Interim Management Statement

RNS Number : 1026G

Intermediate Capital Group PLC

26 January 2010

 



Tuesday, 26 January 2010

INTERMEDIATE CAPITAL GROUP PLC - Interim Management STATEMENT

for the three months to 31 DECEMBER 2009

Monitoring and managing our portfolio

Our portfolio continues to show resilience in an economic environment which remains difficult. At our most recent quarterly portfolio review in mid January, 52 per cent of our portfolio companies continued to perform at or above last year's level which is broadly in line with the previous two quarters.  

Prospects for realisations have improved materially, heightened by the rallies in the equity and bond markets. During the period we realised two investments, Marken Group Limited and Springer. The sale of Marken completed in January and generated proceeds of £168 million to ICG PLC, including a capital gain of £71 million, the largest capital gain in a single transaction in ICG's 21 year history. The sale of Springer is expected to generate proceeds of approximately £40 million in mid-February, subject to final approval by the relevant authorities. This transaction will not have any material impact on the P&L. 

We also recently sold our mezzanine investment in Gala Coral at a price exceeding the net carrying value. This will generate £36 million of proceeds in the fourth quarter and a small write-back. 

Investing cautiously

Going forward, we continue to expect to deploy between £150 million and £200 million per annum. We expect to complete our first material transactions since the summer of 2008 shortly. Meanwhile, we have made some modest follow on investments in support of our portfolio. 

There are signs of momentum in mid market leveraged buyouts in both Asia and North America. In Europe, a limited number of Leveraged Buyouts (LBOs) have been completed, however we do not expect the market to reopen in any significant size until there is improved liquidity in the banking system and a reopening of the syndication market for leveraged loans. In the meantime, there continue to be opportunities to restructure strong companies with unsustainable capital structures on attractive terms.

We remain cautious in our approach to new investments, particularly in Europe, as there is, at this stage, little evidence of wide spread improvement in the trading of European LBOs. We will continue to monitor closely the sustainability of the substantial recovery experienced by the debt markets in the recent months.

Continuing to raise third party funds

We continue to make good progress towards an additional and final close of our Recovery Fund at the end of March 2010.

Maintaining a strong Balance sheet

Undrawn debt facilities at 31 December 2009 were broadly unchanged compared to the end of September at £525 million. Adjusted for the expected proceeds from the Marken, Springer and Gala transactions our headroom is approximately £770 million. Our balance sheet is liquid, with no material debt repayments scheduled in the current financial year.  Between our balance sheet and our third party funds under management we have close to £2 billion of capacity to take advantage of the opportunities emerging from this stage of the economic cycle.

The investment portfolio at 31 December 2009 was broadly flat at £2,828 million.

Financial Outlook

The financial outlook remains unchanged since we reported our interim results on 24 November 2009, with the exception of capital gains expectations which have been revised upwards following the improved prospects for realisations.

Analysts / Investors enquiries: 

Tom Attwood, Managing Director, ICG PLC                         [phone]

Christophe Evain, Managing Director, ICG PLC                  [phone]

Philip Keller, Finance Director, ICG PLC                              [phone]

Jean-Christophe Rey, Investor Relations, ICG PLC             [phone]

Media enquiries:

Amanda Fong, Corporate Communications, ICG                 [phone]

Charlotte Kirkham, Tim Draper, M: Communications           [phone] 

This interim management statement has been prepared solely to provide additional information to shareholders as a body to meet the relevant requirements of the UK Listing Authority's Disclosure and Transparency Rules. The interim management statement should not be relied on by any other party or for any other purpose. 

This interim management statement may contain forward-looking statements. These statements have been made by the directors in good faith based on the information available to them up to the time of their approval of this report and should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information. 

These written materials are not intended as an offer or solicitation with respect to any security, are not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation, and are not  an offer of securities for sale in the United States.  Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended, or an exemption there from. The issuer has not and does not intend to register any securities under the US Securities Act of 1933, as amended, and does not intend to offer any securities to the public in the United States.  No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in these written materials, will not be accepted.

About ICG

Founded in 1989 Intermediate Capital Group PLC ("ICG") is a leading independent investor in and manager of mezzanine finance, minority equity, buyout debt and related assets with approximately £10 billion under management in proprietary capital and third party funds. ICG has a large and experienced investment team of investment executives operating from its head office in London and offices in Paris, Madrid, Stockholm, Frankfurt, Amsterdam, Hong Kong, Sydney and New York. Its stock (ticker symbol: ICP) is listed on the London Stock Exchange. Further information is available at: www.icgplc.com. 

 

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