REG - CT Private Eq Trust - Preliminary Annual Results and Quarterly Dividend
03/04/2024 07:00
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RNS Number : 0587J CT Private Equity Trust PLC 03 April 2024
To: Stock Exchange
Date: 3 April 2024
CT Private Equity Trust PLC
LEI: 2138009FW98WZFCGRN66
Preliminary Announcement for the Year Ended 31 December 2023
CT Private Equity Trust PLC today announces its unaudited financial results
for the year ended 31 December 2023.
Financial Highlights
· Share price total return for the year of 17.6 per cent for the Ordinary Shares.*
· NAV of 702.50 pence per Ordinary Share reflecting a total return
for the year of 2.8 per cent.*
· Total quarterly dividends for the year of 27.98 pence per
Ordinary Share. Quarterly dividend of 7.01 pence per Ordinary Share to be
paid on 30 April 2024.
· Dividend yield of 6.0 per cent based on the year-end share
price.*
· 25-year anniversary - gain of 11.6 times the original investment
over the 25-year period. Significantly outperforming the stock market for the
same period (FTSE All-Share 2.4 times).
*see Alternative Performance Measures
Chairman's Statement
Fellow Shareholders,
This report is for the year ended 31 December 2023. The NAV per share at the
year-end was 702.50p (2022: 710.65p). Taking account of the dividends
received by Shareholders during this year your Company achieved a net asset
value ("NAV") total return of 2.8 per cent.
The share price at the year-end was 468.00p per share (2022: 423.00p).
During the year the share price discount narrowed from 40.5 per cent as at 31
December 2022 to 33.4 per cent as at 31 December 2023. As a consequence, the
share price total return for the year was an impressive 17.6 per cent. This
compares to a total return from the FTSE All-Share Index for 2023 of 7.9 per
cent.
During the year the Company made new investments, either through funds or as
co-investments, totalling £110.9 million. Realisations and associated income
totalled £61.8 million. Outstanding undrawn commitments at the year-end were
£209.3 million of which £26.4 million was to funds where the investment
period had expired.
Approximately 86 per cent of the valuation by value is based on 31 December
2023 valuations and 14 per cent on September 2023 valuations.
The Company's performance fee arrangements contain a hurdle rate, calculated
over rolling three-year periods, of an IRR of 8.0 per cent per annum. The
annual IRR of the NAV for the three-year period ended 31 December 2023 was
17.8 per cent and, consequently, a performance fee of £4.8 million is payable
to the Manager, in respect of 2023. This is the eleventh consecutive year that
a performance fee has been payable, demonstrating consistent performance and
providing Shareholders with an attractive total return, which includes capital
growth and an above average dividend yield.
Dividends
Since 2012 your Company has paid a substantial dividend from realised profits
allowing Shareholders to participate, to some degree, directly in the proceeds
of the steady stream of private equity realisations which the Company
achieves. This policy is well received by Shareholders and provides for a
steadily growing dividend with downside protection. Your Board is fully
committed to maintaining this general approach for the foreseeable future.
The Company's quarterly dividends are payable in respect of the quarters ended
31 March, 30 June, 30 September and 31 December and are paid in the following
July, October, January and April respectively. As Shareholders do not have an
opportunity to approve a final dividend at each Annual General Meeting,
Shareholders are asked to approve the Company's dividend policy at the
forthcoming Annual General Meeting.
In accordance with the Company's stated dividend policy, the Board recommends
a further quarterly dividend of 7.01 pence per Ordinary Share, payable on 30
April 2024 to Shareholders on the register on 12 April 2024 and an ex-dividend
date of 11 April 2024. Total dividends paid for the year therefore amount to
27.98 pence per Ordinary Share equivalent to a dividend yield of 6.0 per cent
at the year-end.
Financing
To reflect the growth in the size of the Company, following the year end,
during February 2024, the Company entered into a revised loan agreement with
RBSI and State Street.
The revised loan agreement increased the €25 million term loan with RBSI to
€60 million and retained the revolving credit facility with RBSI and State
Street at £95 million. The term of the agreement, which was due to expire
in June 2024, was extended to February 2027.
The Board is pleased to have secured this larger facility which allows the
Company to maintain a moderately but flexibly geared structure with the
ability to draw borrowings in multiple currencies.
Share Buybacks
At the Annual General Meeting ("AGM") held on 23 May 2023, the Board sought
and received from Shareholders the authority to buyback up to 14.99% of the
Company's share capital. Buybacks can only be made at a cost which is below
the prevailing net asset value and, in the opinion of Directors, would be in
the interests of Shareholders as a whole.
During December 2023 the Company bought back 92,000 of its ordinary shares to
be held in treasury. The discount at which these shares were bought back was
33%. This was in addition to 1,096,491 shares bought back during 2022.
These shares are held in treasury to allow the Company to re-issue them
quickly and cost effectively. At last year's AGM the Board sought and received
the authority from Shareholders to re-issue treasury shares or issue new
shares, subject to limitations on the number and price. Treasury shares can
only be re-issued and new shares issued at a price which would not dilute the
NAV of existing Shareholders.
The Board seeks renewal of these buyback and reissuance authorities at the AGM
to be held on 29 May 2024.
Directorate Change
The Board recognises the value in both attracting fresh talent and the
maintenance of continuity and accordingly a plan has been developed to ensure
an orderly succession as Directors retire.
As part of this plan, David Shaw retired from the Board at the conclusion of
the Company's Annual General Meeting held on 23 May 2023.
Following a thorough selection process, which included the services of a
search company, Craig Armour was appointed to the Board with effect from 19
December 2023.
Until 2021 Craig was an investment partner at Edinburgh Partners where his
roles included head of European portfolios and the manager of The European
Investment Trust PLC. Previously, he was a senior investment director at
Lloyds Development Capital, a partner at Penta Capital, and a corporate
financier at Noble Grossart. Craig is a member of the Institute of Chartered
Accountants of Scotland.
As a further part of this plan, Elizabeth Kennedy will retire from the Board
at the conclusion of the Company's 2024 Annual General Meeting to be held on
29 May 2024.
Elizabeth has served as a Director since July 2007 and since 2009 she has
Chaired the Company's Audit Committee with great diligence and commitment. I
wish to place on record the Board's appreciation for her support and guidance
throughout her tenure and to thank Elizabeth for her significant contribution
to the Company's success.
Following her retirement, Craig Armour will be appointed Chair of the Audit
Committee.
Annual General Meeting
The Annual General Meeting ("AGM") will be held at 12 noon on 29 May 2024 at
the offices of Columbia Threadneedle Investments, Cannon Place, Cannon Street,
London EC4N 6AG. This will be followed by a presentation by Hamish Mair, the
Company's Investment Manager on the Company and its investment portfolio.
For Shareholders who are unable to attend the meeting, any questions they may
have regarding the resolutions proposed at the AGM or the performance of the
Company can be directed to a dedicated email account,
petagm@columbiathreadneedle.com, by Wednesday 22 May 2024. The Board will
endeavour to ensure that questions received by such date will be addressed at
the meeting. The meeting will be recorded and will be available to view on
the Company's website, ctprivateequitytrust.com, shortly thereafter. All
Shareholders that cannot attend in person are encouraged to complete and
submit their Form of Proxy or Form of Direction in advance of the meeting to
ensure that their votes will count.
25 Year Anniversary
Your Company was established on 22 March 1999 and so has just passed its
25(th) Anniversary. The returns to shareholders over that period, described in
detail in the Investment Manager's review, have been excellent, far outpacing
the stock market in general. These prove the case for long term investment in
private equity and I would like to thank our shareholders for their patient
support and commitment. It is notable and commendable that the management of
the Company has been constant over the first quarter century.
Review and Outlook
As expected 2023 has turned out to be a year of adjustment. Despite this the
Company's portfolio has proved resilient and we delivered a positive total
return in NAV and good growth in dividends The economic challenges which are
presented by higher inflation and interest rates were anticipated in last
year's report and this has clearly affected the investment environment for
private equity internationally. As described in the Investment Manager's
review your company's portfolio has coped well with these challenges. This is
based on strong underlying fundamentals for our investee companies which have
recorded impressive growth in revenues and profits over the year, tempered by
a slight softening in valuation multiples.
The strong flow of exits which has characterised recent years has moderated
significantly. Given that our exits are on average achieved at a significant
premium to recent carrying value, it is no surprise that our NAV has made
relatively modest progress compared to years when realisations were much
higher.
The slowdown in realisations flows from the macroeconomic situation. The
increase in interest rates, which is accompanied by a noticeable tightening of
the credit markets, results in one of the key elements of management buy-outs
- i.e. debt - becoming more difficult to arrange with a consequent slow down
in deal-making. Although the stock of private equity committed capital remains
very healthy, it usually requires to be deployed alongside a similar or
greater quantum of debt. This equity remains available and 'in the system' and
will be deployed steadily over the coming years as debt availability improves.
Whilst investors' long term enthusiasm for private equity remains intact,
fresh commitments to private equity funds have decreased in most markets this
year. This is in part due to the 'denominator effect' where substantial
deployments in recent years now represent larger than expected components of
overall portfolios which have not grown as quickly as projected. This is
currently being corrected via a reduction or hiatus of new commitments to
private equity until equilibrium is regained.
This moderation in activity resulting from higher priced and scarcer debt,
reduced fresh equity commitments and more caution in general, is not without
benefits for your Company. The flow of investment opportunities that your
managers appraise remains very strong reflecting the breadth of the mid-market
universe we address and the depth of our networks in these markets
internationally. As we look forward into 2024 the combination of our steadily
maturing portfolio and our newly extended and enlarged borrowing capacity
leaves your Company in good stead to deliver further gains to shareholders
whilst laying the foundations for future growth.
Richard Gray
Chairman
Investment Manager's Review
Introduction
The principal feature of 2023 has been a slowdown in activity in private
equity markets internationally. This comes after a number of very strong and
active years and therefore a year of adjustment is not unexpected. The most
obvious manifestation of this has been in a decrease in realisations by just
over 50% compared with last year, which was a strong, but not record breaking
year, for exits. The reasons for this are not difficult to understand, with
inflation at the highest level for decades, interest rates having risen
sharply and most of the major economies in which we invest experiencing
sluggish growth or mild recession. Private Equity as we have often emphasised
is a resilient asset class with a unique mode of investment with alignment,
incentivisation and active involvement as its hallmarks. This means that
growth can be achieved even when the economic background is challenging,
especially where we are investing in companies in niche sectors with secular
growth in their end markets. However, private equity-backed companies are
not completely immune from the pressures brought about by a challenging
macro-economic background. Your portfolio made progress this year despite
these pressures. The portfolio is very well diversified and as we have often
noted this is a deliberate policy designed to reduce risk and provide
protection and growth under a wide range of circumstances.
New Investments
There have been many investment opportunities presented to us this year. We
are highly selective backing both those managers which have already delivered
for us and carefully choosing new managers with the necessary skills and track
record to succeed. Our new investments this year cover both categories.
We have committed to twelve new private equity funds this year. These are
diverse by manager and geography. They have different investment styles and
sector preferences; but they are all mid-market funds. We maintain our belief
that investing in the mid-market of the UK and Europe, and selectively in
North America, allows us and our investment partners to buy companies in an
innately inefficient market which offers superior returns compared with buying
larger, better known companies which are usually offered in heavily
intermediated processes.
In the UK, we committed £8 million to Kester Capital III a UK focussed lower
mid-market buyout manager which we have backed before in two previous funds
and in several co-investments.
We also committed £8 million to Axiom I, a debut mid-market enterprise
software fund, where we know the principals from earlier in their careers.
We committed €5 million to Magnesium Capital I, a European energy transition
fund, led by an emerging manager with which we have co-invested before.
We have backed funds with a European or global focus.
€5 million has been committed to Hg Mercury 4, a lower mid-market software
and services fund investing in Europe and North America. This is the second
Hg-managed fund to which we have committed.
£10 million was committed to Inflexion Partnership Capital III, the latest in
the series of funds from this key relationship. The latest fund is focussed on
European mid-market minority investments. The Company has backed the first two
iterations of this fund series which are performing strongly.
We have reinforced our exposure to European country or regional funds.
€8 million has been committed to Wise Equity VI, the latest fund by one of
the leading Italian mid-market buyout managers. We have invested in previous
Wise Equity-managed funds as secondary investors from other managed funds.
€10 million has been committed to Montefiore Expansion Fund following our
previous commitments to Montefiore Fund IV and Fund V. The manager,
Montefiore, has elected to split its fund series in two and the Company has
elected to invest in the lower mid-market fund, which will make investments in
companies with enterprise value of between €25 million and €100 million in
the service sector mainly in France.
€4.0 million was committed to Aurica IV, a Spanish lower mid-market growth
equity fund. We have been tracking Aurica for several years following its
spin-out to become an independent firm.
€2.7 million has been committed to KKA Fund II, the lower mid-market German
emerging manager.
In North America we have made three new commitments.
$8 million has been committed to MidOcean VI, a US mid-market buyout fund whom
we have backed through one of our other funds before.
CAD 10 million has been committed to Torquest VI, one of the leading Canadian
mid-market buyout funds.
$10 million was committed in total to Level 5 Fund II ($5 million) and Purpose
Brands ($5 million), a US consumer franchise fund and co-investment fund,
based in Atlanta, Georgia. The funds are managed by US-based Level 5 Capital
Partners, an emerging manager focussed on consumer franchise businesses.
The funds element of the portfolio has been active throughout the year making
new investments.
In the UK, SEP VI called £1.1 million for its first two investments; Cresset,
the software business focussed on the design of small molecules for drug
discovery, and Pelion, an internet of things connectivity business.
Kester Capital called £0.7 million for MAP Patient, the leader in market
access consulting services to the pharmaceutical and biotech sectors aiming to
accelerate patient access to ground-breaking medicines, devices and
diagnostics.
In different sectors, Piper Equity called £0.6 million from its Fund VII for
jewellery company Monica Vinader, as it continues with this investment having
previously invested from Fund VI. Piper VII also called £0.5 million for
tourist excursion company Rabbie's Trail Burners and £0.6 million for
investment in Ancient & Brave, a natural supplements and wellness company.
Inflexion VI called £0.7 million for a follow-on investment in K2 the IT
recruitment specialist, which acquired a US company which focuses on
enterprise integrations. It also called £0.7 million for Steripack, the
contract manufacturing services provider for medical devices.
Magnesium Capital I (the UK-based manager, pan-European fund) called £1.7
million immediately following closing to invest in Embriq, the software and IT
managed services provider for utilities and data intensive industries. A
further £0.6 million was called for SCADA, the software and control systems
provider for renewables energy plants, and £0.4 million for Inopower, the
provider of e-boilers used in district and industrial heating.
Apposite Healthcare III called £1.2 million for various follow-ons, the
largest being £0.8 million in Riverdale, the UK dentistry provider.
Hg Saturn 3 drew £1.5 million for Access, the provider of enterprise resource
planning software and £1.1 million across the year for IFS/Workwave, the
provider of field service management software.
In Germany, DBAG VIII called £0.5 million for Metalworks which designs and
manufactures high quality fashion accessories such as belt buckles, fasteners
and studs for luxury fashion brands.
France-based Montefiore V called £1.5 million throughout the year for eleven
companies in its portfolio. The largest amounts were £0.4 million for
Generix, the industrial software provider, and £0.3 million for additional
investment in CCGM, a group of oncology clinics mainly focussed on
radiotherapy treatment.
Volpi III called £2.0 million mainly for investment in Cyclomedia, the
Netherlands-based geospatial data company, in which we are also a co-investor.
There was notable activity in the Nordic region with Summa III calling £0.5
million for Velsera, which is the combination of three health-tech companies
focussed on healthcare data analytics. Procuritas VII called £1.8 million for
Werksta, We Select and Nordic Biomarker. £1.0 million was for Werksta, the
automotive repair shop chain which the Company previously had exposure to in
Procuritas Fund V. We Select is a digital recruitment firm which integrates
social media to its platform and Nordic Biomarker produces advanced reagents
for IVD coagulation analysers which tests blood for abnormalities.
Nordic-based Verdane XI called £0.9 million for Apoteka, Fashion Cloud, Urban
Sports Club and Ebertlang. The largest amounts were for Apoteka, a fulfilment
provider to the largest online pharmacy in Denmark and Fashion Cloud, a B2B
software company for the apparel and footwear industry.
Spanish fund Corpfin V called £1.3 million to fund three investments,
including £0.3 million for residential property management business
Mediterráneo, £0.3 million for roadside assistance company Gruas Fuentes and
£0.6 million for the English language school for children Kids&Us. All
investments had been funded by the fund's bridging facility at closing earlier
in 2023. The Company had previously been an investor in Kids&Us through
Corpfin Fund IV.
In the US, Level 5 Capital Partners II & Purpose Brands drew £4.6 million
across both funds for four investments, KidStrong, Restore, GoDog and 2U
Laundry. The fund had invested in these following the first close and we
invested via the second close, giving us full visibility into the performance
of the assets thus far. Level 5 concentrates on consumer-focussed franchise
growth investments.
US financial services and technology focused fund Corsair Capital VI called
£2.2 million for HungerRush. HungerRush is the all in one point of sale and
restaurant management platform.
Lastly, US-based Mid Ocean VI called £0.5 million for Smith Systems, a
leading B2B workplace safety training platform which amongst other activities
provides driver safety training for commercial fleets.
We have added no fewer than 10 co-investments to the portfolio during 2023.
We have invested $2.4 million in the MVM-led life sciences company GT Medical.
This company has developed an innovative brain cancer treatment consisting of
bioresorbable tiles with embedded radioactive caesium seeds. This is thought
to extend life and promote recovery.
We have also invested £4.1 million (80% of our expected investment in the
business) in LeadVenture, a leading SaaS provider of digital retailing,
digital storefronts, e-commerce, proprietary data and vertical ERP dealer
management software. The company's customers are in the non-auto sector such
as RVs, agriculture machinery and transportation. The lead for the investment
is San Francisco-based True Wind Capital.
£2.7 million has been invested (£5.0 million commitment) in Cardo, a Wales
based provider of repair, maintenance and upgrading services mainly to the
social housing sector. Much of the impetus comes from the transition of this
housing stock to become more energy efficient and sustainable. The deal is led
by Buckthorn, with which we have co-invested with several times and who
specialise in energy transition investments.
£3.6 million has been invested alongside August Equity in StarTraq, a
provider of software to police forces and local authorities allowing them to
efficiently issue and process speeding tickets. The technology has an
increasing range of applications with, for example, the capability of
capturing accurately on camera drivers who are using handheld mobile phones
whilst driving. The company also has a large untapped market opportunity
internationally where it already has a small foothold.
In addition, we have also invested £1.2 million alongside August Equity in
OneTouch, a market leading software provider serving the social care market.
This software allows carers to meet client requirements more efficiently and
the care companies themselves to manage their staff productively in what is a
closely regulated sector.
€8.4 million has been invested in the Volpi led co-investment in Cyclomedia.
Volpi has been invested in this Netherlands headquartered provider of
intelligent street-level geospatial data and information solutions company
since 2018 and we are increasing our exposure to this high performing asset.
Cyclomedia's client base includes local municipalities who require
comprehensive, accessible and digitally formatted information on properties
within their areas, mainly for the purposes of local taxation and rates. From
its Northern European base, the company has begun a process of expansion
internationally and Volpi believe that there is considerable further growth to
be achieved.
$8.0 million has been invested in Asbury Carbons, a US-based producer of
milled graphite products with a diverse range of industrial applications. The
investment is led by New York-based Mill Rock Capital and Asbury is an
intriguing opportunity to revitalise a long-established company with
operational improvements and product extensions.
€5.2 million has been invested in Braincube, an Industrial
Internet-of-Things ("IIoT") software company based in France which provides
software solutions primarily for continuous manufacturing processes. The lead
on the investment is our longstanding partner SEP.
€6.0 million has been invested in Utimaco, a Germany-based company providing
mission-critical professional cybersecurity and data intelligence solutions
for critical infrastructures.
€3.1 million was invested (€4.0 million committed) to co-investment Educa
Edtech, a Spanish e-learning business which provides self-paced courses
including master's degrees. The business is international with a major
presence in Spanish speaking countries. The company has an unrivalled
portfolio of course content in an accessible online format and is expected to
benefit from the growth in the e-learning market which is around 14% per
annum. The deal is led by Aurica and is to some extent a 'stapled' deal which
we have access to by virtue of our commitment to the fund, noted above.
Realisations
Notwithstanding the slowdown, there have been many realisations across the
portfolio.
We have completed the sell down of energy services company Ashtead Technology,
which is now listed, with £12.9 million realised during the year. This brings
total proceeds to £19.9 million representing 2.5x cost and an IRR of 19%.
This investment was led by Buckthorn with which we have three other
co-investments.
Kester Capital II returned £2.7 million (4.8x, 60% IRR) from the sale of
Vixio, the leader in the provision of regulator and compliance intelligence to
the payments market. Kester Capital also returned £1.0 million from the
redemption of loan notes in insurance company ATEC, which is performing
strongly.
Our longstanding partner Inflexion has had a series of exits across its range
of funds. £1.6 million was returned from travel company Scott Dunn where the
holding period coincided with a crisis for the industry due to the pandemic
(1.4x, 4% IRR). £1.1 million came in from the sale of software services
company Mobica, where Inflexion's Partnership Capital Fund I made an excellent
return (5.6x, 29% IRR). £0.7 million was returned from international foreign
exchange specialist Global Reach Group (3.1x, 19% IRR). Inflexion also exited
the social media and influencer marketing agency Goat returning £0.4 million
(3.9x, 78% IRR). Other notable exits include the sale by Inflexion 2012
Co-investment Fund of the specialist design engineering services company PDMS
which sells to the oil and gas sector, returning £0.7 million. Inflexion also
sold Chambers, the legal directory and rankings business, and returned a
combined £1.1m (4.7x cost and 31% IRR) from their buyout funds IV and V.
As noted above Piper exited jewellery company Monica Vinader returning £0.4
million in a sale to Bridgepoint (2.1x, 11% IRR). Piper have continued in the
investment alongside Bridgepoint in Piper VII.
Volpi have sold Medinet, the insourced solutions provider to the healthcare
sector, returning £1.7 million (3.2x cost, 18% IRR).
We have received the final tranche from the sale of the RJD led investment in
apprenticeship and training company Babington, which was £0.7 million,
bringing the final return to 0.9x cost.
The Agilitas 2015 Fund has had a good exit with the sale of Hydro
International, the water services company to CRH plc. This realised £2.1
million representing 3.1x cost.
The flow of realisations has continued in continental Europe.
In Spain, Corpfin IV returned £2.5 million from the sale of care company
Grupo 5 (6.1x, 51% IRR) and £3.7 million for Kids&Us (5.4x, 50%), the
English language school for children. Corpfin re-invested in Kids&Us from
a later fund, and we therefore have maintained an exposure to this company.
There have been a number of exits from our French-managed funds. Chequers XVI
exited Paris-based landfill site operator Environnement Conseil Travaux (ECT)
returning £0.8 million and Italy-based Bozzetto, the provider of speciality
chemicals for the textiles industry, returning £0.5 million (4.3x cost, 28%
IRR). Chequers XVII sold premium zips business Riri returning £1.2 million
(2.4x, 34% IRR) and Italian HVAC equipment provider MTA, returning £0.7
million (3.2x cost, 40% IRR). Also in France, Ciclad 4 exited wine drums
company H&A Location returning £0.7 million with an excellent return of
c.8x cost. Ciclad 5 has sold specialist vehicle axle manufacturer Paillard
(1.8x cost, 10% IRR) and has refinanced Edeis (engineering project management)
returning an aggregate £0.7 million. ArchiMed II returned £1.0 million
principally from the sale of gene therapy company Polyplus. This represented
4.6x cost and an IRR of 75%.
In Germany, DBAG's various funds have achieved several exits. £0.4 million
came in from speciality chemicals producer Heytex (1.2x cost). £1.0 million
was returned from Italian company Pmflex, a leading European manufacturer of
electrical installation conduits (2.3x, 65% IRR). DBAG also sold prison phone
communications company Telio returning £0.5 million. DBAG VII also sold
Cloudflight, the IT services provider focussed on digitalisation and
cloud-based transformation, returning £1.1 million (4.4x cost, 52% IRR).
In Central Europe, ARX exited electro-mechanical engineering company TES in
the sale to a consortium including Avallon noted above. This returned £1.2
million (2.7x, 40% IRR).
In Finland, workplace booth company Framery is staging a strong post-COVID
recovery and has been refinanced returning £0.3 million. Summa II, the Nordic
sustainable fund returned £0.5 million from the sale of construction sector
software company Infobric which returned 3.8x cost and an IRR of 36%. Summa I
exited Kiona, the building control system software for energy optimisation,
returning £0.4 million (1.8x, 12% IRR) as well as selling Norsk Gjenvinning
via a continuation vehicle returning £0.3 million (2.1x cost, 14% IRR).
£1.2 million was returned from the Italian Portfolio, which was acquired as a
secondary some years ago, with Progressio II exiting Garda Plast, the
manufacturer of plastic PET preforms for the soft drinks and water industry,
at 1.5x cost.
Co-investment in insurance company ATEC, led by Kester Capital, is performing
strongly and returned £0.7 million from the redemption of loan notes.
Capvis IV has exited Visable, the e-commerce B2B digital platform business to
Alibaba International Digital Commerce returning £0.7 million (2.0x cost, 11%
IRR).
The total of realisations in 2023 was £61.8 million which is approximately
half of the amount realised in 2022 and 62% down on the peak year of 2021.
Looking at last year's exits in more detail. There were 51 exits in the year.
The average multiple of cost achieved on exit was 3.0x with an average IRR
achieved of 22%. The average holding period was 6.8 years. The average uplift
on exit was 31% with the companies valued on average at 2.4x cost immediately
prior to exit. The average uplift on exit expressed as a percentage is very
much in line with prior years, but the average exit multiple is lower with the
average exit multiple over the last four years, when there were 196 exits,
being 3.6x cost.
There are some subtle differences in the type of exits with 60% of exits in
2023 being to other private equity sponsors and 40% to trade buyers. This is a
slightly higher amount of private equity sponsor exits than the average of the
last four years when it was typically below 60%. There were no exits by IPO in
2023. Of the exits to other PE houses, nearly a quarter of the value returned
(22%) was from so-called continuation vehicles where the lead manager
continues to lead the deal within a fresh fund or vehicle with some continuing
and some new investors. Continuation vehicles accounted for 13% of all value
returned in 2023 having accounted for zero in 2022.
Whilst these statistics indicate that exits are numerous and at good values,
the reduced overall volume and the appearance of continuation vehicles implies
that they are harder to achieve. This is entirely consistent with our
experience in the market.
Valuation Changes
There have been many valuation movements during the year in both directions
with a modest net positive trend. This is very much in line with the feeling
expressed by our investment partners about the business environment - i.e. one
of modest but definite improvement.
The large movements are provided by our co-investment portfolio which now
accounts for 44.6% of the portfolio.
The largest positive movement this year was the £9.2 million uplift in the
Kester led pet shop chain Jollyes which, after the year end, agreed a sale to
TDR Capital. The proceeds of the exit are expected to be received imminently
and amount to c.£18.9 million. This is an excellent outcome and depending on
the timing of the proceeds, represents c.3.9x cost and a net IRR of c.29%.
EBITDA has doubled since the company was acquired in 2018 with the number of
its large format pet retail stores growing from 60 at the time of acquisition
to over 100.
The niche insurance company ATEC, managed by Kester, was the second largest
write-up in the year, a £2.8 million uplift due to strong new business
volumes coupled with robust renewal rates across all product lines.
There was another large uplift in the consumer sector with clothing company
Weird Fish, uplifted by £2.1 million. The company had a strong finish to the
year. They recently appointed a new CEO with substantial experience in this
industry and an ambitious growth plan is being implemented.
Other notable uplifts this year are largely from the co-investment portfolio
and cover both long-established holdings and more recently made investments.
Cyberhawk, the unmanned aerial vehicle (drone) inspection and software
company, is up by £2.8 million. Cardo, the social housing refurbishment
company, is up by £2.2 million. Cyclomedia, the geospatial data company, is
up by £1.7 million. Contained Air Solutions, the microbiological safety
cabinets manufacturer, has agreed to two complementary acquisitions and
experienced stronger trading in recent months resulting in an uplift of £1.4
million.
Amongst the funds portfolio there have been notable uplifts from Magnesium
Capital I (+£2.7 million due to very strong trading in the initial three
companies), August Equity V (+£2.5 million), August Equity IV (+£2.4
million) and Graycliff IV (+£2.4 million due to the excellent trading of EMC,
the manufacturer of electrical equipment which was sold shortly after year
end).
The downgrades were also dominated by the co-investment portfolio. The largest
write-down was from Ambio, the producer of active pharmaceutical ingredient
for peptide-based pharmaceuticals, which has been written down by £4.7
million over the year due to a sharp reduction reflecting recent poor
performance partially resulting from a serious fire. Bulgaria-based electric
bike company, Leader96, is down by £4.2 million, reflecting weak trading,
which is affecting the whole electric bike sector. Accuvein, the vein
visualisation medical devices company, has been reduced by £3.4 million
reflecting a lower valuation multiple applied by lead manager MVM. Avalon, the
funeral plans co-investment led by Lonsdale, has been written down by £2.1
million as the market remains depressed with a recovery to previous levels of
demand now considered unlikely. Since regulation was taken over by the FCA in
2022, the funeral plans sector has operated amidst significant uncertainty.
Amongst the funds portfolio, Corsair VI is down £0.9 million due to weaker
trading in HungerRush, the point-of-sale software provider to the restaurant
industry. In Europe, DBAG VI is down by £0.5 million, impacted by a fire at
Siblitz and a serious patent related fine at Polytech.
As the above commentary proves there are considerable risks involved in
private equity investment but there are also clear benefits of maintaining a
well-diversified portfolio which tends to cushion the inevitable shocks.
Financing
The principal development relating to the Company's financing is that the
borrowing facility, which was due to expire on 24 June 2024, has been renewed
and expanded giving valuable additional headroom and increasing the borrowing
capacity to reflect the increase in the asset base since the facility was
agreed nearly five years ago. The term loan element of the facility has been
increased from €25 million to €60 million and the revolving credit
facility remains at £95 million. This gives an increase of around a quarter
in the borrowing capacity. The term loan is provided by RBSI and the revolving
credit facility is split £55 million from RBSI and £40 million from State
Street. Although the margins are slightly higher, we have negotiated an
improvement in the covenants. The new arrangements will last until February
2027 - i.e. three years. As part of the agreement there is the option for us
to ask for an extra year's extension to the facility. We also have the right
to ask for an extension in the RCF by up to £30 million. Neither of these
options are guaranteed but as they are built into the documentation, they
should be straightforward to action should the banks agree in the future.
At the end of 2023 the net debt of the Company was £87.2 million which was
comfortably within the limits of the borrowing capacity and represented
gearing of 14.6%. At the time of writing on 15 March 2024, net debt is £99.2
million, or c.16.6% gearing. This is at the upper end of the normal range - we
have rarely exceeded 20%. Following the receipt of the Jollyes proceeds, it
should reduce to around £80 million or c.13.4% gearing.
The increase in debt over recent months is a consequence of a significant
slowdown in realisations whilst continuing with an active programme of new
investments. The renewal and expansion of the borrowing arrangements proceeded
smoothly and is now in place allowing the Company and its shareholders to be
fully invested and to continue to benefit from gearing, one of the key
advantages of the investment trust structure.
25 Year Anniversary
Having been established on 22 March 1999, the Company has recently celebrated
its 25th anniversary. Over the life of the Company, it has delivered to
Shareholders an excellent return.
An investor investing £100 at the inception of the Company and re-investing
dividends, would now have £978. This is a share price total return of 878% or
9.6% per annum. The NAV total return over the same period is 1,158% with an
annualised return of 10.7%. The gains accumulated since the start of the
Company equate to 11.6x the original investment.
By comparison the stock market, as represented by the FTSE All Share index,
has provided a total return of 244% with an annualised return of 5.1%. A
total gain of approximately 2.4x an investment made in March 1999.
These statistics demonstrate the long-term benefits of investing in a
well-diversified private equity portfolio.
Conclusion
2023 has been a year of adjustment where the natural progress of the portfolio
has been tempered by pressures across the portfolio arising from higher
interest rates and the return of high inflation. These factors have created
varying degrees of pressure for portfolio companies whose managements guided
and supported by their private equity partners have generally coped well. Most
of the investee companies have long term growth characteristics which underpin
their individual investment theses which remain largely intact.
Following three very strong years of gains considerably aided by a large flow
of exits, 2023 has been characterised, unsurprisingly, by lower volumes of
exits. Exits require the buyers to have adequate risk equity, debt and
confidence and an incentive to deal promptly. Whilst there is no shortage of
equity available, debt has been harder to come by and is much higher in price.
Business and investor confidence has been more subdued, especially from around
mid-year - as we have seen at many times during the Company's 25-year history,
caution tends to slowdown deal doing. The combination of these factors has
manifested themselves as a reduction in deal activity with exits proving
harder to achieve, pricing being moderated and delays pushing out exits or
indeed cancelling them.
Outlook
In recent months there appears to have been some signs of improvement with
many of our investment partners and the underlying companies expressing
confidence about the year ahead. Our own pipeline of funds and co-investments
dealflow remains very robust with no shortage of attractive opportunities to
invest shareholders' capital. These factors all bode well as the Company
celebrates 25 years of delivering strongly for shareholders and embarks on its
next quarter century.
Hamish Mair
Investment Manager
CT Investment Business Limited
Portfolio Summary
Portfolio Distribution at 31 December 2023 % of Total % of Total
31 December 2023 31 December 2022
Buyout Funds - Pan European* 10.5 11.1
Buyout Funds - UK 16.2 15.4
Buyout Funds - Continental Europe† 18.2 20.1
Secondary Funds 0.1 0.1
Private Equity Funds - USA 5.0 4.3
Private Equity Funds - Global 1.7 1.2
Venture Capital Funds 3.7 3.7
Direct - Quoted - 1.1
Direct Investments/Co-investments 44.6 43.0
100.0 100.0
* Europe including the UK.
† Europe excluding the UK.
Ten Largest Holdings Total Valuation £'000 % of Total Portfolio
As at 31 December 2023
Jollyes 18,912 3.1
Sigma 15,750 2.6
Inflexion Strategic Partners 15,052 2.5
Coretrax 13,915 2.3
Aliante Equity 3 11,528 1.9
TWMA 11,120 1.8
Bencis V 10,752 1.8
ATEC (CETA) 10,543 1.7
August Equity Partners V 10,408 1.7
San Siro 10,368 1.7
128,348 21.1
Portfolio Holdings
Investment Geographic Focus Total % of Total Portfolio
Valuation
£'000
Buyout Funds - Pan European
F&C European Capital Partners Europe 9,085 1.5
Stirling Square Capital II Europe 9,015 1.5
Apposite Healthcare II Europe 8,577 1.4
Apposite Healthcare III Europe 7,830 1.3
Magnesium Capital 1 Europe 5,469 0.9
MED II Western Europe 4,272 0.7
Agilitas 2015 Fund Northern Europe 3,910 0.7
Astorg VI Western Europe 3,007 0.5
Volpi III Northern Europe 2,641 0.4
TDR Capital II Western Europe 1,458 0.2
Summa III Northern Europe 1,383 0.2
Verdane XI Northern Europe 1,243 0.2
TDR II Annex Fund Western Europe 1,240 0.2
Agilitas 2020 Fund Europe 1,151 0.2
ArchiMed MED III Global 1,075 0.2
Med Platform II Global 881 0.2
KKA II Europe 750 0.1
Silverfleet European Dev Fund Europe 627 0.1
Verdane Edda III Northern Europe 67 -
Volpi Capital Northern Europe 46 -
Wisequity VI Italy 42 -
Inflexion Partnership Fund III Europe (48) -
Total Buyout Funds - Pan European 63,721 10.5
Buyout Funds - UK
Inflexion Strategic Partners United Kingdom 15,052 2.5
August Equity Partners V United Kingdom 10,408 1.7
August Equity Partners IV United Kingdom 7,862 1.3
Inflexion Supplemental V United Kingdom 7,012 1.2
Axiom 1 United Kingdom 6,580 1.1
Apiary Capital Partners I United Kingdom 6,203 1.0
Inflexion Buyout Fund V United Kingdom 5,768 0.9
Kester Capital II United Kingdom 4,298 0.7
Piper Private Equity VI United Kingdom 3,919 0.6
Inflexion Enterprise Fund IV United Kingdom 3,413 0.6
Inflexion Partnership Capital II United Kingdom 3,347 0.6
FPE Fund II United Kingdom 3,153 0.5
Inflexion Buyout Fund IV United Kingdom 3,009 0.5
FPE Fund III United Kingdom 2,659 0.4
Inflexion Enterprise Fund V United Kingdom 2,400 0.4
Inflexion Buyout Fund VI United Kingdom 2,359 0.4
RJD Private Equity Fund III United Kingdom 1,937 0.3
Piper Private Equity VII United Kingdom 1,875 0.3
Inflexion Supplemental IV United Kingdom 1,462 0.2
GCP Europe II United Kingdom 1,260 0.2
Horizon Capital 2013 United Kingdom 1,067 0.2
Inflexion Partnership Capital I United Kingdom 1,063 0.2
Primary Capital IV United Kingdom 1,042 0.2
Kester Capital III United Kingdom 560 0.1
Piper Private Equity V United Kingdom 320 0.1
Inflexion 2010 Fund United Kingdom 73 -
Inflexion 2012 Co-Invest Fund United Kingdom 70 -
Dunedin Buyout Fund II United Kingdom 12 -
Total Buyout Funds - UK 98,183 16.2
Investment Geographic Focus Total % of Total Portfolio
Valuation £'000
Buyout Funds - Continental Europe
Aliante Equity 3 Italy 11,528 1.9
Bencis V Benelux 10,752 1.8
DBAG VII DACH 5,549 0.9
Capvis III CV DACH 5,372 0.9
Vaaka III Finland 5,308 0.9
Avallon MBO Fund III Poland 5,273 0.9
Summa II Nordic 4,965 0.8
Chequers Capital XVII France 4,743 0.8
DBAG VIII DACH 4,681 0.8
Montefiore IV France 4,529 0.8
Montefiore V France 4,151 0.7
Verdane Edda Nordic 3,968 0.7
Procuritas VI Nordic 3,921 0.6
Italian Portfolio Italy 3,415 0.6
ARX CEE IV Eastern Europe 3,304 0.5
Corpfin V Spain 2,795 0.5
Procuritas Capital IV Nordic 2,783 0.5
Corpfin Capital Fund IV Spain 2,772 0.5
Summa I Nordic 2,480 0.4
NEM Imprese III Italy 2,398 0.4
Procuritas VII Nordic 2,096 0.3
Capvis IV DACH 2,057 0.3
Aurica IV Spain 1,400 0.2
Vaaka II Finland 1,383 0.2
Portobello Fund III Spain 1,287 0.2
Vaaka IV Finland 1,250 0.2
Avallon MBO Fund II Poland 1,139 0.2
DBAG VIIB DACH 1,019 0.2
DBAG Fund VI DACH 842 0.1
Chequers Capital XVI France 777 0.1
DBAG VIIIB DACH 721 0.1
PineBridge New Europe II Eastern Europe 470 0.1
Ciclad 5 France 345 0.1
Procuritas Capital V Nordic 209 -
Montefiore Expansion France 141 -
Gilde Buyout Fund III Benelux 93 -
N+1 Private Equity Fund II Iberia 91 -
Capvis III DACH 51 -
DBAG Fund V DACH 5 -
Total Buyout Funds - Continental Europe 110,063 18.2
Investment Geographic Focus Total % of Total Portfolio
Valuation £'000
Private Equity Funds - USA
Blue Point Capital IV North America 7,729 1.3
Graycliff IV North America 5,094 0.9
Graycliff III United States 3,108 0.5
Camden Partners IV United States 3,107 0.5
Stellex Capital Partners North America 2,835 0.5
Blue Point Capital III North America 2,562 0.4
Level 5 Fund II United States 2,039 0.4
Purpose Brands (Level 5) United States 1,981 0.3
MidOcean VI United States 1,357 0.2
Blue Point Capital II North America 149 -
HealthpointCapital Partners III United States 52 -
Total Private Equity Funds - USA 30,013 5.0
Private Equity Funds - Global
Corsair VI Global 5,911 1.0
Hg Saturn 3 Global 2,549 0.4
PineBridge GEM II Global 828 0.2
F&C Climate Opportunities Partners Global 720 0.1
AIF Capital Asia III Asia 91 -
PineBridge Latin America II South America 56 -
Warburg Pincus IX Global 9 -
Hg Mercury 4 Global (36) -
Total Private Equity Funds - Global 10,128 1.7
Venture Capital Funds
SEP V United Kingdom 9,322 1.5
MVM V Global 4,375 0.7
Kurma Biofund II Europe 3,548 0.6
Northern Gritstone United Kingdom 1,500 0.3
SEP VI Europe 1,221 0.2
SEP IV United Kingdom 1,201 0.2
Pentech Fund II United Kingdom 436 0.1
SEP II United Kingdom 273 0.1
Life Sciences Partners III Western Europe 247 -
MVM VI Global 222 -
Environmental Technologies Fund Europe 56 -
SEP III United Kingdom 36 -
Total Venture Capital Funds 22,437 3.7
Secondary Funds
The Aurora Fund Europe 635 0.1
Total Secondary Funds 635 0.1
Investment Geographic Focus Total % of Total Portfolio
Valuation £'000
Direct Investments/Co-investments
Jollyes United Kingdom 18,912 3.1
Sigma United States 15,750 2.6
Coretrax United Kingdom 13,915 2.3
TWMA United Kingdom 11,120 1.8
ATEC (CETA) United Kingdom 10,543 1.7
San Siro Italy 10,368 1.7
Weird Fish United Kingdom 9,670 1.6
Aurora Payment Solutions United States 9,435 1.6
Cyclomedia Netherlands 8,994 1.5
Amethyst Radiotherapy Europe 8,142 1.3
Cyberhawk United Kingdom 7,826 1.3
Utimaco DACH 7,192 1.2
Velos IoT (JT IoT) United Kingdom 6,723 1.1
Rosa Mexicano United States 6,473 1.1
Prollenium North America 6,467 1.1
Asbury Carbons North America 6,276 1.0
Swanton United Kingdom 6,273 1.0
Orbis United Kingdom 5,731 1.0
Family First United Kingdom 5,451 0.9
Contained Air Solutions United Kingdom 5,359 0.9
Cybit (Perfect Image) United Kingdom 4,983 0.8
CARDO Group (Sigma II) United Kingdom 4,920 0.8
123Dentist Canada 4,886 0.8
StarTraq United Kingdom 4,858 0.8
AccuVein United States 4,780 0.8
Braincube France 4,592 0.8
Dotmatics United Kingdom 4,350 0.7
1Med Switzerland 4,338 0.7
Habitus Denmark 4,271 0.7
Omlet United Kingdom 4,019 0.7
LeadVenture United States 3,787 0.6
Agilico (DMC Canotec) United Kingdom 3,740 0.6
Walkers Transport United Kingdom 3,645 0.6
Educa Edtech Spain 3,643 0.6
Alessa (Tier1 CRM) Canada 3,388 0.6
Leader96 Bulgaria 3,079 0.5
PathFactory Canada 3,050 0.5
Vero Biotech United States 2,699 0.4
Collingwood Insurance Group United Kingdom 2,671 0.4
MedSpa Partners Canada 2,253 0.4
Neurolens United States 2,208 0.4
GT Medical United States 1,878 0.3
OneTouch United Kingdom 1,863 0.3
Rephine United Kingdom 1,519 0.3
Ambio Holdings United States 1,480 0.2
Bomaki Italy 1,242 0.2
Avalon United Kingdom 1,234 0.2
TDR Algeco/Scotsman Europe 339 0.1
Babington United Kingdom 88 -
Total Direct - Investments/Co-investments 270,423 44.6
Total Portfolio 605,603 100.0
CT Private Equity Trust PLC
Statement of Comprehensive Income for the
year ended 31 December 2023
(Unaudited)
Revenue Capital Total
£'000 £'000 £'000
Income
Gains on investments held at fair value - 25,226 25,226
Exchange gains - 863 863
Investment income 2,703 - 2,703
Other income 689 - 689
Total income 3,392 26,089 29,481
Expenditure
Investment management fee - basic fee (474) (4,263) (4,737)
Investment management fee - performance fee - (4,767) (4,767)
Other expenses (1,064) - (1,064)
Total expenditure (1,538) (9,030) (10,568)
Profit before finance costs and taxation 1,854 17,059 18,913
Finance costs (513) (4,616) (5,129)
Profit before taxation 1,341 12,443 13,784
Taxation - - -
Profit for year/total comprehensive income 1,341 12,443 13,784
Return per Ordinary Share 1.84p 17.08p 18.92p
CT Private Equity Trust PLC
Statement of Comprehensive Income for the
year ended 31 December 2022
(Audited)
Revenue Capital Total
£'000 £'000 £'000
Income
Gains on investments held at fair value - 77,330 77,330
Exchange losses - (2,083) (2,083)
Investment income 4,550 - 4,550
Other income 186 - 186
Total income 4,736 75,247 79,983
Expenditure
Investment management fee - basic fee (464) (4,172) (4,636)
Investment management fee - performance fee - (5,402) (5,402)
Other expenses (1,077) - (1,077)
Total expenditure (1,541) (9,574) (11,115)
Profit before finance costs and taxation 3,195 65,673 68,868
Finance costs (254) (2,294) (2,548)
Profit before taxation 2,941 63,379 66,320
Taxation - - -
Profit for year/total comprehensive income 2,941 63,379 66,320
Return per Ordinary Share 4.01p 86.42p 90.43p
CT Private Equity Trust PLC
Balance Sheet
As at 31 December 2023 As at 31 December 2022
(Unaudited)
(Audited)
£'000 £'000
Non-current assets
Investments at fair value through profit or loss 605,603 528,557
605,603 528,557
Current assets
Other receivables 841 389
Cash and cash equivalents 9,879 34,460
10,720 34,849
Current liabilities
Other payables (8,121) (7,411)
Interest-bearing bank loan (97,109) (16,618)
(105,230) (24,029)
Net current (liabilities)/assets (94,510) 10,820
Total assets less current liabilities 511,093 539,377
Non-current liabilities
Interest-bearing bank loan - (21,702)
Net assets 511,093 517,675
Equity
Called-up ordinary share capital 739 739
Share premium account 2,527 2,527
Special distributable capital reserve 9,597 10,026
Special distributable revenue reserve 31,403 31,403
Capital redemption reserve 1,335 1,335
Capital reserve 465,492 471,645
Shareholders' funds 511,093 517,675
Net asset value per Ordinary Share 702.50p 710.65p
CT Private Equity Trust PLC
Statement of Changes in Equity
Special Distributable Capital Reserve Special Distributable Revenue Reserve
Share Premium Account Capital Redemption Reserve
Share Capital Capital Reserve Revenue Reserve
Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
For the year ended 31 December 2023 (unaudited)
Net assets at 1 January 2023 739 2,527 10,026 31,403 1,335 471,645 - 517,675
Buyback of ordinary shares - - (429) - - - - (429)
Profit for the year/total comprehensive income - - - - - 12,443 1,341 13,784
Dividends paid - - - - - (18,596) (1,341) (19,937)
Net assets at 31 December 2023 739 2,527 9,597 31,403 1,335 465,492 - 511,093
For the year ended 31 December 2022 (audited)
Net assets at 1 January 2022 739 2,527 15,040 31,403 1,335 422,403 - 473,447
Buyback of ordinary shares - - (5,014) - - - - (5,014)
Profit for the year/total comprehensive income - - - - - 63,379 2,941 66,320
Dividends paid - - - - - (14,137) (2,941) (17,078)
Net assets at 31 December 2022 739 2,527 10,026 31,403 1,335 471,645 - 517,675
CT Private Equity Trust PLC
Statement of Cash Flows
Year ended Year ended
31 December 2023 31 December 2022
(Unaudited) (Audited)
£000 £000
Operating activities
Profit before taxation 13,784 66,320
Adjustments for:
Gains on disposals of investments (26,349) (62,951)
(Losses)/gains on account of fair value movement 1,123 (14,379)
Exchange differences (863) 2,083
Interest Income (689) (186)
Interest received 668 186
Finance costs 5,129 2,548
Increase in other receivables (8) (2)
(Decrease)/increase in other payables (497) 358
Net cash outflow from operating activities (7,702) (6,023)
Investing activities
Purchases of investments (110,784) (88,593)
Sales of investments 58,964 120,413
Net cash (outflow)/inflow from investing activities (51,820) 31,820
Financing activities
Drawdown of bank loans 59,023 -
Arrangement costs of loan facility (27) (28)
Interest paid (3,995) (1,919)
Equity dividends paid (19,937) (17,078)
Buyback of ordinary shares (429) (5,014)
Net cash inflow/(outflow) from financing activities 34,635 (24,039)
Net (decrease)/increase in cash and cash equivalents (24,887) 1,758
Currency gains 306 -
Net (decrease)/increase in cash and cash equivalents (24,581) 1,758
Opening cash and cash equivalents 34,460 32,702
Closing cash and cash equivalents 9,879 34,460
Notes (unaudited)
1. The unaudited financial results, which were
approved by the Board on 2 April 2024, have been prepared in accordance with
UK adopted international accounting standards. Where presentation guidance set
out in the Statement of Recommended Practice "Financial Statements of
Investment Trust Companies and Venture Capital Trusts" ('SORP') issued by the
Association of Investment Companies is consistent with the requirements of
international accounting standards, the Directors have sought to prepare the
financial statements on a basis compliant with the recommendations of the
SORP. The Directors have assessed Going Concern and consider it the
appropriate basis for the figures presented in the announcement.
The accounting policies adopted are consistent with those of the previous
financial year.
Standards issued but not yet effective
There are no standards or amendments to standards not yet effective that are
relevant to the Company and should be disclosed.
2. Returns per Ordinary Share are based on the
following weighted average number of shares in issue during the year:
72,838,637 (2022: 73,342,303)
The net asset value per Ordinary Share is based on the following number of
shares in issue at the year-end: 72,752,938 (2022: 72,844,938)
During the year ended 31 December 2023, the Company issued nil Ordinary
Shares. During the previous year ended 31 December 2022, the Company issued
nil Ordinary Shares. During the year ended 31 December 2023, the Company
bought back 92,000 Ordinary Shares to be held in treasury. During the previous
year ended 31 December 2022, the Company bought back 1,096,491 Ordinary Shares
to be held in treasury.
3. The Board has proposed an interim dividend of 7.01
pence per Ordinary Share, payable on 30 April 2024 to those Shareholders on
the register on 12 April 2024 with an ex-dividend date of 11 April 2024.
4. This results announcement is based on the Company's
unaudited financial statements for the year ended 31 December 2023 which have
been prepared in accordance with UK adopted international accounting
standards.
5. This announcement is not the Company's statutory
accounts. The full audited accounts for the year ended 31 December 2022,
which were unqualified and had no emphasis of matters, have been lodged with
the Registrar of Companies. The statutory accounts for the year to 31
December 2023 (on which the audit report has not yet been signed) will be
delivered to the Registrar of Companies following the Company's Annual General
Meeting which will be held at Cannon Place, 78 Cannon Street Street, London,
EC4N 6AG on 29 May 2024 at 12 noon.
6. The Annual Report and Accounts for the year will be
sent to Shareholders and will be available for inspection at the Company's
registered office, Quartermile 4, 7a Nightingale Way, Edinburgh, EH3 9EG and
the Company's website www.ctprivateequitytrust.com
(http://www.ctprivateequitytrust.com) . The Company intends to issue a
subsequent annual financial report announcement.
For more information, please contact:
Hamish Mair (Investment Manager) 0131 573 8300
Scott McEllen (Company Secretary) 0131 573 8300
hamish.mair@columbiathreadneedle.com
(mailto:hamish.mair@columbiathreadneedle.com) /
scott.mcellen@columbiathreadneedle.com
(mailto:scott.mcellen@columbiathreadneedle.com)
Appendix: Alternative Performance Measures
The Company uses the following Alternative Performance Measures ('APMs'):
Discount (or premium) - If the share price of an Investment Trust is less than
its Net Asset Value per share, the shares are trading at a discount. If the
share price is greater than the Net Asset Value per share, the shares are
trading at a premium.
31 December 2023 31 December 2022
Net Asset Value per share (pence) (a) 702.50 710.65
Share price per share (pence) (b) 468.00 423.00
Discount (c=(b-a)/a) (c) 33.4% 40.5%
Dividend Yield - The dividends declared for the year divided by the share
price at the year end.
Gearing - This is the ratio of the borrowings less cash of the Company to its
total assets less current liabilities (excluding borrowings and cash).
Borrowings may include: preference shares; debentures; overdrafts and short
and long-term loans from banks; and derivative contracts. If the Company has
cash assets, these may be assumed either to net off against borrowings, giving
a "net" or "effective" gearing percentage, or to be used to buy investments,
giving a "gross" or "fully invested" gearing figure. Where cash assets
exceed borrowings, the Company is described as having "net cash".
31 December 2023 31 December 2022
£'000 £'000
Borrowings less cash (a) 87,230 3,860
Total assets less current liabilities (excluding borrowings and cash) (b) 598,323 521,535
Gearing (c=a/b) (c) 14.6% 0.7%
Ongoing Charges - All operating costs expected to be incurred in future and
that are payable by the Company expressed as a proportion of the average Net
Assets of the Company over the reporting year. The costs of buying and
selling investments are excluded, as are interest costs, taxation, performance
fees, non-recurring costs and the costs of buying back or issuing Ordinary
Shares. Ongoing charges of the Company's underlying investments are also
excluded.
Year to Year to
31 December 2023 31 December 2022
Ongoing charges (£'000) 5,801 5,713
Ongoing charges as a percentage of average assets: 1.1% 1.2%
Ongoing charges (including performance fees) (£'000) 10,568 11,115
Ongoing charges (including performance fees) as a percentage of average net
assets:
2.1% 2.3%
Average net assets (£'000) 508,718 491,918
Total Return - The return to Shareholders calculated on a per share basis by
adding dividends paid in the period to the increase or decrease in the Share
Price or NAV. The dividends are assumed to have been reinvested in the form of
Ordinary Shares or Net Assets.
Year to 31 December 2023 Year to 31 December 2022
NAV per share at start of year (pence) 710.65 640.30
NAV per share at end of year (pence) 702.50 710.65
Change in year -1.1% +11.0%
Impact of dividend reinvestments +3.9% +3.8%
Total NAV return for the year +2.8% +14.8%
Year to 31 December 2023 Year to 31 December 2022
Share price per share at start of year (pence) 423.00 489.00
Share price per share at end of year (pence) 468.00 423.00
Change in year +10.6% -13.5%
Impact of dividend reinvestments +7.0% +4.6%
Total share price return for the year +17.6% -8.9%
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