Candover Investments logo

CDI - Candover Investments News Story

115.5p 0.0  0.0%

Last Trade - 18/04/18

Sector
Financials
Size
Micro Cap
Market Cap £n/a
Enterprise Value £n/a
Revenue £9.60m
Position in Universe th / 1819

Candover Investments: Interim results for the half year ended 30th June 2017

Wed 23rd August, 2017 7:00am
23rd August 2017

Candover* Investments plc

Interim results for the half year ended 30th June 2017
* Net assets per share of 156p (31st December 2016: 163p) a 4.3% decrease over
the six months to 30th June 2017.
* Three realisations were announced generating proceeds of £18.3 million, of
which £16.7 million was received in the period.
* Net cash at 30th June 2017 of £1.7 million (31st December 2016: Net debt
£13.7 million) which benefitted from realisation proceeds and dividends of
£2 million received after the period end.
* Debt facility was fully repaid in March 2017.
* Parques investment, representing approximately 2.4% of its share capital,
now directly held and controlled by Candover.
  
Malcolm Fallen, Chief Executive Officer, said:

“Following a series of realisations in the first half, we have repaid our
debt, simplified our balance sheet and now have net cash.  Our focus is to
complete the run-off of Candover’s portfolio in the most effective way.”
 

* Candover means Candover Investments plc and/or one or more of its
subsidiaries
 

For further information, please contact:

Candover Investments plc
Malcolm Fallen, CEO
+44 20 7489 9848

 

Business and financial review

Overview

Net assets per share decreased by 4.3% or 7p per share during the six months
to 30th June 2017 to 156p (31st December 2016: 163p).  The overall reduction
in NAV reflects the benefit of a small foreign currency gain offset by
financing and administration costs.  The portfolio returned a small net gain,
with a realised gain on the disposal of Parques Reunidos (“Parques”),
offsetting an unrealised loss.

The positive effect of a series of realisations has seen net debt move from
£13.7 million at the year end to a net cash position of £1.7 million at 30th
June 2017.

The first half of the year has seen a high level of realisation activity.

In early January, a further partial realisation of the investment in Parques
was announced following the first partial realisation completed at the time of
the initial public offering of Parques in April 2016. This disposal saw the
Company sell 26% of its interest in Parques for cash proceeds of €9.9
million (£8.4 million).

Candover also announced in January the realisation of its remaining investment
in Technogym S.p.A (“Technogym”).  The realisation, which followed the
partial realisation completed at the time of the initial public offering of
Technogym in April 2016, generated cash proceeds of €9.5 million (£8.3
million).

The disposal of Candover’s interest in Hilding Anders for €1.9 million
(£1.6 million) was also executed at the end of the half year, with proceeds
received prior to the end of July. 

Following the termination of the Candover 2005 and 2008 Funds at the end of
the March 2017, Arle Capital Partners Limited (“Arle”) no longer acts as
the Company’s investment manager. Candover is now self-managing its
remaining investments, including the 2.4% direct interest in Parques which the
Company received as a distribution in specie when the 2005 Fund terminated.

The Board has continued to look at the timing and options for the disposal of
the Parques investment, the potential distribution of value to shareholders
and reducing the cost of managing through this phase of the run-off process.
We continue to explore whether Candover’s accumulated income tax losses, in
any way, constitute a future realisable asset, and expect to conclude on the
review in the coming months. 

Net asset value per share

In the six months to 30th June 2017, net assets per share decreased by 4.3%
from 163p to 156p. The decrease of 7p per share comprised favourable currency
movements (3p), the impact of financing costs (5p) together with management
fees and general administration costs (5p).

 

Table 1

                                                                   £m  p/share 
 Net asset value at 31st December 2016 as reported               35.6      163 
                                                                               
 Gain on financial instruments and other income (1)               0.1        - 
 Administrative expenses                                        (1.1)      (5) 
 Finance costs                                                  (1.2)      (5) 
 Currency impact:                                                              
 – Unrealised investments                                         0.8        4 
 – Retranslation of cash and cash equivalents                     0.2        1 
 – Translation of loan                                          (0.4)      (2) 
                                                                               
 Net asset value at 30th June 2017 as reported                   34.0      156 

(1) Stated before favourable currency impact of £0.8 million

Portfolio update and investments

The valuation of investments at 30th June 2017 was £30.9 million compared to
£46.7 million at the start of the year. The reduction reflects the disposal
of Technogym and a further partial realisation of Parques which generated
combined cash proceeds of £16.7 million.

Table 2

 Portfolio company       Residual cost (1)  Valuation   Additions and   Valuation movement excluding FX (2)  Valuation movement attributable to FX (2)  Valuation at 30th June 2017   Valuation movement  
                                              at 31st       disposals                                    £m                                         £m                                         pence per  
                                             December                                                                                                                             £m            share (2) 
                                        £m       2016               £m                                                                                                                                    
                                                    £m                                                                                                                                                    
 Parques Reunidos                     30.0        35.3           (1.0)                            (6.2) (4)                                        0.9                          29.0               (24.0) 
 Technogym                               -         8.2           (8.2)                                    -                                          -                             -                    - 
 Expro International                  94.4         0.6               -                                (0.5)                                      (0.1)                             -                (3.0) 
 Hilding Anders                       24.3         1.6               -                                    -                                          -                           1.6                    - 
 Stork Group                           5.0         0.3               -                                    -                                          -                           0.3                    - 
 All investments                     153.7        46.0           (9.2)                                (6.7)                                        0.8                          30.9               (27.0) 
                                                                                                                                                                                                          
 Other investments (3)                18.1         0.7               -                                (0.7)                                          -                             -                (3.0) 
 Total                               171.8        46.7           (9.2)                                (7.4)                                        0.8                          30.9               (30.0) 

(1)  Residual cost is original cost less realisations to date

(2)  Compared to the valuation at 31st December 2016 or acquisition date, if
later

(3)  Represents other co-investments

(4  ) The unrealised revaluation movement on Parques is offset by a £6.1
million realised revenue gain
 

Over the course of the first nine months to 30th June 2017, Parques has traded
favourably.  On 28th July 2017, it reported Q3 results which saw revenues
grow 4% on a like-for-like basis, whilst EBITDA was up 64%.The critical summer
trading period for the business is the last quarter to 30th September, during
which approximately 60% of its annual revenues and the majority of its profits
are generated.

 

Hilding Anders was realised during the period, in line with the 30th June 2017
valuation, with receipt of proceeds of €1.9 million occurring in July 2017.
The Stork value reflects the current estimated proceeds due to Candover from a
legacy escrow arrangement related to the sale of Fokker in 2015.

Expro continues to face challenging trading conditions with earnings
continuing to fall.  As a consequence, the investment was fully written down
at 30th June 2017.

Valuations of the retained portfolio decreased for the period by £7.4
million, before currency effects, representing a decrease of 19.7% in the
value of these investments since 31st December 2016.  After including £0.8
million of favourable foreign currency movements, the valuation of the
retained portfolio reduced by £6.6 million (17.6%).

The unrealised loss of £6.2 million in relation to Parques offsets the
realised revenue gain of £6.1 million recognised in the period.  This was as
a result of the reallocation of value in the investment instruments prior to
the distribution in specie occurring.

Net cash/(debt) position

Candover’s net cash was £1.7 million as at 30th June 2017 compared to net
debt of £13.7 million as at 31st December 2016. This reflects the cash inflow
from realisations of £16.7 million offset by the impact of interest accrued
on borrowings, operating expenses and adverse foreign currency movements in
the period.

At the end of March 2017, Candover fully repaid its remaining debt from
surplus cash balances which had increased as a result of realisations
completed in the early part of the year. After discussion with its debt
provider, the anticipated cost of repayment was reduced by €918,000
(£795,000).

Following the end of the half year, realisation proceeds and dividends
totalling £2 million were received.

Table 3

                        30th June    31st December 2016 £m 
                             2017                          
                                £m                         
 Loans and borrowings            -                  (34.7) 
 Deferred costs                  -                   (0.3) 
 Value of loan                   -                  (35.0) 
 Cash                          1.7                    21.3 
 Net cash/(debt)               1.7                  (13.7) 

Profit before and after tax

Net revenue profit before tax and exceptional non-recurring costs for the
period was £4.5 million compared to a loss of £3.0 million in the comparable
period.

Including capital costs of £0.7 million (2016: £2.5 million), total
administrative and finance costs in the period were £2.3 million (2016: £5.6
million).  This included £0.2 million (2016: £0.6 million) of management
fees payable to Arle, linked to the value of investments managed, and £1.2
million of financing costs (2016: £4.4 million).  The reduction in financing
costs reflected the benefit of repaying the debt facility in two tranches over
the course of the last twelve months.

Board

Board changes were announced at the time of the preliminary results in
February 2017 and took effect from the Annual General Meeting on 23rd May
2017.

Dividend

The Board is not recommending a dividend payment.

Outlook

Progress over the first half of the year has significantly changed the
financial position of Candover, with realisation proceeds enabling the full
repayment of our debt and leaving the Company with net cash. We are now moving
towards the final stages of the full realisation of Candover’s legacy
investment portfolio, with the disposal options for Parques under review. We
continue to explore whether Candover’s accumulated income tax losses, in any
way, constitute a future realisable asset, and expect to conclude on the
review in the coming months. 


 

Principal risks and uncertainties

Details of the principal risks and uncertainties facing the Group were set out
in the Risk review on pages 5 to 7 of the 2016 Report and Accounts, a copy of
which is available on our website (www.candoverinvestments.com).

The principal risks and uncertainties identified in the 2016 Report and
Accounts, and the policies and procedures for minimising these risks and
uncertainties, remain unchanged and each of them has the potential to affect
the Group’s results during the remainder of 2017. Our views on the current
market conditions are reflected in the Business and financial review.

Statement of Directors’ responsibilities

The Directors of Candover Investments plc confirm that, to the best of their
knowledge, the condensed set of financial statements in this interim report
have been prepared in accordance with International Accounting Standard 34
‘Interim Financial Reporting’ as adopted by the EU, and give a fair view
of the assets, liabilities, financial position and profit or loss of Candover
Investments plc, and the undertakings included in the consolidation as a
whole.

By order of the Board

Ipes (UK) Limited

Company Secretary

23rd August 2017


 

Independent review report to the members of  Candover Investments plc

Introduction

We have reviewed the condensed set of financial statements in the half-yearly
financial report of Candover Investments plc for the six months ended 30 June
2017 which comprises the Group statement of comprehensive income, the Group
statement of changes in equity, the Group statement of financial position, the
Group cash flow statement, and the related explanatory notes. We have read the
other information contained in the half-yearly financial report which
comprises only the Business and financial review, the Principal risks and
uncertainties and the Statement of directors’ responsibilities and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.

This report is made solely to the company’s members, as a body, in
accordance with International Standard on Review Engagements (UK and Ireland)
2410, 'Review of Interim Financial Information performed by the Independent
Auditor of the Entity'. Our review work has been undertaken so that we might
state to the company’s members those matters we are required to state to
them in an independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a body, for our review
work, for this report, or for the conclusion we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, the annual financial statements of the Group are
prepared in accordance with International Financial Reporting Standards as
adopted by the European Union. The condensed set of financial statements
included in this half-yearly financial report has been prepared in accordance
with International Accounting Standard 34, 'Interim Financial Reporting', as
adopted by the European Union.

Our responsibility

Our responsibility is to express a conclusion on the condensed set of
financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity'. A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2017 is not prepared, in all
material respects, in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European Union and the
Disclosure and Transparency Rules of the United Kingdom's Financial Conduct
Authority.

Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

London

23rd August 2017


 

Group statement of comprehensive income
for the period ended 30th June 2017

 £ million                                           Six months to 30th June 2017        Six months to 30th June 2016        Year to 31st December 2016    
                                                      Revenue     Capital       Total     Revenue     Capital       Total    Revenue    Capital      Total 
                                                               unaudited                           unaudited                          audited              
 Gain/(loss) on financial instruments                                                                                                                      
 at fair value through profit and loss                                                                                                                     
 Realised gains/(losses)                                  6.1           -         6.1           -       (3.4)       (3.4)          -      (3.4)      (3.4) 
 Unrealised (losses)/gains                                  -       (5.0)       (5.0)           -       (7.3)       (7.3)     (10.3)       11.4        1.1 
                                                          6.1       (5.0)         1.1           -      (10.7)      (10.7)     (10.3)        8.0      (2.3) 
                                                                                                                                                           
 Revenue                                                                                                                                                   
 Investment and other income                                -           -           -         0.1           -         0.1        0.2          -        0.2 
 Administrative expenses                                (1.0)       (0.1)       (1.1)       (0.9)       (0.3)       (1.2)      (1.7)      (0.4)      (2.1) 
 (Loss)/profit before finance costs and taxation          5.1       (5.1)           -       (0.8)      (11.0)      (11.8)     (11.8)        7.6      (4.2) 
                                                                                                                                                           
 Finance costs                                          (0.6)       (0.6)       (1.2)       (2.2)       (2.2)       (4.4)      (3.7)      (3.7)      (7.4) 
 Exchange movements on borrowings                           -       (0.4)       (0.4)           -       (4.7)       (4.7)          -      (6.0)      (6.0) 
 Profit/(loss) before taxation                            4.5       (6.1)       (1.6)       (3.0)      (17.9)      (20.9)     (15.5)      (2.1)     (17.6) 
                                                                                                                                                           
 Taxation                                                   -           -           -           -           -           -          -          -          - 
 Profit/(loss) after taxation                             4.5       (6.1)       (1.6)       (3.0)      (17.9)      (20.9)     (15.5)      (2.1)     (17.6) 
                                                                                                                                                           
 Total comprehensive income                               4.5       (6.1)       (1.6)       (3.0)      (17.9)      (20.9)     (15.5)      (2.1)     (17.6) 
                                                                                                                                                           
 Earnings per ordinary share:                                                                                                                              
 Total earnings per share – basic and diluted             21p       (28p)        (7p)       (13p)       (82p)       (95p)      (70p)      (10p)      (80p) 

The total column represents the Group statement of comprehensive income under
IFRS. The supplementary revenue and capital columns are presented for
information purposes as recommended by the Statement of Recommended Practice
issued by the Association of Investment Companies and updated in November 2014

All of the loss for the period and the total comprehensive income for the
period are attributable to the owners of the Company

No interim dividend is proposed


 

Group statement of changes in equity
for the period ended 30th June 2017

 unaudited                                          Called      Share       Other         Capital         Capital    Revenue     Total  
                                                  up share    premium    reserves      reserves –      reserves –    reserve    equity  
                                                   capital    account                    realised      unrealised                       
                                                         £m                                     £m              £m                      
                                                                    £m          £m                                         £m        £m 
 Balance at 1st January 2017                            5.5        1.2       (0.1)           191.5         (136.1)     (26.4)      35.6 
 Net revenue after tax                                    -          -           -               -               -      (1.6)     (1.6) 
 Unrealised loss on financial instruments                 -          -           -           (0.6)           (4.4)          -     (5.0) 
 Realised gain on financial instruments                   -          -           -               -               -        6.1       6.1 
 Exchange movements on borrowing                          -          -           -               -           (0.4)          -     (0.4) 
 Costs net of tax                                         -          -           -           (0.7)               -          -     (0.7) 
 (Loss)/profit after tax                                  -          -           -           (1.3)           (4.8)        4.5     (1.6) 
 Total comprehensive income                               -          -           -           (1.3)           (4.8)        4.5     (1.6) 
 Balance at 30th June 2017                              5.5        1.2       (0.1)           190.2         (140.9)     (21.9)      34.0 
                                                                                                                                        
 unaudited                                                                                                                              
 Balance at 1st January 2016                            5.5        1.2       (0.1)           309.9         (252.4)     (10.9)      53.2 
 Net revenue after tax                                    -          -           -               -               -      (3.0)     (3.0) 
 Unrealised loss on financial instruments                 -          -           -               -           (7.3)          -     (7.3) 
 Realised (loss)/gain on financial instruments            -          -           -          (27.9)            24.5          -     (3.4) 
 Exchange movements on borrowing                          -          -           -               -           (4.7)          -     (4.7) 
 Costs net of tax                                         -          -           -           (2.5)               -          -     (2.5) 
 (Loss)/profit after tax                                  -          -           -          (30.4)            12.5      (3.0)    (20.9) 
 Total comprehensive income                               -          -           -          (30.4)            12.5      (3.0)    (20.9) 
 Balance at 30th June 2016                              5.5        1.2       (0.1)           279.5         (239.9)     (13.9)      32.3 
                                                                                                                                        
                                                                                                                                        
 audited                                                                                                                                
 Balance at 1st January 2016                            5.5        1.2       (0.1)           309.9         (252.4)     (10.9)      53.2 
 Net revenue after tax                                    -          -           -               -               -      (5.2)     (5.2) 
 Unrealised loss on financial instruments                 -          -           -               -            11.4     (10.3)       1.1 
 Realised (loss)/gain on financial instruments            -          -           -         (114.3)           110.9          -     (3.4) 
 Exchange movements on borrowing                          -          -           -               -           (6.0)          -     (6.0) 
 Costs net of tax                                         -          -           -           (4.1)               -          -     (4.1) 
 (Loss)/profit after tax                                  -          -           -         (118.4)           116.3     (15.5)    (17.6) 
 Total comprehensive income                               -          -           -         (118.4)           116.3     (15.5)    (17.6) 
 Balance at 31st December 2016                          5.5        1.2       (0.1)           191.5         (136.1)     (26.4)      35.6 

Group statement of financial position
at 30th June 2017

 £ million                                                                Notes   30th June 2017      30th June 2016 unaudited      31st December 2016 audited    
                                                                                     unaudited                                                                    
 Non-current assets                                                                                                                                               
 Financial investments designated at fair value through profit and loss                                                                                           
 Investee companies                                                           5      30.9                     38.7                           46.0                 
 Other financial investments                                                  5         -                      0.6                            0.7                 
                                                                                               30.9                          39.3                            46.7 
 Trade and other receivables                                                            -                      3.2                                            2.4 
                                                                                                  -                           3.2                            49.1 
 Current assets                                                                                                                                                   
 Trade and other receivables                                                          1.7                      0.1                              -                 
 Current tax asset                                                                      -                      0.1                              -                 
 Cash and cash equivalents                                                            1.7                     20.6                           21.3                 
                                                                                                3.4                          20.8                            21.3 
                                                                                                                                                                  
 Current liabilities                                                                                                                                              
 Trade and other payables                                                           (0.3)                    (0.6)                          (0.1)                 
                                                                                              (0.3)                         (0.6)                           (0.1) 
                                                                                                                                                                  
 Net current assets                                                                             3.1                          20.2                            21.2 
                                                                                                                                                                  
 Total assets less current liabilities                                                         34.0                          62.7                            70.3 
                                                                                                                                                                  
 Non-current liabilities                                                                                                                                          
 Loans and borrowings                                                                             -                        (30.4)                          (34.7) 
 Net assets                                                                                    34.0                          32.3                            35.6 
                                                                                                                                                                  
 Equity attributable to equity holders                                                                                                                            
 Called up share capital                                                                        5.5                           5.5                             5.5 
 Share premium account                                                                          1.2                           1.2                             1.2 
 Other reserves                                                                               (0.1)                         (0.1)                           (0.1) 
 Capital reserve – realised                                                                   190.2                         279.5                           191.5 
 Capital reserve – unrealised                                                               (140.9)                       (239.9)                         (136.1) 
 Revenue reserve                                                                             (21.9)                        (13.9)                          (26.4) 
 Total equity                                                                                  34.0                          32.3                            35.6 
                                                                                                                                                                  
 Net asset value per share                                                                                                                                        
 Basic                                                                                         156p                          148p                            163p 
 Diluted                                                                                       156p                          148p                            163p 

Group cash flow statement
for the period ended 30th June 2017

 £ million                                                               Notes    Six months to        Six months to 30th June 2016 unaudited      Year to 31st December 2016 audited    
                                                                                  30th June 2017                                                                                         
                                                                                     unaudited                                                                                           
 Cash flows from operating activities                                                                                                                                                    
 Cash flow from operations                                                   4                 (0.2)                                       (0.4)                                   (0.6) 
 Interest paid                                                                                 (9.8)                                       (2.4)                                   (2.4) 
 Net cash outflow from operating activities                                                   (10.0)                                       (2.8)                                   (3.0) 
                                                                                                                                                                                         
 Cash flows from investing activities                                                                                                                                                    
 Sale of financial investments                                                       16.7                             30.1                                      30.1                     
 Net cash inflow from investing activities                                                      16.7                                        30.1                                    30.1 
                                                                                                                                                                                         
 Cash flows from financing activities                                                                                                                                                    
 Loan facility repaid                                                              (26.5)                           (15.8)                                    (15.8)                     
 Net cash outflow from financing activities                                                   (26.5)                                      (15.8)                                  (15.8) 
                                                                                                                                                                                         
 (Decrease) / increase in cash and cash equivalents                                           (19.8)                                        11.5                                    11.3 
                                                                                                                                                                                         
 Opening cash and cash equivalents                                                              21.3                                         6.5                                     6.5 
 Effect of exchange rates and revaluation on cash and cash equivalents                           0.2                                         2.6                                     3.5 
 Closing cash and cash equivalents                                                               1.7                                        20.6                                    21.3 

Notes to the financial statements

for the period ended 30th June 2017

Note 1 General information

Candover Investments plc is a private equity investment trust listed on the
London Stock Exchange, registered and incorporated in England and Wales. The
consolidated financial statements, which are made up to the Statement of
financial position date, incorporate the Financial statements of Candover
Investments plc and Candover Services Limited, its wholly owned subsidiary.

This condensed consolidated half-year financial information does not comprise
statutory accounts within the meaning of Section 434 of the Companies Act
2006. Statutory accounts for the year ended 31st December 2016 were approved
on 4th April 2017. Those accounts, which contained an unqualified audit report
under Section 498 of the Companies Act 2006 and which did not make any
statements under Section 498 of the Companies Act 2006, have been delivered to
the Registrar of Companies in accordance with Section 441 of the Companies Act
2006.

Note 2 Basis of preparation

The condensed interim consolidated financial statements (“the interim
financial statements”) incorporate the Financial statements for the six
months ended 30th June 2017 and are presented in Sterling which is the
functional currency of the parent company. The accounting policies and
presentation used in the preparation of this report are consistent with the
consolidated financial statements for the year ended 31st December 2016. They
have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’
(IAS 34). They do not include all of the information required in annual
financial statements in accordance with International Financial Reporting
Standards (“IFRS”), and should be read in conjunction with the
consolidated financial statements for the year ended 31st December 2016.

Under the UK Corporate Governance Code dated September 2014 and applicable
regulations and guidance, including the FRC’s ‘Going Concern and Liquidity
Risk: Guidance for Directors of UK Companies 2009’, the Directors are
required to satisfy themselves that it is reasonable to presume that the
Company is a going concern. Candover’s business activities, together with
the factors likely to affect its future development, performance and position,
are set out in the Business and financial review on pages 2 to 5. The
financial position of Candover, its cash flows and liquidity position are
described in the business and financial review on pages 4 to 5. The Directors
have a reasonable expectation that Candover and the Group have adequate
resources to continue as a going concern for the foreseeable future. For these
reasons, they continue to adopt the going concern basis in preparing the
interim financial statements as at 30th June 2017.

Note 3 Estimates

When preparing the interim financial statements, management undertakes a
number of judgements, estimates and assumptions about recognition and
measurement of assets, liabilities, income and expenses. The actual results
may differ from the judgements, estimates and assumptions made by management,
and will seldom equal the estimated results. The judgements, estimates and
assumptions applied in the interim financial statements, including the key
sources of estimation uncertainty, were consistent with those applied in the
Group’s last annual financial statements for the year ended 31st December
2016.


 

Note 4 Reconciliation of operating income to net cash flow from operating
activities

 £ million                                           Six months to   Six months to 30th June 2016 unaudited  Year to 31st December 2016 audited 
                                                    30th June 2017                                                                              
                                                          unaudited                                                                             
 Total income                                                     -                                     0.1                                 0.2 
 Administrative expenses                                      (1.1)                                   (1.2)                               (2.1) 
 Operating loss                                               (1.1)                                   (1.1)                               (1.9) 
 Decrease in trade and other receivables (1)                    0.7                                     0.3                                 1.4 
 Increase/(decrease) in trade and other payables                0.2                                     0.4                               (0.1) 
 Net cash outflow from operating activities                   (0.2)                                   (0.4)                               (0.6) 

(1) Includes accrued portfolio income recognised within Financial investments
shown under Non-current assets on the Group statement of financial position.

Note 5 Financial investments designated at fair value through profit and loss

 £ million                  Six months to   Six months to 30th June 2016 unaudited  Year to 31st December 2016 audited 
                           30th June 2017                                                                              
                                 unaudited                                                                             
 Opening valuation                    46.7                                    82.6                                82.6 
 Disposals at valuation              (9.2)                                  (33.6)                              (33.6) 
 Valuation movements                 (6.6)                                   (9.7)                               (2.3) 
 Closing valuation                    30.9                                    39.3                                46.7 

Note 6 Fair value hierarchy measurements and disclosures

IFRS 13 requires a company to classify fair value measurements using a fair
value hierarchy that reflects the significance of the inputs used in making
the measurements. The fair value hierarchy has the following levels:
 

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or
liabilities.

Level 2 - Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices including interest rates, yield
curves, volatilities, prepayment speeds, credit risks and default rates) or
other market corroborated inputs.
 

Level 3 - Inputs for the asset or liability that are not based on observable
market data (that is unobservable inputs).

The table below sets out fair value hierarchy under the IFRS 7 fair value
disclosures and IFRS 13 fair value measurement:

                                          Six months to 30th June 2017             
                                                    unaudited                      
 Group                            Level 1 £m   Level 2 £m   Level 3 £m      Total  
                                                                                £m 
 Continuing equity investments          29.0            -          1.9        30.9 
 Cash equivalents (1)                      -            -            -           - 
 Total                                  29.0            -          1.9        30.9 
                                      Six months to 30th June 2016 unaudited       
 Group                            Level 1 £m   Level 2 £m   Level 3 £m    Total £m 
 Continuing equity investments             -            -         39.3        39.3 
 Cash equivalents (1)                      -            -            -           - 
 Total                                     -            -         39.3        39.3 
                                        Year to 31st December 2016 audited         
 Group                            Level 1 £m   Level 2 £m   Level 3 £m    Total £m 
 Continuing equity investments             -         43.5          3.2        46.7 
 Cash equivalents (1)                      -            -            -           - 
 Total                                     -         43.5          3.2        46.7 

(1)These are short-dated listed fixed income securities and money market
instruments which meet the definition of cash and cash equivalents

There has been one transfer from Level 2 to Level 1 since the year ended 31st
December 2016. This relates to Candover’s investment in Parques as Candover
now holds ordinary shares in Parques, which is listed on the Spanish stock
exchange. The valuation of Candover’s interest in Parques is now based on
the quoted price of Parques as at 30th June 2017.

The valuation for Hilding Anders has changed since the year end from an
earnings multiple following the agreement to sell the portfolio company. The
valuation of Hilding Anders is currently based on the fair value of the
expected proceeds as at 30th June 2017.

Note 7 Related party transactions

The nature of the Company’s interest in the Candover 2005 and 2008 Funds is
disclosed in Note 9 on page 64 of the 2016 Report and Accounts.

As at 30th June 2017, Candover’s investments as a Special Limited Partner in
the Candover 2005 Fund were valued at £nil (31st December 2016:  £0.5
million).

Note 8 Operating segments

Candover’s operating segments are being reported based on the financial
information provided to the Chief Executive Officer of Candover. Co-investment
activity is presented on the Group statement of comprehensive income in
accordance with the Statement of Recommended Practice. Income arising from
co-investment is reported under ‘revenue’, and capital gains and losses
within ‘capital’. The Group’s material non-current assets are the
portfolio companies of the co-investment segment. There have been no changes
from prior periods in measurement methods used to determine operating segments
during the six month period to 30th June 2017.



Copyright (c) 2017 PR Newswire Association,LLC. All Rights Reserved
© Stockopedia 2020, Refinitiv, Share Data Services.
This site cannot substitute for professional investment advice or independent factual verification. To use it, you must accept our Terms of Use, Privacy and Disclaimer policies.