Final Results

26th February 2015 Candover* Investments plc Preliminary unaudited results for the year ended 31st December 2014 * NAV per share of 545p at 31st December 2014, a 24% decrease (170p) compared to the prior year (31st December 2013: 715p). * Value of Expro International reduced by £35.2 million (161p) following falls in valuation multiples across the oil sector, partially offset by £4.4 million foreign currency gain (20p). * Aggregate portfolio valuations down 19% over the year (144p) primarily driven by the fall in valuations (137p) as well as unfavourable foreign currency movements (7p). * Portfolio performance has improved with aggregate portfolio revenues rising 3.1% and EBITDA up 5.9% year on year. * Investment inflows of £33.1 million following a number of realisations by Arle including Innovia, DX and minority positions in Ono and Get. Aggregate uplift above 31st December 2013 valuation was 29%. * Net debt decreased to £27.3 million at 31st December 2014 (31st December 2013: £47.7 million). Decrease reflects investment inflows offset by the impact of operating and financing costs together with an adverse foreign currency movement of £3.5 million. Loan-to-value ratio improved to 20.1% (31st December 2013: 24.9%). Malcolm Fallen, Chief Executive Officer, said: "The progress made by Arle in realising a number of small investments during2014, together with a broadly based improvement in the portfolio's trading,offer some encouragement as we enter the current year. However, this istempered by the potential impact on Expro of the sharp reversal in the oilsector's outlook." Ends. *Candover means Candover Investments plc and/or one or more of its subsidiaries. For further information, please contact: Candover Investments plcMalcolm Fallen, CEO +44 20 7489 9848 Chairman's statement Our results for 2014 reflect the marked impact caused by the recent decline inthe oil price on our largest investment, Expro International ("Expro"), the oilservices company which represented 44% of Candover's portfolio at the start ofthe year. Our NAV has declined by 170p per share to 545p per share, with thewrite-down of Expro accounting for 141p of the overall decline. Whilst theportfolio managed by Arle Capital Partners Limited ("Arle") has, in aggregate,seen an improvement in profitability compared to the prior year, the decline incomparable valuation multiples across the oil sector has led to the drop in thevaluation of Expro. At the end of 2013, we refinanced our debt obligations, including extending thematurity to 31st December 2015, based on an expected profile of realisations byArle. Over the course of the year, realisations from the portfolio have been inline with expectations, helping to reduce our net debt by over £20 million. Therepayment of our debt is wholly linked to the continued successful realisationof the portfolio by Arle. The Board continues to track progress closely, whilstconsidering alternative sources of funding in the event that the level of cashinflows from realisations falls short of expectations or realisations aredelayed. The Board is not recommending a dividend payment but the payment of dividendsin the future will be reviewed, in the context of our focus on delivering aprogressive return of cash to shareholders over time, as realisations areachieved by the investment manager. At the end of the year, Lord Jay of Ewelme GCMG retired from the Board. Onbehalf of the Board, I would like to thank him for the significant contributionwhich he made since his appointment in 2008 and recognise his support andguidance through some of the most challenging times faced by the Company. Giventhe strategy for the Company, we have concluded that it is not appropriate toreplace Lord Jay. As a result, Jan Oosterveld has assumed the roles of SeniorIndependent Director and Chairman of the Nominations Committee, in addition tohis role as Chairman of the Remuneration Committee. In September 2014, the revised UK Code of Corporate Governance was published.The revised Code applies to accounting years commencing on or after 1st October2014 and does not, therefore, require the Company to make any changes withinthis report or adopt any new policies. The Board continues to be committed tothe highest standards of corporate governance and keeps the requirements underreview, applying the aspects of the Code which are relevant to the business inthe context of our strategy to return cash to shareholders. Whilst 2014 has seen an improvement in the trading performance of the portfolioand a series of smaller realisations by Arle, the impact of the recent fall inoil prices has adversely impacted on the valuation of Expro, our largestinvestment, and potentially delayed its realisation in the near term. As theportfolio becomes ever more concentrated, it is this type of external systemicshock which can adversely impact on our sole objective to optimise the longterm value of our investments by returning cash to shareholders as soon as ispractical. We will continue to track Arle's progress over the year ahead as itmanages and prepares to realise the remainder of the portfolio. Richard StoneChairman26th February 2015 CEO's report Our strategy is to achieve a progressive return of cash to shareholders overtime. To support the delivery of this strategy, our focus remains twofold.First, we continue to ensure that the Company remains financially stable; andsecond, we actively review and monitor the performance of Arle, our investmentmanager, as it seeks to maximise and realise the value of the portfolio. Net asset value The Company's net assets per share of 545p at 31st December 2014 represented a24% decrease over the year from 31st December 2013 (715p) with the declineoccurring in the second half of 2014 following the stability seen over thefirst six months. The full year decrease compares to an increase in the FTSEAll-Share Index of 1.2% over the same period. Our operating model means that there are two clear components to NAVprogression. These are the value of the portfolio assets and any changestherein; and the costs incurred in running the business, which are principallythe fees we pay to Arle, and the interest costs associated with the US privateplacement loan notes. The impact of these costs on NAV will either be offset byincreases in the valuation of the portfolio during any financial period or willexacerbate the impact of any reductions in portfolio value. NAV growth,therefore, is solely dependent on improvements in the valuation of theportfolio managed by Arle exceeding our costs. The overall value of the portfolio decreased by £31.4 million (144p per share)over the year, comprising reductions in valuations of 137p per share togetherwith adverse foreign currency movements of 7p per share. The principal movementwithin the portfolio was a £35.2 million decrease in the valuation of Expro,offset in part by a £4.4 million favourable foreign currency gain. Thereduction reflected the rapid decline in the oil price feeding through to adrop in the comparable valuation multiples for companies in the oil servicessector. The value of Parques increased by £4.9 million, before an adverseforeign currency movement of £2.4 million, reflecting improved underlyingperformance in the business. During 2014, Candover's recurring administrative expenses reduced by a further16%, helping to minimise the adverse impact of costs on NAV performance.Finance costs were also £6 million lower following the refinancing completed atthe end of 2013. The movements are set out in Table 1 of the Financial review. Net debt Net debt during the year decreased by £20.4 million to £27.3 million at 31stDecember 2014 (31st December 2013: £47.7 million). Inflows from realisations of£33.1 million were offset by operating and financing costs, together with theadverse impact of foreign currency where the strength of the US Dollar relativeto Sterling resulted in the Sterling value of the US Dollar denominated privateplacement loan notes increasing by £3.2 million. Our loan-to-value ratio saw a corresponding improvement to 20.1% at 31stDecember 2014 down from 24.9% at 31st December 2013. Loan note obligations The Company successfully refinanced its 2007 US private placement loan notes inDecember 2013 with a new issue of US private placement loan notes maturing inDecember 2015. Based on Arle's current projections, the level of realisationsin 2015 should provide the Company with access to sufficient resources to meetthe repayment obligations under the terms of the new note purchase agreement. However, the Company does not (and cannot) control the realisation process.Furthermore, given the uncertainties in any M&A or flotation process, thereremains a risk that, if sufficient realisations are not achieved by ourinvestment manager over the remainder of the year, new sources of finance mightbe required to provide additional liquidity to repay the US noteholders. TheCompany is actively exploring a range of options in the event that furtherfunding were to be required. Foreign currency Candover's foreign currency exposure was simplified at the time of itsrefinancing in late 2013. At that time, all of the Company's debt was US Dollardenominated, offsetting the currency exposure of the investment in Expro, a USDollar investment. Over the course of 2014, the relative strength of the USDollar against Sterling has resulted in a net £1.2 million positive impact onNAV. The remaining investments are Euro denominated. As a consequence, this unhedgedposition may continue to create volatility in Candover's NAV, as experiencedover the course of 2014 when the weakness of the Euro relative to Sterlingresulted in a £6.0 million adverse impact on the valuation of the portfolio. Realisation activity Arle has been successful in progressing realisations during 2014 with Candoverreceiving a total of £33.1 million from investment inflows. The disposals of Innovia and DX raised £20.2 million, including the carriedinterest crystallised by the Innovia transaction, during the first half of theyear. Over the course of the last six months, aggregate realisation proceeds of£12.9 million have been received from the disposal of minority interests in Onoand Get, including carried interest arising on the Ono transaction, along witha number of smaller receipts from past escrow and deferred considerationagreements. Management of the Candover Funds Following two extension periods to its original eight year life, the Candover2001 Fund terminated on 12th June 2013 and, following the realisation of allits remaining investments during 2014, is now being liquidated by Arle. TheLimited Partners of the Candover 2005 Fund have agreed to extend the originalten year term of this Fund by a further two years until March 2017. Outlook The progress made by Arle in realising a number of small investments during2014, together with a broadly based improvement in the portfolio's trading,offer some encouragement as we enter the current year. However, this istempered by the potential impact on Expro of the sharp reversal in the oilsector's outlook. We will continue to keep a tight control on the costs of the business tominimise erosion of NAV, and Arle will continue with its stewardship of theportfolio to enhance the values of the portfolio companies prior to theirrealisation. Malcolm FallenChief Executive Officer26th February 2015 Financial review Net asset value per share Net asset value per share after exceptional non-recurring costs was 545p,representing a full year decrease of 24% since 31st December 2013 (715p) and adecrease of 25% since 30th June 2014 (722p). The decrease of 170p per share was split between the gain on disposal ofinvestments (+37p), a decrease in constant currency investment values (-137p),overall adverse currency movements (-23p), and the impact of ongoing andnon-recurring business costs (-47p). These costs comprised loan note interest,the investment manager's fee and general administration costs. Table 1 £m p/share Net asset value at 31stDecember 2013 156.3 715 Loss on financial instruments and other income1 (21.8) (100) Recurring administrative expenses (4.1) (19) Finance costs recurring (4.8) (22) Others (including tax) (1.0) (5) Currency impact: - Unrealised investments (1.6) (7) - Restatement of cash and cash equivalents (0.3) (1) - Translation of loan (3.2) (15) Exceptional non-recurring losses: property provision (0.3) (1)unwind, partial release of property provision andprovision against non-recoverable co-investment loans Net asset value at 31stDecember 2014as reported 119.2 545 1Stated before unfavourable currency impact of £1.6 million Investments The valuation of investments, including carried interest and accrued loan noteinterest, was £135.6 million at 31st December 2014 (31st December 2013: £191.2million). Valuations decreased for the year by £29.8 million, before currencyeffects and after adjusting for disposals, representing a decrease of 18% onthe value of these investments over their 31st December 2013 value. The overalldecrease of 19% in the value of the portfolio was £31.4 million, which included£1.6 million of unfavourable foreign currency movements reflecting the relativestrength of Sterling relative to the Euro offset in part by Sterling's weaknessrelative to the US Dollar. Table 2 £m Investments at 31st December 2013 191.2 Disposals at valuation (24.2) Additions at cost - Investments adjusted for additions and disposals 167.0 Revaluation of investments: - Valuation movements before currency impact (29.8) - Currency impact on unrealised investments (1.6) Investments at 31st December 2014 135.6 Net debt and loan-to-value covenant Candover's net debt decreased from £47.7 million at 31st December 2013 to £27.3million at 31st December 2014. This reflects net investment inflows of £33.1million including carried interest received, offset by interest paid of £3.9million, and operating expenses. The loan-to-value ratio of the Company's netdebt improved to 20.1% compared to 24.9% at 31st December 2013. Table 3 Net debt 31st December 31st December 2014 2013 £m £m Loans and borrowings 52.8 48.6 Deferred costs 1.1 2.1 Value of bonds 53.9 50.7 Cash (26.6) (3.0) Net debt 27.3 47.7 Profit before and after tax Net revenue profit before tax and exceptional non-recurring losses fromoperations for the year was a profit of £6.1 million compared to a profit of £1.1 million in the prior year. Exceptional non-recurring loss of £0.3 million (2013: £0.6 million) comprisesthe effect of the unwinding of the discount applied to the property provisionand provision made against non-recoverable co-investment loans, offset in partby the partial release of the property provision. Reported net revenue profit after taxation was £4.9 million compared to £2.5million in the prior year. Manager's portfolio review ARLE CAPITAL PARTNERS LIMITED Introduction Arle is a diversified private equity asset manager currently managing theCandover 2005 Fund and Candover 2008 Fund (together "the Candover Funds" or"Funds"), as well as special purpose vehicles. Portfolio overview The Candover Funds portfolio continued to perform well in 2014, andcollectively the portfolio of investments reported a 3.1% increase in revenuesand a 5.9% increase in EBITDA in the 12 months ended 31st December 2014. Thiswas driven by strong earnings growth at Technogym and Stork. Despiteimprovement in earnings, geo-political volatility towards the end of the yearand a dramatic fall in the oil price meant that the strong trading performancewas not reflected in the combined valuation of the Funds. Whilst theperformance of the Candover Funds managed by Arle was flat over the year, thevaluation of the unrealised investments decreased by 5% compared to thevaluation at 31st December 2013, whereas the valuation of Candover's unrealisedportfolio fell by 19%. The main difference between Candover's performance andthe performance of the Funds' unrealised investments reflects the combinedeffect of: (i) Expro representing a larger proportion of Candover's portfoliocompared to the proportion held by the Funds; and (ii) the cumulative dilutiveimpact on Candover's holding in Expro as a result of Candover not providingfollow-on investment in Expro alongside the Candover 2008 Fund since January2010. Arle made good progress in optimising the operational and financial performanceof its portfolio companies in readiness for exit and sold four companies duringthe course of the year. DX Group was successfully floated on AIM at a marketcapitalisation of £200 million, with the Candover Funds selling their fullshare at listing. Innovia Group was acquired by an investor syndicate, managedby Arle, for €498 million. The Funds also saw exits of minority positions inOno which was sold to Vodafone for an enterprise value of €7.2 billion and Getwhich was sold to TDC for NOK 13.8 billion. The portfolio is increasinglyconcentrated and at 31st December 2014, the four largest investments, Expro,Stork, Parques and Technogym together represented 96% of the overall value. Expro International Expro, the international oilfield services company, performed consistently inthe first half of its financial year beginning 1 April 2014. In September,Expro issued a US$1.3 billion Term Loan, the proceeds of which were used torepay the outstanding senior secured notes as well as part of its mezzaninefinance. Whilst Expro continues to win a number of valuable new contracts andmaintains a strong position in a high growth niche market, the sharp fall inthe price of Brent crude oil since June 2014 has impacted activity across thesector. Parques Reunidos Parques, a global operator of attraction and water parks, enjoyed strongtrading during the year due to renewed consumer confidence in Spain and Italyas well as a good performance in the US. During the year, the shareholdersinvested €33 million in the group to drive organic growth within the existingportfolio, and upgrade some parks which have been earmarked for expansion. Thiscontinues to yield results, with the number of visitors increasing in Europeduring the summer. Parques also won significant new management contracts,including an agreement with Dubai Parks and Resorts LLC to operate bothMotiongate and Bollywood Parks in Dubai. In July, Parques acquired MiamiSeaquarium and in September sold 14 US Family Entertainment Centres and onewater park. Stork BV Stork BV comprises two discrete and separately financed entities: Stork(formerly STS) which provides knowledge-based asset integrity services toenergy companies, and Fokker Technologies ("Fokker") which manufacturescomponents and systems for the global aerospace industry. In January 2013,independent governance structures and boards were put in place, therebycompleting the separation of the two businesses that began in 2012 and which isintended to lay the foundation for future exit scenarios. Stork Following a difficult year in 2013, the improvement plans put in place haveresulted in a significantly improved trading performance in 2014, with salesand EBITDA well ahead of prior year. Trading has been positively impacted byboth higher activity as well as the cost cutting initiatives that wereimplemented throughout the second half of 2013 and throughout 2014. Fokker Trading at Fokker in 2014 was strong with EBITDA ahead of prior year andbudget. The EBITDA outperformance to prior year was driven by operationalimprovements on the Design & Build programmes and improved margins in theServices business. Technogym Technogym enjoyed significant growth in 2014, due to increased sales volumes ofits latest product ranges and optimisation of internal processes. Theunderlying growth fundamentals for fitness and wellness remain strong andemerging economies such as Latin America and China present significantopportunities for Technogym. The company continues to expand its presence andoperations in these regions. Hilding Anders Hilding Anders, the leading manufacturer of beds and mattresses in Europe,Russia and Asia, witnessed good trading across its regions during the year,with Russia outperforming. However, the significant depreciation of the Roublehas adversely impacted the company's earnings. Realisations Arle exited from four businesses during the year. In February, DX Group floatedon AIM generating proceeds of £34.4 million (Candover's share £3.4 million).Innovia Group was acquired on behalf of an investor syndicate generatingproceeds of £140.9 million (Candover's share £16.8 million including carriedinterest of £6.2 million). Ono was sold to Vodafone generating proceeds of £41.7 million (Candover's share £5.2 million including carried interest of £1.9million), and Get was sold to TDC generating proceeds of £69.6 million(Candover's share £5.9 million). The principal realisations during 2014 are set out in Table 1. Table 1 Candover Total Type £m Proceeds £m Portfolio DX Group 3.4 34.4 IPO Innovia Group 10.6 115.8 Private equity sale Ono 3.3 34.3 Trade sale Get 5.9 69.6 Trade sale Other Candover 2001 Fund 8.1 32.5 Crystallisation of carriedcarried interest interest Total realisations - 2014 31.3 286.6 Portfolio composition The portfolio is largely based in Western Europe. Whilst the UK represented 31%of the £135 million investments by value, the portfolio companies themselvesare well diversified in the regions and sectors in which they trade. Portfolio valuation review Whilst the portfolio generated a 5.9% EBITDA improvement over the 12 months to31st December 2014, the energy sector downgrade has impacted the tradingcomparables for Expro which has resulted in the valuation of the unrealisedassets declining by 5%. The decrease in the value of Candover's co-investmentsin the portfolio of £31.4 million (144p per share) represented a 19% reductionon its value at the start of the year, after adjusting for additions anddisposals. The main difference between Candover's performance and theperformance of the Funds reflects the combined effect of Expro representing alarger proportion of Candover's portfolio compared to the proportion held bythe Funds, together with the cumulative dilutive impact on Candover's holdingin Expro as a result of Candover not providing follow-on investment in Exproalongside the Candover 2008 Fund since January 2010. Expro was written down reflecting the current turbulent market environment,which has seen the spot price of Brent crude oil fall from US$111 a barrel at30th June 2014 to US$55 at 31st December 2014. However, the downward movementwas partially offset by Parques which was written up to reflect its strongertrading performance. Table 2 shows the valuation movement by reference to each portfolio company. Table 2 Residual Valuation Additions Valuation Valuation Valuation at Valuation cost1 at 31st and movement movement 31stDecember movement December disposals excluding attributable 2014Portfolio £m 2013 FX2 to FX2 £m pence percompany £m £m £m £m share2 Expro 92.1 72.6 - (35.2) 4.4 41.8 (141)International Parques 30.0 37.4 - 4.9 (2.4) 39.9 11Reunidos Stork BV 42.5 34.5 - (1.4) (2.2) 30.9 (16) Technogym 29.2 16.2 - 1.9 (1.0) 17.1 4 Hilding 24.3 5.7 - - (0.4) 5.3 (2)Anders All 218.1 166.4 - (29.8) (1.6) 135.0 (144)investments3 Candover 2001 - 5.6 (5.6) - - - -Fund carriedinterest Other 67.7 19.2 (18.6) - - 0.6 -investments4 Total 285.8 191.2 (24.2) (29.8) (1.6) 135.6 (144) 1 Residual cost is original cost less realisations to date2 Compared to the valuation at 31st December 20133 Excluding Candover 2001 Fund carried interest4 Represents assets sold in 2014 and other co-investments The portfolio 1 Expro International Industry sector: Energy Geography: UK Date of investment: July 2008 Residual cost of investment £m: 92.1 Directors' valuation £m: 41.8 Change over prior valuation £m: (30.8) Effective equity interest (fully 4.7%diluted): % of Candover's net assets: 35.1% Basis of valuation: Multiple of earnings Dividends received £m: - Year end: March 2014 Sales: US$1,385m Earnings1: US$385m Expro is a leading oilfield service provider specialising in well flowmanagement. The company provides services and products that measure, improve,control and process flow from high-value oil and gas wells, from explorationand appraisal through to mature field production optimisation and enhancement. Expro's vision is to be the market leader in well flow management, using theindustry's best people to deliver the highest standards of safety, quality andpersonalised customer service. Expro's 40 years of experience and innovationempowers the company to offer tailor-made solutions for customers across theenergy sector, including multinational oil majors, as well as state-ownednational oil companies. With 5,000 employees across 50 countries, Expro offersa global service solution. The company delivered a strong financial performance in FY 2014, with earnings33% ahead of prior year. H1 2015 was operationally solid for Expro and thecompany has secured a number of new contracts. In September 2014, Expro issued a US$1.3 billion Term Loan, the proceeds ofwhich were used to repay the outstanding senior secured loan notes as well aspart of its mezzanine finance. However, since the end of June 2014, the spot price of Brent crude oil hasfallen from US$111 a barrel to US$55 at 31st December 2014 which has impactedactivity across the sector. As a result of the sector downgrade, the valuation has been written down by £30.8million, a decrease of 141p per share after favourable currency movementsof £4.4 million. Company website www.exprogroup.com 2 Parques Reunidos Industry sector: Services Geography: Spain Date of investment: March 2007 Residual cost of investment £m: 30.0 Directors' valuation £m: 39.9 Change over prior valuation £m: 2.5 Effective equity interest (fully 3.9%diluted): % of Candover's net assets: 33.5% Basis of valuation: Multiple of earnings Dividends received £m: - Year end: September 2014 Sales: €549.4m Earnings1: €172.1m Parques is one of the world's leading operators of attraction parks. Thecompany enjoys strong positions in all its key markets and the majority of itsparks are the leading family attractions in their respective surrounding areas.Parques operates 56 sites across 12 countries, attracting around 22 millionvisitors each year. These include theme or amusement parks, nature and animalparks, water parks, family entertainment centres and cable cars. Parques traded well in the year to September 2014, reporting year-on-yearEBITDA growth for the first time since the global financial crisis. Trading waspositively impacted by the improved economic environment in Southern Europe,which resulted in renewed consumer confidence which drove a strong tradingperformance in Spain and Italy, both of which reported an increase in thenumber of visitors. In addition, trading in the US was significantly betterthan in the prior financial year. The company continued to make good progressin driving organic growth through the successful roll-out of marketing andyield management initiatives. In addition to the organic growth initiatives, the company acquired MiamiSeaquarium and sold a number of its Family Entertainment Centers in the US.Going forwards, Parques will continue to make selective acquisitions. In 2015, Parques will continue to focus on developing and implementing theorganic growth initiatives, integrating Miami Seaquarium into the group andidentifying new management contracts. The investment was written up by £2.5 million (11p per share) after an adverseforeign exchange movement of £2.4 million. Company website www.parquesreunidos.com 3 Stork BV Industry sector: Industrials Geography: The Netherlands Date of investment: January 2008 Residual cost of investment £m: 42.5 Directors' valuation £m: 30.9 Change over prior valuation £m: (3.6) Effective equity interest (fully 4.6%diluted): % of Candover's net assets: 25.9% Basis of valuation: Multiple of earnings Dividends received £m: - Year end: December 2013 Sales: €2,208m Earnings1: €134m Stork BV, the Dutch engineering conglomerate, separated its two subsidiaries,Fokker and Stork (formerly STS), during 2012. Stork BV, in aggregate, wasvalued at £30.9 million at the end of 2014, a reduction of £3.6 million (16pper share) after an adverse foreign exchange movement of £2.2 million. Stork Stork is a global provider of knowledge-based asset integrity services for theoil and gas, power and chemical sectors and employs 16,500 people across the UK& Africa, Continental Europe, the Middle East, Asia Pacific and the Americas.Stork helps customers reduce risk, assure safety and improve asset performance.Customers' profits are enhanced through innovative services and solutionsduring the lifecycle of the asset. Core activities include maintenance,modification and overhaul (MMO), asset integrity (optimize performance andefficiencies), inspection and testing. Stork traded well during 2014 due to the initiatives put in place by the newmanagement team in 2013. This progress, combined with volume improvements andgood cost control, resulted in Stork reporting sales and EBITDA significantlyahead of prior year and budget. The order book remains strong and ahead ofprior year. In 2015, given its exposure to the more fixed operating expenditure of the oiland gas market, Stork will focus on controlled revenue and margin growththrough increasing value added services and continued risk management and costcontrol. Fokker Technologies Fokker is active in the civil, defence and service sectors of Aerospace spreadover 75 different aircraft types. Fokker designs and builds business units(aerostructures, wiring, landing gear) and produces over 7,000 advancedcomponents for the global aerospace industry. The company also suppliesintegrated parts availability services and MRO (maintenance, repair andoverhaul) services to aircraft owners and operators worldwide. R&D andproduction and service facilities are located in Europe as well as the Americasand Asia. 2014 EBITDA was ahead of prior year. The Design and Build businesses tradedahead of prior year driven by strong performances by the majority of itsprogrammes. The Services business stepped up significantly from a disappointing2013 result due to improved margins and restructuring measures. Fokker's orderbook remains strong as customers continue to seek innovative solutions applyingadvanced technologies and programmes which Fokker is presently moving fromdevelopment into the commercial/volume phase. In 2015, Fokker will continue to drive through the operational improvementsidentified during the strategic review in early 2014. Company website www.stork.com www.fokker.com 4 Technogym Industry sector: Industrials Geography: Italy Date of investment: August 2008 Residual cost of investment £m: 29.2 Directors' valuation £m: 17.1 Change over prior valuation £m: 0.9 Effective equity interest (fully 3.2%diluted): % of Candover's net assets: 14.3% Basis of valuation: Multiple of earnings Dividends received £m: - Year end: December 2013 Sales: €411m Earnings1: €37m Technogym is a global leader in the design and manufacture of premium brandedfitness equipment and wellness solutions and enjoys strong brand recognitioninternationally. The group serves major fitness club chains, as well asprofessional customers in the hospitality, corporate, education, medical andmilitary markets. In 2014, the company enjoyed significant growth due to an improved tradingenvironment resulting from the strength of the US Dollar against the Euro, thelaunch of new equipment as well as the implementation of internal optimisationprogrammes. In 2015, Technogym will continue to focus on delivering growth throughincreased penetration of its new product range, geographical expansion andinternal process efficiencies. The investment was written up by £0.9 million (4p per share) after an adverseexchange rate movement of £1.0 million. Company website www.technogym.com 5 Hilding Anders Industry sector: Industrials Geography: Sweden Date of investment: December 2006 Residual cost of investment £m: 24.3 Directors' valuation £m: 5.3 Change over prior valuation £m: (0.4) Effective equity interest (fully 4.3%diluted): % of Candover's net assets: 4.4% Basis of valuation: Multiple of earnings Dividends received £m: - Year end: December 2013 Sales: SEK 7,496m Earnings1: SEK 737m Hilding Anders is Europe's largest bed and mattress manufacturer and isheadquartered in Sweden. It operates in more than 40 countries in Europe andAsia, has 24 manufacturing facilities and circa 9,000 employees. Hilding Andersoffers an innovative and diverse portfolio of beds and mattresses sold mainlyto major furniture retailers and bedding specialists in Western Europe andthrough own retail outlets in Russia, Croatia and China. The company has abalanced portfolio of private label and branded products. It has grown bothorganically and through 14 acquisitions and, in more recent years, hassignificantly reinforced its presence in emerging markets and grown together asone company. Hilding Anders traded well in 2014 reporting like-for-like sales andprofitability ahead of prior year. Europe returned to growth in nearly allmarkets. France and Benelux, in particular, experienced double digit growthwhile trading in Northern Europe continued to be strong. Russia remains theoutperformer reporting significant year-on-year growth of over 30%. However,despite the strong trading performance, profitability has been impacted by thesignificant translation effect from the depreciation of the Rouble during thecourse of the year. In 2015, Hilding Anders will continue to focus on its operational excellencestrategy encompassing four key strategic areas and 14 projects whereimprovements are monitored continuously. The four key areas of focus includeenhancing its sales approach and supply chain, streamlining and improving theportfolio offering and safeguarding growth in emerging markets. The value of the investment was written down by £0.4 million due to adverseforeign exchange movements (2p per share). Company website www.hildinganders.com Update on Fund terms Following two extensions to the original eight year life, the Candover 2001Fund terminated on 12th June 2013. The final two companies were sold during theyear and the 2001 Fund is now in liquidation. Following a two year extension, the follow on investment period for theCandover 2005 Fund terminated on 26th August 2013. No further amounts can becalled down for investment in the Fund. The ten year term of the Fund wouldhave come to an end on 26th August 2015, but consent has been granted by theLimited Partners to extend the Fund to March 2017. The investment period for the Candover 2008 Fund terminated on 12th January2010. Follow on investments can be made until 12th January 2017 with €42million available for follow on investment in Expro. Candover has no remainingcommitment in respect of the 2008 Fund. Outlook for 2015 Arle continues to work with the portfolio management teams to optimise theoperational and financial performance of each portfolio company and to preparethe businesses for exit. As and when Arle and management consider market andtrading conditions to be favourable, we will seek to execute realisations. Arle Capital Partners Limited 26thFebruary 2015 Note: 1 Earnings figures are taken from the portfolio company's most recent auditedaccounts or financial statements filed with regulatory bodies. The figuresshown are the total earnings on ordinary activities before exceptional items,depreciation, goodwill amortisation, interest and tax for the period The portfolio Analysis by value at 31st December 2014 (representing 100% of the Arle managedportfolio) By valuation method By sector 1. Multiple of earnings 100% 1. Energy & Natural Resources 31% 2. Industrials 39% 3. Services 30% By region By age 1. United Kingdom 31% 1. Greater than 5 years 100% 2. Spain 30% 3. Benelux 23% 4. Italy 12% 5. Scandinavia 4% Group statement of comprehensive incomefor the year ended 31st December 2014 Unaudited Audited Year to 31st December Year to 31st December 2014 2013 Notes Revenue Capital Total1 Revenue Capital Total1 £m £m £m £m £m £m Gains/(losses) on financialinstruments at fair valuethrough profit and loss Realised gains/(losses) - 4.8 4.8 - (1.6) (1.6) Unrealised (losses)/gains - (39.9) (39.9) - 27.7 27.7 Total - (35.1) (35.1) - 26.1 26.1 Revenue/(expense) Investment and other income 11.3 - 11.3 10.2 - 10.2 Total 11.3 - 11.3 10.2 - 10.2 Recurring administrative (2.8) (1.3) (4.1) (3.7) (1.2) (4.9)expenses Exceptional non-recurring 2 (0.3) - (0.3) (0.6) - (0.6)costs Profit/(loss)before finance 8.2 (36.4) (28.2) 5.9 24.9 30.8costs and taxation Finance costs (2.4) (2.4) (4.8) (5.4) (5.4) (10.8) Exchange movements on - (3.2) (3.2) - 1.5 1.5borrowings Profit/(loss)before taxation 5.8 (42.0) (36.2) 0.5 21.0 21.5 Analysed between: Profit/(loss) before 6.1 (42.0) (35.9)exceptional non-recurring 1.1 21.0 22.1costs Exceptional non-recurring (0.3) - (0.3) (0.6) - (0.6)costs Taxation (0.9) - (0.9) 2.0 - 2.0 Profit/(loss)after taxation 4.9 (42.0) (37.1) 2.5 21.0 23.5 Total comprehensive income/ 4.9 (42.0) (37.1) 2.5 21.0 23.5(loss) Earnings/(loss)per ordinaryshare: Total earnings/(loss) per 22p (192p) (170p)share - basic and diluted 11p 96p 107p 1 The total column represents the Group statement of comprehensive income underIFRS i All of the gain/(loss) for the year and the total comprehensive income/(loss)for the year are attributable to the owners of the Company ii The supplementary revenue and capital columns are presented for informationpurposes as recommended by the Statement of Recommended Practice issued by theAssociation of Investment Companies Group statement of changes in equityfor the year ended 31st December 2014 Unaudited Called Share Other Capital Capital Revenue Total up premium reserves reserves reserves - reserve Equity share account -realised unrealised capital £m £m £m £m £m £m £m Balance at 1stJanuary 5.5 1.2 (0.1) 318.1 (159.2) (9.2) 156.32014 Net revenue after tax - - - - - 4.9 4.9 Unrealised loss on - - - - (39.9) - (39.9)financial instruments Realised gain/(loss) - - - (4.0) 8.8 - 4.8on financialinstruments Exchange movements on - - - - (3.2) - (3.2)borrowing Costs net of tax - - - (3.7) - - (3.7) Loss after tax - - - (7.7) (34.3) 4.9 (37.1) Total comprehensive - - - (7.7) (34.3) 4.9 (37.1)income Balance at 31st 5.5 1.2 (0.1) 310.4 (193.5) (4.3) 119.2December 2014 Audited Called Share Other Capital Capital Revenue Total up premium reserves reserves reserves - reserve Equity share account -realised unrealised capital £m £m £m £m £m £m £m Balance at 1stJanuary 5.5 1.2 (0.1) 320.4 (182.5) (11.7) 132.82013 Net revenue after tax - - - - - 2.5 2.5 Unrealised gain on - - - - 27.7 - 27.7financial instruments Realised gain/(loss) - - - 4.3 (5.9) - (1.6)on financialinstruments Exchange movements on - - - - 1.5 - 1.5borrowing Costs net of tax - - - (6.6) - - (6.6) Profit after tax - - - (2.3) 23.3 2.5 23.5 Total comprehensive - - - (2.3) 23.3 2.5 23.5income Balance at 31st 5.5 1.2 (0.1) 318.1 (159.2) (9.2) 156.3December 2013 Group statement of financial positionat 31st December 2014 Unaudited Audited 31st December 2014 31st December 2013 £m £m £m £m Non-current assets Financial investments designated atfair value through profit and loss Portfolio companies 135.2 185.2 Other financial investments 0.4 6.0 135.6 191.2 Trade and other receivables 8.5 9.0 Deferred tax asset 2.1 3.0 146.2 203.2 Current assets Trade and other receivables 0.1 1.4 Current tax asset 0.1 0.1 Cash and cash equivalents 26.6 3.0 26.8 4.5 Current liabilities Other payables (0.5) (1.2) Provisions (0.5) (1.6) Loans and borrowings (52.8) - (53.8) (2.8) Net current (liabilities)/assets (27.0) 1.7 Total assets less current 119.2 204.9liabilities Non-current liabilities Loans and borrowings - (48.6) Net assets 119.2 156.3 Equity attributable to equityholders Called up share capital 5.5 5.5 Share premium account 1.2 1.2 Other reserves (0.1) (0.1) Capital reserve - realised 310.4 318.1 Capital reserve - unrealised (193.5) (159.2) Revenue reserve (4.3) (9.2) Total equity 119.2 156.3 Net asset value per share Basic 545p 715p Diluted 545p 715p Group cash flow statementfor the year ended 31st December 2014 Unaudited Audited Year to 31st Year to 31st December 2014 December 2013 £m £m £m £m Cash flows from operatingactivities Cash flow from operations 3.6 (4.5) Interest paid (3.9) (12.2) Tax received - - Net cash outflow from operating (0.3) (16.7)activities Cash flows from investingactivities Purchase of financial investments - (5.0) Sale of financial investments 24.2 9.8 Net cash inflow from investing 24.2 4.8activities Cash flows from financingactivities Loan notes issued - 49.2 Loan notes repaid - (150.7) Net cash outflow from financing - (101.5)activities Increase/(Decrease)in cash and cash 23.9 (113.4)equivalents Opening cash and cash equivalents 3.0 117.7 Effect of exchange rates and (0.3) (1.3)revaluation on cash and cashequivalents Closing cash and cash equivalents 26.6 3.0 Notes to the financial statements Note 1 The preliminary results for the year ended 31st December 2014 are unaudited.The financial information included in this statement does not constitute theGroup's statutory accounts within the meaning of Section 434 of the CompaniesAct 2006. Statutory accounts for the year ended 31st December 2014 will befinalised on the basis of the financial information presented by the Directorsin this preliminary announcement and will be delivered to the Registrar ofCompanies in due course. The information given as comparative figures for the year ended 31st December2013 does not constitute the Company's statutory accounts for those financialperiods. Statutory accounts for the year ended 31st December 2013, prepared inaccordance with International Financial Reporting Standards as adopted by theEuropean Union, have been reported on by the Company's auditors and deliveredto the Registrar of Companies. The report of the auditors was unqualified anddid not contain a statement under Section 498 (2) or (3) of Companies Act 2006. Note 2 Exceptional non-recurring lossesfor the Group. There were exceptional non-recurring losses for the Group in the year of £0.3million (2013: loss £0.6 million).