21st Aug 2009 07:00
Press release For immediate release on 21st August 2009 The information contained herein is not for publication or distribution to persons in the United States of America. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold without registration thereunder or pursuant to an available exemption therefrom. Any public offering of securities to be made in the United States would have to be made by means of a prospectus that would be obtainable from the issuer or its agents and would contain detailed information about the issuer of the securities and its management, as well as financial statements. Neither this document nor the information contained herein constitutes an offer to sell or the solicitation of an offer to buy any
securities. These materials do not constitute an offer of securities for sale in the United States. No money, securities or other consideration is being
solicited, and, if sent in response to the information contained herein, will not be accepted. Candover Investments plc
Interim results for the six months ended 30th June 2009
Financial headlines
Net assets per share were 902p, a decrease of 12% since 31st December 2008 (1026p) driven by currency movements and exceptional non-recurring costs which accounted for declines of 13% and 7% respectively
Net assets per share before currency movements and exceptional non-recurring costs increased by 8% reflecting the stabilisation of the value of the investment portfolio as equity markets recover
* Net debt reduced to 19.2 million ( 54.5 million at 31st December 2008)
following asset realisations; loan to value covenant ratio of 25% (34% at
31st December 2008)
* Realisation proceeds of 41.6m; 36.4m from the sale of Wood Mackenzie,
which crystallised carried interest payments * Value of future carried interest increased to 25.7m ( 19.2m at 31st December 2008) * No interim dividend (2008: 22.0p per share)
Strategic review
* Financial position strengthened markedly
* Clear progress to stability made following recent asset realisations and
lowering of the cost base
* Range of strategic options considered; third party proposals not advanced
because no certainty of creating value for shareholders * Restructuring of Candover Partners completed with management succession plan implemented and new leadership team now in place
* Review now focused on the interlinked issues of the status of the 2008 Fund
and the ownership structure of Candover Partners
Gerry Grimstone, Chairman of Candover Investments plc, said:
"During the last six months we have made significant progress in terms ofachieving financial stability for Candover. We are in a much stronger positionthan previously due to recent asset realisations and the lowering of the costbase. We continue to focus on enhancing our stability further and resolvingthe organisational and structural issues that remain. "In the short term our portfolio companies continue to operate in a challengingeconomic climate, although we see some stability returning. Our priorityremains to ensure that these companies and their management teams have theresources and expertise to trade through the downturn and are well positionedto take advantage of growth opportunities when conditions improve. We continueto believe that there is considerable long-term value within many of Candover'sportfolio companies which, when realised over time, should provide asubstantial enhancement of value for our shareholders." For further information, please contact:
Tulchan +44 20 7353 4200 Susanna Voyle/Peter Hewer KEY FINANCIALSTotal net assets 197.2 millionTotal net assets (after currency movements and exceptional non-recurring costs)were 197.2 million, a decrease of 12.1% for the six months to 30th June 2009Net assets per share902pNet assets per share (after currency movements and exceptional non-recurringcosts) decreased by 12.1% to 902p for the six months to 30th June 2009Net revenue before exceptional non-recurring costs 5.2 millionCompares to net revenue of 9.5 million in 2008 and stated before exceptionalnon-recurring costs of 15.4 millionincurred on undertaking the strategicreview, restructuring costs and the costs of discontinued operations in Asiaand Eastern EuropeReferences in this Interim Report to Candover mean Candover Investments plc and/or,where appropriate, one or more of its subsidiaries, and references to Candover Partners means Candover Partners Limited.The information contained herein is not for publication or distribution topersons in the United States of America. Any securities referred to herein havenot been and will not be registered under the US Securities Act of 1933, asamended (the Securities Act), and may not be offered or sold withoutregistration thereunder or pursuant to an available exemption therefrom. Anypublic offering of securities to be made in the United States would have to bemade by means of a prospectus that would be obtainable from the issuer or itsagents and would contain detailed information about the issuer of thesecurities and its management, as well as financial statements. Neither thisdocument nor the information contained herein constitutes an offer to sell orthe solicitation of an offer to buy any securities. These materials do notconstitute an offer of securities for sale in the United States. No money,securities or other consideration is being solicited, and, if sent in responseto the information contained herein, will not be accepted.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to be able to report that the financial position of Candover hasstrengthened markedly in the last six months. Your Board is confident that theCompany has made good progress in dealing with the challenges that face it andin achieving greater financial stability.In our preliminary announcement in March, I reported to you that Candover wasfacing its most challenging period since its foundation in 1980. The financialposition of the Company had weakened significantly during the latter part of2008, reflecting a combination of external factors, structural aspects uniqueto our business model, and the changes to the Company's balance sheet that weremade in 2006 and 2007. I informed you that, in the wake of our decision towithdraw from our commitment to the Candover 2008 Fund, the Board wasconsidering a range of strategic options to reinforce our financial positionand maximise value for shareholders.The challenges we faced included how to deal with a rapid fall in the value ofour assets and how to ensure that the Company had access to sufficient cash andliquidity to fund both its ongoing operations and to meet its commitments toinvest in the Funds raised and managed by Candover Partners.Achieving stabilisationThe review of strategic options we undertook was focused on how to put Candoveron a firm footing for the future.During the review, Candover received a number of expressions of interestcovering a range of options for the business, including potential offers forthe Company. Together with our advisors, we entered into detailed discussionswith a number of parties to establish whether a bid for the entire Companywould deliver superior value for shareholders compared with a realisation ofour underlying portfolio. After careful consideration of all of the optionsavailable and taking into account the progress made in stabilising the overallfinancial position of the Company, the Board concluded that none of theproposals had sufficient certainty of creating enhanced value for shareholders.These discussions terminated at the end of June.
Various proposals were also made to us that would have resulted in substantial dilution for existing shareholders but we found none of these appropriate.
We concluded that a reduction in the cost base was essential in the light ofthe changed economic situation that we faced, including the suspension of theCandover 2008 Fund. This meant that we had to make a number of our investmentexecutives and support staff redundant. This was not an easy process and Iwould like to thank all our colleagues for their efforts and support forCandover. In addition, we have closed our nascent Asian and Eastern Europeanoperations where the efforts by these teams to become self-financing had sadlynot made enough progress.Asset sales have made a major contribution to our stabilisation. We sold ourinterests in three French buyout funds for 5.3 million. The major contributionto our much firmer financial footing, however, came from the sale of WoodMackenzie by Candover Partners for an enterprise value of 553 million. Thisgenerated cash proceeds for the Company of 36.4 million - 19.6 million fromthe sale itself and a further 16.8 million as a result of the crystallisationof carried interest payments from the Candover 2001 Fund. The value of ourcarried interest entitlements have increased from 19.6 million to 25.7million. This reflects the increased certainty as to the crystallisation ofthe carry into incremental cash flow, as and when the Candover 2001 Fundachieves further realisations.The overall positive impact of these events is reflected in both the reductionin net debt at 30th June 2009 to 19.2 million from 54.5 million at 31stDecember 2008; as well our ability to meet the covenant obligations attached toour loan notes. As at 30th June 2009, our loan to value ratio as calculated inaccordance with our loan note agreement was 24.8% compared to 33.6% at 31stDecember 2008, and was well within the required threshold of 40%. In addition,the Board is satisfied that Candover continues to have adequate capital to meetits follow-on commitments to the 2005 Fund which amount to 78.4 millioncompared to cash and cash equivalents of 151.9 million.
Two interlinked strategic issues remain - the future of the Candover 2008 Fund and the ownership structure of Candover Partners.
The Candover 2008 FundThe Company has always been a cornerstone investor in the funds raised byCandover Partners. However, because of the issues faced by Candover Investmentsplc, we withdrew from our commitment to the Candover 2008 Fund, leading to theFund's suspension for up to six months from 6th April 2009. As a result ofCandover's decision not to make any further commitment, discussions beganbetween Candover, Candover Partners (as manager of the Fund) and the Fund'sLimited Partners regarding the options for the future of the Fund. These talksare ongoing and we expect them to conclude within the weeks ahead. We hope thatthey will lead to the emergence of a smaller Fund but we do not yet know thatthis will be the case. In any event, Candover Investments plc will not be aninvestor in a new Candover 2008 Fund.Candover PartnersOur long-standing business model - a listed plc which invests, realises andrecycles profits through an independent but wholly owned private equity fundmanager, Candover Partners - has been severely tested by the global financialand economic crisis. The stresses that have resulted from this have made itclear that our ownership of Candover Partners and our co-investing alongsidefunds raised by them, have created a set of arrangements that are notnecessarily optimal from the point of view of our shareholders. The fiduciaryduty owed by Candover Partners to the Limited Partners in its funds has thepotential for creating an undesirable conflict between the interests of theLimited Partners and the shareholders of Candover Investments plc.The strategic review has therefore focused our minds on whether an alternativeownership model for Candover Partners (or some other arrangements) may bemerited in the future. This is closely linked to the discussions concerningthe future of the Candover 2008 Fund and we will be concluding our review ofthis once the future of that Fund has been settled.
Management
The restructuring of our business team has provided Candover Partners with theopportunity to bring forward some changes to the senior management of thebusiness that were envisaged as part of a long-term succession plan. JohnArney, who has been with Candover Partners since 2002, has taken on thenewly-created role of Managing Partner, responsible for both the strategy andmanagement of Candover Partners. Marek Gumienny has become Chairman of CandoverPartners. Colin Buffin, who has been a driving force in the firm's evolutionsince he joined Candover in 1985, will leave the Company once discussions onthe Candover 2008 Fund have concluded. Likewise, Tian Tan, the Finance Directorof Candover Partners, has retired and Matthew Harrison has assumed that role. Iwould like again to thank all our departing colleagues for their hard work andefforts over the years.I am pleased to say that Malcolm Fallen, who led the strategic review processon behalf of the Board since joining on an interim basis in March 2009, hasbeen confirmed as CEO of Candover Investments plc and he will be joining yourboard from 9th September. I am confident that Malcolm will continue to drivethe affairs of the Company forward as he has so successfully done over the lastfew months.Our performanceWe have seen stabilisation in the underlying value of our investmentportfolio. Whilst unaudited net assets fell over the six months by 27.1million, this was after providing for exceptional non-recurring costs of 15.4million, and net currency losses of 29.8 million due to the adversetranslation impact on our non-sterling denominated investments and cashbalances, offset by translation gains on the loan notes and related swaps. Excluding these items net assets would have increased by 18.1 million (8.1%),reflecting a steadying in the valuations of the portfolio companies in constantcurrency terms.Net revenue before tax and exceptional non-recurring costs was 5.2 million,compared to net revenue before tax of 9.5 million in 2008. The reducedrevenue is a result of the impact of lower fee income offset by the benefits ofrestructuring our cost base.Most significantly during the period under review, our net debt has reduced to 19.2 million from 54.5 million at 31st December 2008, principally due torealisation proceeds of 41.6 million. Realisation proceeds crystallised inthe first half of 2008 were 31.7 million.
Dividend
At this point in time the Board does not feel it would be appropriate to recommence paying dividends to shareholders. However, as and when further clarity arises on the remaining strategic issues, and future realisations enhance our balance sheet further, the Board would seek to recommence the process of returning value to shareholders.
Outlook
During the last six months we have made significant progress in terms of achieving financial stability for Candover. We are now in a much stronger position due to recent asset realisations and the lowering of the cost base. We continue to focus on enhancing our stability further and resolving the organisational and structural issues that remain.
In the short term, our portfolio companies continue to operate in a challengingeconomic climate although we see some stability returning. Our priorityremains to ensure that these companies and their management teams have theresources and expertise to trade through the downturn and are well positionedto take advantage of growth opportunities when conditions improve. We continueto believe that there is considerable long-term value within many of Candover'sportfolio companies which, when realised over time, should provide asubstantial enhancement of value for our shareholders.Gerry GrimstoneChairman21st August 2009INTERIM MANAGEMENT REPORT
Activity in the European buyout market continues to be muted and our focus in the near term is very much on protecting and growing value in the existing portfolio. The most significant event in the first half of the year was the realisation of Wood Mackenzie.
Investments
The European buyout market suffered in the first half of the year from thedifficult market conditions and a lack of availability of debt, with activityreaching lows not seen for ten years in terms of both volume and value. Wemade no new investments during the period due to a lack of investmentopportunities in the first quarter,and, from April onwards, the suspension ofthe Candover 2008 Fund.
Realisations
Candover and its managed funds achieved realisation proceeds totalling 218.5 million during the period. Candover's share was 41.6 million.
In May we realised our direct holdings in Ciclad 2, 3 and 4, which the strategic review had identified as non-core assets. The sale of these three investments generated proceeds of 5.3 million.
In June, we realised our holding in Wood Mackenzie. The sale generated proceedsof 36.4 million for Candover (including loan note interest of 0.7 million),of which 16.8 million resulted from the crystallisation of the carriedinterest. The Candover 2001 Fund achieved a return of 173.6 million(including loan note interest of 5.0 million), bringing the overall investmentmultiple to 2.7 times the original investment. Date of Company Capital Exit route exit proceeds Candover Funds GBPm GBPm May Ciclad 2, 3 and 4 5.3 - Private equity sale June Wood Mackenzie 18.9 168.6 Private equity sale Candover 2001 Fund 16.8 - Crystallisation of Carried Interest carried interest Other 0.6 2.6 _____ ______ 41.6 171.2 Valuations
Over the period under review the portfolio has shown signs of stabilisation. Of our top ten investments, seven are trading ahead of prior year at the earnings level on a twelve month basis.
The portfolio is well diversified by region and sector. Whilst the UKrepresents 39% of our investments by value, the companies themselves are welldiversified in the regions in which they trade. Industrials remain our largestsector by exposure, due to our investments in Stork, Qioptiq and CapitalSafety. The slow down in the private equity markets over the past year has affected ourability to achieve realisations, and a significant part of our portfolio byvalue has now been held for over five years. These investments, Springer,Ontex and Equity Trust, have all now shown positive growth under our ownershipand we feel they are well positioned to prosper further when the currentclimate changes.
The 10 largest companies represent 87% of the portfolio, with the 2001 Fund Carried Interest representing a further 10%.
Top 10 investmentsAnalysis by value as at 30th June 2009By valuation method1. Multiple of earnings 100%By region1. United Kingdom 39%2. Benelux 26%3. Spain 13%4. France 13%5. Switzerland 5%6. Germany 4%By sector1. Industrials 31%2. Energy 21%3. Financials 18%4. Leisure 13%5. Health 8%6. Support services 5%7. Media 4%By age1. 5 years 17%OutlookAs part of the ongoing strategic review, we are currently exploring possiblechanges to the ownership structure between Candover Investments plc andCandover Partners. Any change to this structure will depend on the progress ofdiscussions concerning the future of the 2008 Fund.Under the terms of the suspension of the Candover 2008 Fund, no new investmentswill be made until at least October 2009. However, whilst there are earlyindications that the buyout market is starting to recover, we believe thatbuyout activity in the second half of 2009 will remain relatively quiet. It isour view there will be a number of interesting opportunities in 2010 asdeveloped economies emerge from the recession.Our focus therefore remains on managing the portfolio through this difficulteconomic period, and ensuring that the long-term value of each company ismaximised.John ArneyManaging PartnerCandover Partners Limited21st August 200910 LARGEST INVESTMENTSas at 30th June, 2009 Residual Directors' Effective % of Basis of cost valuation equity
interest Candover's valuation
Date of of GBPm (fully diluted) net assetsInvestment Geography investment investment GBPm Expro UK Apr-08 69.5 46.3 See note 23.5% MultipleInternational 1 of earningsOilfield services Stork Netherlands Jan-08 48.9 41.3 6.4% 20.9% MultipleEngineering of earningsconglomerate Parques Spain Mar-07 25.7 29.8 5.6% 15.1% MultipleReunidos of earningsOperator of attraction parks AlmaConsulting France Dec-07 20.5 28.9 5.4% 14.7% MultipleGroup of earningsCost reduction and tax recovery services Ontex Belgium January 22.1 17.3 6.3% 8.8% MultipleHygienic 2003/ of earningsdisposables Jul-07 Qioptiq UK Dec-05 9.6 15.0 7.2% 7.6% MultipleOptical of earningsengineering Capital Safety UK Jun-07 11.8 13.2 6.4% 6.7% MultipleGroup of earningsFall protection equipment Equity Trust UK May-03 8.3 11.9 5.6% 6.0% MultipleTrust services of earnings EurotaxGlass's Switzerland Jun-06 17.4 10.8 8.0% 5.5% MultipleAutomotive of earningsdata intelligence Springer Germany January/ 0.6 9.0 3.6% 4.5% MultipleScience + Sep-03 of earningsBusiness Media Academic publisher
Note 1 - Candover's final investment amount, and therefore its effective equity interest, will depend on the level of syndication
FINANCIAL REVIEW
Net asset value per shareNet assets per share after currency movements and exceptional items were 902p,a decrease of 12.1% since 31st December 2008. Candover currently manages itscurrency exposure in order to mitigate any adverse impact on its loan to valuecovenant through the denomination of its cash balances and swaps. As a result,currency fluctuations can have a material impact on net assets. See Table 1.At 30th June 2009, net assets per share before currency movements andexceptional non-recurring costs were 1109p compared to 1026p at 31st December2008. The increase of 8.1% over the six month period compares with a fall inthe FTSE All-Share of 1.7% over the same period, reflecting the growingstabilisation of the portfolio.Table 1 GBP GBP p/ p/ million million share share
Net asset value at 31st December 2008 as 224.3 1026 reported Investment movements (before currency) 22.1 101 Net revenue before exceptional 5.2 24 non-recurring costs Capitalised expenses net of tax (7.7) (35)
Others (1.5) (7) _____ ____ 242.4 1109 Currency impact:
- Realised and unrealised investments (39.6) (181) - Restatement of cash and cash equivalents (15.9) (73) - Translation of loan and swap balances 25.7 118
______ ______ (29.8) (136) Exceptional non-recurring costs (15.4)
(71)
______ _____ Net asset value at 30th June 2009 as 197.2 902
reported InvestmentsThe valuation of investments, including accrued loan note interest, at 30thJune 2009 was 256.6 million (31st December 2008: 313.9 million). See Table 2.Table 2 GBP million million Investments at 31st December 2008 313.9 Disposals at valuation (46.5) Additions 0.1 Revaluation of investments: - Valuation movements before currency 26.1 - Currency impact on unrealised investments (37.0) _________ (10.9) ______ Investments at 30th June 2009 256.6 Net debt positionCandover's net debt has fallen from 54.5 million at 31st December 2008 to 19.2 million as at 30th June 2009, principally due to realisation proceeds of 41.6 million. Realisation proceeds crystallised in the first half of 2008 were 31.7 million. See Table 3.Table 3 30th June 2009 31st December 2008 million Loans and borrowings 187.1 217.5 Fair value hedge adjustment (12.0) (21.0) Deferred costs 1.4 1.6 _______________________ Value of bonds 176.5 198.1 Value of related swaps (5.4) (10.4) Cash (151.9) (133.2) _______________________ Net debt 19.2 54.5
The outstanding commitment to the Candover 2005 Fund fell to 78.4 million over the period from 90.4 million at the year end, largely due to currency.
As disclosed at the year end, Candover has guaranteed an additional EUR43.2 million investment in Expro, pending its syndication.
Net revenue before taxFor the six month period net revenue before exceptional items and tax was 5.2million compared to 9.5 million in the comparative period. This resulted fromthe impact of lower fee income offset by the benefits of restructuring our costbase.
Exceptional non-recurring costs of 15.4 million were incurred on undertaking the strategic review, restructuring costs and the costs of discontinued operations in Asia and Eastern Europe.
PRINCIPAL RISKS AND UNCERTAINTIES
Details of the principal risks and uncertainties facing the Group were set outon pages 53 to 59 of the 2008 Annual Report and Accounts, a copy of which isavailable on the website. In summary, those risks and uncertainties were asfollows: market risk, currency risk (in particular the euro and US dollar),interest rate risk, other price risk, liquidity risk, credit risk, fair valuesof financial assets and financial liabilities and capital management policiesand procedures.
The principal risks and uncertainties identified in the 2008 Annual Report remain unchanged and each of them has the potential to affect the Group's results during the remainder of 2009.
Candover aims to minimise risk by:
- Diversifying the portfolio by size, sector and geography; - Monitoring the Group's exposure to foreign currencies and fixed
interest securities; - Using foreign currency borrowing and derivative financial instruments
to reduce the Group's exposure to future exchange rate movements;- Ensuring full and timely access to relevant information from the investee companies and attending board meetings;- Managing cash and non-cash equivalents in such a way that they are readily realisable to meet investment and operating needs- Monitoring and reviewing the broad structure of the Group's capital on an ongoing basis; and- Hedging market movements where appropriate
Our views on the current market conditions are reflected in the Chairman's statement and interim management report.
STATEMENT OF DIRECTORS'RESPONSIBILITIES
The directors of Candover Investments plc confirm that, to the best of theirknowledge, the condensed set of financial statements on pages 11 to 14 havebeen prepared in accordance with International Accounting Standard 34 'InterimFinancial Reporting' as adopted by the EU, and that the interim managementreport on pages 4 and 5 includes a fair review of the information required byDTR 4.2.4, DTR 4.2.7 and DTR 4.2.8.
The directors of Candover Investments plc are listed on page 16.
By order of the BoardPhilip PriceCompany Secretary21st August 2009INDEPENDENT REVIEW REPORT TO CANDOVER INVESTMENTS PLCIntroductionWe have been engaged by the Company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 30th June 2009 which comprises the statement of comprehensive income, statement ofchanges in equity, statement of financial position, group cash flow statementand the related notes. We have read the other information contained in thehalf-yearly financial report and considered whether it contains any apparentmisstatements or material inconsistencies with the information in the condensedset of financial statements.This report is made solely to the Company in accordance with guidance containedin ISRE (UK and Ireland) 2410, 'Review of Interim Financial Informationperformed by the Independent Auditor of the Entity'. Our review work has beenundertaken so that we might state to the Company those matters we are requiredto state to them in a review report and for no other purpose. To the fullestextent permitted by law, we do not accept or assume responsibility to anyoneother than the Company, for our review work, for this report, or for theconclusion we have formed.Directors' responsibilitiesThe half-yearly financial report is the responsibility of, and has beenapproved by, the directors. The directors are responsible for preparing thehalf-yearly financial report in accordance with the Disclosure and TransparencyRules of the United Kingdom's Financial Services Authority.As disclosed in Note 2, the annual financial statements of the Group areprepared in accordance with IFRSs as adopted by the European Union. Thecondensed set of financial statements included in this half-yearly financialreport has been prepared in accordance with International Accounting Standard34, 'Interim Financial Reporting', as adopted by the European Union.Our responsibilityOur responsibility is to express to the Company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview.Scope of reviewWe conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, 'Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity' issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly,we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us tobelieve that the condensed set of financial statements in the half-yearlyfinancial report for the six months ended 30th June 2009 is not prepared, inall material respects, in accordance with International Accounting Standard 34as adopted by the European Union and the Disclosure and Transparency Rules ofthe United Kingdom's Financial Services Authority.Grant Thornton UK LLPRegistered AuditorLondon21st August 2009 STATEMENT OF COMPREHENSIVE INCOMEfor the period ended 30th June 2009 million Six months to 30th Six months to 30th Year to 31st December June 2009 June 2008 2008Unaudited Revenue Capital Total Revenue Capital Total Revenue Capital Total Notes Gain/(loss) on financial instruments at fair value through profit and loss Realised gains and losses - (12.4) (12.4) - 15.1 15.1 - 34.3 34.3 Unrealised gains and losses - (0.4) (0.4) - 6.6 6.6 - (224.9) (224.9)
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- (12.8) (12.8) - 21.7 21.7 - (190.6) (190.6) Revenue Management fees from managed funds 9.8 - 9.8 20.0 - 20.0 46.4 - 46.4 Investment and other income 6.5 - 6.5 12.0 - 12.0 (5.2) - (5.2)
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16.3 - 16.3 32.0 - 32.0 41.2 - 41.2 Recurring administrative expenses (10.1) (3.6) (13.7) (21.4) (5.8) (27.2) (33.2) (9.0) (42.2)Exceptional 3 non-recurring costs (15.4) - (15.4) - - - - - -
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Profit/(loss) before finance costs and taxation (9.2) (16.4) (25.6) 10.6 15.9 26.5 8.0 (199.6) (191.6) Finance costs (1.0) (4.1) (5.1) (1.1) (4.7) (5.8) (2.8) (11.1) (13.9) Movement in the fair value of derivatives - (1.0) (1.0) - (14.8) (14.8) - 2.2 2.2 Exchange movements on borrowings - 5.8 5.8 - (1.4) (1.4) - (11.8) (11.8)
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Profit/(loss) before taxation and other comprehensive income (10.2) (15.7) (25.9) 9.5 (5.0) 4.5 5.2 (220.3) (215.1) Analysed between: Profit/(loss) before exceptional non-recurring costs 5.2 (15.7) (10.5) 9.5 (5.0) 4.5 5.2 (220.3) (215.1)Exceptional non- recurring costs (15.4) - (15.4) - - - - - - Taxation (0.8) - (0.8) (2.8) 3.0 0.2 (1.4) 3.9 2.5Other comprehensive income: Exchange differences on translation of foreign operations (0.4) - (0.4) (0.2) - (0.2) (0.2) - (0.2)
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Profit/(loss) attributable to equity shareholders (11.4) (15.7) (27.1) 6.5 (2.0) 4.5 3.6 (216.4) (212.8) Earnings per ordinary share:
Before exceptional non-recurring costs
Basic and diluted 18p (72)p (54)p 30p (9)p 21p 16p (990)p (974)p
After exceptional non-recurring costs
Basic and diluted (52)p (72)p (124)p 30p (9)p 21p 16p (990)p (974)p
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Dividends paid ( millions) - - - 8.7 - 8.7 13.6 - 13.6
All of the profit for the year and the total comprehensive income for the year is attributable to the owners of the Company.
The total column of the statement is the Statement of Comprehensive Income ofthe Company prepared in accordance with IFRS. The supplementary revenue andcapital columns are presented for information purposes as recommended by theStatement of Recommended Practice issued by the Association of InvestmentCompanies.
All items in the above Statement derive from continuing operations. No operations were acquired or discontinued in the year.
No interim dividend is proposed.
Exceptional non-recurring costs are outlined in Note 3.
STATEMENT OF CHANGES IN EQUITYfor the period ended 30th June 2009 million Called Share Other Capital Capital Revenue Total up premium reserves reserve reserve - reserve equity share account - unrealised capital realised Unaudited Balance at 1st 5.5 1.2 (0.2) 369.8 (182.1) 30.1 224.3January 2009 Net revenue - - - - - (11.4) (11.4)Unrealised loss on - - - - (0.4) - (0.4)financial instruments Realised gain on - - - 24.1 (36.5) - (12.4)financial instruments Movement in fair - - - - (1.0) - (1.0)value of derivatives Exchange movements - - - - 5.8 - 5.8on borrowing Costs net of tax - - - (7.7) - - (7.7) Exchange - - (0.4) - - 0.4 -differences on translation of foreign operations
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Balance at 30th 5.5 1.2 (0.6) 386.2 (214.2) 19.1 197.2 June 2009
________________________________________________________ million Called Share Other Capital Capital Revenue Total up premium reserves reserve reserve - reserve equity share account - unrealised capital realised Unaudited Balance at 1st 5.5 1.2 0.6 326.6 77.5 39.9 451.3January 2008 Dividends - - - - - (8.7) (8.7)Share based - - 1.2 - - - 1.2payments Transactions with - - 1.2 - - (8.7) (7.5)equity holders Net revenue - - - - - 6.5 6.5Unrealised loss on - - - - 6.6 - 6.6financial instruments Realised gain on - - - 40.0 (24.9) - 15.1financial instruments Movement in fair - - - - (14.8) - (14.8)value of derivatives Exchange movements - - - - (1.4) - (1.4)on borrowing Costs net of tax - - - (7.5) - - (7.5) Exchange - - (0.1) - - 0.1 -differences on translation of foreign operations
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Balance at 30th 5.5 1.2 1.7 359.1 43.0 37.8 448.3June 2008 __________________________________________________ million Called Share Other Capital Capital Revenue Total up share premium reserves reserve - reserve - reserve equity capital account realised unrealised Audited Balance at 1st 5.5 1.2 0.6 326.6 77.5 39.9 451.3January 2008 Dividends - - - - - (13.6) (13.6)Share based - - (0.2) - - - (0.2)payments Share buy-backs - - (0.6) - - - (0.6)Transactions - - (0.8) - - (13.6) (14.4)with equity holders Net revenue - - - - - 3.8 3.8Unrealised loss - - - - (224.9) - (224.9)on financial instruments Realised gain - - - 59.3 (25.0) - 34.3on financial instruments Movement in - - - - 2.2 - 2.2fair value of derivatives Exchange - - - - (11.9) - (11.9)movements on borrowing Costs net of - - - (16.1) - - (16.1)tax
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Balance at 31st 5.5 1.2 (0.2) 369.8 (182.1) 30.1 224.3December 2008 STATEMENT OF FINANCIAL POSITIONat 30th June 2009 million 30th June 30th June 31st December Unaudited 2009 2008 2008 Non-current assets Notes Property, plant and equipment 3.5 3.9 4.0 Financial investments designated at fair value through profit and loss Investee companies 4 230.9 425.4 294.3
Other financial investments 4 25.7 24.8 19.6
256.6 450.2 313.9
Trade and other receivables 2.9 -
7.1Deferred tax asset 5.9 6.1 6.5 268.9 460.2 331.5 Current assets
Trade and other receivables 7.7 7.1 14.1
Derivative financial instruments 32.9 7.3 58.7 Current tax asset - - 3.9
Cash and cash equivalents 151.9 183.1 133.2
192.5 197.5 209.9Current liabilities
Trade and other payables (22.0) (26.3) (20.3) Financial liability on
equity commitments (27.3) - (31.1) Derivative financial instruments (27.6) (24.1) (48.2)
Current tax liabilities (0.2) (0.9) -
(77.1) (51.3) (99.6) Net current assets 115.4 146.2 110.3
Total assets less current
liabilities 384.3 606.4 441.8Non-current liabilities Loans and borrowings (187.1) (158.1) (217.5) Net assets 197.2 448.3 224.3 Equity attributable to equity holders Called up share capital 5.5 5.5 5.5 Share premium account 1.2 1.2 1.2 Other reserves (0.6) 1.7 (0.2)Capital reserve - realised 386.2 359.1
369.8
Capital reserve - unrealised (214.2) 43.0 (182.1)Revenue reserve 19.1 37.8 30.1 Total equity 197.2 448.3 224.3 Net asset value per share Basic 902p 2051p 1026pDiluted 902p 1996p 1026p GROUP CASH FLOW STATEMENTfor the period ended 30th June 2009 Six months Six months Year to to to million 30th June 30th June 31st December Unaudited 2009 2008 2008
Cash flow from operating activities
Cash flow from operations (3.6) (16.9) (22.9) Interest paid (7.2) (4.8) (11.7) Tax reclaimed/(paid) 3.9 (1.7) (4.7)
Net cash from operating activities (6.9) (23.4)
(39.3) Cash flows from investing activities
Purchase of property, plant and equipment - (0.3) (0.9) Purchase of financial investments (0.1) (103.5) (168.8) Sale of financial investments* 41.6 31.7 47.4 Net cash (outflow)/inflow from
investing activities 41.5 (72.1) (122.3) Cash flows from financing activities Equity dividends paid - (8.7) (13.6) Purchase of own shares - - (0.6) Advances of loans - 33.0 33.2
Net cash from financing activities - 24.3
19.0
(Decrease)/increase in cash and
cash equivalents 34.6 (71.2) (142.6)
Opening cash and cash equivalents 133.2 240.3
240.3Effect of exchange rates and revaluation on cash and cash equivalents (15.9) 14.0 35.5
Closing cash and cash equivalents 151.9 183.1
133.2
*Whilst rolled-up loan note interest is disclosed within "Financial investmentsdesignated at fair value through profit and loss" on the balance sheet, anyinterest received or receivable is shown within the revenue column of the"Statement of comprehensive income" and so included in cash flow from operatingactivities above.
NOTES TO THE FINANCIAL STATEMENTS
Note 1 - General informationThe information for the year ended 31st December 2008 does not constitutestatutory accounts as defined in Section 240 of the United Kingdom CompaniesAct 1985. Comparative figures for 31st December 2008 are taken from the fullaccounts, which have been delivered to the Registrar of Companies and containan unqualified audit report and did not contain a statement under Section 237(2) or Section 237(3) of the Companies Act 1985.Note 2 - Basis of accountingThe Group financial statements are prepared under International FinancialReporting Standards (IFRS) as adopted by the European Union. This statement hasbeen prepared using accounting policies and presentation consistent with thoseapplied in the preparation of the accounts for the Group for the year ended31st December 2008, and in accordance with IAS 34 'Interim FinancialReporting', with the exception of:IAS 1 'Presentation of financial statements'. This revised standard affectsthe presentation of changes in equity and the introduction of a Statement ofComprehensive Income.Note 3 - Exceptional costsExceptional costs are those items that are one-off in nature and createsignificant volatility in reported earnings and are therefore reportedseparately in the income statement. These include non-recurring costs relatingto the strategic review and restructuring costs that are not regular runningcosts of the underlying business. million Western European Asia and Central Total Buyout Team European Team Redundancy costs 6.8 1.6 8.4 Advisor costs 2.7 - 2.7
Placing agents' fees written off 1.7 -
1.7 Discontinued operations - 2.6 2.6 Total costs 11.2 4.2 15.4 Note 4 - Financial investments designated at fair value through profit and loss million Six months to Six months to Year to 30th June 30th June 31st December 2009 2008 2008 Opening valuation 313.9 364.4 364.4 Additions at cost 0.1 103.5 168.8 Disposals (46.8) (29.6) (30.1) Valuation movements (10.6) 11.9 (189.2) Closing valuation 256.6 450.2 313.9
'Other financial investments' comprise the Company's valuation of its investment as a Special Limited Partner in managed funds.
The value of rolled-up loan note interest recognised has been reclassifiedwithin "Financial investments designated at fair value through profit and loss"rather than in accrued income, as the value recognised is based of the overallvalue of the investment.
Note 5 - Related party transactions The Company's interest in the Candover 1997, 2001, 2005 and 2008 Funds is disclosed in note 10 on page 44 of the 2008 Annual Report and Accounts.
As at 30th June 2009, Candover's investments as a Special Limited Partner inthe Candover 2001, 2005 and 2008 Funds were valued at 25.3 million, 0.3million and 0.1 million respectively (31st December 2008: Candover 2001 Fund 19.2 million , Candover 2005 Fund 0.3 million, and Candover 2008 Fund 0.1million).
The Company's subsidiaries are listed in note 11 on page 46 of the 2008 Annual Report, which includes a description of the nature of their business.
During the period the Company undertook transactions with Candover Services Limited which provided investment and administration services to the Company, for which the Company was charged 3.3 million (2008: 6.7 million).
Note 6 - Outstanding commitmentsAt 30th June 2009, the Company had an outstanding commitment to fundinvestments alongside the Candover 2005 Fund of 78.4 million (31st December2008: 90.4 million). The reduction in the period was mainly due to currencymovements. As previously communicated because of the issues faced by theCompany, it withdrew from its commitment to the Candover 2008 Fund, leading tothe Fund's suspension for up to six months from 6th April 2009.
FURTHER INFORMATION
Information for shareholdersShare priceThe Company's shares are listed on the London Stock Exchange under share code'CDI'. The share price is quoted daily in the Financial Times, The DailyTelegraph, The Times, The Independent and the Evening Standard and is alsoavailable on our website at www.candoverinvestments.com/ andwww.candoverinvestments.com/investor-info/price-graphISA statusThe Board has considered the ISA status of Candover's shares and for the timebeing considers that a decision to make Candover's shares eligible forinclusion in an ISA will impose constraints on the Company's investmentcriteria that will not be in the overall interests of shareholders.
Website
For the latest information about Candover Investments plc visit our website:
Home page:www.candoverinvestments.comLatest plc newswww.candoverinvestments.com/media/latest-plc-newsDividend Historywww.candoverinvestments.com/financial-performance/dividend-history
Registrars
Enquiries concerning registered shareholdings, including changes of address,should be referred to:Capita RegistrarsNorthern HouseWoodsome ParkFenay BridgeHuddersfieldWest YorkshIre HD8 0LATelephone +44 (0)871 664 0300*Facsimile +44 (0)1484 600911Email [email protected]* Calls cost 10p per minute plus network extras Board of directorsG E Grimstone ***Non-executive ChairmanA P Hichens MBA ***Non-executive, nominations committee chairmanSenior Independent DirectorLord Jay of Ewelme GCMG ***Non-executiveN M H Jones FCA *Non-executiveJ Oosterveld *Non-executive C Russell FSIP FCA *Non-executive, audit committee chairmanR A Stone FCA ***Non-executive, remuneration committee chairman* Member of the remuneration committee Member of the audit committee** Member of the nominations committee
vendorRelated Shares:
CDI.L