 741.7 432.3
Current liabilities
Trade and other payables 10 (e) 48.2 90.2
Lease liabilities 10 (e) 2.4 4.0
Derivative financial instruments 10 (e) 5.0 -
Fair value of CLO liabilities* 10 (e) 2.4 1.5
CLO purchases awaiting settlement* 10 (e) 37.3 35.8
Total current liabilities 95.3 131.5
Total liabilities 837.0 563.8
Net assets 730.8 716.3
Equity
Share capital 0.1 0.1
Share premium 289.8 289.8
Share-based payment reserve 3.6 3.2
Cash flow hedge reserve (1.6) 7.5
Net exchange differences reserve 9.3 3.1
Retained earnings 429.6 412.6
Total equity 730.8 716.3
Detail of the Group's interest in consolidated CLOs are included in note 10.
The equity holders' exposure in the consolidated CLOs is £47.4m at 30 June
2022 (31 December 2021: £12.3m). The Group's investment in CLOs which are not
consolidated is £15.6m (31 December 2021: £38.0m) and are included within
fair value of fund investments.
Condensed Consolidated Statement of Changes in Equity
Six months ended 30 June 2022 Note Share capital Share premium Capital redemption reserve Share-based payment reserve Cash flow hedge reserve Net exchange differences reserve Retained earnings Total Non-controlling interests Total equity
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
At 1 January 2022 0.1 289.8 - 3.2 7.5 3.1 412.6 716.3 - 716.3
Profit for the period - - - - - - 44.9 44.9 - 44.9
Other comprehensive income - - - - (9.1) 6.2 2.1 (0.8) - (0.8)
Total comprehensive income - - - - (9.1) 6.2 47.0 44.1 - 44.1
Share-based payments - - - 0.4 - - - 0.4 - 0.4
Dividends 11 - - - - - - (30.0) (30.0) - (30.0)
At 30 June 2022 0.1 289.8 - 3.6 (1.6) 9.3 429.6 730.8 - 730.8
Six months ended 30 June 2021 Note Share capital Share premium Capital redemption reserve Share-based payment reserve Cash flow hedge reserve Net exchange differences reserve Retained earnings Total Non-controlling interests Total equity
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
At 1 January 2021 240.9 0.5 24.6 - (2.2) 5.3 39.7 308.8 81.7 390.5
Profit for the period - - - - - - 29.1 29.1 8.3 37.4
Other comprehensive income - - - - 6.9 (1.9) (1.4) 3.6 1.1 4.7
Total comprehensive income - - - - 6.9 (1.9) 27.7 32.7 9.4 42.1
Share capital reorganisation (240.8) 0.9 (24.6) - - - 265.2 0.7 - 0.7
Dividends 11 - - - - - - - - - -
At 30 June 2021 0.1 1.4 - - 4.7 3.4 332.6 342.2 91.1 433.3
Condensed Consolidated Statement of Cash Flows
Six months ended Note 30 June 2022 30 June 2021
£m
£m
Cash flows from operating activities
Cash generated from operations 12 (32.6) 2.3
Tax paid (1.1) (0.4)
Net cash (outflow)/inflow from operating activities (33.7) 1.9
Cash flows from investing activities
Investment in term deposits with original maturities greater than three months 10 (d) (100.0) -
Receipts from investments (non-CLO) 28.3 27.9
Purchase of investments (non-CLO) (22.7) (25.0)
Acquisitions of CLOs (11.4) (11.7)
Receipts from sale and repurchase of the Group's holding in CLOs - 12.7
Payments for property, plant and equipment (12.0) (1.2)
Interest received 0.5 0.1
Receipts from investments (CLO) 76.0 56.4
Purchase of investments (CLO) (81.0) (198.7)
Cash movements from consolidation/(deconsolidation) of CLOs 56.8 (2.4)
Net cash outflow from investing activities (65.5) (141.9)
Cash flows from financing activities
IPO costs (2.2) -
Dividends paid to shareholders of the Company 11 (30.0) -
Drawings on banking facilities - 50.4
Repayment of banking facilities - (43.3)
Interest paid (non-CLO) (2.3) (3.2)
Principal elements of lease payments (2.8) (4.5)
Drawings from related party investors in intermediate fund holding entities 3.5 -
Drawn funding (CLO) - 65.3
Repayment of CLO borrowings (CLO) (4.4) -
Interest paid (CLO) - (1.3)
Net cash (outflow)/inflow from financing activities (38.2) 63.4
Net decrease in cash and cash equivalents (137.4) (76.6)
Cash and cash equivalents at the beginning of the period 327.3 157.1
Effect of exchange rate changes on cash and cash equivalents 1.0 (7.5)
Cash and cash equivalents at the end of period 190.9 73.0
Cash and cash equivalents (for use within the Group) 10 (d) 139.3 43.0
CLO cash (restricted) 10 (d) 51.6 30.0
Total cash at the end of the period 190.9 73.0
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. General information and basis of preparation
Basis of preparation
The condensed consolidated interim financial statements ("interim financial
statements") for the six months ended 30 June 2022 have been prepared in
accordance with IAS 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
The interim financial statements should be read in conjunction with the Annual
Report and Accounts for the year ended 31 December 2021 including the
statutory accounts for the year to 31 December 2021 (the "2021 financial
statements"). The Group's accounting policies, areas of significant judgement
and the key sources of estimation uncertainty are consistent with those
applied to the 2021 financial statements.
The financial information contained within this half year financial report
does not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The 2021 financial statements have been reported on by
Mazars LLP and delivered to the Registrar of Companies. The report of the
auditors was (i) unqualified, (ii) did not include a reference to any matters
which the auditors drew attention by way of emphasis without qualifying their
report, and (iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006. Financial information dated 30 June 2022 and
comparative financial information dated 30 June 2021 has not been audited,
while comparative financial information dated 31 December 2021 has been
audited as part of the 2021 financial statements unless noted.
The consolidated financial statements of the Bridgepoint Group plc (the
"Company") and entities controlled by the Company (the "Group") for the year
ended 31 December 2021 were prepared in accordance with international
accounting standards in conformity with UK adopted international accounting
standards, International Financial Reporting Standards ("IFRS") and the legal
requirements of the Companies Act 2006 and have been prepared under the
historical cost convention, except for financial instruments measured at fair
value are available on the Group's website: www.bridgepointgroupplc.com. The
2022 annual financial statements will be prepared in a consistent manner.
Consolidation
The interim financial statements include the comprehensive gains or losses,
the financial position and the cash flows of the Company, its subsidiaries and
the entities that the Group is deemed to control, drawn up to the end of the
relevant period, which includes elimination of all intra-group transactions.
The Group's approach to assessing control and accounting policies governing
consolidation have not changed since 31 December 2021.
At 30 June 2022, the Group has consolidated Bridgepoint CLO 3 DAC ("CLO 3"),
which was treated as an associate as at 31 December 2021. At 31 December
2021, the Group's holding in CLO 3 represented 7% of all notes, including a
31% interest in the subordinated notes. On 8 June 2022, the Group acquired an
additional 30% interest from another investor which increased the Group's
interest in the subordinated notes to 61%. The subordinated notes are the
tranche that is most exposed to the risk of portfolio assets failing to pay as
they are the first to absorb any losses. As a result, the directors have
therefore determined that the Group is principal and should consolidate.
The following table provides an overview of the consideration transferred, and
the recognised amounts of assets acquired and liabilities assumed as of the
acquisition date.
£m
Consideration
Cash paid on acquisition date 8.3
Total consideration transferred 8.3
Fair value of the Group's equity interest in CLO 3 held before the acquisition 8.6
Total 16.9
Recognised amounts of identifiable assets acquired and liabilities assumed
Financial assets 342.9
Financial liabilities (315.2)
Total identifiable net assets attributable to subordinated notes 27.7
Atrributable to third party investors of CLO 3 (10.8)
Total 16.9
The Group paid £8.3 million (€9.6 million) in cash on the acquisition date
with no further consideration due. The fair value of the identifiable net
assets acquired approximates the fair value of consideration on the
acquisition date, and as a result, no goodwill is recognised on the
acquisition.
Bridgepoint CLO 4 DAC ("CLO 4") is also consolidated in the interim financial
statements. CLO 4 warehousing began during the first six months of 2022. As
the Group held a majority interest in the warehouse equity, the Group fully
consolidates CLO 4.
The Group's assessment of control for its other investments, including
Bridgepoint CLO 1 DAC ("CLO 1") and Bridgepoint CLO 2 DAC ("CLO 2"), is
unchanged from 31 December 2021.
Further details of the consolidation assessment accounting policy are set out
within notes 2 and 3 to the 2021 financial statements.
Future accounting developments
The Group has not early adopted any standard, interpretation or amendment that
has been issued but is not yet effective. No other standards or
interpretations have been issued that are expected to have an impact on the
Group's interim financial statements.
Going concern
As set out within the viability and going concern statements within the 2021
Annual Report and Accounts, a high proportion of the Group's revenue is made
up of management fees, which are under long-term fund management contracts.
When taken together with a largely predictable cost base, of which over three
quarters is personnel related, the Group has good visibility of income,
expenditure and future profitability when projecting for and beyond the next
12 months from the signing of the interim financial statements. In addition,
the Group has a strong balance sheet following the Company's IPO, with
£239.3m of cash (including term deposits with original maturities of more
than 3 months and excluding cash within consolidated CLOs), no borrowings and
an undrawn £125.0m banking facility.
The interim financial statements have therefore been prepared on a going
concern basis as the directors have a reasonable expectation that the Group
has adequate resources to continue in operational existence for next 12 months
from the date of signing the interim financial statements having assessed the
business risks, financial position and resources of the Group.
Related party transactions
All related party transactions that took place in the six months ended 30 June
2022 are consistent in nature with the disclosures in Note 26 to the 2021
financial statements.
2. Operating segments
The Group's operations are divided into two groups, the core business,
consisting of the Private Equity and Credit fund management and associated
Central support, and Other. Other includes the Group's procurement consulting
business, PEPCO Services LLP, and costs relating to strategic projects.
The Group's core operations are divided into two business segments: Private
Equity and Credit. The operations of both business segments consist of
providing investment management services to the underlying funds and their
investors. The investment management services comprise of identification and
structuring of new investments, the monitoring of investments and the sale and
exit from investments. The two business segments are supported by the Central
support functions which include investor relations, head office, finance,
human resources, IT and marketing. Together the Private Equity, Credit and
Central segments form the Core business.
Segmental Income Statement analysis
The EBITDA for each segment, together with depreciation and amortisation and
net finance expense forms profit before tax. Depreciation and amortisation,
net finance expense and exceptional expenses are not allocated to operating
segments and are included in the Group total. Foreign exchange gains/losses
are allocated to Central.
Private Equity Credit Central Total Core Total Other Total Group
£m
£m
£m
£m
£m
£m
Six months ended 30 June 2022
Management fees 76.6 22.8 1.5 100.9 - 100.9
Carried interest 14.0 - - 14.0 - 14.0
Fair value remeasurement of investments 22.8 1.9 - 24.7 - 24.7
Other operating income - - - - 0.5 0.5
Total operating income 113.4 24.7 1.5 139.6 0.5 140.1
Personnel expenses (30.6) (11.5) (18.3) (60.4) (0.5) (60.9)
Other operating expenses (5.5) (3.8) (8.6) (17.9) (0.1) (18.0)
Foreign exchange - - 0.6 0.6 - 0.6
EBITDA (excluding exceptional expenses) 77.3 9.4 (24.8) 61.9 (0.1) 61.8
Exceptional expenses (0.7)
EBITDA (including exceptional expenses) 61.1
Depreciation and amortisation (9.1)
Net finance expense (3.7)
Profit before tax 48.3
Private Equity Credit Central Total Core Total Other Total Group
£m
£m
£m
£m
£m
£m
Six months ended 30 June 2021
Management fees 78.7 17.5 - 96.2 0.1 96.3
Carried interest 1.4 - - 1.4 - 1.4
Fair value remeasurement of investments 23.6 0.5 - 24.1 - 24.1
Other operating income - - - - 0.4 0.4
Total operating income 103.7 18.0 - 121.7 0.5 122.2
Personnel expenses (29.9) (10.7) (14.2) (54.8) (0.7) (55.5)
Other operating expenses (6.7) (4.3) (3.9) (14.9) 0.2 (14.7)
Foreign exchange - - 1.0 1.0 - 1.0
EBITDA (excluding exceptional expenses) 67.1 3.0 (17.1) 53.0 0.0 53.0
Exceptional expenses (1.2)
EBITDA (including exceptional expenses) 51.8
Depreciation and amortisation (6.3)
Net finance expense (5.1)
Profit before tax 40.4
Assets and liabilities analysis
The Group's statement of financial position is managed as a single unit rather
than by segment. The only distinction for the business segments relates to the
Group's investments in funds and the carried interest receivable, which can be
split between Private Equity and Credit (split between that attributable to
the Group and to third party investors).
30 June 31 December
2022
2021
£m
£m
Investments
Private Equity 249.3 217.9
Credit (assets attributable to the Group) 117.7 108.1
Credit (CLO assets attributable to third party investors) 530.1 274.5
Total investments 897.1 600.5
Carried interest receivable
Private equity 50.3 36.4
Credit 2.6 2.5
Total carried interest receivable 52.9 38.9
3. Operating expenses
Operating expenses include:
30 June 2022 30 June 2021
£m
£m
Six months ended
Wages and bonuses (47.7) (44.2)
Social security costs (7.9) (7.2)
Pensions (1.0) (0.9)
Share-based payments (0.4) -
Other employee expenses (4.5) (4.1)
Personnel expenses (61.5) (56.4)
Total personnel expenses include £0.6m (2021: £0.9m) of exceptional
expenses, and accordingly are excluded from the calculation of underlying
profitability measures (see note 4 for further details).
4. Exceptional items
Exceptional items are material items of income or expenditure that are not
considered to be incurred in the normal course of business and without
separate disclosure could distort an understanding of the financial
statements. Accordingly, exceptional items are excluded from the calculation
of underlying profitability measures.
Exceptional items recognised in the period principally relate to costs
relating to the Group's acquisition of EQT Credit and costs incurred in
relation to potential acquisitions. Exceptional finance income relates to an
unwind of a discount on deferred proceeds receivable. Costs associated with
the Company's IPO were recognised in the six months ended 31 December 2021 and
are therefore not included in the comparative period.
30 June 2022 30 June 2021
£m
£m
Six months ended
Personnel expenses 0.6 0.9
Other expenses 0.1 0.3
Total exceptional expenses within EBITDA 0.7 1.2
Finance expenses 1.4 0.5
Total exceptional expenses 2.1 1.7
30 June 2022 30 June 2021
£m
£m
Six months ended
Finance income - (1.4)
Total exceptional income - (1.4)
a) Exceptional personnel expenses
In 2022 and 2021 exceptional personnel expenses arose from the acquisition of
EQT Credit, including deferred transaction related bonuses and associated
social security costs.
b) Exceptional finance income and expenses
Exceptional finance expense of £1.4m in 2022, and exceptional finance income
of £0.9m in 2021, relates to remeasurement and revaluation of the deferred
contingent consideration payable to EQT AB and associated unwind of the
discount. 2021 also includes deferred proceeds receivable under investment
agreement with Dyal Capital Partners IV (C) LP.
5. Depreciation and amortisation
The following table summarises the depreciation and amortisation charge during
the period.
30 June 2022 30 June 2021
£m
£m
Six months ended
Depreciation on property, plant and equipment 7.6 4.7
Amortisation of intangible assets 1.5 1.6
Total depreciation and amortisation 9.1 6.3
The amortisation of intangible assets is excluded from the calculation of
underlying profitability measures in order to distinguish from
underlying performance.
6. Finance income and expenses
30 June 2022 30 June 2021
£m
£m
Six months ended
Other finance income 0.5 1.5
Total finance income 0.5 1.5
Interest expense on bank overdrafts and borrowings (0.7) (2.3)
Interest expense on lease liabilities (1.7) (0.9)
Other finance expenses (1.7) (0.7)
Finance expense on amounts payable to related party investors in Opal (0.1) (2.7)
Investments LP
Total finance expenses (4.2) (6.6)
7. Tax expense
Analysis of tax expense reported in the income statement:
30 June 2022 30 June 2021
£m
£m
Six months ended
Current tax 1.0 1.3
Deferred tax 2.4 1.7
Total tax expense reported in the income statement 3.4 3.0
The tax expense for the half year to 30 June 2022 is calculated based on a
forecast full year effective tax rate for the Group which is then applied to
the actual profits before tax for the half year.
8. Earnings per share
30 June 2022 30 June 2021
£m
£m
Six months ended
Profit attributable to equity holders of the Company (£m) 44.9 29.1
Weighted average number of ordinary shares for purposes of basic and diluted 823.3 3.2
EPS (m)
Basic and diluted earnings per share (£) 0.05 9.06
The weighted average number of shares for the six months ended 30 June 2022
and 30 June 2021 reflects the number of shares both pre and post
simplification of the share structure and issue of new shares in the IPO. Had
the shares in issue at 30 June 2022 been in issue throughout the six months
ended 30 June 2021, the weighted average number of shares would have been
823.3m and the earnings per share would have been £0.04.
The adjusted earnings per share on underlying profit after tax of £51.9m
based on the number of shares in issue at 30 June 2022 is £0.06 (2021: £0.05
on underlying profit after tax of £42.3m gross of non-controlling interests).
The number of ordinary shares used in the calculation of earnings per share
excludes shares held by the Group itself.
9. Carried interest receivable
The carried interest receivable relates to revenue which has been recognised
by the Group relating to its share of fund profits through its holdings in
Carried Interest Partnerships ("CIPs").
Revenue is only recognised to the extent it is highly probable that the
revenue recognised would not result in significant revenue reversal of any
accumulated revenue recognised on the completion of a fund. The reversal risk
is mitigated through the application of discounts. If adjustments to the
carried interest receivable recognised in previous periods are required, they
are adjusted through revenue.
30 June 31 December 2021
2022
£m
£m
Opening balance 38.9 27.9
Purchases - -
Income recognised in the period/year 13.5 15.2
Foreign exchange movements 0.6 (1.1)
Receipts of carried interest (0.1) (3.1)
Closing balance 52.9 38.9
10. Financial assets and liabilities
(a) Classification of financial assets
The following tables analyse the Group's assets in accordance with the
categories of financial instruments in IFRS 9 "Financial Instruments" ("IFRS
9"). Assets which are not considered as financial assets, for example
prepayments and lease receivables, under IFRS 9 are also shown in the table in
a separate column in order to reconcile to the face of the Condensed
Consolidated Statement of Financial Position.
Fair value through Hedging derivatives Financial assets at amortised cost Assets which are not financial assets Total
profit or loss
£m
£m
£m
£m
£m
As at 30 June 2022
Fair value of fund investments 319.6 - - - 319.6
Fair value of CLO assets 577.5 - - - 577.5
Trade and other receivables - - 89.6 29.8 119.4
Derivative financial instruments - 3.2 - - 3.2
Cash and cash equivalents - - 139.3 - 139.3
Term deposits with original maturities of more than three months - - 100.0 - 100.0
CLO cash - - 51.6 - 51.6
Total 897.1 3.2 380.5 29.8 1,310.6
Fair value through Hedging derivatives Financial assets at amortised cost Assets which are not financial assets Total
profit or loss
£m
£m
£m
£m
£m
As at 31 December 2021
Fair value of fund investments 313.7 - - - 313.7
Fair value of CLO assets 286.8 - - - 286.8
Trade and other receivables - - 76.4 28.7 105.1
Derivative financial instruments - 9.9 - - 9.9
Cash and cash equivalents - - 323.1 - 323.1
Term deposits with original maturities of more than three months - - - - -
CLO cash - - 4.2 - 4.2
Total 600.5 9.9 403.7 28.7 1,042.8
There are no material differences between the above amounts for trade and
other receivables and their fair value.
(b) Fair value of fund investments
Investments representing the Group's interests in private equity and credit
funds are initially recognised at fair value and subsequently measured at fair
value through the Income Statement within operating income.
The investments primarily consist of loans or commitments made in relation to
the Bridgepoint VI, V and III private equity funds, the Bridgepoint Credit I,
II, Direct Lending I, II and Credit Opportunities III funds.
The fund investments are measured at fair value through profit or loss as the
business model of each vehicle is to manage the assets and to evaluate their
performance on a fair value basis.
(c) Fair value of CLO assets
The balance shown includes the gross value of the assets held by CLO 1, CLO 3
and CLO 4 (2021: CLO 1), which are consolidated by the Group, but of which the
Group only holds the rights and liabilities in relation to a small portion.
The CLO assets are measured at fair value through profit or loss as the
business model of each vehicle is to manage the assets and to evaluate their
performance on a fair value basis.
30 June 31 December 2021
2022
£m
£m
Fair value of CLO assets consolidated by the Group 577.5 286.8
Fair value of CLO assets attributable to third party investors (530.1) (274.5)
Group's exposure to consolidated CLO assets 47.4 12.3
(d) Cash and term deposits
30 June 31 December 2021
2022
£m
£m
Cash at bank and in hand 64.3 323.1
Money market funds 25.0 -
Term deposits with original maturities of less than three months 50.0 -
Total cash and cash equivalents 139.3 323.1
Term deposits with original maturities of more than three months 100.0 -
CLO cash 51.6 4.2
Total cash and term deposits 290.9 327.3
Cash and cash equivalents comprise cash in hand and call deposits, and other
short-term highly liquid investments including term deposits with original
maturities of three months or less and money market funds, which are readily
convertible to a known amount of cash and are subject to an insignificant risk
of changes in value.
CLO cash is cash held by CLO vehicles consolidated by the Group and is not
available for the Group's operating activities. Term deposits represent fixed
term deposits placed with banks and financial institutions. There are no
material differences between cash and cash equivalents, CLO cash and term
deposits and their fair value.
(e) Classification of financial liabilities
The following tables analyse the Group's financial liabilities in accordance
with the categories of financial instruments in IFRS 9. Liabilities such as
deferred income, long-term employee benefits, social security and other taxes
which do not constitute a financial liability under IFRS 9 are shown in the
table in a separate column in order to reconcile to the face of the Condensed
Consolidated Statement of Financial Position.
Fair value through Hedging derivatives Financial liabilities at amortised cost Liabilities which are not financial liabilities Total
profit or loss
£m
£m
£m
£m
£m
As at 30 June 2022
Trade and other payables 31.8 - 18.1 43.4 93.3
Other financial liabilities 25.4 - 28.8 - 54.2
Lease liabilities - - 84.8 - 84.8
Derivative financial instruments - 5.0 - - 5.0
Fair value of CLO liabilities 544.5 - - - 544.5
CLO purchases awaiting settlement - - 37.3 - 37.3
Total 601.7 5.0 169.0 43.4 918.1
Fair value through Hedging derivatives Financial liabilities at amortised cost Liabilities which are not financial liabilities Total
profit or loss
£m
£m
£m
£m
£m
As at 31 December 2021
Trade and other payables 30.3 - 39.0 64.4 133.7
Other financial liabilities 18.8 - 28.1 - 46.9
Lease liabilities - - 84.8 - 84.8
Fair value of CLO liabilities 242.9 - - - 242.9
CLO purchases awaiting settlement - - 35.8 - 35.8
Total 292.0 - 187.7 64.4 544.1
The carrying amount of financial liabilities carried at amortised cost
approximates their fair value, and therefore have not been included in the
disclosure within this section.
(f) Fair value measurement
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date in the principal, or in its absence, the most
advantageous market to which the Group has access to at that date. The fair
value of a liability reflects its non-performance risk.
The Group discloses fair values using the following fair value hierarchy that
reflects the significance of the inputs used in making the measurements:
· Quoted prices (unadjusted) in active markets (level 1);
· Inputs - other than quoted prices included within level 1 - that are
observable for assets or liabilities, either directly (as prices) or
indirectly (derived from prices) (level 2);
· Inputs for assets or liabilities that are not based on observable
market data (level 3).
Derivatives used for hedging, which are fair valued, are classified as level 1
fair values as the inputs are observable.
Financial Assets Financial Liabilities
30 June 31 December 2021 30 June 31 December 2021
2022
£m
2022
£m
£m
£m
Financial assets and liabilities at fair value through profit or loss
Level 1 - - - -
Level 2 577.5 286.8 2.4 213.2
Level 3 319.6 313.7 599.3 78.8
Total 897.1 600.5 601.7 292.0
Investments in funds, which hold portfolios of private equity and credit
assets are valued in line with the International Private Equity and Venture
Capital Valuation ("IPEV") Guidelines using a variety of methodologies. These
investments are classified as level 3 financial assets due to the level of
unobservable inputs within the determination of the valuation of individual
assets within each fund and the lack of an observable price for each
investment in a fund.
The assets of the CLO vehicles, which are fully consolidated by the Group, are
classified as level 2 fair values as they are priced using independent loan
pricing sources. These sources consolidate multiple broker quotes submitted by
various independent market participants.
Further details of the valuation methodologies, process and governance for
investments in funds and investments held by consolidated CLOs is set out
within the notes to the 2021 financial statements.
A reconciliation of level 3 fair values for financial assets which represent
the Group's interest in private equity and credit funds, including the Group's
investment in CLOs which are not consolidated, is set out in the table below:
30 June 31 December 2021
2022
£m
£m
Level 3 financial assets at fair value through profit or loss
Opening balance 313.7 235.9
Additions 26.1 92.7
Change in fair value 26.8 65.7
Foreign exchange movements 6.9 (14.7)
Receipts (53.9) (65.9)
Transfers (to)/from Level 1 or 2 - -
Closing balance 319.6 313.7
The underlying assets in each fund consist of portfolios of investments in
controlling or minority stakes, typically in private companies, and their
debt. Due to the level of unobservable inputs within the determination of the
valuation of individual assets within each fund, and no observable price for
each investment, such investments are classified as level 3 financial assets
under IFRS 13 "Fair Value Measurement".
A sensitivity analysis of a change in the value of investments at fair value
through profit or loss is set out in note 10(g).
The valuation methodology for valuing and subordinated debt liabilities of the
consolidated CLOs is valued based upon internal discounted cash flow models
with unobservable market data inputs, such as asset coupons, constant annual
default rates, prepayment rates, reinvestment rates, recovery rates and
discount rates and are therefore considered level 3 financial liabilities. At
31 December 2021, the approach had been to use broker pricing for the debt
liabilities, which under IFRS is considered to be more observable and
therefore classified as level 2 financial liabilities. Due to the change in
valuation methodology, £204.5m of financial liabilities have been transferred
from level 2 to level 3 in the fair value hierarchy during the period (2021:
nil).
Financial liabilities classified as level 3 under the fair value hierarchy
consist of the deferred contingent consideration, liabilities of CLOs
consolidated by the Group and other financial liabilities, which includes a
payable to related party investors in Opal Investments LP. The valuation of
these liabilities is based on unobservable market data and therefore
classified as level 3.
30 June 31 December 2021
2022
£m
£m
Level 3 financial liabilities at fair value through profit or loss
Deferred contingent consideration 31.8 30.3
CLO liabilities 542.1 29.7
Other financial liabilities 25.4 18.8
Total 599.3 78.8
A reconciliation of level 3 fair values for CLO liabilities at fair value
through profit or loss is set out in the table below.
30 June 31 December 2021
2022
£m
£m
Movement in CLO liabilities at fair value through profit or loss which are
level 3
Opening balance 29.7 37.8
On acquisition 319.6 -
Repayment - (5.5)
Drawn - -
Foreign exchange movements 0.7 (2.2)
Change in fair value (12.4) (0.4)
Transfers (to)/from Level 1 or 2 204.5 -
Closing balance 542.1 29.7
The impact of a 1% change in the value of the CLO liabilities is included in
the table below.
Group
30 June 31 December 2020
£m
2022
£m
Increase or decrease of 1% 5.4 0.3
(g) Valuation inputs and sensitivity analysis
The number of unique investments that the Group indirectly invests into
through its investments in private equity and credit funds is numerous, and it
is not practical to provide a summary of the principal inputs into each
investment. The table below summarises the valuation methodologies used to
fair value investments in private equity and credit funds which are classified
as level 3 financial assets. Due to the level of unobservable inputs within
the determination of the valuation of individual assets within each fund, and
the lack of an observable price for each investment in a fund, fund
investments at fair value are classified as level 3. Whilst some assets held
by the funds may be classified as level 2 instruments, the Group does not
consolidate the funds and treats the unit of account as the fund rather than
the individual asset.
Nature of investments Fair value at 30 June 2022 (£m) Number of unique investments Valuation methodology Description Inputs
Private equity funds 249.3 66 Earnings Where a portfolio company is profitable and a set of comparable listed Earnings multiples are applied to the earnings of each portfolio company to
companies and precedent transactions are available, earnings multiples are determine the enterprise value. The most common measure of earnings is EBITDA.
used. This is the most commonly used private equity valuation methodology. Earnings are adjusted for non-recurring items and run-rate adjustments to
arrive at maintainable earnings. Earnings are usually obtained from portfolio
company management accounts or forecast/budgeted earnings, as considered
appropriate.
When selecting earning multiples consideration is given to:
· the original transaction price/entry multiple;
· recent transactions in the same or similar instruments;
· relevant comparable listed company multiples; and
· exit expectations and other company specific factors.
The resulting enterprise value is then adjusted to take into account the
capital structure of the portfolio company, including any assets or
liabilities such as cash or debt that should be included. The fund's share of
the value is calculated by calculating its holding.
At 30 June 2022, 97% of private equity fund investments were valued using the
earnings multiples approach.
Listed price Where a portfolio company has instruments traded on a recognised exchange the The traded price is applied to the number of shares held by the fund in the
traded price is used to value the investment. portfolio company. The value is then adjusted to take into account any assets
or liabilities in holding entities outside of the listed company. As at 30
June 2022, there were two listed portfolio companies which were priced using
the prevailing share price.
Nature of investments Fair value at 30 June 2022 (£m) Number of unique investments Valuation methodology Description Inputs
Credit funds 647.8 250 Market price Where a loan is traded in the market, market prices can be obtained for use in Market prices can be obtained from third-party market price aggregation
pricing. services or broker quotes where there is an active market. The extent to which
the market is active depends upon the 'depth' of the pricing, (being the
number of distinct price quotations available from different sources).
Before the use of market pricing, work is undertaken to identify anomalies or
other inaccuracies in market pricing or whether there are other factors that
should be considered, for example, recent transactions.
As at 30 June 2022, 4% of the Credit fund assets (excluding CLOs) were priced
using market prices. 99% of the CLO fund assets were priced using market
prices.
Amortising to par method Where a performing loan that has been originated is valued based upon its Provided that there are no circumstances which indicate material
amortised cost. underperformance or an inability of the borrower to pay interest or repay the
principal, the valuation of loans that have been originated is determined by
apportioning any arrangement fees, similar fees or discount on a linear basis
over the anticipated holding period (which is typically three years).
As at 30 June 2022, 80% of the Credit fund assets were priced using the
amortising to par method.
Earnings Where a loan may be impaired an earnings basis is typically used to determine Where there are circumstances which indicate there is risk of
the enterprise value of the borrower, following which a waterfall approach is non-performance of the borrower, the enterprise value of the borrower will
used to determine the value of the loan. typically be determined in accordance with an earnings methodology (as
described above), following which a waterfall approach is used to determine
the value of the loan.
As at 30 June 2022, 4% of the Credit fund assets were priced using earnings
basis
Other Other valuation techniques may be utilised where the above methodologies are Considering the broad array of debt instruments that may be held by the
not deemed appropriate. funds, it may be deemed appropriate for other valuation techniques to be
utilised in certain cases.
As at 30 June 2022, 12% of the Credit fund assets were priced using other
valuation techniques.
A reasonably possible change in the values of investments at fair value
through profit or loss is shown in the table below. This is modelled as 10% of
private equity fund investments and 1% of credit fund investments. As above,
investments in private equity inherently have greater potential for larger
changes in their valuation as the upside is not capped. The downside is
limited to the amount invested in the funds. For credit investments, the
upside is capped to the maximum of the principal and interest receipts and the
downside is limited to the amount invested in the funds, but due to the
investment strategy of the fund, losses are expected to be very small.
The sensitivity analysis considers only the net impact on the Group from
changes in the consolidated CLO portfolio, as the Group's exposure to price
risk is limited to its interest within the CLO and not the gross assets and
liabilities.
30 June 31 December 2021
2022
£m
£m
(+/-)
(+/-)
Fair value sensitivity
10% private equity fund investments 24.9 21.8
1% credit fund investments 1.2 1.1
11. Dividends
The Company paid a final dividend of £30.0m in May 2022, in respect of the
second half of 2021, which equates to 3.6 pence per share.
The directors have announced an interim dividend of £33.0m, which equates to
4.0 pence per share, to be paid in September 2022 to shareholders on the
register as at 19 August 2022.
Six months ended Six months ended
30 June 2022
30 June 2021
£m Pence per share £m Pence per share
Ordinary dividends paid:
Prior period final dividend paid 30.0 3.6 - -
12. Cash flow generated from operations
30 June 2022 30 June 2021
£m
£m
Six months ended
Profit before tax 48.3 40.4
Adjustments for
Exceptional expenses 0.7 1.2
Share-based payments 0.4 -
Profit on disposal of right-of-use asset - 0.6
Depreciation and amortisation expense 9.1 6.3
Net finance expense 3.7 5.1
Carried interest (14.0) (1.4)
Fair value remeasurement of investments (24.7) (24.1)
Net exchange gains (0.6) (1.0)
(Increase)/decrease in trade and other receivables (17.1) 1.6
Decrease in trade and other payables (38.4) (26.4)
Cash generated from operations (32.6) 2.3
FORWARD LOOKING STATEMENTS
This announcement may include forward-looking statements. Forward-looking
statements are statements that are not historical facts and may be identified
by words such as "plans", "targets", "aims", "believes", "expects",
"anticipates", "intends", "estimates", "will", "may", "continues", "should"
and similar expressions. These forward-looking statements reflect, at the time
made, the beliefs, intentions and current targets/aims of Bridgepoint Group
plc (the "Company"). Forward-looking statements involve risks and
uncertainties because they relate to events and depend on circumstances that
may or may not occur in the future. The forward-looking statements in this
announcement are based upon various assumptions. Although the Company believes
that these assumptions were reasonable when made, these assumptions are
inherently subject to significant known and unknown risks, uncertainties,
contingencies and other important factors which are difficult or impossible to
predict and are beyond its control. Forward-looking statements are not
guarantees of future performance and such risks, uncertainties, contingencies
and other important factors could cause the actual outcomes and the results of
operations, financial condition and liquidity of the Company, its subsidiary
undertakings or the industry to differ materially from those results expressed
or implied in this announcement by such forward-looking statements. No
representation or warranty, express or implied, is made that any of these
forward-looking statements or forecasts will come to pass or that any forecast
result will be achieved. Undue influence should not be given to, and no
reliance should be placed on, any forward-looking statement. No statement in
this announcement is intended to be nor may be construed as a profit forecast.
Neither the Company, nor any of its subsidiaries nor any of their affiliates,
nor any of its or their officers, employees, agents or advisers, undertake to
publicly update or revise any such forward-looking statement, except to the
extent required by applicable law.
Issued by Bridgepoint Group plc
LEI: 213800KFNMVI8PDZX472
Registered in England and Wales no. 11443992.
Registered office: 95 Wigmore Street, London, W1U 1FB
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR SEUSIMEESELWRecent news on Bridgepoint
See all newsREG - Bridgepoint Group - Transaction in Own Shares
AnnouncementREG - Bridgepoint Group - Transaction in Own Shares
AnnouncementREG - Bridgepoint Group - Transaction in Own Shares
AnnouncementREG - Bridgepoint Group - Transaction in Own Shares
AnnouncementREG - Bridgepoint Group - Notice of AGM
Announcement