REG - Graphite Enterprise - Half Yearly Report to 31 July 2014 <Origin Href="QuoteRef">GPE.L</Origin> - Part 2
29/10/2014 14:42
- Part 2: For the preceding part double click ID:nRSZ6774Sa
Largest new underlying investments
Investment Description Country Cost£ million
ICR Group Provider of repair and maintenance services to the energy industry UK 10.9
Education Personnel* Provider of temporary staff for the education sector UK 10.2
The Laine Pub Company** Operator of pubs and bars UK 5.5
Autodata Provider of technical information to the automotive aftermarket UK 1.4
Minimax Supplier of fire protection systems and services Germany 1.2
CeramTec Manufacturer of high performance ceramics Germany 1.2
iPrisim E-wholesaler of insurance to brokers UK 1.1
Parex Provider of dry mix solutions for the construction industry France 1.0
JET Group Provider of rooflight and ventilation and fire safety solutions for industrial, commercial and residential markets UK 1.0
Advantage Provider of sales and marketing services North America 0.9
Total of 10 largest new underlying investments 34.4
* Sold by Graphite Capital to ICG in the period. The Company re-invested
alongside ICG.
** Formerly InnBrighton, which was realised in the period. The Company
re-invested in the rebranded business, The Laine Pub Company.
Realisations - 10 year record*
Financial period ending £ million % of opening portfolio
31 December 2005 93.8 61.9%
31 December 2006 92.9 53.3%
31 December 2007 112.4 54.5%
31 December 2008 25.8 12.9%
31 December 2009 14.0 7.3%
31 January 2011 19.8 8.5%
31 January 2012 92.9 26.0%
31 January 2013 74.2 19.7%
31 January 2014 118.3 28.5%
6 months to 31 July 2014 82.4 19.0%
1 February 2014 to 25 September 2014 90.9 21.0%
* Excluding secondary sales of fund interests.
Largest underlying realisations
Investment Manager Realisation type Proceeds£ million
CEVA Euromezzanine Secondary 15.3
Education Personnel* Graphite Capital Secondary 14.9
London Square Graphite Capital Secondary 9.8
National Fostering Agency Graphite Capital Refinancing 5.0
Avio Cinven Trade 4.6
InnBrighton** Graphite Capital Secondary 3.5
Acromas*** Charterhouse Public offering 2.1
HellermannTyton Doughty Hanson Public offering 1.9
Applus ICG Public offering 1.8
Evonik CVC Public offering 1.6
Total of 10 realisations 60.5
* Sold by Graphite Capital to ICG in the period. The Company re-invested
alongside ICG.
**The Company re-invested in the rebranded business, The Laine Pub Company.
*** Acromas represents AA and Saga, both of which listed in the period.
Commitments analysis
Commitments at 31 July 2014 Original commitment1£ million Outstanding commitment£ million Average drawdown percentage % of commitments
Funds in investment period 302.6 199.6 34.0% 82.9%
Funds post investment period 528.5 41.1 92.2% 17.1%
Total 831.1 240.7 71.0% 100.0%
1 Original commitments are translated at 31 July 2014 exchange rates
Commitments at 31 July 2014 - remaining investment period % of commitments
4-5 years 28.0%
3-4 years 40.0%
2-3 years 7.5%
1-2 years 2.9%
<1 year 4.5%
Investment period complete 17.1%
Total 100.0%
Movement in outstanding commitments Six months to 31 July 2014£ million
Opening outstanding commitments 277.3
Drawdowns (36.9)
Secondaries and co-investments 5.5
Secondary disposals (2.2)
Currency (5.1)
Other 2.1
Closing outstanding commitments 240.7
CURRENCY EXPOSURE
31 July 2014£ million 31 July 2014% 31 January 2014£ million 31 January 2014%
Portfolio*
- sterling 197.6 49.1% 203.2 46.9%
- euro 136.8 34.0% 144.7 33.4%
- other 67.8 16.9% 85.4 19.7%
Total 402.2 100.0% 433.3 100.0%
* Currency exposure is calculated using the location of the underlying
portfolio companies' headquarters.
31 July 2014£ million 31 July 2014% 31 January 2014£ million 31 January 2014%
Outstanding commitments
- sterling 102.3 42.5% 117.5 42.4%
- euro 131.4 54.6% 151.6 54.7%
- other 7.0 2.9% 8.2 2.9%
Total 240.7 100.0% 277.3 100.0%
UNAUDITED RESULTS FOR THE SIX MONTHS TO 31 JULY 2014
Consolidated Income Statement (unaudited)
Half year to 31 July 2014 Half year to 31 July 2013 Year to 31 January 2014
Revenue return Capital return Total Revenue return Capital return Total Revenue return Capital return Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investment returns
Gains and losses on investments held at fair value 10,190 8,869 19,059 3,038 42,517 45,555 18,809 27,475 46,284
Income from cash and cash equivalents 82 - 82 92 - 92 172 - 172
Return from current asset investments - - - 5 (220) (215) 5 (342) (337)
Other income 241 - 241 - - - 58 - 58
Foreign exchange gains and losses - (389) (389) - 145 145 - (371) (371)
10,513 8,480 18,993 3,135 42,442 45,577 19,044 26,762 45,806
Expenses
Investment management charges (737) (2,213) (2,950) (710) (2,132) (2,842) (1,490) (4,470) (5,960)
Other expenses (770) (883) (1,653) (898) (905) (1,803) (1,723) (2,188) (3,911)
(1,507) (3,096) (4,603) (1,608) (3,037) (4,645) (3,213) (6,658) (9,871)
Profit before tax 9,006 5,384 14,390 1,527 39,405 40,932 15,831 20,104 35,935
Taxation (989) 989 - (378) 378 - (1,965) 1,965 -
Profit for the period 8,017 6,373 14,390 1,149 39,783 40,932 13,866 22,069 35,935
Attributable to:Equity shareholders 8,017 6,227 14,244 1,149 39,594 40,743 13,866 23,127 36,993
Non-controlling interests - 146 146 - 189 189 - (1,058) (1,058)
Basic and diluted earnings per share 19.6p 55.9p 50.7p
The columns headed 'Total' represent the income statement for the relevant
financial periods and the columns headed 'Revenue return' and 'Capital return'
are supplementary information. There is no Other Comprehensive Income.
Consolidated Balance Sheet (unaudited)
31 July 31 July 31 January
2014 2013 2014
£'000 £'000 £'000
Non-current assets
Investments held at fair value
- Unquoted investments 398,158 446,246 429,186
- Quoted investments 4,055 4,895 4,163
402,213 451,141 433,349
Current assets
Cash and cash equivalents 101,123 35,481 68,239
Current asset investments held at fair value - 19,774 -
Receivables 1,588 1,899 1,351
102,711 57,154 69,590
Current liabilities
Payables 385 505 262
Net current assets 102,326 56,649 69,328
Total assets less current liabilities 504,539 507,790 502,677
Capital and reserves
Called up share capital 7,292 7,292 7,292
Capital redemption reserve 2,112 2,112 2,112
Share premium 12,936 12,936 12,936
Capital reserve 454,764 465,004 448,537
Revenue reserve 19,600 10,168 22,885
Equity attributable to equity holders 496,704 497,512 493,762
Non-controlling interests 7,835 10,278 8,915
Total equity 504,539 507,790 502,677
Net asset value per share (basic and diluted) 681.2p 682.3p 677.2p
Consolidated Cash Flow Statement (unaudited)
Half year to Half year to Year to
31 July 31 July 31 January
2014 2013 2014
£'000 £'000 £'000
Operating activities
Sale of portfolio investments 93,269 36,608 99,492
Purchase of portfolio investments (53,315) (30,066) (90,201)
Net sale of current asset investments held at fair value - 6,410 26,061
Interest income received from portfolio investments 6,438 1,464 8,504
Dividend income received from portfolio investments 3,412 1,677 10,357
Other income received 322 92 230
Investment management charges paid (3,076) (2,829) (5,947)
Taxation (paid)/received (22) - 1
Other expenses paid (480) (697) (1,644)
Net cash inflow from operating activities 46,548 12,659 46,853
Financing activities
Investments by non-controlling interests 118 94 309
Distributions to non-controlling interests (1,344) (1,053) (1,385)
Bank facility fee (747) (1,494) (2,301)
Equity dividends paid (11,302) (3,646) (3,646)
Net cash outflow from financing activities (13,275) (6,099) (7,023)
Net increase in cash and cash equivalents 33,273 6,560 39,830
Cash and cash equivalents at beginning of period 68,239 28,778 28,778
Net increase in cash and cash equivalents 33,273 6,560 39,830
Effect of changes in foreign exchange rates (389) 143 (369)
Cash and cash equivalents at end of period 101,123 35,481 68,239
Consolidated Statement of Changes in Equity (unaudited)
Share Capital redemption reserve Share Capital reserve Revenue reserve Total shareholders' equity Non-controlling interests Total equity
capital premium
£'000 £'000 £'000 es issued in December 2012. The primary valuation methodology
used is an earnings multiple methodology, with other methodologies used where
they are more appropriate. The fair value of the Company's unlisted
investments is sensitive to changes in the assumed earnings multiples. An
increase in the earnings multiple would lead to an increase in the fair value
of the investment portfolio and a decrease in the earnings multiple would lead
to a decrease in the fair value. The following table presents the changes in
level 3 instruments for the six months to 31 July 2014.
Unquoted investments (indirect) at fair value through profit or loss Unquoted investments(direct) at fair value through profit or loss Total
Group £'000 £'000 £'000
Opening balance 378,754 50,432 429,186
Additions 38,372 14,943 53,315
Disposals (97,088) (6,274) (103,362)
Gains and losses recognised in profit or loss 16,393 2,626 19,019
Closing balance 336,431 61,727 398,158
Total gains for the period included in income statement for assets held at the end of the reporting period 16,393 2,626 19,019
The following tables present the assets that are measured at fair value. The
Company did not have any financial liabilities measured at fair value at these
dates.
31 July 2014 Level 1 Level 2 Level 3
£'000 £'000 £'000
Investments held at fair value
Unquoted investments - indirect - - 336,431
Unquoted investments - direct - - 61,727
Quoted investments - direct 4,055 - -
Total investments held at fair value 4,055 - 398,158
31 January 2014 Level 1 Level 2 Level 3
£'000 £'000 £'000
Investments held at fair value
Unquoted investments - indirect - - 378,754
Unquoted investments - direct - - 50,432
Quoted investments - direct 4,163 - -
Total investments held at fair value 4,163 - 429,186
8 INVESTMENT MANAGEMENT CHARGES
The investment management charges set out in the table below were payable to
the Manager, Graphite Capital Management LLP, in the period. The Manager is a
related party.
Half year to31 July 2014 Half year to31 July 2013 Year to31 January 2014
£'000 £'000 £'000
Investment management fee 2,939 2,817 5,912
Irrecoverable VAT 11 25 48
2,950 2,842 5,960
The allocation of the total investment management charges was unchanged in
2014 with 75% of the total allocated to capital and 25% allocated to income.
The management fee charged by the Manager is 1.5% of the value of invested
assets and 0.5% of outstanding commitments, in both cases excluding funds
managed by Graphite Capital. No fee is charged on cash or liquid asset
balances. The amounts payable during the period are set out above.
At 31 July 2014 management fees of £50,000 were prepaid (31 July 2013: accrual
of £77,000).
The Company has borne management charges in respect of its investments in
funds managed by Graphite Capital as set out below:
Half year to 31 July 2014 Half year to 31 July 2013 Year to31 January 2014
£'000 £'000 £'000
Graphite Capital Partners VI 70 224 311
Graphite Capital Partners VII 225 226 581
Graphite Capital Partners VIII 696 - 422
991 450 1,314
REGULATORY DISCLOSURES
Statement of Directors' Responsibilities
The directors confirm that this half-yearly financial report has been prepared
in accordance with IAS 34 as adopted by the European Union and that the
interim management report includes a fair review of the information required
by DTR 4.2.7 and DTR 4.2.8, namely:
- an indication of important events that have occurred during the first
six months and their impact on the condensed set of financial statements, and
a description of the principal risks and uncertainties for the remaining six
months of the financial year; and
- material related-party transactions in the first six months and any
material changes in the related-party transactions described in the last
annual report.
Principal Risks and Uncertainties
The principal risks and uncertainties facing the Company for the second half
of the financial year are substantially the same as those disclosed in the
Report and Accounts for the year ended 31 January 2014.
Going Concern
The factors likely to affect the Company's ability to continue as a going
concern were set out in the Report and Accounts for the year ended 31 January
2014. As at 31 July, there have been no significant changes to these factors.
Having reviewed the Company's forecasts and other relevant evidence, the
Directors have a reasonable expectation that the Parent Company and the
Company have adequate resources to continue in operational existence for the
foreseeable future. Accordingly, they continue to adopt the going concern
basis in preparing the half-yearly condensed financial statements.
On behalf of the Board
Mark Fane, Chairman
25 September 2014
Copies of the Interim Report will be available on the Company's website (see
below) and posted in early October 2014 to shareholders who have elected to
receive a paper copy. Copies may be obtained during normal business hours from
the Company's registered office thereafter.
For further information please contact:
Tim Spence / Emma Osborne
Graphite Capital
Tel: 020 7825 5300
www.graphite-enterprise.com
This information is provided by RNS
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