Annual Results

Pantheon Intl Participations PLC 27 September 2000 PANTHEON INTERNATIONAL PARTICIPATIONS PLC PRELIMINARY ANNOUNCEMENT OF RESULTS 26 September 2000 The Board of Pantheon International Participations PLC today announces the unaudited results for the year ended 30 June 2000. CHAIRMAN'S STATEMENT The year under review has been one of great change and achievement for the Company and its shareholders. I am pleased to report that the Net Asset Value of the Company grew by 48%, from 405.6 pence per ordinary share to 599.9 pence per share. The total return per share was 251.9 pence. It should be noted that, whilst total assets increased to £161.3 million, a further £50 million was also returned to shareholders during the year. Results The performance of the portfolio during the year was very strong. The private equity portfolio showed gains of over 70% of its opening value, whilst realised gains totalled over £28 million. The Company's returns from primary fund investments have exceeded 37.4% per annum in the USA, reflecting the exceptional returns that US venture fund managers have achieved on technology and Internet investing. However, the portfolio is broadly diversified and is not subject to the same level of risk as pure technology portfolios. Reorganisation The Company completed a major capital reorganisation in May 2000, in the creation of a new, flexible capital structure of Ordinary Shares and Participating Loan Notes (PLNs). This structure, together with commitments from institutions to subscribe for over £31 million of further PLNs in the future, allowed the Board to return £50 million of surplus cash to shareholders. The reorganisation was carried out to improve net asset growth. Since inception, it has been necessary to keep a significant proportion of the Company's assets as cash in order to meet the outstanding commitments as they fall due. This has reduced the growth of net assets, because the return earned on this cash has been significantly less than that from the private equity investments. The new structure will allow the Company to be more efficient and will reduce the difference between the growth in net assets per share (17% per annum) and the return on private equity investments (29%) since the Company's formation in 1987. Market Commentary & Outlook The private equity market continues to grow with little impairment of the significant out-performance of other asset classes. The flexibility of the Company's new capital structure will enable the Company to benefit by supporting the very best private equity managers, as well as exploiting any rationalisation caused by over-optimistic investors through the secondary markets. A portfolio foundation which is laid by a strategic new fund programme, properly diversified by geography, stage of funding and sector, will provide low volatility and a firm base for institutions' or individuals' exposure to the private equity markets. The Company will benefit greatly from its relationship with the new $418 million Pantheon Global Secondary Fund. Activities The Company has been active in both primary and secondary investing during the year. The Company has been making commitments to new funds since 1994, achieving a return of 27.5%. Accordingly the Board has agreed a strategic new fund programme for global private equity amounting to £75 million per annum over the next three years. The increase in the size of the programme means that the Company will now make investments directly in private equity funds in the USA and Europe, rather than through fund of funds vehicles, managed by Pantheon Ventures, as in the past. However, investment in the Asian region will continue to be through these vehicles because of the limited size of this element of the programme. A total of £36.1 million of secondary purchases, including outstanding commitments, were completed during the year. This includes one substantial portfolio purchase. The rate of distributions from the Company's investments has continued to grow, reaching £59.8 million in the year - almost double that in the previous year. Post Balance Sheet Event I am also pleased to report that, after the year-end, the Company was able to complete the purchase of a portfolio of 15 funds for a cost of £23.1 million, which was acquired for additional PLNs issued to the vendors. This deal demonstrates the increased flexibility available to the Company following the capital reorganisation. Dividend The Board has recommended a final dividend of 2.0p per share, payable on 30 November 2000 to holders of shares on 27 October 2000. Subject to approval of this dividend by shareholders, an interest payment of 2.0p per PLN will be paid on 30 November 2000 to holders of PLNs on the register at close of business on the record date. The final dividend is being paid to meet investment trust regulations; the Company's aim remains capital growth and shareholders should not expect regular dividends. The Board Alain Lefebvre, having reached the age of 70, will be retiring from the Board at the AGM. He has been a member of the Board since the Company was formed in 1987 and I would like to thank him for his wise counsel and valued contribution. The Board has appointed Richard Crowder as a director and he will seek appointment at the AGM. He has been involved with the investment and private equity industries for many years, and he brings this valuable experience to the existing strengths of the Board. Annual Meeting & Presentation The Annual General Meeting of the Company will take place at 12.00 noon on 23 November 2000 at Chatham House. Afterwards, the Board has arranged a presentation to explain the progress of the Company in more detail. The Directors and the management team look forward to meeting you informally after the meeting. L. G. Stopford Sackville Chairman 26 September 2000 PANTHEON INTERNATIONAL PARTICIPATIONS PLC Statement of Total Return of the Company (incorporating the revenue account*): ** Restated 1 July 1999 1 July 1998 to 30 June 2000 to 30 June 1999 Revenue Capital Total Revenue Capital Total £'000s £'000s £'000s £'000s £'000s £'000s Gains on investments - 67,121 67,121 - 13,867 13,867 Currency (losses)/gains - (196) (196) - 83 83 Income (see note) 4,644 - 4,644 4,047 - 4,047 Investment management fee (2,179) (266) (2,445) (2,036) - (2,036) Other expenses (967) - (967) (717) - (717) Capital reorganisation costs - (1,734) (1,734) - - - ------- ------- ------- ------- ------- ------- Return on ordinary activities before financing costs and tax 1,498 64,925 66,423 1,294 13,950 15,244 Interest payable (124) - (124) - - - Revaluation of participating loan notes - (4,907) (4,907) - - - ------- ------- ------- ------- ------- ------- Return on ordinary activities before tax 1,374 60,018 61,392 1,294 13,950 15,244 Tax on ordinary activities (416) - (416) (98) - (98) ------- ------- ------- ------- ------- ------- Return on ordinary activities after tax for the financial year 958 60,018 60,976 1,196 13,950 15,146 Dividends in respect of ordinary shares (354) - (354) (679) - (679) ------- ------- ------- ------- ------- ------- Transfer to reserves 604 60,018 60,622 517 13,950 14,467 ======= ======= ======= ======= ======= ======= Return per ordinary share - Basic 3.96p 247.98p 251.94p 3.52p 41.11p 44.63p - Diluted 3.69p 231.32p 235.01p 3.48p 40.55p 44.03p * The revenue column of this statement is the profit and loss account of the Company. ** The accounts have been prepared using accounting standards and policies adopted at the previous year end, with the exception of income and taxation which have been calculated in accordance with Financial Reporting Standard No: 16, Current Taxation. This change in presentation has no effect on the revenue return per ordinary share on ordinary activities after tax. The comparative figures have been restated to reflect this change. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. Note: Income for the year ended 30 June 2000 was made up of dividends and interest received from shares and securities of £4,173,000 (1999: £3,960,000) and other income of £471,000 (1999: £87,000). PANTHEON INTERNATIONAL PARTICIPATIONS PLC Balance Sheet of the Company As at 30 June 2000 1999 £'000s £'000s Fixed assets Investments 150,049 140,696 Investment in subsidiary undertaking 1 - ------- ------- 150,050 140,696 Current assets Debtors 10,458 4,720 Cash at bank 5,687 1,479 ------- ------- 16,145 6,199 ------- ------- Creditors: amounts falling due within one year 4,868 1,106 ------- ------- Net current assets 11,277 5,093 ------- ------- Total assets less current liabilities 161,327 145,789 ======= ======= Creditors: amounts falling due after one year Participating loan notes 36,836 - Capital and reserves Called-up share capital 11,870 16,968 Share premium - 32,525 Capital reserve - realised gains 53,826 75,587 Capital reserve - unrealised gains 56,583 19,101 Revenue reserve 2,212 1,608 ------- ------- Total equity shareholders' funds 124,491 145,789 ------- ------- Amounts attributable to shareholders and participating loan note holders 161,327 145,789 ======= ======= Number of ordinary 67p shares in issue (1999: 50p shares)*** 17,715,805 33,936,363 Number of warrants in issue 5,238,632 5,242,545 Net asset value per share: - basic 702.7p 429.6p - fully diluted 599.9p 405.6p Adjusted redemption value per participating loan note 591.8p - *** In a circular dated 31 March 2000 the Company announced a proposed reorganisation of capital, the issue of 6,224,471 participating loan notes (PLNs) and a return of surplus cash to shareholders. Following shareholder and court approval of these proposals, £50 million in cash was returned to shareholders by the cancellation of 2,946 out of every 10,000 ordinary shares and a bonus issue of £31,929,046 in value of PLNs at an issue price of 512.96p was made to shareholders. As a result, the ordinary share capital was reorganised into 17,715,805 ordinary shares of 67p each. PANTHEON INTERNATIONAL PARTICIPATIONS PLC Cashflow Statement Year ended 30 June 2000 1999 £'000s £'000s Cash flow from operating activities: Investment income received 5,287 2,153 Deposit interest received 461 89 Investment management fees paid (1,862) (1,892) Secretarial fees paid (62) (74) Other cash payments (946) (772) ------- ------- Net cash inflow/(outflow) from operating activities 2,878 (496) ------- ------- Capital expenditure and Financial investment: Purchases of investments (58,377) (15,109) Purchases of government securities (98,261) (87,896) Disposals of investments 51,610 30,276 Disposals of government securities 157,180 72,258 Realised currency gains 250 81 ------- ------- Net cash inflow/(outflow) from capital expenditure and financial investment 52,402 (390) ------- ------- Equity dividends paid (679) - ------- ------- Financing: Return of capital to shareholders (50,000) - Proceeds of Warrant conversion 10 - ------- ------- Net cash outflow from financing (49,990) - ------- ------- Increase/(decrease) in cash 4,611 (886) ======= ======= On 30 July 2000 the Directors recommended a final dividend of 2.0p per share (1999: 2.00p) payable on 30 November 2000 to shareholders on the register at close of business on 27 October 2000. Subject to approval of this dividend by shareholders, an interest payment of 2.0p per PLN will be paid on 30 November 2000 to holders of PLNs on the register at the close of business on the record date. The above financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The comparative financial information for the year ended 30 June 1999 is taken from the full accounts, which have been delivered to the Registrar of Companies and contained an unqualified audit report and did not contain statements under s.237(2) or (3) of the Companies Act 1985. Statutory financial statements for the year ended 30 June 2000 will be delivered to the Registrar. PRIVATE EQUITY PORTFOLIO: Geographical analysis % USA 59.0 UK 21.0 Continental Europe 13.0 Asia 5.6 Latin America 1.0 Eastern Europe 0.4 ----- 100.0 ===== Stage analysis % Development 36.0 Balanced 20.0 Large Buyout 16.0 Mid size Buyout 11.0 Early 9.0 Other 6.0 Direct Quoted Shares 2.0 ----- 100.0 ===== Sector analysis % Communications and Media 17.0 Manufacturing 15.0 Software 13.0 Consumer Related (not E-commerce) 11.0 Other Services 9.0 Biotechnology, Medical and Healthcare 9.0 Computer Hardware and Electronics 7.0 Software and Tools for the Internet 5.0 Other Services 4.0 E-commerce 4.0 Industrial Services 3.0 Energy Related 3.0 ----- 100.0 =====

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