Q1 update for the three months ended 30 April 2023
27/06/2023 14:00
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ICG Enterprise Trust plc 27 June 2023 Q1 update for the three months ended 30 April 2023
NAV per Share of 1,876p
Highlights * Portfolio continuing to grow on underlying basis; strengthening of Sterling impacting Sterling returns
* NAV per Share of 1,876p (31 January 2023: 1,903p); NAV per Share Total Return of (1.1)% during the quarter and 8.3% over the last twelve months (5 year annualised: 16.2%)
* Portfolio Return on a Local Currency Basis of 0.5% during the quarter and 10.2% on an LTM basis (5 year annualised: 18.6%)
* Balance sheet strength and Portfolio performance enabling us to make £72m of new fund Commitments (including £42m to ICG-managed funds)
* Proceeds of £68m, including from the sale of Endeavor Schools (previously our third largest portfolio company). 10 Full Exits completed, at a weighted average Uplift to Carrying Value of 20%
* First quarter dividend of 8p per share (Q1 FY23: 7p). Board intends to pay total dividends of at least 32p per share for FY24 (FY23: 30p)
* £7.1m returned so far via share buybacks at weighted average discount to last reported NAV of 41.0% since programme initiated in October 2022 (1)
(1)Up to and including 23 June 2023
PERFORMANCE OVERVIEW
Annualised
Performance to 30 April 2023 3 months 1 year 3 years 5 years 10 years
Portfolio Return on a Local Currency Basis 0.5 % 10.2 % 23.6 % 18.6 % 13.1 %
NAV per Share Total Return (1.1) % 8.3 % 21.6 % 16.2 % 13.6 %
Share Price Total Return (7.3) % (2.2) % 15.9 % 7.1 % 10.8 %
FTSE All-Share Index Total Return 1.9 % 6.0 % 13.2 % 4.4 % 6.1 %
Portfolio activity overview for Q1 FY24 Primary Direct Secondary Total ICG-managed
Portfolio Return on a Local Currency Basis 1.7 % (1.4) % (0.5) % 0.5 % 0.4 %
Portfolio Return in Sterling 0.8% (2.4%) (2.0%) (0.6%) (0.9%)
New Investments £18m £5m £2m £25m £4m
Proceeds £31m £31m £6m £68m £10m
New fund Commitments £51m — £20m £72m £42m
Closing Portfolio value £754m £349m £252m £1,354m £401m
% Total Portfolio 55.7 % 25.7 % 18.6 % 100.0 % 29.6 %
ENQUIRIES
Institutional investors and analysts: Chris Hunt, Head of Shareholder
Relations, ICG: +44 (0) 20 3545 2000
Media: Clare Glynn, Corporate Communications, ICG: +44 (0) 20 3545 1395
www.icg-enterprise.co.uk
COMPANY TIMETABLE
FY23 Final Dividend FY24 First Interim Dividend
Ex-dividend date 6 July 2023 17 August 2023
Record date 7 July 2023 18 August 2023
Dividend payment date 21 July 2023 1 September 2023
ABOUT ICG ENTERPRISE TRUST
ICG Enterprise Trust is a leading listed private equity investor focused on
creating long-term growth by delivering consistently strong returns through
selectively investing in profitable, cash-generative private companies,
primarily in Europe and the US, while offering the added benefit to
shareholders of daily liquidity.
We invest in companies directly as well as through funds managed by
Intermediate Capital Group ('ICG') and other leading private equity managers
who focus on creating long-term value and building sustainable growth through
active management and strategic change.
NOTES
Included in this document are Alternative Performance Measures (“APMs”).
APMs have been used if considered by the Board and the Manager to be the most
relevant basis for shareholders in assessing the overall performance of the
Company, and for comparing the performance of the Company to its peers and its
previously reported results. The Glossary includes further details of APMs and
reconciliations to International Financial Reporting Standards (“IFRS”)
measures, where appropriate.
In the Manager’s Review and Supplementary Information, all performance
figures are stated on a Total Return basis (i.e. including the effect of
re-invested dividends). ICG Alternative Investment Limited, a regulated
subsidiary of Intermediate Capital Group plc, acts as the Manager of the
Company.
DISCLAIMER
The information contained herein and on the pages that follow does not
constitute an offer to sell, or the solicitation of an offer to acquire or
subscribe for, any securities in any jurisdiction where such an offer or
solicitation is unlawful or would impose any unfulfilled registration,
qualification, publication or approval requirements on ICG Enterprise Trust
PLC (the "Company") or its affiliates or agents. Equity securities in the
Company have not been and will not be registered under the applicable
securities laws of the United States, Australia, Canada, Japan or South Africa
(each an “Excluded Jurisdiction”). The equity securities in the Company
referred to herein and on the pages that follow may not be offered or sold
within an Excluded Jurisdiction, or to any U.S. person ("U.S. Person") as
defined in Regulation S under the U.S. Securities Act of 1933, as amended (the
"U.S. Securities Act"), or to any national, resident or citizen of an Excluded
Jurisdiction.
The information on the pages that follow may contain forward looking
statements. Any statement other than a statement of historical fact is a
forward looking statement. Actual results may differ materially from those
expressed or implied by any forward looking statement. The Company does not
undertake any obligation to update or revise any forward looking statements.
You should not place undue reliance on any forward looking statement, which
speaks only as of the date of its issuance.
MANAGER’S REVIEW
Our investment strategy
We focus on investing in buyouts of profitable, cash-generative businesses in
developed markets that exhibit defensive growth characteristics which might
support strong and resilient returns across economic cycles.
We take an active approach to portfolio construction, with a flexible mandate
that enables us to deploy capital in Primary, Secondary and Direct
investments. Geographically we focus on the developed markets of North America
and Europe, including the UK, which have deep and mature private equity
markets supported by a robust corporate governance framework.
Medium-term target Five-year average Q1 FY24
1. Target Portfolio composition (1)
Investment category
Primary ~50% 59% 56%
Direct ~25% 27% 26%
Secondary ~25% 14% 19%
Geography (2)
North America ~50% 37% 42%
Europe (inc. UK) ~50% 63% 51%
2. Balance sheet
(Net cash)/net debt (3) ~0% (3)% 1%
1 As percentage of Portfolio; 2 Excludes Other geographical exposure (30 April 2023: 7%); 3 (Net cash)/net debt as a percentage of NAV
Investments managed by ICG accounted for 29.6% of the Portfolio.
Performance overview
* At 30 April 2023, our Portfolio was valued at £1,354m, and the Portfolio
Return on a Local Currency Basis for the quarter was 0.5%. In Sterling terms
the Portfolio value reduced by 0.6%
* The net result was that ICG Enterprise Trust generated a NAV per Share Total
Return of (1.1)% during the quarter, ending the period with a NAV per Share of
1,876p
* Over the last five years, ICG Enterprise Trust has generated an annualised
NAV per Share Total Return of 16.2%
Movement in the Portfolio Three months to 30 April 2023
Opening Portfolio £1,406m
Total New Investments £25m
Total Proceeds £(68)m
Net (proceeds)/investments £(44)m
Valuation movement (1) £7m
Currency movement £(16)m
Closing Portfolio £1,354m
% Portfolio growth (local currency) 0.5 %
% currency movement (1.1) %
% Portfolio growth (Sterling) (0.6) %
Impact of (net cash)/net debt (0.1) %
Expenses and other income (0.6) %
Co-investment Incentive Scheme Accrual — %
Impact of share buybacks and dividend reinvestment 0.2 %
NAV per Share Total Return (1.1) %
1. 80% of the Portfolio is valued using 31 March 2023 (or later) valuations
(Q1 FY23: 83%). All fund valuations converted to GBP at 30 April 2023 FX rate
Quoted company exposure
* We do not actively invest in publicly quoted companies but gain listed
investment exposure when IPOs are used as a route to exit an investment. In
these cases, exit timing typically lies with the manager with whom we have
invested
* At 30 April 2023, ICG Enterprise Trust’s exposure to quoted companies was
valued at £96m, equivalent to 7.1% of the Portfolio value (31 January 2023:
7.8%). There was one quoted investment that individually accounted for 0.5% or
more of the Portfolio value:
Company Ticker 30 April 2023 % of Portfolio value
Chewy (part of PetSmart) (1) CHWY-US 2.8 %
Other companies 4.3 %
Total 7.1 %
1 Value includes entire holding of PetSmart and Chewy. Majority of value is within Chewy
Realisation activity
* Total Realisation proceeds of £68m during the quarter
* 10 Full Exits completed during the quarter, at a weighted average Uplift to
Carrying Value of 20% and a 4.2x Multiple to Cost. This included the sale of
Endeavor Schools, announced on 2 February 2023, which at 31 January 2023 was
our third largest portfolio company
New investment activity
* Total New Investment of £25m during the quarter, of which 16% (£4m) was
alongside ICG
* The split of Total New Investment was split by category as follows:
Investment Category Cost % of New Investments
Primary £17.5m 71 %
Direct £4.8m 20 %
Secondary £2.2m 9 %
Total £24.5m 100 %
* The £5m of direct investments were all follow-on investments in existing
portfolio companies
Commitments
* We made five new fund Commitments totalling £72m during the quarter,
including £42m in aggregate to two ICG-managed funds
Fund Manager Focus Commitment during the period
Local currency GBP
ICG Europe Mid-Market II ICG Mezzanine and equity in mid-market buyouts €25.0m £22.0m
ICG Strategic Equity V ICG GP-led secondary transactions $25.0m £20.3m
Cinven VIII Cinven Mid-market and large buyouts €15.0m £13.2m
Hellman Friedman XI Hellman & Friedman Large buyouts $10.0m £8.0m
Audax Private Equity VII Audax Group Mid-market buyouts $10.0m £8.0m
* At 30 April 2023 we had Total Undrawn Commitments of £419m to funds in
their investment period and a further £126m to funds outside their investment
period
Liquidity
* During the period there was particular volatility in certain areas of the
banking sector, and as a prudent approach to risk management we drew down a
portion of our RCF. Both our cash and debt positions at the period end were
therefore higher than they would be in the normal course of business. Our net
debt position and gearing were unaffected
* At 30 April 2023 we had a cash balance of £87m (31 January 2023: £21m) and
drawn debt of £102m (31 January 2023: £65m). As a result, we had net debt of
£15m. As previously announced, at 26 May 2023 net debt was £13m
* Total available liquidity at 30 April 2023 was £195m
* As announced on 1 June 2023, ICG Enterprise Trust entered into a new €240m
revolving credit facility (RCF) which was effective from 31 May 2023. This
replaced the previous €240m facility, and extended the maturity of the
Company's financing facility by one year, through to 30 May 2027. Terms of the
new RCF were outlined in the announcement of 1 June 2023
£m
Cash at 31 January 2023 20.7
Realisation Proceeds 68.1
New investments (24.5)
Debt drawn down 37.6
Shareholder returns (8.0)
Management fees (3.5)
FX and other expenses (3.0)
Cash at 30 April 2023 87.4
Available undrawn debt facilities 108.0
Cash and undrawn debt facilities (total available liquidity) 195.4
* At 30 April 2023 the Portfolio represented 106.1% of net assets (31 January
2022: 108.1%)
£m % of net assets
Portfolio 1,354 106.1 %
Cash 87 6.8 %
Drawn debt (102) (8.0) %
Co-investment Incentive Scheme Accrual (58) (4.6) %
Other net current liabilities (4) (0.3) %
Net assets 1,276 100.0 %
Dividend and share buyback
* Progressive dividend policy maintained: first quarter dividend of 8p per
share (Q1 FY23: 7p)
* In the absence of any unforeseen circumstances, it is the Board’s current
intention to declare total dividends of at least 32p per share for the
financial year ended 31 January 2024. This would represent an increase of 2p
(6.7%) per share compared to the financial year ended 31 January 2023
* The following purchases have been made under the Company's long-term share
buyback programme:
Q1 FY24 Since 19 October 2022 (1)
Number of shares purchased 280,698 632,178
Aggregate consideration £3.1m £7.1m
Weighted average discount to last reported NAV 42.0 % 41.0 %
(1) Being the date the long-term share buyback programme was announced, up to
and including 23 June 2023
Activity since the period end
Notable activity between 1 May 2023 and 31 May 2023 has included:
* Realisation Proceeds of £13m
* New investments of £6m
ICG Private Equity Fund Investments Team
27 June 2023