Unaudited Interim Results For the six months ended 31 July 2023
05/10/2023 07:00
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ICG Enterprise Trust Plc
Unaudited Interim Results For the six months ended 31 July 2023
5 October 2023
Defensive growth with a disciplined approach
Highlights * NAV per Share of 1,904p at 31 July 2023, LTM NAV per Share Total Return* of 4.1% and 5 year annualised of 15.2%
* Portfolio companies generating ~15% LTM revenue and earnings growth, with weighted-average leverage of 4.7x (1)
* H1 FY24 Portfolio Return* on a Local Currency Basis of 4.6% (Sterling return 1.6%), ICG-managed investments generated a local currency return of 5.1%
* Continuing to realise investments at Uplifts to Carrying Value and our Managers are executing on new investment opportunities, despite more subdued transaction activity market-wide
* Second quarter dividend of 8p per share, taking total dividends for H1 FY24 to 16p (H1 FY23: 14p). Reaffirmed intended FY24 dividend of at least 32p per share, an increase of 6.7% on FY23
* One year since launch of long-term buyback programme: £10.6m (2)invested to repurchase 1.4% of outstanding share capital at a weighted average discount to NAV of 40.6% since programme initiated
* In the coming months we expect to retain a disciplined approach to Direct investments and to continue to build a diversified portfolio through our Primary commitments
1 Based on Enlarged Perimeter covering 66.4% of the Portfolio. See page 7. (2)Up to and including 30 September 2023 *This is an Alternative Performance Measure. Please refer to the Glossary for the definition.
Oliver Gardey
Head of Private Equity Fund Investments, ICG
ICG Enterprise Trust's strategy of investing exclusively in buyouts of businesses that exhibit defensive growth characteristics - along with our capital allocation policy - is delivering attractive shareholder returns. In the last twelve months we have generated an NAV per Share Total Return of 4.1%, and over the last five years an annualised NAV Per Share Total Return of 15.2%. Although market-wide transaction activity was lower during the period, we and our Managers have continued to identify attractive opportunities for new investments and realisations. Total Realisations during the period generated proceeds of £94.1m, including 17 full exits at a weighted average Uplift to Carrying Value of 17.7%. Our investments of £64.1m during the period included two
Direct investments. A challenging fundraising market for private equity managers continues to be a favourable environment for our perpetual capital structure, and we made nine new commitments during the period, including to two funds managed by ICG. Our Portfolio is performing in line with our expectations, and the Primary commitments made in recent quarters are enabling us to continue to build a diversified Portfolio through cycles. Our relationship with ICG is demonstrating economic and broader benefits to ICG Enterprise Trust, and we feel well positioned for the months ahead and for the longer term.
PERFORMANCE OVERVIEW
Annualised
Performance to 31 July 2023 3 months 6 months 1 year 3 years 5 years 10 years
Portfolio Return on a Local Currency Basis 4.3% 4.6% 7.3% 24.3% 17.9% 13.4%
NAV per Share Total Return 1.9% 0.8% 4.1% 21.1% 15.2% 13.0%
Share Price Total Return 11.7% 2.9% 2.8% 17.0% 9.4% 11.9%
FTSE All-Share Index Total Return (1.2) % 0.5% 6.1% 12.3% 3.4% 5.5%
Portfolio activity overview for H1 FY24 Primary Direct Secondary Total ICG-managed
Local Currency return 4.8% 3.8% 5.5% 4.6% 5.1%
Sterling return 1.8% 1.4% 1.4% 1.6% 1.8%
New Investments £39.2m £18.4m £6.5m £64.1m £9.9m
Total Proceeds £46.6m £35.3m £12.2m £94.1m £15.8m
New Fund Commitments £89.7m - £20.3m £110.0m £42.2m
Closing Portfolio value £767.5m £372.5m £258.8m £1,398.8m £411.9m
% Total Portfolio 54.9% 26.6% 18.5% 100.0% 29.4%
OUTLOOK
We are encouraged by the performance of our underlying investments, which have continued to generate robust revenue and EBITDA growth. In the current market, we opt to retain a disciplined approach to Direct investments, and our fund commitments are enabling us to continue to invest in our portfolio. We continue to see favourable dynamics in the Secondary market as other private equity investors seek routes to liquidity. Importantly, we remain confident in the quality of our Portfolio, of our managers,
and of our team, to generate resilient long-term returns for our shareholders.
COMPANY TIMETABLE
A presentation for investors and analysts will be held at 10:00 BST today. A
link for the presentation can be found on the Results & Reports page
(https://www.globenewswire.com/Tracker?data=KST8GFsiiwQkqam29kfOdfJ756F6lCG8_TFehzO8t4RP0qeeYhUaODR_aatDZq9wYfh2eaziB2s71YVWok_igaYgg3MNTPsBViYwJOEB1ArEaIkB-WaYTubiD6Kf7DjyLh1hITBaAkra9OraJl8xUQ==)
of the Company website. A recording of the presentation will be made available
on the Company website after the event.
FY24 First Interim Dividend FY24 Second Interim Dividend
Ex-dividend date 17 August 2023 16 November 2023
Record date 18 August 2023 17 November 2023
Dividend payment date 1 September 2023 1 December 2023
ENQUIRIES
Institutional investors and analysts:
Chris Hunt, Head of Shareholder Relations +44
(0) 20 3545 2000
Livia Bridgman Baker, Shareholder Relations
Media:
Clare Glynn, Corporate Communications +44 (0)
20 3545 1395
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.
CHAIR’S FOREWORD
ICG Enterprise Trust aims to provide investors with exposure to private equity
investments that can deliver resilient returns for our shareholders over the
long term, with the added benefit of daily liquidity.
Your Company’s NAV per Share Total Return during the period was 0.8% and at
31 July 2023 the Company’s NAV stood at 1,904p per share. Over the
longer-term, our track record is evidencing the success of our investment
strategy: over the five years to 31 July 2023 we have generated an annualised
NAV per Share Total Return of 15.2%, and over the three years to 31 July 2023
we have generated an annualised NAV per Share Total Return of 21.1%.
Despite this impressive track record and the resilient operational performance
of our underlying investments, our discount has remained wide, in common with
much of the listed private equity investment trust sector. In the face of
this, the Board has taken a number of steps to optimise returns for our
shareholders today, and to engage with the shareholders of tomorrow.
Costs remain a focus for the Board, and this period benefits from the
management fee cap and cost sharing agreement we entered into with the
Manager, effective from 1(st) February 2023. In aggregate we estimate
shareholders have saved approximately £1m in this period as a result of these
actions, including the management fees of £8.0m being approximately 8% lower
than they would have been had the management fee cap not been in place.
Our buyback programme has been successfully and regularly implemented since
its introduction almost a year ago today: we have repurchased just under 1
million shares at a weighted average discount to NAV of 40.6%. These buybacks
represent £10.6m of capital returned to shareholders, equivalent to
approximately one third of total cash returns during the period. Alongside
this, we reiterate our commitment to the Company's progressive dividend
policy.
Finally, your Board recognises the importance of transparent and open
shareholder engagement, and I look forward to seeing a number of you in the
coming months. I was delighted to represent the Board at ICG Enterprise
Trust’s first Investor Day earlier this year. Then, as now, your Board
remains confident that ICG Enterprise Trust is well positioned to navigate the
current macroeconomic environment. The portfolio has performed well over the
last year, reassuring us that it will be resilient and defensive through the
cycle. Our underlying earnings continue to grow, which should provide long
term returns for our shareholders.
Jane Tufnell
Chair
5 October 2023
MANAGER’S REVIEW
Alternative Performance Measures
The Board and the Manager monitor the financial performance of the Company on
the basis of Alternative Performance Measures (APM), which are non-IFRS
measures. The APM predominantly form the basis of the financial measures
discussed in this review, which the Board believes assists shareholders in
assessing their investment and the delivery of the investment strategy.
The Company holds certain investments in subsidiary entities. The substantive
difference between APM and IFRS is the treatment of the assets and liabilities
of these subsidiaries. The APM basis “looks through” these subsidiaries to
the underlying assets and liabilities they hold, and it reports the
investments as the Portfolio APM. Under IFRS, the Company and its subsidiaries
are reported separately. The assets and liabilities of the subsidiaries are
presented on the face of the IFRS balance sheet as a single carrying value.
The same is true for the IFRS and APM basis of the Cash flow statement.
The following table sets out IFRS metrics and the APM equivalents:
IFRS (£m) 31 July 2023 31 July 2022 APM (£m) 31 July 2023 31 July 2022
Investments 1,342.7 1,298.1 Portfolio 1,398.8 1,353.7
NAV 1,290.3 1,268.8
Cash flows from the sale of portfolio investments 15.7 18.2 Total Proceeds 94.1 106.8
Cash flows related to the purchase of portfolio investments 15.5 29.6 Total New Investment 64.1 143.7
The Glossary includes definitions for all APM and, where appropriate, a
reconciliation between APM and IFRS.
Our investment strategy
We focus on investing in buyouts of profitable, cash-generative businesses in
developed markets that exhibit defensive growth characteristics which we
believe 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 which have deep and mature private equity markets supported by a
robust corporate governance ecosystem.
Medium-term target Five-year average 31 July 2023
1. Target Portfolio composition (1)
Investment category
Primary ~50% 61% 55%
Direct ~25% 27% 27%
Secondary ~25% 12% 18%
Geography (2)
North America ~50% 39% 43%
Europe (inc. UK) ~50% 55% 51%
Other — 6% 6%
2. Balance sheet
(Net cash)/debt (3) ~0% (2)% 4%
1 As percentage of Portfolio; 2 (Net cash)/net debt as a percentage of NAV; 3 (Net cash)/debt as a percentage of NAV Note: five year average is the linear average of FY exposures for FY20 - FY23 and H1 FY24
ICG Enterprise Trust benefits from access to ICG-managed funds and Direct
investments, which represented 29.4% of the Portfolio value at period end and
generated a 5.1% return on a local currency basis.
Performance overview
At 31 July 2023, our Portfolio was valued at £1,398.8m, and the Portfolio
Return on a Local Currency Basis for the first half of the financial year was
4.6% (H1 FY23: 7.3%).
All investment categories, Primary, Direct and Secondary, generated positive
Portfolio returns during the period:
* Primary investments generated a local currency return of 4.8%. Returns were
broad based, with notable outperformance from funds managed by ICG and
Gridiron, among others
* Direct Investments generated a return of 3.8%, reflecting resilient
operational performance, as well as a number of realisations agreed during the
period
* Secondary investments generated a return of 5.5%
Over the last five years, our Portfolio has generated an annualised Portfolio
Return on a Local Currency Basis of 17.9%.
Due to the geographic diversification of our Portfolio, the reported value is
impacted by changes in foreign exchange rates. During the period, the
Portfolio decreased by £42.5m (3.0%) due to FX movements, driven by Sterling
appreciation versus both the Euro and US Dollar. In Sterling terms, Portfolio
growth during the period was 1.6%.
ICG Enterprise Trust generated a NAV per Share Total Return of 0.8% during H1
FY24 (4.1% on an LTM basis), ending the period with a NAV per Share of 1,904p.
Over the last five years, ICG Enterprise Trust has generated an annualised NAV
per Share Total Return of 15.2%.
Movement in the Portfolio £m Six months to 31 July 2023 Six months to 31 July 2022
Opening Portfolio (1) 1,406.4 1,172.2
Total New Investments 64.1 143.7
Total Proceeds (94.1) (106.8)
Portfolio net cashflow (30.0) 36.9
Valuation movement (2) 65.0 87.0
Currency movement (42.6) 57.6
Closing Portfolio 1,398.8 1,353.7
% Portfolio growth (local currency) 4.6 % 7.4%
% currency movement (3.0)% 5.0%
% Portfolio growth (Sterling) 1.6 % 12.4%
Impact of (net cash)/net debt 0.1 % 0.2%
Expenses and other income (1.0) % (0.9) %
Co-investment Incentive Scheme Accrual (0.2) % (0.8) %
Impact of share buybacks and dividend reinvestment 0.3 % —%
NAV per Share Total Return 0.8 % 10.9%
1 Refer to the Glossary 2 92.4% of the Portfolio is valued using 30 June 2023 (or later) valuations (2022: 99.6%)
Portfolio company performance
Our Portfolio companies delivered robust financial performance during the
period, generating double digit revenue and EBITDA growth over the last twelve
months. As well as performance metrics for our Top 30 companies, we include
data for our "Enlarged Perimeter", which represents the aggregate value of the
Top 30 Companies and as many of the managers from within the Top 30 funds as
practicable. At 31 July 2023, the Enlarged Perimeter represented 66.4% of the
Portfolio by value.
Based on the Enlarged Perimeter, valuation metrics and leverage of the
Portfolio remained broadly stable during the period: EV/EBITDA for the
Enlarged Perimeter was 14.4x for the period (FY23: 14.0x); and Net Debt /
EBITDA for the Enlarged Perimeter was 4.7x (FY23: 4.6x).
Top 30 Enlarged Perimeter
Portfolio coverage 36.8% 66.4%
Last Twelve Months ('LTM') revenue growth 14.9% 15.6%
LTM EBITDA growth 14.7% 16.9%
Net Debt / EBITDA (1) 4.8x 4.7x
Enterprise Value / EBITDA (1) 14.7x 14.4x
Note: values are weighted averages for the respective portfolio segment; see Glossary for definition and calculation methodology 1 Weighted average metrics exclude PetSmart, for which EBITDA multiple is not an appropriate valuation metric
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 31 July 2023, ICG Enterprise Trust’s exposure to quoted companies was
valued at £97.1m, equivalent to 6.9% of the Portfolio value (FY23: 7.8%).
Across the Portfolio, quoted positions resulted in a marginal decrease of
£0.1m in Portfolio NAV during the period. The share price of our largest
listed exposure, Chewy, decreased by 24% in local currency (USD) during the
period.
At 31 July 2023 there was one quoted investment that individually accounted
for 0.5% or more of the Portfolio value:
Company Ticker 31 July 2023 % of Portfolio value
Chewy (part of PetSmart) (1) CHWY-US 2.7%
Other companies 4.2%
Total 6.9%
1 Value includes entire holding of PetSmart and Chewy. Majority of value is within Chewy
During the period, BC Partners (the underlying manager of the PetSmart
investment) announced a transaction between PetSmart/Chewy and Apollo, which
is expected to close later this year. While we do not expect a meaningful
near-term impact on our Portfolio valuation or realisation proceeds as a
result of this transaction, we believe it provides some long-term flexibility
around this investment for BC Partners.
Realisation activity
During the first half of FY24, the ICG Enterprise Trust Portfolio generated
Total Realisation Proceeds of £94.1m.
Realisation activity during the period included 17 Full Exits. These were
completed at a weighted average Uplift to Carrying Value of 17.7% and weighted
average Multiple to Cost of 4.0x.
The 10 largest underlying realisations in the period, which represent 65.8% of
Total Realisation Proceeds, are set out in the table below:
Investment Description Manager Country Proceeds £m
Endeavor Schools Provider of paid private schooling Leeds Equity Partners United States 32.9
Signify Health Provider of technology enabled healthcare payor services New Mountain Capital United States 8.3
Breitling Manufacturer of luxury watches CVC Capital Partners Switzerland 3.9
GoodLife Foods Producer of frozen snacks Egeria Netherlands 3.3
SERB Manufacturer of speciality pharmaceuticals Charterhouse Capital Partners Belgium 2.9
USCO Manufacturer and supplier of components for earth-moving machines One Equity Partners Italy 2.5
Enhesa Group Provider of Environmental, Health and Safety compliance support ICG Belgium 2.4
TMF Provider of management and accounting outsourcing services CVC Capital Partners Netherlands 2.1
Ilionx Provider of IT services and solutions Egeria Netherlands 1.8
group.ONE Provider of web hosting and domain services Cinven Sweden 1.7
Total of 10 largest underlying realisations 61.8
New investment activity
Total new investments of £64.1m during the period, of which 5.4% (£9.9m)
were alongside ICG. New investment by category detailed in the table below:
Investment Category Cost (£m) % of New Investments
Primary 39.2 61.2%
Direct 18.4 28.7%
Secondary 6.5 10.1%
Total 64.1 100.0%
During the first half of the financial year we made two new Direct Investments
for a combined value of £12.2m. The balance of Direct Investments is
comprised of £6.2m of incremental drawdowns across existing Direct
Investments.
The 10 largest underlying new investments in the period were as follows:
Investment Description Manager Country Cost £m (1)
Archer Technologies Developer of governance, risk and compliance software intended for risk management Cinven United States 9.5
Atlas Technical Consultants Provider of professional testing, inspection, engineering, environmental and consulting services GI Partners United States 4.2
Independence Products Provider of prescribed infection prevention products Graphite Capital United Kingdom 1.5
NovaTaste Supplier of flavourings and ingredients PAI Partners Austria 1.3
Maxar Provider of geospatial intelligence and satellite manufacturing services Advent International United States 1.2
Envalior Provider of engineering materials solutions Advent International Germany 1.1
Looping Operator of theme parks PAI Partners United Kingdom 1.0
European Camping Group Operator of premium campsites and holiday parks PAI Partners France 1.0
Coupa Software Operator of a SaaS platform that provides enterprises with procurement, invoicing, and expense management modules Thoma Bravo United States 1.0
TalentNeuron Provider of talent analytics and labour market data Leeds Equity Partners United States 1.0
Top 10 largest underlying new investments 22.8
1 Represents ICG Enterprise Trust's indirect investment (share of fund cost)
plus any direct investments in the period.
Commitments
The fundraising market continues to be favourable to ICG Enterprise Trust: in
an environment where many investors are restricted in their ability to commit
new capital, our perpetual capital structure and flexible investment mandate
enables us to commit through the cycle, maintaining vintage diversification
for our Portfolio and sowing the seeds for future growth.
During the period we made nine new fund Commitments totalling £110.0m,
including to two funds managed by ICG plc, as detailed below:
Fund Manager Type / Focus Commitment during the period
Local currency £m
Audax Private Equity VII Audax Group Primary / mid-market buyouts $10.0m £8.0m
Cinven VIII Cinven Primary / large buyouts €15.0m £13.2m
Hellman Friedman XI Hellman & Friedman Primary / large buyouts $10.0m £8.0m
ICG Europe Mid-Market II ICG Primary / mid-market buyouts €25.0m £22.0m
Apax XI Apax Partners Primary / mid-market buyouts €10.0m £8.8m
Bregal Unternehmerkapital IV Bregal Primary / mid-market buyouts €10.0m £8.7m
CVC IX CVC Capital Partners Primary / large buyouts €15.0m £13.0m
Genstar Capital Partners XI Genstar Capital Partners Primary / large buyouts $10.0m £8.0m
ICG Strategic Equity V ICG Secondaries / GP-led $25.0m £20.3m
At 31 July 2023, ICG Enterprise Trust had outstanding Undrawn Commitments of
£548.7m.
Movement in outstanding Commitments 6 months to 31 July 2023 £m
Undrawn Commitments as at 1 February 2023 496.7
New Fund Commitments 110.0
New Commitments relating to Co-investments 12.5
Drawdowns (64.1)
Currency and other movements, including repayment of commitments which can be reinvested (6.4)
Undrawn commitments as at 31 July 2023 548.7
Total Undrawn Commitments at 31 July 2023 represented £429.3m of Undrawn
Commitments to funds within their Investment Period, while £119.4m was to
funds outside their Investment Period.
31 July 2023 £m 31 July 2022 £m
Undrawn Commitments – funds in Investment Period 429.3 367.0
Undrawn Commitments – funds outside Investment Period 119.4 129.7
Total Undrawn Commitments 548.7 496.7
Total available liquidity (including facility) (158.6) (167.0)
Overcommitment net of total available liquidity 390.1 329.7
Overcommitment % of net asset value 30.2% 25.3%
Commitments are made in the funds' underlying currencies. The currency split
of the undrawn commitments at 31 July 2023 was as follows:
31 July 2023 31 July 2022
Undrawn Commitments £m % £m %
US Dollar 271.5 49.4% 253.7 51.1%
Euro 261.0 47.6% 226.1 45.5%
Sterling 16.2 3.0% 16.9 3.4%
Total 548.7 100.0% 496.7 100.0%
Liquidity
At 31 July 2023 ICG Enterprise Trust had a cash balance of £24.0m (31 January
2023: £20.7m) and total available liquidity of £158.6m (31 January 2023:
£167.0m).
£m
Cash at 31 January 2023 20.7
Realisation Proceeds 94.1
New investments (64.1)
Debt drawn down 5.4
Shareholder returns (17.3)
Management fees (7.5)
FX and other expenses (7.3)
Cash at 31 July 2023 24.0
Available undrawn debt facilities 134.6
Total available liquidity 158.6
At 31 July 2023, the drawn debt was £72.9m (31 January 2023: £65.4m),
resulting in a net debt position of £48.9m. At 31 July 2023, the Portfolio
represented 108.4% of net assets (31 January 2023: 108.1%).
£m % of net assets
Portfolio 1,398.8 108.4%
Cash 24.0 1.9%
Drawn debt (72.9) (5.6%)
Co-investment Incentive Scheme Accrual (57.0) (4.4%)
Other net current liabilities (2.6) (0.3%)
Net assets 1,290.3 100.0%
Our objective is to be fully invested through the cycle, while ensuring that
we have sufficient financial resources to be able to take advantage of
attractive investment opportunities as they arise. Drawdowns of commitments
are funded from Total Proceeds and, where appropriate, the debt facility.
Dividend and share buyback
Reflecting the Company's ongoing focus on optimising shareholder returns, ICG
Enterprise Trust maintains a progressive dividend policy alongside an active
share buyback programme to return capital to shareholders.
The Board has declared a dividend of 8p per share in respect of the second
quarter, taking total dividends for the period to 16p (H1 FY23: 14p). It
remains the Board's intention, in the absence of any unforeseen circumstances,
to declare total dividends of at least 32p per share for the financial year,
implying an increase of 6.7% on the previous financial year.
In October 2022 the Board announced the introduction of a long-term active
share buyback programme, which may be executed at any discount to NAV. Details
of share repurchases made under this programme are provided below:
Buyback activity summary H1 FY24 Since 19 October 2022 (1)
Number of shares purchased 583,352 946,347
Aggregate consideration £6.5m £10.6m
Weighted average discount to last reported NAV 41.2% 40.6%
(1)Being the date the long-term share buyback programme was announced, up to and including 30 September 2023 Note: aggregate consideration excludes commission, PTM and SDRT
The Board believes the buyback programme demonstrates the Manager’s
discipline around capital allocation; underlines the Board’s confidence in
the long-term prospects of the Company, its cashflows and NAV; will enhance
the NAV per share; and, over time, may positively influence the volatility of
the Company’s discount and its trading liquidity.
The Board reviews the size, mandate and efficacy of the buyback programme on a
quarterly basis, to ensure it is working in the long-term interests of
shareholders and in line with the objectives outlined above.
The Board retains absolute discretion as to the execution, pricing and timing
of any share buybacks, subject to the conditions set out in the authority to
execute share buybacks approved at the Company's 2023 Annual General Meeting.
Any shares repurchased by the Company will be held in treasury.
Activity since the period end
Notable activity between 1 August 2023 and 31 August 2023 has included:
* Realisation Proceeds of £8.4m
* New investments of £15.0m
Foreign exchange rates
The details of relevant FX rates applied in this report are provided in the
table below:
Average rate 6 months to Period end rate
31 July 2023 31 July 2022 31 July 2023 31 July 2022
GBP:EUR 1.1465 1.1680 1.1671 1.1341
GBP:USD 1.2445 1.2257 1.2836 1.2320
EUR:USD 1.0854 1.0491 1.0997 1.0863
ICG Private Equity Fund Investments Team
5 October 2023
SUPPLEMENTARY INFORMATION
This section presents supplementary information regarding the Portfolio (see
Manager’s Review and the Glossary for further details and definitions).
Portfolio composition
Portfolio by calendar year of investment % of value of underlying investments 31 July 2023 % of value of underlying investments 31 July 2022
2023 2.3 % — %
2022 17.0% 19.6%
2021 27.4% 25.1%
2020 10.7% 10.3%
2019 12.7% 12.0%
2018 10.7% 12.0%
2017 6.2% 6.7%
2016 4.0% 4.1%
2015 3.3% 4.1%
2014 and older 5.7% 6.1%
Total 100.0% 100.0%
Portfolio by sector % of value of underlying investments 31 July 2023 % of value of underlying investments 31 July 2022
TMT 24.1% 22.5%
Consumer goods and services 20.9% 20.9%
Healthcare 13.2% 13.3%
Business services 12.9% 12.6%
Industrials 8.1% 8.4%
Education 5.4% 7.0%
Financials 6.0% 5.0%
Leisure 4.8% 3.9%
Other 4.6% 6.4%
Total 100.0% 100.0%
Portfolio by fund currency (1) £m 31 July 2023 % 31 July 2022 £m 31 July 2022 %
US Dollar 671.3 48.0% 508.7 43.4%
Euro 612.0 43.8% 558.5 47.6%
Sterling 115.2 8.2% 104.7 9.0%
Other 0.3 —% 0.3 —%
Total 1,398.8 100.0% 1,172.2 100.0%
(1)Currency exposure by reference to the reporting currency of each fund .
Portfolio Dashboard
The tables below provide disclosure on the composition and dispersion of
financial and operational performance for the Top 30 and the Enlarged
Perimeter. At 31 July 2023, the Top 30 Companies represented 36.8% of the
Portfolio by value and the Enlarged Perimeter represented 66.4% of total
Portfolio value. This information is prepared on a value-weighted basis, based
on contribution to Portfolio value at 31 July 2023.
% of value at 31 July 2023
Sector exposure Top 30 Enlarged Perimeter
TMT 26.6% 22.2%
Consumer goods and services 21.2% 20.9%
Business services 17.7% 14.5%
Healthcare 10.6% 12.9%
Education 7.7% 5.9%
Leisure 7.1% 5.5%
Financials 2.6% 4.3%
Industrials 6.5% 9.5%
Other - 4.3%
Total 100.0% 100.0%
% of value at 31 July 2023
Geographic exposure (1) Top 30 Enlarged Perimeter
North America 43.1% 45.0%
Europe 50.1% 51.0%
Other 6.8% 4.0%
Total 100.0% 100.0%
1 Geographic exposure is calculated by reference to the location of the headquarters of the underlying Portfolio companies
% of value at 31 July 2023
LTM revenue growth Top 30 Enlarged Perimeter
<0% 12.6% 13.0%
0-10% 26.7% 28.6%
10-20% 31.7% 27.7%
20-30% 9.8% 12.5%
>30% 12.0% 13.0%
n.a. (1) 7.2% 5.2%
Weighted average 14.9% 15.6%
Note: for consistency, any excluded investments are excluded for all dispersion analysis. 1 n.a. within Top 30 represents PetSmart, for which EBITDA multiple is not an appropriate valuation metric.
% of value at 31 July 2023
LTM EBITDA growth Top 30 Enlarged Perimeter
<0% 20.1% 23.1%
0-10% 20.2% 18.9%
10-20% 30.5% 24.1%
20-30% 4.6% 7.7%
>30% 17.4% 20.5%
n.a (1) 7.2% 5.7%
Weighted average 14.7% 16.9%
Note: for consistency, any excluded investments are excluded for all dispersion analysis. 1 n.a. within Top 30 represents PetSmart, for which EBITDA multiple is not an appropriate valuation metric.
% of value at 31 July 2023
EV/EBITDA multiple Top 30 Enlarged Perimeter
0-10x 8.8% 14.1%
10-12x 15.7% 15.5%
12-13x 15.2% 13.7%
13-15x 19.7% 18.4%
15-17x 15.8% 13.0%
17-20x 8.1% 9.2%
>20x 9.5% 10.1%
n.a. (1) 7.2% 6.0%
Weighted average 14.7x 14.4x
Note: for consistency, any excluded investments are excluded for all dispersion analysis. 1 n.a. within Top 30 represents PetSmart, for which EBITDA multiple is not an appropriate valuation metric.
% of value at 31 July 2023
Net Debt / EBITDA Top 30 Enlarged Perimeter
<2x 21.0% 15.9%
2-4x 9.0% 18.6%
4-5x 19.0% 15.8%
5-6x 17.0% 17.1%
6-7x 7.0% 9.7%
>7x 20.0% 15.8%
n.a. (1) 7.0% 7.1%
Weighted average 4.8x 4.7x
Note: for consistency, any excluded investments are excluded for all dispersion analysis. 1 n.a. within Top 30 represents PetSmart, for which EBITDA multiple is not an appropriate valuation metric.
Top 30 companies
The table below presents the 30 companies in which ICG Enterprise Trust had
the largest investments by value at 31 July 2023. The valuations are gross of
underlying managers fees and carried interest.
Company Manager Year of investment Country Value as a % of Portfolio
1 Minimax
Supplier of fire protection systems and services ICG 2018 Germany 3.1%
2 Petsmart / Chewy
Retailer of pet products and services BC Partners 2015 United States 2.7%
3 Froneri
Manufacturer and distributor of ice cream products PAI 2013 / 2019 United Kingdom 2.2%
4 Leaf Home Solutions
Provider of home maintenance services Gridiron 2016 United States 1.7%
5 European Camping Group
Operator of premium campsites and holiday parks PAI 2021 / 2023 France 1.4%
6 Yudo
Designer and manufacturer of hot runner systems ICG 2017 / 2018 South Korea 1.4%
7 Curium Pharma
Supplier of nuclear medicine diagnostic pharmaceuticals ICG 2020 United Kingdom 1.4%
8 AML RightSource
Provider of compliance and regulatory services and solutions Gridiron 2020 United States 1.3%
9 Circana (formerly known as IRI)
Provider of mission-critical data and predictive analytics to consumer goods manufacturers New Mountain 2022 United States 1.3%
10 Precisely
Provider of enterprise software Clearlake / ICG 2021 / 2022 United States 1.3%
11 Newton
Provider of management consulting services ICG 2021 / 2022 United Kingdom 1.2%
12 Ambassador Theatre Group
Operator of theatres and ticketing platforms ICG / Providence 2021 United Kingdom 1.2%
13 David Lloyd Leisure
Operator of premium health clubs TDR 2013 / 2020 United Kingdom 1.2%
14 Crucial Learning
Provider of corporate training courses focused on communication skills and leadership development Leeds Equity 2019 United States 1.1%
15 DomusVi
Operator of retirement homes ICG 2017 / 2021 France 1.1%
16 Visma
Provider of business management software and outsourcing services HgCapital / ICG 2017 / 2020 Norway 1.1%
17 PSB Academy
Provider of private tertiary education ICG 2018 Singapore 1.1%
18 Ivanti
Provider of IT management solutions Charlesbank / ICG 2021 United States 1.1%
19 Planet Payment
Provider of integrated payments services focused on hospitality and luxury retail Advent / Eurazeo 2021 Ireland 1.0%
20 DigiCert
Provider of enterprise security solutions ICG 2021 United States 1.0%
21 ECA Group
Provider of autonomous systems for the aerospace and maritime sectors ICG 2022 France 1.0%
22 Davies Group
Provider of speciality business process outsourcing services BC Partners 2021 United Kingdom 1.0%
23 KronosNet
Provider of tech-enabled customer engagement and business solutions ICG 2022 Spain 0.9%
24 Class Valuation
Provider of residential mortgage appraisal management services Gridiron 2021 United States 0.9%
25 Brooks Automation
Provider of semiconductor manufacturing solutions THL 2021 / 2022 United States 0.8%
26 WCT
Provider of clinical research outsourcing services The Jordan Company 2021 United States 0.8%
27 Archer Technologies
Developer of governance, risk and compliance software intended for risk management Cinven 2023 United States 0.7%
28 AMEOS Group
Operator of private hospitals ICG 2021 Switzerland 0.6%
29 RegEd
Provider of SaaS-based governance, risk and compliance enterprise solutions Gryphon 2018 / 2019 United States 0.6%
30 Vistage
Provider of CEO leadership and coaching for small and mid-size businesses in the US Gridiron 2022 United States 0.6%
Total of the 30 largest underlying investments 36.8%
The 30 largest fund investments
The table below presents the 30 largest fund investments by value at 31 July
2023. The valuations are net of underlying managers’ fees and carried
interest.
Fund Year of commitment Value £m Outstanding commitment £m
1 ICG Strategic Equity Fund III
GP-led secondary transactions 2018 34.8 10.8
2 ICG Europe VII
Mezzanine and equity in mid-market buyouts 2018 33.7 6.6
3 ICG LP Secondaries Fund I
LP-led secondary transactions 2022 33.2 26.0
4 ICG Ludgate Hill I
Secondary portfolio 2021 31.7 14.0
5 Gridiron Capital Fund III
Mid-market buyouts 2016 30.2 4.0
6 CVC European Equity Partners VII
Large buyouts 2017 30.0 1.7
7 PAI Strategic Partnerships
Mid-market and large buyouts 2019 29.0 0.3
8 Graphite Capital Partners VIII
Mid-market buyouts 2013 27.2 2.2
9 PAI Europe VII
Mid-market and large buyouts 2017 26.5 1.5
10 Gridiron Capital Fund IV
Mid-market buyouts 2019 23.7 1.0
11 ICG Strategic Equity Fund IV
GP-led secondary transactions 2021 23.0 14.9
12 ICG Ludgate Hill III
Secondary portfolio 2022 21.3 3.3
13 Resolute IV
Mid-market buyouts 2018 20.5 1.5
14 Sixth Cinven Fund
Large buyouts 2016 19.8 1.6
15 Resolute II
Secondary fund restructuring 2018 18.9 1.1
16 Oak Hill V
Mid-market buyouts 2019 18.9 1.0
17 CVC European Equity Partners VI
Large buyouts 2013 18.0 1.9
18 Advent Global Private Equity IX
Large buyouts 2019 17.1 0.8
19 Advent Global Private Equity VIII
Large buyouts 2016 17.1 0.0
20 Seventh Cinven
Large buyouts 2019 16.9 3.8
21 AEA VII
Mid-market buyouts 2019 16.3 0.6
22 BC European Capital X
Large buyouts 2016 16.0 1.4
23 Resolute V
Mid-market buy-outs 2021 15.7 1.1
24 New Mountain Partners V
Mid-market buyouts 2017 15.4 1.7
25 ICG Augusta Partners Co-Investor
Secondary fund restructurings 2018 15.3 17.6
26 Thomas H Lee Equity Fund VIII
Mid-market and large buyouts 2017 15.2 2.2
27 Gryphon V
Mid-market buyouts 2019 14.9 1.7
28 Graphite Capital Partners IX
Mid-market buyouts 2018 14.8 5.8
29 BC European Capital IX
Large buyouts 2011 14.0 0.6
30 ICG Europe Mid-Market Fund
Mezzanine and equity in mid-market buyouts 2019 13.1 7.6
Total of the largest 30 fund investments 642.2 138.3
Percentage of total investment Portfolio 45.9%
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties facing the Company are substantially the
same as those disclosed in the Strategic Report and in the notes to the
Financial Statements in the Company’s latest Annual Report for the year
ended 31 January 2023 which was approved by the Board on 10 May 2023.
The Company considers its principal risks (as well as several underlying risks
comprising each principal risk) in four categories:
Investment risks: the risk to performance resulting from ineffective or
inappropriate investment selection, execution or monitoring.
External risks: the risk of failing to deliver the Company’s investment
objective and strategic goals due to external factors beyond the Company’s
control.
Operational risks: the risk of loss resulting from inadequate or failed
internal processes, people or systems and external event, including regulatory
risk.
Financial risks: the risks of adverse impact on the Company due to having
insufficient resources to meet its obligations or counterparty failure and the
impact any material movement in foreign exchange rates may have on underlying
valuations.
A comprehensive risk assessment process is undertaken regularly to re-evaluate
the impact and probability of each risk materialising and the strategic,
financial and operational impact of the risk. Where the residual risk is
determined to be outside of appetite, appropriate action is taken.
In addition to these, emerging risks are regularly considered to assess any
potential impact on the Company and to
determine whether any actions are required. The Board also regularly considers
the evolution of requirements and standards
relating to ESG and responsible investing.
Related Party Transactions
There have been no material changes in the related party transactions
described in the 31 January 2023 Annual Report.
Directors’ Responsibility Statement
The Directors are responsible for preparing the Interim Report, in accordance
with applicable laws and regulations. The Directors confirm that, to the best
of their knowledge:
* The condensed interim financial statements have been prepared in accordance
with UK-adopted IAS 34 Interim condensed financial statements and gives a true
and fair view of the assets, liabilities, financial position and profit or
loss of the Company;
* The Chair’s Statement and Manager’s Review includes a fair review of the
information required by DTR 4.2.7R of the Disclosure Guidance and Transparency
Rules, being an indication of important events that have occurred during the
first six months of the financial year and their impact on the condensed
interim financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the year; and
* The interim financial statements include a fair review of the information
required by DTR 4.28R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the financial year and that have materially affected the financial position or
performance of the Company during that period, and any changes in the related
party transactions described in the last Annual Report that could do so.
The Interim Report was approved by the Board and the above Directors’
Responsibility Statement was signed on its behalf by the Chair.
Jane Tufnell
Chair
5 October 2023
Unaudited Interim Financial Statements for the period ended 31 July 2023
INTERIM CONDENSED FINANCIAL STATEMENTS
Income statement
Half year to 31 July 2023 (Unaudited) Half year to 31 July 2022 (Unaudited)
Notes Revenue return £’000 Capital return £’000 Total £’000 Revenue return £’000 Capital return £’000 Total £’000
Income, gains and losses on investments 481 19,267 19,748 1,489 135,029 136,518
Deposit interest 324 - 324 - - -
Other income 78 - 78 - - -
Foreign exchange gains and losses - 38 38 - 46 46
883 19,305 20,188 1,489 135,075 136,564
Expenses
Investment management charges (802) (7,219) (8,021) (814) (7,323) (8,137)
Finance cost (433) (3,899) (4,332) (155) (1,394) (1,549)
Other expenses (887) - (887) (960) - (960)
(2,122) (11,118) (13,240) (1,929) (8,717) (10,646)
(Loss)/profit before tax (1,239) 8,187 6,948 (440) 126,358 125,918
Taxation 1,837 (1,837) - 464 (464) -
Profit for the period 598 6,350 6,948 24 125,894 125,918
Attributable to:
Equity shareholders 598 6,350 6,948 24 125,894 125,918
Basic and diluted earnings per share 10.21 183.78
The columns headed ‘Total’ represent the income statement for the relevant
financial years and the columns headed ‘Revenue return’ and ‘Capital
return’ are supplementary information in line with guidance published by the
AIC. There is no Other Comprehensive Income.
All profits are from continuing operations.
The notes on pages 27 to 29 form an integral part of the interim financial
statements.
Balance sheet
Notes 31 July 2023 (unaudited) £’000 31 January 2023 (audited) £’000
Non-current assets
Investments held at fair value 7 1,342,657 1,349,075
Current assets
Cash and cash equivalents 23,504 20,694
Receivables 2,618 2,416
26,122 23,110
Current liabilities
Borrowings (72,904) (65,293)
Payables (5,615) (6,274)
(78,519) (71,567)
Net current assets / (liabilities) (52,397) (48,457)
Total assets less current liabilities 1,290,260 1,300,618
Capital and reserves
Share capital 7,292 7,292
Capital redemption reserve 2,112 2,112
Share Premium 12,936 12,936
Capital reserve 1,268,795 1,279,751
Revenue reserve (875) (1,473)
Total equity 1,290,260 1,300,618
Net Asset Value per Share (basic and diluted) 6 1,904.1 1903.3p
The notes on pages 27 to 29 form an integral part of the interim financial
statements.
The financial statements on pages 27 to 29 were approved by the Board of
Directors on 4 October 2023 and signed on its behalf by:
Jane Tufnell Alastair Bruce
Director Director
Cash flow statement
Half year to 31 July 2023 (unaudited) £’000 Half year to 31 July 2022 (unaudited) (restated) £’000
Operating activities
Sale of Portfolio investments 15,737 18,183
Purchase of Portfolio investments (13,705) (29,644)
Cash flow to subsidiaries' investments (52,921) (108,890)
Cash flow from subsidiaries' investments 77,331 81,364
Interest income received from Portfolio investments 294 1,338
Dividend income received from Portfolio investments 296 151
Other income received and Deposit Interest 401 -
Investment management charges paid (7,488) (11,114)
Other expenses paid (2,892) (1,723)
Net cash inflow/(outflow) from operating activities 17,053 (50,335)
Financing activities
Bank facility fee (1,628) (2,018)
Interest paid (2,903) (332)
Purchase of own shares into treasury (6,477) -
Credit Facility utilised 90,087 56,737
Credit Facility repaid (82,476) (17,671)
Equity dividends paid to shareholders (10,886) (15,074)
Net cash (outflow)/inflow from financing activities (14,282) 21,642
Net increase/(decrease) in cash and cash equivalents 2,771 (28,693)
Cash and cash equivalents at beginning of period 20,694 41,328
Net increase/(decrease) in cash and cash equivalents 2,771 (28,693)
Effect of changes in foreign exchange rates 39 56
Cash and cash equivalents at end of period 23,504 12,691
(1) In the prior period financial statements, 'Cash outflows to subsidiaries'
and 'Cash inflows from subsidiaries' were netted within 'Net cash flows to
subsidiary investments'. The netted items have been presented gross to display
the individual inflows and outflows to provide better clarity for readers of
the financial statements in line with IAS 7 with a nil impact on the overall
Cash Flow Statement.
The notes on pages 27 to 29 form an integral part of the interim financial
statements.
Statement of changes in equity
Share capital £’000 Capital redemption reserve £’000 Share premium £’000 Capital reserve £’000 Revenue reserve £’000 Total shareholders’ equity £’000
Half year to 31 July 2023 (Unaudited)
Opening balance at 1 February 2023 7,292 2,112 12,936 1,279,751 (1,473) 1,300,618
Profit for the period and total comprehensive income — — — 6,350 598 6,948
Dividends paid — — — (10,886) — (10,886)
Purchase of own shares into treasury — — — (6,420) (6,420)
Closing balance at 31 July 2023 7,292 2,112 12,936 1,268,795 (875) 1,290,260
Share capital £’000 Capital redemption reserve £’000 Share premium £’000 Capital reserve £’000 Revenue reserve £’000 Total shareholders’ equity £’000
Half year to 31 July 2022 (Unaudited)
Opening balance at 1 February 2022 7,292 2,112 12,936 1,135,637 — 1,157,977
Profit for the period and total comprehensive income — — — 125,896 24 125,920
Dividends paid — — — (15,049) (24) (15,074)
Purchase of own shares into Treasury — — — — — —
Closing balance at 31 July 2022 7,292 2,112 12,936 1,246,484 — 1,268,823
The notes on pages 27 to 29 form an integral part of the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 July 2023
1 GENERAL INFORMATION
These interim condensed financial statements relate to ICG Enterprise Trust
Plc (‘the Company’). ICG Enterprise Trust Plc is registered in England and
Wales and is incorporated in the United Kingdom. The Company is domiciled in
the United Kingdom and its registered office is Procession House, 55 Ludgate
Hill, London EC4M 7JW. The Company’s objective is to provide long-term
growth by investing in private companies managed by leading private equity
managers.
2 FINANCIAL INFORMATION
The interim condensed financial statements are unaudited and do not comprise
statutory accounts within the meaning of
section 434 of the Companies Act 2006. Within the notes to the interim
condensed financial statements, all current and
comparative data covering the period to (or as at) 31 July 2023 is unaudited.
Data given in respect of the year to 31 January 2023
is audited. The statutory accounts for the year to 31 January 2023 have been
reported on by Ernst & Young LLP and delivered to
the Registrar of Companies. The report of the auditors was (i) unqualified,
(ii) did not contain an emphasis of matter paragraph,
and (iii) did not contain any statements under section 498(2) or (3) of the
Companies Act 2006.
3 BASIS OF PREPARATION
The interim financial statements have been prepared in accordance with
UK-adopted IAS 34 Interim financial Reporting (IAS 34) and on the basis of the
accounting policies and methods of computation set out in the financial
statements of the Company for the year to 31 January 2023.
The financial information for the year ended 31 January 2023 was prepared in
accordance with UK-adopted International Accounting Standards (‘UK-IAS’)
and the Statement of Recommended Practice ('SORP') for investment trusts
issued by the Association of Investment Companies in July 2022.
The Company comprises one operating segment which is also a reporting segment.
Going concern
These financial statements have been prepared on a going concern basis and on
the historical cost basis of accounting,
modified for the revaluation of certain assets at fair value. In making their
going concern assessment, the Directors have
considered the potential impact of principal risks on the Company’s business
activities; the Company’s net cash position; the
availability of the Company’s credit facility and compliance with its
covenants; and the Company’s cash flow projections, in
particular those arising from committed but undrawn commitments.
The Directors have concluded based on the above assessment that the
preparation of the interim condensed financial
statements on a going concern basis, to 31 October 2024, a period of more than
12 months from the signing of the interim
condensed financial statements, continues to be appropriate.
4 DIVIDENDS
Half year to 31 July 2023 £’000 Half year to 31 July 2022 £’000
Third Quarterly dividend in respect of year ended 31 January 2023 of 7.0p per share (2022: 6.0p) 4,781 4,111
Final dividend in respect of year ended 31 January 2023 of 9.0p per share (2022: 9.0p) 6,105 6,167
First quarterly dividend in respect of year ended 31 January 2024: 8.0p per share (2023: 7.0p) — 4,796
Total 10,886 15,074
The Board has approved an interim dividend for the quarter to 30 April 2023 of
8.0p per share (totalling £5.4m) which has
been paid on 1 September to shareholders on the register on 18 August 2023.
The Board has proposed a second interim dividend of 8.0p per share in respect
of the year ended 31 January 2024 which will be paid on 1 December 2023 to
shareholders on the register at the close of business on 17 November 2023.
5 EARNINGS PER SHARE
Earnings per share Half year to 31 July 2023 Half year to 31 July 2022
Revenue return per ordinary share 0.88p 0.04p
Capital return per ordinary share 9.33p 183.74p
Earnings per ordinary share (basic and diluted) 10.21p 183.78p
Weighted average number of shares 68,040,279 68,517,055
Revenue return per ordinary share is calculated by dividing the revenue return
attributable to equity shareholders of £0.6m (2022: £0.0m) by the weighted
average number of ordinary shares outstanding during the year.
Capital return per ordinary share is calculated by dividing the capital return
attributable to equity shareholders of £6.4m (2022: £125.9m) by the weighted
average number of ordinary shares outstanding during the year.
Basic and diluted earnings per ordinary share are calculated by dividing the
earnings attributable to equity shareholders of £6.9m (2022: £125.9m) by the
weighted average number of ordinary shares outstanding during the year.
The weighted average number of ordinary shares outstanding (excluding those
held in treasury) during the year was 68,040,279 (2022: 68,517,055). There
were no potentially dilutive shares, such as options or warrants, in either
year.
6 NET ASSET VALUE PER SHARE
The net asset value per share is calculated on equity attributable to equity
holders of £1,290.3m (31 January 2023: £1,300.6m) and on 67,762,825 (31
January 2023: 68,335,575) ordinary shares in issue at the period end. There
were no potentially dilutive shares, such as options or warrants, at either
year end. Calculated on both the basic and diluted basis the net asset value
per share was 1,904.1p (31 January 2023: 1,903.3p).
7 FAIR VALUE ESTIMATION
IFRS 13 requires disclosure of fair value measurements of financial
instruments categorised according to the following fair value measurement
hierarchy:
* Quoted prices (unadjusted) in active markets for identical assets or
liabilities (level 1).
* Inputs other than quoted prices included within level 1 that are observable
for the asset or liability, either directly (that is, as prices) or indirectly
(that is, derived from prices) (level 2).
* Inputs for the asset or liability that are not based on observable market
data (that is, unobservable inputs) (level 3).
The valuation techniques applied to level 3 assets are described in note 1(c)
of the annual financial statements. No investments were categorised as level 1
or level 2.
The Company’s policy is to recognise transfers into and transfers out of
fair value hierarchy levels at the end of the reporting year when they are
deemed to occur.
The following table presents the assets that are measured at fair value at 31
July 2023 and 31 January 2023:
Level 1 Level 2 Level 3 Total
31 July 2023 £’000 £’000 £’000 £’000
Investments held at fair value
Unquoted investments - - 269,553 269,553
Quoted investments - - - -
Subsidiary undertakings - - 1,073,104 1,073,104
Total investments held at fair value - - 1,342,657 1,342,657
Level 1 Level 2 Level 3 Total
31 January 2023 £’000 £’000 £’000 £’000
Investments held at fair value
Unquoted investments - - 269,178 269,178
Quoted investments - - -
Subsidiary undertakings - - 1,079,897 1,079,897
Total investments held at fair value - - 1,349,075 1,349,075
7 FAIR VALUE ESTIMATION (CONTINUED)
All unquoted and quoted investments are valued at fair value in accordance
with IFRS 13. The Company has no quoted investments as at 31 July 2023;
quoted investments held by subsidiary undertakings are reported within Level
3.
Investments in level 3 securities are in respect of private equity fund
investments and co-investments. These are held at fair value and are
calculated using valuations provided by the underlying manager of the
investment, with adjustments made to the statements to take account of cash
flow events occurring after the date of the manager’s valuation, such as
realisations or liquidity adjustments.
The following tables present the changes in level 3 instruments for the period
ended 31 July 2023 and 31 July 2022.
Half year to 31 July 2023 £’000 Half year to 31 July 2022 £’000
Opening Balance 1 February 1,349,075 1,123,747
Additions 64,055 57,170
Disposals (86,090) (18,183)
Gains recognised in profit or loss 15,617 135,319
Closing balance 1,342,657 1,298,053
GLOSSARY
Term Short form Definition
Alternative Performance Measures APMs Alternative Performance Measures are a term defined by the European Securities and Markets Authority as “financial measures of historical or future performance, financial
position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework”. APMs are used in this report 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, taking into account industry practice. Definitions and reconciliations to IFRS measures are provided in the main body of the report or in this
Glossary, where appropriate.
Carried Interest Carried interest is equivalent to a performance fee. This represents a share of the profits that will accrue to the underlying private equity managers, after achievement
of an agreed Preferred Return.
Cash drag Cash drag is the negative impact on performance arising as a result of the allocation of a portion of the entity’s assets to cash.
Co-investment Co-investment is a Direct Investments in a company alongside a private equity fund.
Co-investment Incentive Scheme Accrual Co-investment Incentive Scheme Accrual represents the estimated value of interests in the Co-investment Incentive Scheme operated by the subsidiary partnerships of the
Company.
Commitment Commitment represents the amount of capital that each investor agrees to contribute to a fund or a specific investment.
Deployment Please see ‘Total new investment’.
Direct Investments An investment in a portfolio company held directly, not through a private equity fund. Direct Investments are typically co-investments with a private equity fund.
Discount Discount arises when the Company’s shares trade at a price below the Company’s NAV per Share. In this circumstance, the price that an investor pays or receives for a
share would be less than the value attributable to it by reference to the underlying assets. The Discount is the difference between the share price and the NAV, expressed
as a percentage of the NAV. For example, if the NAV was 100p and the share price was 90p, the Discount would be 10%.
Drawdowns Drawdowns are amounts invested by the Company when called by underlying managers in respect of an existing Commitment.
EBITDA Stands for earnings before interest, tax, depreciation and amortisation, which is a widely used performance measure in the private equity industry.
Enlarged Perimeter As well as performance metrics for our Top 30 companies, we include data for our "Enlarged Perimeter", which represents the aggregate value of the Top 30 Companies and as
many of the managers from within the Top 30 funds as practicable.
Enterprise Value EV Enterprise Value is the aggregate value of a company’s entire issued share capital and Net Debt.
Exclusion List The Exclusion List defines the business activities which are excluded from investment.
FTSE All-Share Index Total Return The change in the level of the FTSE All-Share Index, assuming that dividends are re-invested on the day that they are paid.
Full Exits Full Exits are exit events (e.g., trade sale, sale by public offering, or sale to a financial buyer) following which the residual exposure to an underlying company is
zero or immaterial; this does not include Fund Disposals. See ‘Fund Disposals’.
Fund Disposals Fund Disposals are where the Company receives sales proceeds from the full or partial sale of a fund position within the secondary market.
General Partner GP The General Partner is the entity managing a private equity fund. This is commonly referred to as the manager.
Hedging Hedging is an investment technique designed to offset a potential loss on one investment by purchasing a second investment that is expected to perform in the opposite
way.
Initial Public Offering IPO An Initial Public Offering is an offering by a company of its share capital to the public with a view to seeking an admission of its shares to a recognised stock
exchange.
Internal Rate of Return IRR Internal Rate of Return is a measure of the rate of return received by an investor in a fund. It is calculated from cash drawn from and returned to the investor, together
with the residual value of the investment.
Investment Period Investment Period is the period in which funds are able to make new investments under the terms of their fund agreements, typically up to five years after the initial
Commitment.
Last Twelve Months LTM Last Twelve Months refers to the timeframe of the immediately preceding 12 months in reference to financial metrics used to evaluate the Company’s performance.
Limited Partner LP The Limited Partner is an institution or individual who commits capital to a private equity fund established as a Limited Partnership. These funds are generally protected
from legal actions and any losses beyond the original investment.
Limited Partnership A Limited Partnership includes one or more General Partners, who have responsibility for managing the business of the partnership and have unlimited liability, and one or
more Limited Partners, who do not participate in the operation of the partnership and whose liability is ordinarily capped at their capital and loan contribution to the
partnership. In typical fund structures, the General Partner receives a priority share ahead of distributions to Limited Partners.
Net Asset Value per Share NAV per Share Net Asset Value per Share is the value of the Company’s net assets attributable to one Ordinary share. It is calculated by dividing ‘shareholders’ funds’ by the total
number of ordinary shares in issue. Shareholders’ funds are calculated by deducting current and long-term liabilities, and any provision for liabilities and charges, from
the Company’s total assets.
Total Return Total Return is the change in the Company’s Net Asset Value per Share, assuming that dividends are re-invested at the end of the quarter in which the dividend was paid.
Net Debt Net Debt is calculated as the total short-term and long-term debt in a business, less cash and cash equivalents.
Ongoing Charges Ongoing Charges are calculated in line with guidance issued by the Association of Investment Companies (‘AIC’) and capture management fees and expenses, excluding finance
costs, incurred at the Company level only. The calculation does not include the expenses and management fees incurred by any underlying funds.
Other Net Liabilities Other Net Liabilities at the aggregated Company level represent net other liabilities per the Company’s balance sheet. Net other liabilities per the balance sheet of the
subsidiaries include amounts payable under the Co-investment Incentive Scheme Accrual.
Overcommitment Overcommitment refers to where private equity fund investors make Commitments exceeding the amount of cash immediately available for investment. When determining the
appropriate level of Overcommitment, careful consideration needs to be given to the rate at which Commitments might be drawn down, and the rate at which realisations will
generate cash from the existing Portfolio to fund new investment.
Portfolio Portfolio represents the aggregate of the investment Portfolios of the Company and of its subsidiary Limited Partnerships. This APM is consistent with the commentary in previous annual and interim reports. The Board and the Manager consider that disclosing our Portfolio assists shareholders in understanding the value and performance of the underlying investments selected by the Manager. It is shown before the Co-investment Incentive Scheme Accrual to avoid being distorted by certain funds and Direct Investments on which ICG Enterprise Trust Plc does not incur these costs (for example, on funds managed by ICG plc). Portfolio is related to the NAV, which is the value attributed to our shareholders, and which also incorporates the Co-investment Incentive Scheme Accrual as well as
the value of cash and debt retained on our balance sheet. The value of the Portfolio at 31 July 2023 is £1,398.8m (31 January 2023: £1,406.4m).
31 July 2023 £m IFRS Balance sheet fair value Net assets of subsidiary limited partnerships Co-investment Incentive Scheme Accrual Total Company and subsidiary Limited Partnership
Investments (1) 1,342.7 (0.9) 57.0 1,398.8
Cash 23.5 23.5
Other Net Liabilities (75.9) 0.9 (57.0) (132.0)
Net assets 1,290.3 1,290.3
31 January 2023 £m IFRS Balance sheet fair value Balances receivable from subsidiary Limited Partnerships Co-investment Incentive Scheme Accrual Total Company and subsidiary Limited Partnership
Investments (1) 1,349.1 (0.8) 58.1 1,406.4
Cash 20.7 20.7
Other Net Liabilities (69.2) 0.8 (58.1) (126.5)
Net assets 1,300.6 1,300.6
(1)Investments as reported on the IFRS balance sheet at fair value comprise the total of assets held by the Company and the net asset value of the Company’s investments in the subsidiary Limited Partnerships.
Portfolio Return on a Local Currency Basis Portfolio Return on a Local Currency Basis represents the change in the valuation of the Company’s Portfolio before the impact of currency movements and Co-investment Incentive Scheme Accrual. The Portfolio return of 4.6% is calculated as follows:
£m 31 July 2023 31 July 2022
Income, gains and losses on Investments 19.7 136.5
Foreign exchange gains and losses included in gains and losses on investments 43.4 (60.6)
Incentive accrual valuation movement 1.9 11.1
Total gains on Portfolio investments excluding impact of foreign exchange 65.0 87.0
Opening Portfolio valuation 1,406.4 1,172.2
Portfolio Return on a Local Currency Basis 4.6% 7.4%
Term Short form Definition
Portfolio Return on a Local Currency Basis (continued) A reconciliation between the Portfolio Return on Local Currency Basis and NAV per Share Total Return is disclosed under ‘Total Return’.
Portfolio Company Portfolio Company refers to an individual company in an investment portfolio.
Premium Premium occurs when the share price is higher than the NAV and investors would therefore be paying more than the value attributable to the shares by reference to the underlying assets.
Primary Investment A Primary Investment is a Commitment to a private equity fund.
Quoted Company A Quoted Company is any company whose shares are listed or traded on a recognised stock exchange.
Realisation Proceeds Realisation Proceeds are amounts received in respect of underlying realisation activity from the Portfolio and exclude any inflows from the sale of fund positions via the secondary market.
Realisations - Multiple to Cost Realisations - Multiple to Cost is the average return from Full Exits from the Portfolio in the period on a primary investment basis, weighted by cost.
£m 31 July 2023 31 July 2022
Realisation Proceeds from Full Exits in the year-to-date 63.3 73.2
Cost 16.0 32.5
Average return Multiple to Cost 4.0x 3.3x
Realisations – Uplift To Carrying Value Realisations – Uplift To Carrying Value is the aggregate uplift on Full exits from the Portfolio in the period excluding publicly listed companies that were exited via sell downs of their shares.
£m 31 July 2023 31 July 2022
Realisation Proceeds from Full Exits in the year-to-date 63.3 97.2
Prior Carrying Value (at previous quarterly valuation prior to exit) 53.7 77.2
Realisations – Uplift To Carrying Value 17.7% 25.8%
Secondary Investments Secondary Investments occur when existing private equity fund interests and Commitments are purchased from an investor seeking liquidity.
Share Price Total Return Share Price Total Return is the change in the Company’s share price, assuming that dividends are re-invested on the day that they are paid.
Total New Investment Total New Investment is the total of direct Co-investment and fund investment Drawdowns in respect of the Portfolio. In accordance with IFRS 10, the Company’s subsidiaries are deemed to be investment entities and are included in subsidiary investments within the financial statements. Movements in the cash flow statement within the financial statements reconcile to the movement in the Portfolio as follows:
£m 31 July 2023 31 July 2022
Purchase of Portfolio investments per cash flow statement 15.5 29.6
Purchase of Portfolio investments within subsidiary investments 48.6 114.1
Total New Investment 64.1 143.7
Term Short form Definition
Total Proceeds Total Proceeds are amounts received by the Company in respect of the Portfolio, which may be in the form of capital proceeds or income such as interest or dividends. In accordance with IFRS 10, the Company’s subsidiaries are deemed to be investment entities and are included in subsidiary investments within the financial statements.
£m 31 July 2023 31 July 2022
Sale of Portfolio investments per cash flow statement 15.7 18.2
Sale of Portfolio investments, interest received, and dividends received within subsidiary investments 77.3 87.1
Interest income per cash flow statement 0.3 1.3
Dividend income per cash flow statement 0.3 0.2
Other income per cash flow statement 0.5 —
Total Proceeds 94.1 106.8
Fund Disposals — 0.0
Realisation Proceeds 94.1 106.8
Undrawn Commitments Undrawn Commitments are Commitments that have not yet been drawn down (please see ‘Drawdowns’).
Unquoted Company An Unquoted Company is any company whose shares are not listed or traded on a recognised stock exchange.
Valuation Date The date of the valuation report issued by the underlying manager.
Valuation Multiples Valuation Multiples are earnings (EBITDA), or revenue multiples applied in determining the value of a business enterprise