3rd Quarter Results for the three months to 31 October 2017
16 January 2018
ICG ENTERPRISE TRUST PLC
QUARTERLY UPDATE
FOR THE THREE MONTHS TO 31 OCTOBER 2017
Highlights
- Realisation activity key driver of growth in the quarter - NAV per share of 930p
- Highly cash generative portfolio
- YTD distributions exceed total proceeds received in the previous two financial years
- Continued progress against strategic goals
- Selective investment in compelling opportunities and increased exposure to ICG managed assets
- Move to progressive annual dividend policy and quarterly payments
- NAV and share price continue to outperform FTSE All-Share over one, three, five and ten years
Realisation activity key driver of growth in the quarter
- Net asset value per share of 930p
- Total Return[1] of 0.4% for the quarter; 9.1% for the nine months
- Investment portfolio valued at £578.4m, 89.7% of net assets
- 1.2% return for the quarter; 2.5% on a constant currency basis
- 11.1% return for the nine months; 11.3% on a constant currency basis
- Portfolio continues to be highly cash generative
- 19 full realisations in the quarter - £63.0m of proceeds received
- Realisations at an 36% uplift to carrying value; 1.9x multiple of cost
- Standard Brands largest exit generating proceeds of £16.1m
- 47 full realisations in the nine months - £180.1m of proceeds received
- 35% uplift to carrying value; 2.4x multiple of cost
Selective investment in compelling opportunities
- Total new investment of £33.7m in the quarter; £98.5m in the nine months
- Co-investment of £8.1m in Visma, provider of accounting software and business outsourcing services, alongside ICG Europe VI
- Including previous co-investment alongside Cinven, Visma now the third largest portfolio company, valued at £14.7m
Continued progress against strategic goals
- More fully invested - investment portfolio represents 89.7% of net assets
- High conviction investments of ICG directly controlled investments, third-party co-investments and secondary investments represent 43% of investment portfolio
- Four of the largest 10 companies managed by ICG with total weighting to ICG managed investments increasing to 17.0% of the portfolio, up from 10% at January 2017
- Two co-investments alongside ICG Europe Fund VI completed in the nine months totalling £23.4m along with a £10.4m secondary in ICG Recovery 2008B
- Increased exposure to US market - £31.8m committed to US opportunities in the nine months
- 23.0% of the portfolio at October 2017
Progressive annual dividend policy and move to quarterly dividend payments
- The Board anticipates paying a minimum dividend of 20.0p per share each year and, in the absence of unforeseen circumstances, intends to grow the annual dividend progressively
- The Company to move to quarterly dividend payments, with a quarterly dividend of 5p payable on 2 March 2018. The ex-dividend date will be 8 February 2018 and the record date 9 February 2018 - Quarterly dividend, together with interim dividend of 10p paid in November takes dividend payments to 15p
Strong balance sheet and continued buybacks of shares
- High level of realisations increased cash and liquid assets by £8.7m during the quarter to £83.6m
- Uncalled commitments of £319m
- 110,000 shares bought back at an average discount of 16%, adding 0.03% to net asset value per share in the quarter
Continued strong realisation activity and selective investment since October
- £35.4m of proceeds received in the two months to 31 December 2017, taking total proceeds to £215.5m year-to-date
- A record period for realisations - outweighing total proceeds received in the previous two financial years
- £26.0m of new investments in the two months to 31 December 2017, taking total investments year-to-date to £124.5m, in-line with 12 months to January 2017
- Focus on defensive businesses that are relatively uncorrelated to economic cycles and highly cash generative
- £36.9m of new commitments made to two existing managers - PAI VII (£22.0m) and TH Lee (£14.9m)
- £7.5m primary commitment signed to a new manager relationship, Leeds Equity Partners VI, a US based mid- market private equity firm focused on education, training, business services and information services and software industries
- Co-investment of £7.5m signed alongside Leeds Equity Partners, expected to close prior to year-end
Consistent strong performance
The performance of the Company remains strong over the short, medium and long term, with the NAV and share price outperforming the FTSE All-Share Index over one, three, five and ten years.
| Performance to 31 October 2017 | 3 months | 9 months | 1 year | 3 years | 5 years | 10* years |
| Net asset value per share | +0.4% | +9.1% | +16.8% | +46.9% | +73.4% | +112.0% |
| Share price | +12.5% | +21.6% | +30.7% | +57.6% | +123.4% | +123.9% |
| FTSE All-Share Index | +2.8% | +10.1% | +13.4% | +31.0% | +62.5% | +78.4% |
* As the Company changed its year end in 2010, the ten-year figures are for the 121 month period to 31 October 2017. Emma Osborne, Head of Private Equity Fund Investments, ICG, commented:"The portfolio remains highly cash generative with over £215m of realisations year-to-date, a record period for the portfolio, and outweighing total proceeds received in the previous two financial years. "Pricing for new investments is high and there is intense competition for good quality assets. Our flexible investment strategy allows us to be nimble, giving us greater control and visibility on the portfolio and enabling us to increase exposure to companies we believe will outperform through the cycle. In the current market conditions, our focus has been on high quality, defensive direct co-investments and secondary investments in both Europe and the US. As always discipline is key." EnquiriesAnalyst / Investor enquiries: +44 (0) 20 3201 7700Emma Osborne, Head of Private Equity Fund Investments, ICGNikki Edgar, Finance and Investor Relations, ICG Media: Helen Gustard, Head of Corporate Communications, ICG +44 (0) 20 3201 7700 Vikki Kosmalska, Associate Partner, Maitland +44 (0) 20 7379 5151 DisclaimerThis report 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 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 therefrom. 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. This report contains information which, prior to this announcement, was inside information. | ||||||
Supplementary information
The 30 largest underlying investments
The table below presents the 30 companies in which ICG Enterprise had the largest investments by value at 31 October 2017. These investments may be held directly or through funds, or in some cases in both ways. The valuations are gross and are shown as a percentage of the total investment Portfolio.
| Company | Manager | Year of investment | Country | Value as a % of Portfolio | |
| 1 | City & County Healthcare Group | ||||
| Provider of home care services | Graphite Capital | 2013 | UK | 3.4% | |
| 2 | DomusVi+^ | ||||
| Operator of retirement homes | ICG | 2017 | France | 3.0% | |
| 3 | Visma+ | ||||
| Provider of ERP software and BPO services business in the Nordic region | ICG & Cinven | 2014 & 2017 | Europe | 2.5% | |
| 4 | Education Personnel+^ | ||||
| Provider of temporary staff for the education sector | ICG | 2014 | UK | 2.3% | |
| 5 | Froneri+^ | ||||
| Manufacturer and distributor of ice cream products | PAI Partners | 2013 | UK | 2.2% | |
| 6 | CPA Global+ | ||||
| Provider of patent and legal services | Cinven | 2012 | UK | 2.1% | |
| 7 | David Lloyd Leisure+ | ||||
| Operator of premium health clubs | TDR Capital | 2013 | UK | 2.1% | |
| 8 | nGAGE | ||||
| Provider of recruitment services | Graphite Capital | 2014 | UK | 2.1% | |
| 9 | Gerflor^ | ||||
| Manufacturer of vinyl flooring | ICG | 2011 | France | 2.1% | |
| 10 | PetSmart+ | ||||
| Retailer of pet products and services | BC Partners | 2015 | USA | 2.0% | |
| 11 | Skillsoft+ | ||||
| Provider of off the shelf e-learning content | Charterhouse | 2014 | USA | 1.7% | |
| 12 | The Laine Pub Company+ | ||||
| Operator of pubs and bars | Graphite Capital | 2014 | UK | 1.6% | |
| 13 | Frontier Medical+ | ||||
| Manufacturer of medical devices | Kester Capital | 2013 | UK | 1.6% | |
| 14 | TMF^ | ||||
| Provider of management and accounting outsourcing services | Doughty Hanson | 2008 | Netherlands | 1.5% | |
| 15 | System One+ | ||||
| Provider of specialty workforce solutions | Thomas H Lee Partners | 2016 | USA | 1.5% |
| 16 | Roompot+ | ||||
| Operator and developer of holiday parks | PAI Partners | 2016 | Netherlands | 1.4% | |
| 17 | ICR Group | ||||
| Provider of repair and maintenance services to the energy industry | Graphite Capital | 2014 | UK | 1.4% | |
| 18 | Swiss Education+ | ||||
| Provider of hospitality training | Invision Capital | 2015 | Switzerland | 1.2% | |
| 19 | Beck & Pollitzer | ||||
| Provider of industrial machinery installation and relocation | Graphite Capital | 2016 | UK | 1.2% | |
| 20 | New World Trading Company | ||||
| Operator of distinctive pub restaurants | Graphite Capital | 2016 | UK | 1.1% | |
| 21 | Cambium^ | ||||
| Provider of educational solutions and services | ICG | 2016 | USA | 1.1% | |
| 22 | U-POL^ | ||||
| Manufacturer and distributor of automotive refinishing products | Graphite Capital | 2010 | UK | 1.1% | |
| 23 | Cognito+ | ||||
| Supplier of communications equipment, software & services | Graphite Capital | 2002 | UK | 1.0% | |
| 24 | Ceridian+ | ||||
| Provider of payment processing services | Thomas H Lee Partners | 2007 | USA | 0.9% | |
| 25 | Random42 | ||||
| Provider of high-quality medical animation and digital media services to the healthcare and pharmaceutical industry | Graphite Capital | 2017 | UK | 0.9% | |
| 26 | inVentiv Health | ||||
| Provider of commercial solutions for healthcare companies | Advent & Thomas H Lee Partners | 2010 & 2016 | USA | 0.7% | |
| 27 | AVS Group | ||||
| Manufacturer of traffic safety products | Fynamore Advisers | 2013 | Germany | 0.7% | |
| 28 | CeramTec | ||||
| Manufacturer of high performance ceramics | Cinven | 2013 | Germany | 0.6% | |
| 29 | Explore Learning | ||||
| Provider of after-school tuition | Graphite Capital | 2012 | UK | 0.6% | |
| 30 | Intervias | ||||
| Operator of petrol station forecourts | TDR Capital | 2014 | UK | 0.6% | |
| Total of the 30 largest underlying investments | 46.2% | ||||
| + All or part of this investment is held directly as a co-investment or other direct investment. | |||||
| ^ All or part of this investment was acquired as part of a secondary purchase. | |||||
The 30 largest fund investments
The 30 largest funds by value at 31 October 2017 are:
| Fund | Year of commitment | Country/ region | Value £m | Outstanding commitment £m | |
| 1 | Graphite Capital Partners VIII * | ||||
| Mid-market buyouts | 2013 | UK | 61.8 | 33.7 | |
| 2 | ICG Europe VI ** | ||||
| Mezzanine and equity in mid-market buyouts | 2015 | Europe | 21.6 | 3.6 | |
| 3 | BC European Capital IX ** | ||||
| Large buyouts | 2011 | Europe | 20.3 | 1.1 | |
| 4 | Fifth Cinven Fund | ||||
| Large buyouts | 2012 | Europe | 14.8 | 1.6 | |
| 5 | Graphite Capital Partners VII * / ** | ||||
| Mid-market buyouts | 2007 | UK | 14.4 | 4.7 | |
| 6 | Thomas H Lee Parallel Fund VI | ||||
| Large buyouts | 2007 | USA | 12.2 | 1.0 | |
| 7 | CVC European Equity Partners V ** | ||||
| Large buyouts | 2008 | Europe/USA | 11.2 | 0.5 | |
| 8 | ICG Strategic Secondaries Fund II | ||||
| Secondary fund restructurings | 2016 | North America | 11.1 | 17.3 | |
| 9 | Thomas H Lee Equity Fund VII | ||||
| Mid-market and large buyouts | 2015 | USA | 10.7 | 5.9 | |
| 10 | ICG Velocity Partners Co-Investor ** | ||||
| Mid-market buyouts | 2016 | USA | 10.6 | 2.1 | |
| 11 | Permira V | ||||
| Large buyouts | 2013 | Europe | 10.4 | 0.6 | |
| 12 | TDR Capital III | ||||
| Mid-market and large buyouts | 2013 | Europe | 10.3 | 3.1 | |
| 13 | CVC European Equity Partners VI | ||||
| Large buyouts | 2013 | Global | 9.8 | 7.8 | |
| 14 | Bowmark Capital Partners IV | ||||
| Mid-market buyouts | 2007 | UK | 9.6 | - | |
| 15 | IK VII | ||||
| Mid-market buyouts | 2013 | Europe | 9.4 | 0.4 | |
| 16 | PAI Europe VI | ||||
| Mid-market and large buyouts | 2013 | Europe | 9.1 | 7.1 | |
| 17 | Nordic Capital Partners VIII | ||||
| Mid-market and large buyouts | 2013 | Nordic | 9.1 | 2.6 | |
| 18 | One Equity Partners VI | ||||
| Mid-market buyouts | 2016 | USA/Western Europe | 9.0 | 3.1 | |
| 19 | Hollyport Secondary Opportunities V | ||||
| Tail-end secondary portfolios | 2015 | Global | 8.7 | 2.3 | |
| 20 | Doughty Hanson & Co V ** | ||||
| Mid-market and large buyouts | 2006 | Europe | 8.6 | 6.7 | |
| 21 | ICG Europe V ** | ||||
| Mezzanine and equity in mid-market buyouts | 2012 | Europe | 8.5 | 0.8 | |
| 22 | Graphite Capital Partners VI ** | ||||
| Mid-market buyouts | 2003 | UK | 8.2 | 2.1 | |
| 23 | Egeria Private Equity Fund IV | ||||
| Mid-market buyouts | 2012 | Europe | 8.2 | 2.6 | |
| 24 | ICG European Fund 2006 B | ||||
| Mezzanine and equity in mid-market buyouts | 2014 | Europe | 7.5 | 2.1 | |
| 25 | Deutsche Beteiligungs Fund VI | ||||
| Mid-market buyouts | 2012 | Germany | 7.4 | 1.3 | |
| 26 | Steadfast Capital III | ||||
| Mid-market buyouts | 2011 | Europe | 6.9 | 0.2 | |
| 27 | Gridiron Capital Fund III | ||||
| Mid-market buyouts | 2016 | North America | 6.5 | 5.9 | |
| 28 | Activa Capital Fund III | ||||
| Mid-market buyouts | 2013 | France | 6.4 | 6.8 | |
| 29 | Advent Global Private Equity VIII | ||||
| Large buyouts | 2016 | Europe/North America | 5.8 | 7.2 | |
| 30 | Activa Capital Fund II | ||||
| Mid-market buyouts | 2007 | France | 5.7 | 1.9 | |
| Total of the largest 30 fund investments | 353.8 | 136.1 | |||
| Percentage of total investment Portfolio | 61.2% | ||||
| * Includes the associated Top Up funds. | |||||
| ** All or part of an interest acquired through a secondary fund purchase. | |||||
Portfolio analysis
| Investment category | % of portfolio |
| High conviction portfolio ICG | 17.0% |
| Third party co-investments | 18.8% |
| Third party secondary investments | 7.5% |
| Total High Conviction investments | 43.3% |
| Third party funds' portfolio Graphite Capital primary funds | 13.8% |
| Third party primary funds Total diversified fund investments | 42.9% 56.7% |
| Total | 100.0% |
| Portfolio by investment type | % of value of underlying investments | ||||
| Large buyouts | 41.1% | ||||
| Mid-market buyouts | 47.3% | ||||
| Small buyouts | 6.3% | ||||
| Other | 5.3% | ||||
| Total | 100.0% | ||||
| Portfolio by calendar year of investment | % of value of underlying investments | ||||
| 2017 | 15.2% | ||||
| 2016 | 20.5% | ||||
| 2015 | 13.3% | ||||
| 2014 | 18.8% | ||||
| 2013 | 14.0% | ||||
| 2012 | 5.8% | ||||
| 2011 | 2.5% | ||||
| 2010 | 2.5% | ||||
| 2009 | 1.2% | ||||
| 2008 | 2.1% | ||||
| 2007 | 1.8% | ||||
| 2006 and before | 2.3% | ||||
| Total | 100.0% | ||||
| Portfolio by sector | % of value of underlying investments | |
| Healthcare and education | 22.5% | |
| Business services | 17.2% | |
| Industrials | 15.5% | |
| Consumer goods and services | 14.8% | |
| Leisure | 11.8% | |
| TMT | 10.2% | |
| Financials | 5.2% | |
| Other | 2.8% | |
| Total | 100.0% |
| Portfolio by geographic distribution based on location of Company headquarters | % of value of underlying investments | |
| UK | 36.2% | |
| North America | 23.0% | |
| Europe | 39.4% | |
| Rest of world | 1.4% | |
| Total | 100.0% |
Balance sheet information Movement in liquid assets | |||
| £m | 3 months 31 October 2017 | 9 months 31 October 2017 | |
| Additions2 | (36.4) | (98.5) | |
| Cash proceeds generated by the portfolio (including income)3 | 55.5 | 172.6 | |
| Net cash generated by the investment portfolio | 19.1 | 74.1 | |
| Non-investment cash flows | (0.4) | (8.6) | |
| Effect of changes in foreign exchange rates | (1.1) | 0.5 | |
| Cash inflow before shareholder distributions | 17.6 | 66.0 | |
| Dividends paid to shareholders | (6.9) | (13.9) | |
| Share buy-backs settled in the period | (1.9) | (7.1) | |
| Net cash movement | 8.8 | 45.0 | |
| Opening cash and liquid assets | 74.8 | 38.6 | |
| Closing cash and liquid assets | 83.6 | 83.6 | |
Footnote
- All balance sheet data is presented on a look-through basis to the investment portfolio held by the Company, which is consistent with the commentary in previous annual and interim reports.
- Additions cash figure for quarter to 31 October includes £2.6m of drawdowns paid which were accrued at the prior quarter end.
- During the quarter ended 31 October a secondary disposal was completed which included £7.5m of deferred consideration. As a result cash proceeds do not equal total realisations in the period.
The summary balance sheet and commitment position at 31 October 2017 is set out below.
| 31 October 2017 | % of net assets | 31 January 2017 | % of net assets | |
| £m | £m | |||
| Total portfolio | 578.4 | 89.7% | 594.4 | 97.0% |
| Cash and liquid assets | 83.6 | 13.0% | 38.6 | 6.3% |
| Other net current liabilities | (16.9) | (2.7%) | (20.3) | (3.3)% |
| Net assets | 645.1 | 100.0% | 612.7 | 100.0% |
Uncalled commitment coverage
| 31 October 2017 | 31 January 2017 | |
| £m | £m | |
| Cash and liquid assets | 83.6 | 38.6 |
| Undrawn bank facility | 104.1 | 103.0 |
| Total liquidity | 187.7 | 141.6 |
| Outstanding commitments | 319.0 | 300.3 |
| Less: Total liquidity | (187.7) | (141.6) |
| Over-commitment | 131.3 | 158.7 |
| Over-commitment as % of net assets | 20.4% | 25.9% |
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: ICG Enterprise Trust Plc via Globenewswire
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: ICG Enterprise Trust Plc via Globenewswire
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