1st Mar 2011 07:00
Press release For immediate release on 1st March 2011 Candover Investments plc Preliminary unaudited results for the year ended 31st December 2010 * Financial position significantly strengthened and outstanding liabilities to the Candover 2005 Fund reduced. Pro forma net debt of £26.7m1 (31st December 2010: £91.0m), pro forma loan to value covenant of 13.7%1 (31st December 2010: 32.6%), liability to fund outstanding commitments reduced by £11.2m to £27.6m1 * Net assets per share of 814p at 31st December 2010, a 21.6% decrease compared to 31st December 2009 (1038p) and a 9.9% decrease compared to 30th June 2010 (903p). This reflects one-off costs and provisions for discontinued operations (the sale of CPL and the strip disposal) and exceptional costs. Excluding these items, net assets would have been 1026p, a decrease of 1.2% from 31st December 2009, but an increase from 30th June 2010 of 13.6% * Seven of top ten investments written up in value; three written down. Ten largest investments comprised 87.0% of Candover's investment value at 31st December 2010, with Expro International individually accounting for 27.9% * Realisation proceeds (including income) of £36.9m received from funds managed by CPL during the year, including proceeds from the sale of Springer Science+Business Media and Ontex. Further realisation proceeds of £15.4m received post year end from the sale of Equity Trust and the disposal of interest in two mezzanine funds. Follow on investments totalling £34.7 million were made in the year to support a number of portfolio companies * Balance sheet restructuring undertaken to reflect Company's status as a run-off vehicle for a portfolio of investments. Strategy in place to deliver long-term equity value to shareholders from a progressive return of net cash over time as portfolio realisations occur * Sale of Candover Partners Limited (CPL), the manager, and sale of a strip of Candover's investments in the portfolio for a cash consideration of £ 60.0m on track to complete by the end of March * Board restructured in light of the changes in the nature of the Company. On completion of these transactions, Richard Stone, currently a non-executive director, to become Chairman
Malcolm Fallen, Chief Executive Officer, said:
"2010 was another year of major change for Candover. Our objectives at the beginning of the year were to continue to deliver greater stability for the business whilst also exploring the options available to allow us to protect and grow value for our shareholders. This we have achieved having put in place a clear strategy aimed at delivering long-term equity value, based on a sustainable stable financial
position. By putting in place an innovative solution to a complex series of problems we have provided greater certainty of outcome of being able to return cash to shareholders over time.
"The transforming effects of the solution can clearly be seen in some of our key performance metrics at the year end. The strip sale, combined with other disposals completed since the year end, will reduce net debt on a pro forma basis to £26.7 million from 31st December's £91.0 million with the pro forma loan to value covenant at 13.7% compared to 32.6% at 31st December as reported. Additionally, as part of the disposals, Candover's liability to fund outstanding commitments will be reduced by £11.2 million to £27.6 million.
"The Board is confident that the decisions and actions taken are the best way to ensure shareholders will benefit from the long term value inherent in the portfolio. Candover now has an appropriate operating model with a transparent and simplified balance sheet. This provides a solid base from which to deliver significant potential value in the underlying investments."
Ends.
1 Pro forma financials based on the completion of the disposals (proceeds net of related costs) and known post-year end realisation proceeds
* Candover means Candover Investments plc and / or one or more of its subsidiaries
For further information, please contact: Candover +44 20 7489 9848 Malcolm Fallen Helen Walsh Tulchan +44 20 7353 4200 Susanna Voyle Peter Hewer Business reviewOverview
2010 was another year of major change for Candover. Our objectives at the beginning of the year were to continue to deliver greater stability for the business whilst also exploring the options available to allow us to protect and grow value for our shareholders. We are therefore pleased to report that we ended the year having put in place a clear strategy aimed at delivering long-term equity value, based on a sustainable financial position and an independent stable manager.
In our interim announcement in August we outlined our belief that the best way to optimise the long term value of the underlying investments in the portfolio for shareholders was to focus solely on a progressive return of cash over time as portfolio realisations were made by our manager, Candover Partners Limited (CPL). We would no longer make new investments.
In December, we announced the final steps to effect this strategy; a formal change in investment policy and two consequent proposed disposals - the sale of CPL to Arle Capital Partners (Arle), a new private equity partnership formed by some of the CPL team, and the sale of a strip of Candover's investments in the portfolio for a cash consideration of £60 million to an entity backed by Pantheon, one of the largest private equity fund of fund and secondary managers in the world, and Arle.
The change in investment policy is now in place after being approved by shareholders, and the two disposals are on track to complete by the end of March, subject to receiving the necessary consents which we are actively progressing. The Board consider it highly probable that these consents will be received.
The rationale behind the disposals was to mitigate some of the volatilities surrounding our business in order to protect and deliver long term shareholder value. The transforming effects of this strategy can clearly be seen in some of our key performance metrics at the year end. The strip sale, combined with initial proceeds from other disposals completed since the year end, will reduce debt on a pro forma basis to £26.7 million from 31st December's £91.0 million and the pro forma loan to value covenant will stand at 13.7% compared to 32.6% at 31st December as reported. Additionally, as part of the disposals, Candover's liability to fund outstanding commitments has been reduced by £11.2 million to £27.6 million.
We believe that we have been able to put in place an innovative solution to a complex series of problems and one which provides a greater certainty of outcome of being able to return cash to shareholders over time.
Performance
As has already been outlined, the two disposals, when completed, will significantly strengthen the Group's balance sheet by reducing the level of net debt and markedly improving the covenant position. At the same time, the level of outstanding liabilities to future commitments to the 2005 Fund will also have been reduced. Whilst net asset value per share has decreased in the short term as a consequence of the disposals, foregoing some of the upside means we have established greater likelihood of being able to deliver long term shareholder value.
The disposals will leave the Company focussed entirely on benefitting from the realisation of existing investments as the manager runs off the portfolio and so accordingly we have decided that our balance sheet should be restructured now to reflect this. We have therefore not only provided against the costs of completing the disposals and related restructuring costs but we have also made a provision against the future cost of our property lease obligations, as well as writing off all related leasehold improvements. Overall, the majority of the costs represent an acceleration of existing contractual liabilities of the Group. Whilst this has adversely affected our results in the short term, it
provides transparency and the impact will be to simplify our balance sheet and align its make-up with that of a run-off vehicle for our portfolio of investments.
The Company's net assets per share of 814p at 31st December include costs and provisions for the discontinued operations (the sale of CPL and the strip disposal) and exceptional non-recurring costs (primarily a provision against an ongoing property liability). This is a decrease of 21.6% since 31st December 2009 (1038p) and a decrease of 9.9% since 30th June 2010 (903p). If these provisions and costs were excluded, net assets per share would have been 1026p, a decrease of 1.2% from 31st December 2009, but an increase from 30th June 2010 of 13.6%.
During the year, Candover received realisation proceeds (including income) of £ 36.9 million from funds managed by CPL from the sale of Springer Science+Business Media and Ontex. Since the year end we have received further realisation proceeds of £15.4 million from the sale of Equity Trust and the disposal of our interest in two mezzanine funds, with additional deferred proceeds of £8.2 million contracted to be received in June 2011. These proceeds are all in line with year end valuations. Follow on investments totalling £34.7 million were made to support a number of portfolio companies.
The realisations have led to a further concentration of the portfolio during the last year. As at 31st December 2010, the ten largest investments comprised 87.0% of Candover's investment value (2009: 81.5% on a like-for-like basis) with Expro International individually accounting for 27.9% (2009: 29.9%). This trend will continue as further realisations occur.
The combination of follow-on investments and operating and financing costs, which have only been partially offset by inflows from realisations, has resulted in our net debt at the year end rising to £91.0 million against £74.8 million at the start of 2010. At 31st December 2010 our loan to value ratio was 32.6% compared to 26.4% at 31st December 2009 and 25.0% at 30th June 2010.
The transforming effect of the strip sale on our net debt level and loan-to-value covenant can clearly be seen in this context. The proceeds from the strip sale of £60.0 million net of related costs, combined with proceeds from other disposals completed since the year end, will reduce debt on a pro forma basis to £26.7 million at 31st December 2010 from £91.0 million as reported at year end with the pro forma loan to value covenant improving to 13.7% from 32.6%.
As we move towards a net cash position, our current hedging structure may no longer be required. The existing arrangements were put in place when the original US private placement notes were raised in 2007 and were structured to match the currency of our indebtedness against the currency of our investments. Based on our current estimates it may be appropriate to unwind the existing hedges which would benefit the Company's net assets.
Key strategic events and initiatives
Termination of the Candover 2008 Fund
As reported in the 2009 Report and Accounts, the investment period of the Candover 2008 Fund was formally terminated in January 2010. This had a significant impact on our financial position very early on in the year, with outstanding commitments to ongoing funds capped at our then outstanding exposure to the Candover 2005 Fund (€90 million as at 31st December 2009) compared to the combined exposure to both the 2005 and 2008 Funds of €994 million prior to the termination.
Unsolicited approach
In April we received an unsolicited approach from a third party to buy the whole of the Company. As the Board has a fiduciary duty to consider any credible approach, we began discussions with this third
party aimed at understanding how such a potential offer might bring further financial stability to Candover. These talks ended in July when the potential offeror concluded that it was not able to make a firm proposal that could be considered by the Board.
Change of investment policy and disposals
At the half year we indicated that following our ongoing review of our options, a decision had been reached with regard to the future of the Company. Based on our belief that there was significant long
term value in the portfolio we considered that the best way to optimise value for shareholders was to remain as a listed investment trust, no longer to make new investments, and instead to focus solely on returning cash to investors over time as portfolio realisations were made by CPL.
In December we announced the final steps to facilitate these plans. As a consequence of the proposed change in investment policy, we proposed two disposals, the sale of CPL to Arle for a nominal consideration; and the sale of a strip of our investments in the portfolio for a cash consideration of approximately £60 million. The new investment policy and the interconditional disposals were approved by shareholders in December. The investment policy came into immediate effect, while the two disposals are anticipated to complete towards the end of the first quarter of this year.
The sale of CPL
With the change of investment policy Candover will not commit to a new fund and therefore does not need a manager with the capacity to make new investments. It does however need a stable and focused manager to manage its existing assets, and the sale of CPL to Arle achieves this.
Arle is a new private equity partnership formed by some of the current CPL Directors and led by John Arney, who is currently Managing Partner of CPL. The team will continue to manage the portfolio on behalf of the Funds' Limited Partners. It will manage Candover's investments for a market-based fee of 1.5% of their value. The team's independence provides a stable platform through which a motivated manager can be retained in order to focus on maximising and realising the value of the portfolio. Independence for the team also increases their prospects of raising a new fund at some stage in the future, which is an important factor in the retention and incentivisation of a professional and dedicated group of executives.
The sale of a portfolio strip
When considering the sale of the strip, the Board felt that while Candover was more financially stable than twelve months previously, there were still volatilities surrounding the business that could impact on the ability to deliver the return of cash strategy - for example, the lack of control over follow-on investments and realisations, movements in valuations, the level of our debt, the leveraged nature of the investments in the portfolio and the portfolio's highly concentrated nature.
Whilst we recognised that some of these volatilities could not be controlled - for example when and for how much the individual portfolio companies could be sold for, or the timing of any follow on investments - other volatilities could be mitigated. We decided, therefore, that the most appropriate strategy to mitigate the impact of future potential volatility on the return of cash to shareholders was to strengthen the Company's balance sheet by reducing net debt.
After considering various options, the Board concluded that the sale of a strip of the portfolio, from a shareholder perspective, was preferable compared to a highly dilutitive rights issue as a way of reducing net debt.
The portfolio strip sale comprises selling 29.1% of each portfolio company (excluding Ontex and Equity Trust and the 2001 Fund carry) to a new entity formed by the Arle team and Pantheon. The transaction, which was negotiated in September 2010, will deliver cash sale proceeds of £60 million
representing a discount of 14.3% to the 30th June carrying value of £70 million of the strip of assets being sold.
The strip sale will reduce debt on a pro forma basis to £26.7million from 31st December's £91.0 million with a pro forma loan-to-value covenant of 13.7% (actual 32.6%). In addition, the strip sale reduces
Candover's liability to fund its remaining commitments by £11.2m from £38.9 million as at 31st December, 2010 to £27.6 million, on a pro forma basis.
Year end Pro forma position, as position reported reflecting post year end transactions1 Net assets as at 31st December 2010 £177.9m £177.9m Net debt at 31st December 2010 £91.0m £26.7m Ratio of net debt to net assets 51.2% 15.0%
Loan-to-value covenant at 31st December 32.6% 13.7% 2010
Outstanding commitments as at 31st £38.9m £27.6m December 2010 Ratio of cash to outstanding commitments 2 x 5 x (times)
1 Sale of the strip, associated costs, Equity Trust and ICG sale proceeds (excluding the additional contractual proceeds expected in June 2011
Proceeds from the sale of the strip will be used to reduce net debt and this will also reduce the Company's net annual interest costs. The proceeds will be made available to the 2007 Note Holders to prepay part of the outstanding notes at par. If this offer of prepayment is not accepted by some of the note holders, the remaining proceeds will be invested in cash and cash equivalent assets to meet future repayment obligations.
The sale of the portfolio strip to Pantheon, who require an independent manager to run their purchase, and who have put in place additional incentives for the team, provides additional context for the spin-out of CPL at this point in time.
Dividends and future return of capital
In reviewing when and how to return cash to shareholders, the Board has agreed with its note holders that it is prudent that no money should be returned until the Company is in a net cash position, with
total available cash in excess of the outstanding principal and accrued interest on the notes, and the then outstanding commitments to the 2005 Fund (the follow-on investment period of which currently expires in August 2011), as well as an appropriate cash reserve to support future operating cash flow. The one exception will be dividends that may be required to be paid to meet Investment Trust obligations.
In respect of 2010, the Board is not recommending the payment of a dividend.
Reaching the point of returning cash will be determined by the pace of realisations that are achieved by the manager and so the timing is hard to predict at present. The Board will consider different mechanisms for returning cash to shareholders in anticipation of a successful programme of realisations.
Board structure and management
In light of the changes in the nature of the Company, it was announced in December 2010 that Gerry Grimstone will be stepping down as Chairman when the two disposals complete, and that Malcolm Fallen, Candover's CEO will reduce his time commitment to three days a week from the end of March.
Lord Jay, the Senior Independent Director, has led the process to appoint a new Chairman and after considering a number of external candidates, the Board has decided to appoint Richard Stone. Richard, a former member of the global board of PriceWaterhouseCoopers LLP, has been a member of the Candover Board for almost six years and we are confident that he will do an excellent job in steering the company forward. A process has now commenced to find a replacement non-executive director who will also take on Richard's position as Chair of the Audit, Risk and Valuation committee.
Following these changes the Board will comprise a non-executive Chairman, a part time CEO and three non-executive directors, which we feel is an appropriate structure for our situation going forward.
Risk and performance management
We intend to review our financial and investment risks in light of the change in the balance sheet profile and, as already mentioned, specifically assess the appropriateness of our current hedging techniques.
We will retain our focus on the key measures we believe are clear determinants of shareholder value - net assets per share, net debt and outstanding commitments - and use these to provide clarity on our performance.
Outlook
The Board is confident that the decisions and actions taken are the best way to ensure shareholders will benefit from the long term value inherent in the portfolio. Candover now has an appropriate operating model with a transparent and simplified balance sheet. This provides a solid base from which to deliver significant potential value in the underlying investments.
2010 has been the end of an era for Candover - we will no longer be making commitments to a new fund - but it is also the start of a new one for the CPL team as they transition to Arle. We wish them every success in building their own sustainable model for the future, whilst continuing to maximise the returns for all stakeholders from the existing investments they manage.
Financial review
Net asset value per share
Net asset value per share after discontinued operations and exceptional non-recurring costs was 814p, a decrease of 21.6% since 31st December 2009 (1038 pence) and a decrease of 9.9% since 30th June 2010 (903 pence). Excluding the impact of discontinued operations and exceptional non-recurring costs the net asset value per share would have been 1026p, a decrease of 1.2% from 31st December 2009, but an increase from 30th June 2010 of 13.6%. See Table 1.
As outlined in the business review, the combined disposal of CPL and a strip of investments when completed will have significantly strengthened the Group's balance sheet, improved its covenant position and reduced its uncalled fund commitments. Whilst these disposals have reduced net assets, the liquidity event has positioned the Company, and the manager, on a more stable financial basis to enable shareholders to benefit from the anticipated growth in value and realisation of the residual investments.
Table 1
£m p/share Net asset value at 31st December 2009 227.0 1038 Gain on financial instruments and other income1 12.7 58 Recurring administrative expenses (7.0) (32) Finance costs (6.5) (29) Others (including tax) 2.1 10 228.3 1045 Currency impact: - Unrealised investments (5.9) (27) - Restatement of cash and cash equivalents (6.3) (29) - Translation of loan and swap balances 8.2 37 224.3 1026
Loss from CPL disposal group ("discontinued operations") (21.7) (99)
Loss relating to assets subject to strip disposal (19.6) (90) ("discontinued operations")
Exceptional non-recurring costs (5.1) (23)
Net asset value at 31st December 2010 as reported 177.9 814
1 Stated before adverse currency impact of £4.0 million and adverse ineffective interest rate swap movements of £1.2 million (included in "others")
Investments
The valuation of investments, including carried interest and accrued loan note interest was £310.0 million at 31st December 2010 (31st December 2009: £319.9 million).
Valuation movements for the year before currency effects were £7.6 million. Taking into account additions and disposals, this is an increase of 2.5% on the value of investments at 31st December 2009, and 10.8% since 30th June 2010. See Table 2.
Table 2 £m Investments at 31st December 2009 319.9 Disposals at valuation (33.1) Additions at cost 34.7 Less: release of financial liability on equity commitments (12.2) Investments adjusted for additions and disposals 309.3 Revaluation of investments1: - Valuation movements before currency impact 7.6 - Currency impact on unrealised investments (6.9) Investments at 31st December 2010 (including assets held for 310.0 sale) Investments held for sale2 (80.0) Investments at 31st December 2010 230.0
1 Stated before the impact of the assets subject to the strip disposal
2 Includes the investments realised as part of the strip disposal (£77.4 million by value at 31st December 2010) and the interests in the ICG mezzanine funds the disposals of which were agreed in December 2010 and completed post-year end (£2.6 million by value at 31st December 2010)
Net debt and loan-to-value covenant
Candover's net debt has increased from £74.8 million at 31st December 2009 to £91.0 million at 31st December 2010. This reflects net operating outflows of £20.5 million, including £6.1 million of net interest paid. Over the course ofthe year a further £34.7 million of follow-on investments were made offset byinflows from realisations of £35.5 million (£36.9 million including incomeproceeds). See Table 3.Table 3 31st December 31st December 2010 2009 £m £m Loans and borrowings 200.5 194.6 Fair value hedge adjustment (16.5) (13.3) Deferred costs 1.0 1.3 Value of bonds 185.0 182.6 Value of related swaps (14.1) (1.5) Cash (79.9) (106.3) Net debt 91.0 74.8
At this level of net debt the year end loan-to-value covenant on the Company's borrowings was 32.6% compared to 26.4% at 31st December 2009 and 25.0% at 30th June 2010.
As noted above, the strip disposal will significantly improve the net debt and covenant position of the Company. On a pro-forma basis, taking into account the impact of the strip disposal (including related costs), the initial proceeds from the realisations of Equity Trust (including carried interest) and the ICG
funds, the net debt of the Company would be £26.7 million, with a resulting loan-to-value ratio of 13.7%. See Table 4.
In addition the impact of the strip realisation has also reduced the outstanding commitment of the Company to the Candover 2005 Fund from £38.9m to £27.6 million (the follow-on investment period of which currently expires in August 2011) further improving the Group's financial stability.
Table 4 Pro-forma £m Net debt as reported at 31st December 2010 91.0 Initial proceeds from Equity Trust realisation (14.1) (including carried interest) Initial proceeds from realisation of ICG funds (1.3) Proceeds from disposal of the strip of investments1 (60.0) Exceptional costs - post year end cash impact 11.1 Pro-forma net debt 26.7
1 Assumes no rights are exercised by "tag" investors
Profit before tax
Profit before tax for continuing operations for the year was £0.3 million compared to £8.1 million in the prior year. This reflects a reduction in the level of investment and other income recognised and the impact of the change in capitalisation policy. In light of the change in our focus on realisation rather than investment, we have reviewed and revised the allocation of expenses between revenue and capital. In particular, this change reflects the impact of longer hold periods on investments before realisations which will result in a greater proportion of the anticipated future return being received as loan stock interest, rather than capital gains, which would therefore be recognised as revenue rather than capital return in the future.
As a consequence of the change in investment strategy of the business and the decision to dispose of CPL and the strip assets, the Group has reported £41.3 million of losses (of which £19.6 million are reported as a capital loss) on discontinued operations and £5.1 million of exceptional non-recurring costs. The costs comprise losses attributable to the CPL disposal group of £21.7 million; a provision of £17.4 million against the fair value of the investments subject to the strip disposal as well as losses for the year on those assets of £2.2 million; and £5.1 million of exceptional non-recurring costs primarily comprising a provision against the ongoing property liability. Of these costs, post-year end cash payments of £11.1 million will be incurred.
Manager's portfolio review
Overview
The European buyout market recovered well during 2010, with volume and value of transactions completed rising by 43% and 169% respectively with 367 deals worth €63.1 billion. The increase in buyout activity is encouraging in the context of exits, and to this end Candover Partners has realised its investment in Springer Science+Business Media, Ontex and Equity Trust all via secondary buyouts. The Springer and Ontex transactions were two of the largest buyouts announced in Europe during the year.
As it currently has no new investment capability other than for follow on investments, CPL has focused exclusively on continuing to explore ways to enhance portfolio company values both organically and through add-on acquisitions with the objective of maximising realisable values. We have also made it a priority to ensure that our portfolio has been well positioned to take advantage of the improvements seen in the developing economies, whilst minimising the negative impacts of a slower recovery in the more developed economies.
Six of the top ten of our investments have achieved LTM earnings at 31st December 2010 above the comparative 2009 LTM position. The average implied multiple of the top ten investments is 7.6 times LTM EBITDA compared to 8.5 times 2009 LTM EBITDA. In terms of the level of leverage across the portfolio, the weighted average net debt to EBITDA multiple for the largest ten investments has fallen to 5.1x (2009: 5.3x) reflecting the focus on maximising cash flow and ensuring sustainable capital structures are in place. Excluding Expro International, which replaced its senior debt with a high yield bond in December 2009, this leverage falls to 3.6x (2009: 4.6x).
The following review and analysis of the portfolio is prior to the impact of the strip disposal on Candover.
Realisations
Candover and the managed funds achieved realisation proceeds of £169.2 million during the year - Candover's own share of such realisation proceeds was £36.9 million (including income proceeds).
In February, Candover and the Candover 2001 Fund sold their investment in Springer Science+Business Media. The sale generated total proceeds of £11.7 million for Candover (including loan note interest of £0.1 million), of which £ 8.0 million resulted from the catch up phase of the carried interest scheme. The Candover 2001 Fund achieved a return of £32.1 million before payments of carried interest (including loan note interest of £0.5 million), bringing the overall investment multiple to 1.8x with an IRR of 28%. At the same time, Candover received proceeds of £4.6 million relating to the return of surplus cash from the 2001 Fund which went towards the remaining carried interest catch up amount.
In May, Candover and the Candover 2001 Fund completed the exit of Gala Coral achieving an overall multiple of 0.6 times. In November, the sale of Ontex to Goldman Sachs and TPG completed for an enterprise value of €1.2bn. The sale generated initial estimated cash proceeds for Candover of £17.3 million, including £4.9 million of carried interest. A guaranteed, interest accruing deferred payment, will result in further proceeds valued today at £7.6 million and will be payable between completion and September 2012. The carried interest from this deferred payment will return an additional £3.0 million. The Candover 2001 Fund received initial proceeds of £96.8 million and a further £59.3 million from the deferred payment, giving an investment multiple, before carried interest, of 0.7 times the original investment.
Post the year end, the sale of Equity Trust to Doughty Hanson completed in January 2011 generating initial cash proceeds of £14.1 million for Candover, including £4.0 million of carried interest. A deferred payment of £5.1m, guaranteed by Funds managed by the purchaser, is payable upon the earlier of a
refinancing or recapitalisation of the business and the end of June 2011. The carried interest from this deferred payment will return an additional £2.0 million. The Candover 2001 Fund received initial proceeds of £79.1 million and will receive a further £40.2 million from the deferred payment, giving an investment multiple, before carried interest, of 1.5 times the original investment.
The principal realisations are set out in Table 1.
Table 1Portfolio company Candover £ Funds £m Type m Candover 2001 Fund carried 17.7 - Crystallisation of interest carried interest Ontex 12.4 96.8 Private equity sale Springer 3.7 32.1 Private equity sale Other 3.1 3.4 Total realisations - 2010 36.9 132.3 Equity Trust 10.1 79.1 Private equity sale
Candover 2001 Fund carried 4.0 - Crystallisation of interest
carried interest Other 1.3 - Total realisations - 2011 15.4 79.1 to date
Proceeds shown above include loan interest income
The carried interest receipts are distributed to the Company from the fund receipts
Follow on investments
In September, Expro International completed the acquisition of Production Testers International, an Asian based oilfield services company. Candover invested £1.5 million and the Candover 2005 and 2008 Funds invested £25.8 million in the transaction.
In addition, during the year Candover made further investments in the following portfolio companies:
* £2.2 million in DX Group as part of a balance sheet restructuring; * £2.4 million in EurotaxGlass's ("ETG") as part of a restructuring; * £6.8 million in Hilding Anders to repay a facility put in place to fund acquisitions; and * £21.6 million in Technogym to repay a debt facility put in place at the time of the original acquisition.
Since the period end, EurotaxGlass's has completed the acquisition of Autovista in Finland, a business supplying motor vehicle valuation data products. The acquisition should accelerate the ETG business forward enabling it to supply its customers with more robust data in near real time. Candover invested £0.6 million and the Candover 2005 Fund £3.6 million in the transaction.
Portfolio valuation review
Table 2 shows the valuation movement by portfolio company. Adverse exchange rate movements reduced the effect of the valuation uplifts on the Euro denominated investments, although overall the portfolio has been written up by £0.7 million (3p per share) since December 31st 2009.
Table 2 Valuation Valuation Valuation Valuation at 31st Additions movement Movement at 31st Valuation Residual December and excluding Attributable December movement cost1 2009 disposals FX2 to FX2 2010 pence per Portfolio £m £m £m £m £m £m share2 company Expro 110.9 95.8 1.5 (14.2) 3.3 86.4 (50) International Stork 48.9 43.8 0.0 19.9 (2.2) 61.5 82 Parques 25.7 34.7 0.0 3.0 (1.7) 36.0 6 Reunidos Capital 11.9 10.8 0.1 7.7 0.3 18.9 37 Safety Group Qioptiq 9.6 15.8 0.0 2.1 (0.8) 17.1 6 Technogym 41.2 0.0 9.43 6.0 0.6 16.0 30 Equity Trust 8.3 12.6 0.0 3.3 (0.6) 15.3 12 Innovia Films 3.8 5.0 0.0 2.0 (0.2) 6.8 8 Alma 20.5 30.9 0.0 (23.0) (1.7) 6.2 (113) Consulting Group Eurotax 19.8 11.4 2.4 (6.8) (1.4) 5.6 (38) Glass's Ten largest 300.6 260.8 13.4 (0.0) (4.4) 269.8 (20) investments5 Hilding 34.2 0.0 6.8 (1.7) 0.4 5.5 (6) Anders DX Group 30.2 0.0 2.2 0.0 0.0 2.2 0 Ono 3.1 1.4 0.0 0.1 (0.1) 1.4 0 Candover 2001 0.0 27.9 (15.5) 5.9 (0.8) 17.5 23 Fund carried interest Other4 65.1 29.8 (17.5) 3.3 (2.0) 13.6 6 Other 132.6 59.1 (24.0) 7.6 (2.5) 40.2 23 investments Total 433.2 319.9 (10.6) 7.6 (6.9) 310.0 3
1 Residual cost is original cost less realisations to date
2 Compared to the valuation at 31st December 2009 or acquisition date, if later
3 Net investment of £21.6 million and release of equity bridge provision of £ 12.2 million
4 Includes £33.5 million relating to Alcontrol and Gala which are fully written off and £8.0m to the cost of the vendor loan note remaining on Ontex
5 Excluding Candover 2001 Fund carried interest
Ten largest investments
1. Expro International
Expro International is one of the leading oil field service providers specialising in well flow management with a particular focus on the most technically challenging deepwater environments. Expro International's operations are critical to the development of oil and gas reservoirs and are utilised by multinational oil majors as well as state-owned national oil companies. The macro factors affecting Expro International's markets are improving, such as increased global demand for oil and rising oil prices. The company continues to build its order backlog but there will inevitably be a lag before a pick up in performance is seen because of the long lead times between orders and the recognition of revenue. In light of the weaker performance of the business over the last 12 months and no impact yet from the positive sectoral trends, the investment has been written down by £10.9 million (50p per share), after adding back favourable foreign exchange movements.
Industry sector: EnergyGeography: UKDate of investment: July 2008
Residual cost of investment £m: 110.9
Directors' valuation £m: 86.4
Change over prior valuation £m: (10.9)
Effective equity interest (fully diluted): 6.7%
% of Candover's net assets: 48.6%
Basis of valuation: Multiple of earnings
Dividends received £m: -Year end: March 2010Sales: US$1,018.8mEarnings1: US$302.9m2. Stork
Stork is a diversified Dutch engineering conglomerate active in the aerospace and technical services sectors. The group enjoys good positions in the markets and sectors in which it operates and there is a clear strategy for driving value from each of the divisions. Stork has performed strongly over the year with profits ahead of prior year and budget. As a result of the improved trading and positive outlook for the business, the investment in Stork has been written up by £17.7 million (82p per share), after adverse exchange rate movements.
Industry sector: IndustrialsGeography: The Netherlands
Date of investment: January 2008
Residual cost of investment £m: 48.9
Directors' valuation £m: 61.5
Change over prior valuation £m: 17.7
Effective equity interest (fully diluted): 6.4%
% of Candover's net assets: 34.6%
Basis of valuation: Multiple of earnings
Dividends received £m: -Year end: December 2009Sales: €1,626.0mEarnings1: €118.0m3. Parques Reunidos
Parques Reunidos further consolidated its position during the year as one of the world's leading operators of attraction parks. The company enjoys strong positions in all its key markets and the majority of the parks are the leading family attraction in the surrounding area. Parques performed well in 2010, with profits for its financial year to September ahead of prior year despite the economic downturn and poor weather in parts of Europe and the US during the summer months. Management continue to drive operational improvements throughout the park portfolio, particularly in the parks acquired in the past 12-18 months. In February 2011 the equity bridges for Parques were repaid in full. At the same time, the US part of the business was refinanced with a High Yield Bond, freeing up cash to provide the company with additional acquisition capability going forward. The investment was written up by £1.3 million (6p per share), after adverse foreign exchange movements.
Industry sector: Leisure
Geography: Spain
Date of investment: March 2007
Residual cost of investment £m: 25.7
Directors' valuation £m: 36.0
Change over prior valuation £m: 1.3
Effective equity interest (fully diluted): 5.6%
% of Candover's net assets: 20.2%
Basis of valuation: Multiple of earnings
Dividends received £m: -Year end: September 2010Sales: €516.8mEarnings1: €178.8m4. Capital Safety Group
Capital Safety Group is one of the global market leaders in height safety and fall protection equipment. Capital Safety's products are widely used in industries such as oil and gas, construction (predominantly non-residential), utilities, renewable energy and telecoms. Capital Safety Group has had a strong year with order intake, sales and earnings significantly ahead of prior year and budget. This is underpinned by a strong recovery in nearly all end markets, geographies and sales channels. As a result, the investment has been written up by £8.0 million (37p per share), including a small positive foreign exchange movement.
Industry sector: IndustrialsGeography: UKDate of investment: June 2007
Residual cost of investment £m: 11.9
Directors' valuation £m: 18.9
Change over prior valuation £m: 8.0
Effective equity interest (fully diluted): 7.2%
% of Candover's net assets: 10.6%
Basis of valuation: Multiple of earnings
Dividends received £m: -Year end: March 2010Sales: US$197.0mEarnings1: US$50.1m5. Qioptiq
Qioptiq is one of the world's leaders in high-precision optical and photonic technologies. Despite a softening in the US defence market, the business has outperformed compared to the prior year. The main drivers for the continued growth of the business have been the recovery of the industrial markets and the increased volumes of defence modules and equipment sales. As a result of this improved performance the valuation has been written up by £1.3 million (6p per share), after adverse foreign exchange movements.
Industry sector: Industrials
Geography: UK
Date of investment: December 2005
Residual cost of investment £m: 9.6
Directors' valuation £m: 17.1
Change over prior valuation £m: 1.3
Effective equity interest (fully diluted): 7.2%
% of Candover's net assets: 9.6%
Basis of valuation: Multiple of earnings
Dividends received £m: -Year end: December 2009Sales: US$370.0mEarnings1: US$71.4m6. Technogym
Technogym is a global leader in the design and manufacture of premium branded fitness equipment and wellness solutions and enjoys strong brand recognition internationally. The business performed strongly in all of its three main product segments, and also across its geographies, with sales ahead of prior year in all but one of the regions. The resulting year-on-year earnings growth has seen the investment valuation increased by £6.6 million (30p per share) after adverse foreign exchange movements.
Industry sector: Industrials
Geography: Italy
Date of investment: August 2008
Residual cost of investment £m: 41.2
Directors' valuation £m: 16.0
Change over prior valuation £m: 6.6
Effective equity interest (fully diluted): 4.5%
% of Candover's net assets: 9.0%
Basis of valuation: Multiple of earnings
Dividends received £m: -Year end: December 2009Sales: €305.8Earnings1: €32.3m7. Equity Trust
Equity Trust, a leading trust and fiduciary services group, was sold in January 2011 for £15.3 million, including a deferred payment of £5.1 million. These proceeds result in an uplift of £2.7 million (12p per share) despite adverse foreign exchange movements.
Industry sector: FinancialsGeography: UKDate of investment: May 2003
Residual cost of investment £m: 8.3
Directors' valuation £m: 15.3
Change over prior valuation £m: 2.7
Effective equity interest (fully diluted): 5.6%
% of Candover's net assets: 8.6%
Basis of valuation: Sale price
Dividends received £m: -Year end: December 2009Sales: €134.8mEarnings1: €32.9m8. Innovia Films
Innovia Films manufactures speciality films primarily for packaging and is the only manufacturer of polymer bank notes in the world via a joint venture with the Reserve Bank of Australia. The business has had an excellent year with volumes continuing their positive trend resulting in record earnings. The valuation was therefore written up by £1.8 million (8p per share) after adverse foreign exchange movements.
Industry sector: Industrials
Geography: UK
Date of investment: September 2004
Residual cost of investment £m: 3.8
Directors' valuation £m: 6.8
Change over prior valuation £m: 1.8
Effective equity interest (fully diluted): 8.0%
% of Candover's net assets: 3.8%
Basis of valuation: Multiple of earnings
Dividends received £m: -Year end: December 2009Sales: €345.7mEarnings1,2: €51.4m9. Alma Consulting Group
Alma Consulting Group is one of the European leaders in cost reduction and optimisation, offering a wide range of services based on a success fee model. The business has underperformed over the year with a decline in earnings as a result of a series of difficulties in its small business lines combined with increased costs driven by regulatory changes in one of its major products. The regulatory environment remains uncertain with recent statutory changes implemented by the French Government altering the Research Tax Credit scheme thereby reducing the value Alma brings to its customers. As a result, the valuation has been written down by £24.7 million (113p per share) including adverse foreign exchange movements.
Industry sector: Financials
Geography: France
Date of investment: December 2007
Residual cost of investment £m: 20.5
Directors' valuation £m: 6.2
Change over prior valuation £m: (24.7)
Effective equity interest (fully diluted): 5.4%
% of Candover's net assets: 3.5%
Basis of valuation: Multiple of earnings
Dividends received £m: -
Year end: December 2009
Sales: €271.0Earnings1: €98.2m10. EurotaxGlass's
EurotaxGlass's, a provider of automotive intelligence, is predominantly a B2B subscription business providing valuation data to all sectors of the automotive industry. The business has had a solid trading performance over the past 12 months with earnings in line with the restructuring plan implemented this year. Management expect that the market will start to recover slightly in 2011 with some positive signs already seen in Germany, Switzerland and Austria. The investment has been written down by £8.2 million (38p per share) to reflect both the restructuring and the difficult trading environment as well as adverse foreign exchange movements.
Industry sector: Support services
Geography: Switzerland
Date of investment: June 2006
Residual cost of investment £m: 19.8
Directors' valuation £m: 5.6
Change over prior valuation £m: (8.2)
Effective equity interest (fully diluted): 7.9%
% of Candover's net assets: 3.1%
Basis of valuation: Multiple of earnings
Dividends received £m: -Year end: December 2009Sales: €100.5mEarnings1: €30.3mNotes:
1 Earnings figures are taken from the portfolio company's most recent audited accounts or financial statements filed with regulatory bodies. The figures shown are the total earnings on ordinary activities before exceptional items, depreciation, goodwill amortisation, interest and tax for the period.
2 Excludes earnings from associate joint venture (Securency).
Other investments
The remainder of the portfolio, including carried interest, was written up by £ 5.1 million (23p per share).
1. Hilding Anders
Hilding Anders is a European and Asian manufacturer of beds and mattresses. The company has diverse products and operations, selling both branded and private label products and operates in 40 countries. The company agreed a new capital structure in November 2009 and in doing so, significantly reduced leverage. The valuation has decreased by £1.3 million (6p per share), reflecting the decline in trading caused by the difficult trading environment.
2. DX Group
DX Group is one of the largest independent end-to-end operators in the UK postal market offering mail solutions for both businesses and the secure mail market. Key customers include property lawyers, financial institutions, national and local government agencies and credit card companies, all of which have been adversely impacted by the recession in the UK. Given the significant impact of the recession on trading, the company restructured its balance sheet during the year with Candover injecting £2.2 million. The trading tracked the restructuring plan during the year and as a result the valuation of the business remains in line with the follow-on investment.
3. Ono
Ono is a Spanish cable operator in which Candover and the Candover 2001 Fund have a small minority interest. The company performed well in 2010 with earnings ahead of prior year and restructured its balance sheet to provide stability for growth going forward. The investment has remained unchanged driven by a slight valuation increase offset by adverse foreign exchange movements.
4. Candover 2001 Fund carried interest
Candover's share of the Candover 2001 Fund carried interest was valued at £17.5 million, representing a £5.1 million increase from 2009 after adverse foreign exchange movements.
Conclusion
In conclusion, the majority of the investee companies are performing to plan and we will continue to focus on maximising value throughout the portfolio over the course of 2011 and beyond.
Candover Partners Limited1st March 2011Ten largest investmentsas at 31st December 2010Investment Date of Residual Directors' Movement Effective % of Basis of investment cost of valuation from 31 equity Candover's valuation investment £m st Dec interest net assets £m 2009 (fully diluted) Expro Apr-08 110.9 86.4 (10.9) 6.7% 48.6% MultipleInternational of earningsOilfield services Stork Jan-08 48.9 61.5 17.7 6.4% 34.6% Multiple ofEngineering earningsconglomerate Parques Reunidos Mar-07 25.7 36.0 1.3 5.6% 20.2% Multiple ofOperator of earningsattraction parks Capital Safety Jun-07 11.9 18.9 8.0 7.2% 10.6% MultipleGroup of earningsFall protection equipment Qioptiq Dec-05 9.6 17.1 1.3 7.2% 9.6% Multiple ofOptical earningsengineering Technogym Aug-08 41.2 16.0 6.6 4.5% 9.0% Multiple ofPremium fitness earningsequipment and wellness products Equity Trust May-03 8.3 15.3 2.7 5.6% 8.6% Sale priceTrust services Innovia Films Sep-04 3.8 6.8 1.8 8.0% 3.8% MultipleLimited of earningsTransparent and coated films and polymer bank notes Alma Consulting Dec-07 20.5 6.2 (24.7) 5.4% 3.5% MultipleGroup of earningsCost reduction and optimisation EurotaxGlass's Jun-06 19.8 5.6 (8.2) 7.9% 3.1% Multiple ofAutomotive data earningsintelligence Ten largest investments
Analysis by value as at 31st December 2010
By valuation method By sector 1. Multiple of earnings 94% 1. Industrials 45% 2. Sale price 6% 2. Energy 32% 3. Leisure 13% 4. Financials 8% 5. Support services 2% By region By age 1. United Kingdom 54% 1. 5 years 14%
Group statement of comprehensive income
for the year ended 31st December 2010
Note Unaudited Audited Year to 31st December Year to 31st December 2010 2009 Revenue Capital Total* Revenue Capital Total * £m £m £m £m £m £m Gains/(losses) on financial instruments at fair value through profit and loss Realised gains and losses - (2.7) (2.7) - (9.8) (9.8) Unrealised gains and - 2.1 2.1 - 30.5 30.5losses Total - (0.6) (0.6) - 20.7 20.7 Revenue Investment and other 8.1 - 8.1 13.3 - 13.3income Total 8.1 - 8.1 13.3 - 13.3 Recurring administrative (4.5) (2.5) (7.0) (3.4) (5.2) (8.6)expenses Exceptional non-recurring 2 (5.1) - (5.1) (7.9) - (7.9)costs Profit/(loss) before (1.5) (3.1) (4.6) 2.0 15.5 17.5finance costs and taxation Finance costs (3.3) (3.2) (6.5) (1.8) (7.1) (8.9) Movement in the fair - (0.8) (0.8) - (0.8) (0.8)value of derivatives Exchange movements on - 0.8 0.8 - 3.7 3.7borrowings Profit/(loss) before (4.8) (6.3) (11.1) 0.2 11.3 11.5taxation Analysed between: Profit/(loss) before 0.3 (6.3) (6.0) 8.1 11.3 19.4exceptional non-recurring costs Exceptional non-recurring (5.1) - (5.1) (7.9) - (7.9)costs Taxation 3.4 - 3.4 - - - Profit/(loss) after (1.4) (6.3) (7.7) 0.2 11.3 11.5taxation from continuing operations
Loss from CPL disposal 3 (21.7) - (21.7) (9.2) - (9.2) group (`discontinued
operations') Loss relating to assets 4 - (19.6) (19.6) - - -subject to the strip disposal (`discontinued operations') (21.7) (19.6) (41.3) (9.2) - (9.2) Profit/(loss) after (23.1) (25.9) (49.0) (9.0) 11.3 2.3taxation Other comprehensive income: Exchange differences on translation of foreign operations (0.1) - (0.1) 0.4 - 0.4 Total comprehensive (23.2) (25.9) (49.1) (8.6) 11.3 2.7income Earnings per ordinary share: Continuing operations - (7p) (29p) (36p) 1p 52p 53pbasic and diluted Discontinued operations - (99p) (90p) (189p) (42p) - (42p)basic and diluted
* The total column represents the Group statement of comprehensive income under IFRS.
i All of the profit for the year and the total comprehensive income for the year are attributable to the owners of the Company.
ii The supplementary revenue and capital columns are presented for information purposes as recommended by the Statement of Recommended Practice issued by the Association of Investment Companies.
iii The CPL disposal group result reflects the trading activities of CPL, including costs recharged to CPL by other parts of the group, that will not form part of the continuing operations.
iv The loss relating to assets subject to the strip disposal include the movements on those assets during the year and the movement in fair value of the related derivative at the year end.
Group statement of changes in equity
for the year ended 31st December 2010
Unaudited Called Share Other Capital Capital Revenue Total up premium reserves reserves reserves - reserve equity share account - unrealised capital realised £m £m £m £m £m £m £m Balance at 1st 5.5 1.2 0.2 359.5 (160.5) 21.1 227.0January 2010 Net revenue after - - - - - (23.1) (23.1)tax Unrealised gain on financial - - - - 2.1 - 2.1instruments Realised gain/ (loss) on financial - - - 6.7 (9.4) - (2.7)instruments Movement in fair value of derivatives - continuing - - - - (0.8) - (0.8)operations Loss relating to assets subject to the strip disposal - discontinued - - - - (19.6) - (19.6)operations Exchange movements on borrowing - - - - 0.8 - 0.8 Costs net of tax - - - (5.7) - - (5.7) Profit after tax - - - 1.0 (26.9) (23.1) (49.0) Other comprehensive income Exchange differences on translation of - - (0.1) - - - (0.1)foreign operations Total - - (0.1) 1.0 (26.9) (23.1) (49.1)comprehensive income Balance at 31st 5.5 1.2 0.1 360.5 (187.4) (2.0) 177.9December 2010 Audited Called Share Other Capital Capital Revenue Total up premium reserves reserve reserve - reserve equity share account - unrealised capital realised £m £m £m £m £m £m £m Balance at 1st 5.5 1.2 (0.2) 369.8 (182.1) 30.1 224.3January 2009 Dividends Share based payments Share buy-backs Transactions with equity holders Net revenue after - - - - - (9.0) (9.0)tax Unrealised gain on financial - - - - 30.5 - 30.5instruments Realised gain/ loss on financial - - - 2.0 (11.8) - (9.8)instruments Movement in fair value of derivatives - - - - (0.8) - (0.8) Exchange movements on borrowing - - - - 3.7 - 3.7 Costs net of tax - - - (12.3) - - (12.3) Profit after tax - - - (10.3) 21.6 (9.0) 2.3 Other comprehensive income Exchange differences on translation of foreign - - 0.4 - - - 0.4operations Total - - 0.4 (10.3) 21.6 (9.0) 2.7comprehensive income Balance at 31st 5.5 1.2 0.2 359.5 (160.5) 21.1 227.0December 2009
Group statement of financial position
at 31st December 2010 Unaudited Audited 31st December 31st December 2010 2009 £m £m £m £m Non-current assets Property, plant and equipment 0.1 2.7 Financial investments designated at fair value through profit and loss Portfolio companies 212.1 291.6 Other financial investments 17.9 28.3 230.0 319.9 Trade and other receivables 6.5 4.7 Deferred tax asset 3.5 3.4 240.1 330.7 Current assets Trade and other receivables 1.8 8.2 Derivative financial instruments 44.1 38.4 Current tax asset 0.1 0.9 Cash and cash equivalents 78.9 106.3 124.9 153.8 Financial investments held for sale 80.0 - (`discontinued operations') Assets of CPL disposal group 2.3 - (`discontinued operations') 207.2 153.8 Current liabilities Trade and other payables (15.9) (13.8) Financial liability on equity commitments - (12.2) Derivative financial instruments (29.9) (36.9) Provisions (4.5) - (50.3) (62.9) Derivative financial instruments (17.4) - (`discontinued operations') Liabilities of CPL disposal group (1.2) - (`discontinued operations') (68.9) (62.9) Net current assets 138.3 90.9 Total assets less current liabilities 378.4 421.6 Non-current liabilities Loans and borrowings (200.5) (194.6) Net assets 177.9 227.0 Equity attributable to equity holders Called up share capital 5.5 5.5 Share premium account 1.2 1.2 Other reserves 0.1 0.2 Capital reserve - realised 360.5 359.5 Capital reserve - unrealised (187.4) (160.5) Revenue reserve (2.0) 21.1 Total equity 177.9 227.0 Net asset value per share Basic 814p 1038p Diluted 814p 1038p Group cash flow statement
for the year ended 31st December 2010
Unaudited Audited Year to Year to 31st December 31st December 2010 2009 £m £m £m £m Cash flows from operating activities Cash flow from operations (15.2) (16.1) Interest paid (6.1) (11.0) Tax received 0.8 3.8 Net cash from operating activities (20.5) (23.3) Cash flows from investing activities Purchase of property, plant and equipment (0.4) (0.1) Purchase of financial investments (34.7) (40.0) Sale of property, plant and equipment - 0.1 Sale of financial investments 35.5 44.4 Net cash from investing activities 0.4 4.4 Cash flows from financing activities Equity dividends paid - - Purchase of own shares - - Advances of loans - - Net cash from financing activities - - (Decrease) in cash and cash equivalents (20.1) (18.9) Opening cash and cash equivalents 106.3 133.2 Effect of exchange rates and revaluation (6.3) (8.0)on cash and cash equivalents Closing cash and cash equivalents 79.9 106.3
Note to the financial statements
Note 1
The preliminary results for the year ended 31st December 2010 are unaudited. The financial information included in this statement does not constitute the Group's statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31st December 2010 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies in due course.
The information given as comparative figures for the year ended 31st December 2009 does not constitute the Company's statutory accounts for those financial periods. Statutory accounts for the year ended 31st December 2009, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.
Note 2
Exceptional non-recurring costs for the continuing group.
Exceptional non-recurring costs for the continuing group include a provision of £4.5 million in respect of an onerous property lease.
Note 3
Loss from CPL disposal group ("discontinued operations").
£m Management fees from third parties 14.6 Management fees charged to continuing group 5.0 Total fee income 19.6 Payroll and administrative expenses (20.1) Redundancy costs (2.3) Net operating deficit (2.8) Write-off on deferred tax asset (3.4) Net income before exceptional non-recurring charges (6.2) Exceptional non-recurring charges: Discretionary contribution to EBT (3.3) Payment of future deferred incentives (0.9) Advisor costs (3.6) Bond consent fee (0.9) Write-off on fixed assets (2.1)
Accelerated write-off on deferred incentive arrangements (4.7)
Loss from CPL disposal group ("discontinued operations") (21.7)
Of the charges incurred above £11.1 million will result in cash payments post year end.
Note 4
Loss relating to assets subject to strip disposal ("discontinued operations").
Revenue Capital Total £m £m £m Gains/losses on financial instruments at fair value through profit and loss Unrealised gains and losses - (4.1) (4.1) Investment and other income 1.9 - 1.9 Movement in fair value of (1.9) (15.5) (17.4) derivatives Loss relating to assets subject - (19.6) (19.6) to strip disposal ("discontinued
operations")
vendorRelated Shares:
CDI.L