REG - EPE Special Opps Ltd EPE Special Opp-EO.P EPE Special Opp-EL.P - Trading Statement

EPE Special OpportunitiesAnnouncement

13/02/2025 07:00

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RNS Number : 9300W  EPE Special Opportunities Limited  13 February 2025

EPE Special Opportunities Limited
("ESO" or the "Company")

 

Trading Statement

 

The Board of EPE Special Opportunities is pleased to provide an update on the
Company's performance for the year ended 31 January 2025.

 

·   The Company and its portfolio have faced a challenging environment
during the year ended 31 January 2025 against the backdrop of an uncertain and
complex economic landscape. The Board and Investment Advisor continue to
manage the Company prudently, prioritising liquidity and securing the
financial position of the portfolio. Given the economic context, overall
M&A activity has remained subdued and market valuations have been
depressed, limiting the opportunities for new acquisitions and disposals in
the period. The operational improvements and progress made against long term
value creation plans within the portfolio, position our businesses for
sustained growth as macro economic conditions stabilise.

 

·    The unaudited estimate of the Net Asset Value ("NAV") per share of
the Company as at 31 January 2025 was 328 pence, representing an increase of 1
per cent. on the NAV per share of 324 pence as at 31 January 2024. The
unaudited estimate has been prepared using the Company's historic valuation
methodology and accounting principles.

 

·    The share price of the Company as at 31 January 2025 was 149 pence,
representing a decrease of 10 per cent. on the share price of 165 pence as at
31 January 2024.

 

·    In January 2025, Luceco released a trading update for the year ended
31 December 2024, announcing results ahead of market expectations. The group
announced sales in the region of £240 million, achieving organic growth of 5
per cent. on the prior year on a constant currency basis. The business
delivered strong Q4 trading, with impressive sales growth in the Residential
RMI division as well as the Residential EV Charger division, which delivered
quarterly year-on-year growth of circa 50%. The business expects to generate
operating profit in the region of £28.5 - 29.0 million for the year. Luceco
completed two acquisitions in the period, acquiring D-Line, a supplier of
cable management solutions, for £8.6 million initial consideration and up to
£3.8m million contingent consideration in March 2024, and CMD, a wiring
accessories manufacturer for commercial premises, for £30.0 million
consideration in October 2024. The business' balance sheet remains robust with
net debt of 1.7x LTM EBITDA as at 31 December 2024, within the the target
range of 1.0-2.0x.

 

·    Whittard of Chelsea ("Whittard") delivered pleasing growth across its
sales channels. The UK retail store estate performed strongly, achieving 6%
like for like sales growth and opening new stores in Oxford Circus, Gatwick
Airport and Victoria Station. Whittard has continued to develop its
international channels, with expansion in the US market underpinned by new
customers wins with key retailer accounts, including Sam's Club. The business
has also continued to improve its customer proposition, with a new customer
loyalty programme launched in the period.

 

·   The Rayware Group ("Rayware") continued to face headwinds to trading
performance, but has made progress on the development of its overall channel
strategy in the period. In August 2024 Rayware launched a new retail channel,
with its first store opened in Swindon. Rayware's US channel achieved pleasing
growth, securing new customer wins. Rayware appointed a CEO in May-24, Jamie
O'Brien, who brings to the business over 20 years' leadership experience in
the branded consumer sector. During the period, the Company, through its
subsidiary ESO Investments 1 Limited, invested £3.5 million to reduce
Rayware's senior debt and has a £1.0 million contingent guarantee outstanding
to third-party lenders as at 31 January 2025.

 

·    Pharmacy2U ("P2U") maintained strong organic growth during the period
and accelerated its underlying growth trajectory via acquisition. The
integration of LloydsDirect was approved by the CMA in March 2024, delivering
material additional scale to the platform and synergy opportunities. In April
2024, P2U expanded its offering to include pet care, via the acquisition of
The PharmaPet Co.

 

·    David Phillips ("DP") continues to experience profitability headwinds
but enters the year with an encouraging pipeline. In July 2024, Ben Munn
joined the business as CEO, with over 25 years of experience in the real
estate sector. In January 2025, the Company, through its subsidiary ESO
Investments 1 Limited, invested £0.7 million to support the business.

 

·    Denzel's achieved top line growth, expanding their offering within
key retailers and securing new accounts. The business' marketing activity has
been supported by new partnerships such as the collaboration with Battersea
Dogs & Cats Home, launched in June 2024.

 

·    The Company had cash balances of £11 million(1) as at 31 January
2025. In July 2024, the Company agreed the extension of the maturity of £4.0
million of unsecured loan notes to July 2025. In the period, the Company
repurchased 3.0 million zero dividend preference ("ZDP") shares. Following
this buyback, the Company has 9.5 million ZDP shares remaining in issue,
maturing in December 2026. The Company has no other third-party debt
outstanding. In the period, the Company completed ordinary share buybacks in
the market totalling 0.6 million ordinary shares at a weighted average share
price of 152 pence.

 

·    As at 31 January 2025, the Company's unquoted portfolio was valued at
a weighted average EBITDA to enterprise value multiple of 7.8x and the
portfolio has a low level of third-party leverage with net debt at 1.2x EBITDA
in aggregate.

 

Mr Clive Spears, Chairman, commented: "Due to the complex business conditions
faced in the period, the priority of the Board, Investment Advisor and
portfolio management teams has been to ensure the resilience of the Company
and its portfolio against these headwinds. Value creation plans are in place
within the portfolio to generate future growth, with close monitoring of
progress maintained. Prudent action has been taken to preserve liquidity and
to manage the capital structure of the Company. The Board would like to extend
their thanks to the Investment Advisor and portfolio management teams for
their efforts through a demanding period and look forward to updating
shareholders on further progress at the half year."

 

The person responsible for releasing this information on behalf of the Company
is Amanda Robinson of Langham Hall Fund Management (Jersey) Limited.

 

Note 1: Company liquidity is stated inclusive of cash held by subsidiaries in
which the Company is the sole investor.

 

Enquiries:

 

 EPIC Investment Partners LLP                   +44 (0) 207 269 8865

                                                Rupert Palmer
 Langham Hall Fund Management (Jersey) Limited  +44 (0) 15 3488 5200

                                                Amanda Robinson
 Cardew Group Limited                           +44 (0) 207 930 0777

                                                Richard Spiegelberg
 Deutsche Numis                                 +44 (0) 207 260 1000
 Nominated Advisor:                             Stuart Skinner
 Corporate Broker:                              Charles Farquhar

 

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