TIDMICGT
ICG Enterprise Trust plc
11 October 2022
Unaudited Interim Results for the six months ended 31 July
2022
DEFENSIVE GROWTH IN CHALLENGING MARKETS
Highlights
-- NAV per Share of 1,852p (31 January 2022: 1,690p)
-- NAV per Share Total Return of 10.9% in the period (H1
FY22: 11.1%), 24.2% over the last twelve months
('LTM')
-- Portfolio delivering strong performance: Portfolio
Return on a Local Currency Basis of 7.4% (Sterling
return 12.4%); 99.6% of Portfolio has a valuation
date of 30 June 2022 or later
-- Realisation Proceeds of GBP106.8m, including GBP73.2m
from 30 Full Exits at an average Uplift To Carrying
Value of 25.2%
-- New Investments of GBP143.7m, including GBP30.1m
direct and GBP49.2m in Secondary Investments,
focussing on investments with enhanced downside
protection
-- New Commitments to funds of GBP164.1m, including
GBP65.9m to Secondary funds
-- Second quarter dividend of 7p per share, taking total
dividends for the period to 14p (H1 FY22: 12p).
Reaffirmed intended FY23 dividend of at least 30p per
share, an increase of 11.1% on FY22
-- Long-term share buyback programme approved by the
Board
Oliver Gardey
Head of Private Equity Fund Investments, ICG
Against a macroeconomic backdrop that became increasingly
challenging, we are proud of the resilience of our
investments during the first half of FY23. At 31 July
2022, NAV per Share stood at 1,852p, a NAV per Share
Total Return of 10.9% for the period and 24.2% on
an LTM basis.
Delivering defensive growth through economic cycles
defines our approach at ICG Enterprise Trust: it shapes
how we construct the Portfolio and evaluate potential
investments, as well as how we allocate capital between
reinvestments and shareholder distributions. We entered
the financial year with a Portfolio aligned with this
strategy and during the period it has delivered on
our ambition, generating a 7.4% Portfolio Return on
a Local Currency Basis.
Our investment team has reacted effectively to the
evolving market dynamics, allocating capital in a
disciplined fashion to opportunities that we believe
offer attractive risk-adjusted returns in this environment,
such as secondary portfolios, while also selectively
making primary commitments to third party funds.
There are great opportunities to be captured by successfully
navigating challenging markets. We believe that our
clear investment strategy and flexible mandate, supported
by the experience and network of our dedicated team,
position us well to generate long-term value.
PERFORMANCE OVERVIEW
Annualised
------------ -------- --------- --------- ---------------------------------
Performance
to 31 July
2022 3 months 6 months 1 year 3 years 5 years 10 years
------------ -------- --------- --------- --------- --------- ---------
NAV per
Share Total
Return 6.1% 10.9% 24.2% 18.6% 16.9% 14.5%
Share Price
Total
Return 5.5% (1.6)% 10.0% 12.8% 12.2% 14.4%
FTSE
All-Share
Index Total
Return (1.2)% (0.1)% 5.5% 3.2% 4.0% 7.2%
Three months to: Six months to: 12 months to:
------------------- -------------------- ----------------------
31 Jul. 31 Jul. 31 Jul. 31 Jul. 31 Jul. 31 Jul.
2022 2021 2022 2021 2022 2021
------------ -------- --------- --------- --------- --------- -----------
Portfolio
Return on a
Local
Currency
Basis 5.1% 12.3% 7.4% 14.9% 21.9% 48.5%
NAV per
Share Total
Return 6.1% 9.3% 10.9% 11.1% 24.2% 37.5%
Realisation GBP58.0m GBP75.3m GBP106.8m GBP175.3m GBP265.0m GBP273.5m
Proceeds
Total New GBP84.6m GBP101.5m GBP143.7m GBP133.3m GBP314.1m GBP220.2m
Investment
ENQUIRIES
Investors and Analysts:
Oliver Gardey, Head of Private Equity Fund Investments, ICG: +44
(0) 20 3545 2000
Colm Walsh, Managing Director, Private Equity Fund Investments,
ICG
Chris Hunt, Shareholder Relations, ICG
Livia Bridgman Baker, Shareholder Relations, ICG
Media:
Clare Glynn, Corporate Communications, ICG: +44 (0) 20 3545
1395
Website:
www.icg-enterprise.co.uk
EVENTS
A presentation for investors and analysts will be held at 10:00
BST today. A link for the presentation can be found on the Results
https://www.globenewswire.com/Tracker?data=Ak3IvVhPfgcZdE3jeOrX624AyvfPixXiFY5JxVvXL2KbnA7v5DU9RyL495N91yJrzG_RHjwJUkiRIcZ4TVugt7ZbLjufoB__X-qJHxm0IX1OHub2knOkbD9FybN8-yoE
& Reports
https://www.globenewswire.com/Tracker?data=9VynWtsizPgvB62XJRSEaGY6cH17gFs32K55-viMp0gxyzVvMSuemX7Kki6LHSeOB0A6LsAO5Gl3ZRjgrPRofrb3W1wiQVn0TbbziQR3SDfoDkO-Z-oiqkcIwFYwnwrjgm9HcYqzsKx_slRqbddUAw==
page
https://www.globenewswire.com/Tracker?data=hRfkli4MpjL30eolFnYnf3FK33PZAOV6a7fNeSsJUdVMA9GtR02w8T-IHdbROE1FLSMy3Rsg5C-uPm8m2HjJcc0riFDHtyCL0G3-wrMPz9hjZ86boUpF_Ee2LznwxQr2
of the Company website. A recording of the presentation will be
made available on the Company website after the event.
Company timetable
Ex-dividend date: 17 November 2022
Record date: 18 November 2022
Payment of dividend: 02 December 2022
ABOUT ICG ENTERPRISE TRUST
ICG Enterprise Trust is a leading listed private equity investor
focused on creating long-term growth by delivering consistently
strong returns through selectively investing in profitable,
cash-generative private companies, primarily in Europe and the US,
while offering the added benefit to shareholders of daily
liquidity.
We invest in companies directly as well as through funds managed
by ICG and other leading private equity managers who focus on
creating long-term value and building sustainable growth through
active management and strategic change.
We have a long track record of delivering strong returns through
a flexible mandate and highly selective approach that strikes the
right balance between concentration and diversification, risk and
reward.
NOTES
Included in this document are Alternative Performance Measures
("APM"). APM have been used if considered by the Board and the
Manager to be the most relevant basis for shareholders in assessing
the overall performance of the Company, and for comparing the
performance of the Company to its peers and its previously reported
results. The Glossary includes further details of APMs and
reconciliations to International Financial Reporting Standards
("IFRS") measures, where appropriate.
In the Chair's Foreword, Manager's Review and Supplementary
Information, all performance figures are stated on a Total Return
basis (i.e., including the effect of re-invested dividends). ICG
Alternative Investment Limited, a regulated subsidiary of
Intermediate Capital Group plc, acts as the Manager of the
Company.
DISCLAIMER
This report may contain forward looking statements. These
statements have been made by the directors in good faith based on
the information available to them up to the time of their approval
of this report and should be treated with caution due to the
inherent uncertainties, including both economic and business risk
factors, underlying such forward-looking information. These written
materials are not an offer of securities for sale in the United
States. Securities may not be offered or sold in the United States
absent registration under the US Securities Act of 1933, as
amended, or an exemption therefrom. The issuer has not and does not
intend to register any securities under the US Securities Act of
1933, as amended, and does not intend to offer any securities to
the public in the United States. No money, securities or other
consideration from any person inside the United States is being
solicited and, if sent in response to the information contained in
these written materials, will not be accepted.
CHAIR'S FOREWORD
Our aim is to deliver attractive compounding returns across the
cycle by identifying companies that have defensive growth
characteristics. Our performance for the first six months of this
financial year has delivered on that intention.
I am pleased to report that your Company's NAV per Share Total
Return during the period was 10.9% and at 31 July 2022 NAV stood at
1,852p per share. The Portfolio(1) has performed strongly,
recording a Portfolio Return on a Local Currency Basis of 7.4% for
the six months to 31 July 2022.
Despite the strong Portfolio performance and NAV per Share Total
Return, an ICG Enterprise Trust share generated a total share price
return of (1.6)% during the period. As part of its ongoing focus on
optimising the return that the Company delivers for its
shareholders, the Board has resolved to commence a long-term
programme of share buybacks. This programme will sit alongside the
Company's existing progressive dividend policy as a route to
deliver returns to our shareholders. The Board believes the buyback
programme demonstrates the Manager's discipline around capital
allocation; underlines the Board's confidence in the long-term
prospects of the Company, its cashflows and NAV; will enhance the
NAV per share; and over time may reduce the volatility of the
Company's discount and increase its trading liquidity.
Your Board remains confident that ICG Enterprise Trust is well
positioned to provide shareholders with access to the attractive
long-term returns generated by investing in private companies, with
the added benefit of daily liquidity. Our investment strategy is
clear, our financial position is robust, and the underlying
companies in which our Portfolio is invested are well-equipped to
withstand the economic uncertainties we currently face. As
evidenced by our buyback programme announced today, and our
enhanced disclosure on the financial and operational performance of
the top 30 companies within our Portfolio, we are committed to
helping the market share our confidence in the long-term prospects
of ICG Enterprise Trust.
Jane Tufnell
Chair
10 October 2022
MANAGER'S REVIEW
Alternative Performance Measures
The Board and the Manager monitor the financial performance of
the Company on the basis of Alternative Performance Measures (APM),
which are non-IFRS measures. The APM predominantly form the basis
of the financial measures discussed in this review, which the Board
believes assists shareholders in assessing their investment and the
delivery of the investment strategy.
The Company holds certain investments in subsidiary entities.
The substantive difference between APM and IFRS is the treatment of
the assets and liabilities of these subsidiaries. The APM basis
"looks through" these subsidiaries to the underlying assets and
liabilities they hold, and it reports the investments as the
Portfolio APM. Under IFRS, the Company and its subsidiaries are
reported separately. The assets and liabilities of the subsidiaries
are presented on the face of the IFRS balance sheet as a single
carrying value. The same is true for the IFRS and APM basis of the
Cash flow statement.
The following table sets out IFRS metrics and the APM
equivalents:
IFRS APM
---------------------------------------------------------------------------------- ----------------------------------------------------------------
Investments GBP1,298.1m (January 2022: Portfolio GBP1,353.7m (January 2022: GBP1,172.2m)
GBP1,123.7m)
------------------------------------------------- ------------------------------- --------------------- -----------------------------------------
NAV GBP1,268.8m (January 2022:
GBP1,158.0m)
------------------------------------------------- ------------------------------- --------------------- -----------------------------------------
Cash flows from the sale of portfolio investments GBP18.2m (July 2021: GBP122.0m) Total Proceeds GBP106.8m (July 2021:
GBP184.7m)
------------------------------------------------- ------------------------------- --------------------- --------------------------------------- ---------------------- ----------------------
Realisation Proceeds GBP106.8m (July 2021: GBP175.3m)
------------------------------------------------- ------------------------------- --------------------- -----------------------------------------
Cash flows related to the purchase of Portfolio GBP29.6m (July 2021: Total New Investment GBP143.7m (July 2021:
investments GBP82.2m) GBP133.3m)
------------------------------------------------- ------------------------------- --------------------- --------------------------------------- ------------------------
The Glossary on page 28 include definitions for all APM and,
where appropriate, a reconciliation between APM and IFRS.
Our investment strategy
We focus on investing in buyouts of businesses that are
profitable, cash generative and have defensive growth
characteristics that we believe will deliver strong and resilient
returns across economic cycles. There are a number of themes that
contribute to a business having, in our view, such characteristics.
These include (among others) attractive market positioning,
providing mission-critical services to their clients and customers,
ability to pass on price increases, and structurally high
margins.
We take an active approach to portfolio construction, with a
flexible mandate that enables us to deploy capital in primary,
secondary and Direct Investments. Investments managed by ICG
account for 29.2% of the Portfolio. We believe our investment
strategy results in a differentiated portfolio with attractive
growth characteristics. Our Portfolio composition is shown
below:
31 July 2022 31 July 2022 31 July 2021
Investment category GBPm % of Portfolio % of Portfolio
------------------------------------------------------- ------------ --------------- ---------------
ICG-managed investments(1) 395.6 29.2% 26.9%
Third Party Direct Investments 243.8 18.0% 15.2%
Third Party Secondary Investments 65.8 4.9% 6.2%
------------------------------------------------------- ------------ --------------- ---------------
High Conviction Investments 705.2 52.1% 48.3%
------------------------------------------------------- ------------ --------------- ---------------
Third Party Primary Funds 648.5 47.9% 51.7%
------------------------------------------------------- ------------ --------------- ---------------
Portfolio 1,353.7 100% 100%
------------------------------------------------------- ------------ --------------- ---------------
(1) ICG-managed investments include Primary, Secondary
and Direct Investments
Geographically we focus on the developed markets of North
America and Europe, including the UK, which have deep and mature
private equity markets supported by a robust corporate governance
framework. The geographic profile of the Portfolio is shown
below:
31 July 2022
Geography % of Portfolio(1)
----------------------- -----------------------------
North America 45.4%
----------------------- -----------------------------
Europe 29.1%
----------------------- -----------------------------
UK 18.3%
----------------------- -----------------------------
Other 7.2%
----------------------- -----------------------------
Total 100%
----------------------- -----------------------------
(1) Calculated by reference to the location of the
headquarters of the underlying Portfolio companies
on a value-weighted basis
Investment strategy in practice
Our focus on defensive growth has remained at the forefront of
our investment decisions during the period. In a time of heightened
macroeconomic uncertainty, we target investments with fewer unknown
variables. This year we have identified a number of investment
opportunities that can provide this. Firstly, leveraging ICG's
expertise in structured transactions, we made two Direct
Investments during the period, both of which include contractual
downside protection. Secondly, we have increased our allocation to
Secondary Investments: in the secondary market, an investor is
purchasing a more mature portfolio with clear visibility of the
underlying assets which provides greater conviction in the
financial profile of the investment. Finally, we have ensured that
we will remain appropriately invested through the cycle by making
commitments to high-quality Third Party managers with strong track
records, which we expect to be invested over the coming 3-4
years.
Performance overview
Our growth during the period extends the track record of strong
investment performance. Over the last five years, our Portfolio has
generated an annualised Portfolio Return on a Local Currency Basis
of 20.6% and 21.9% on an LTM basis. At 31 July 2022, our Portfolio
was valued at GBP1,353.7m, which reflects a Portfolio Return on a
Local Currency Basis in the first half of the financial year of
7.4% (H1 FY22: 14.9%).
Due to the geographic diversification of our Portfolio, the
reported value is impacted by changes in foreign exchange rates.
During the period, the Portfolio increased by GBP57.6m / 5.0% due
to FX movements, driven primarily by US Dollar strengthening
against Sterling. Including the positive FX impact, Portfolio
growth during the period was 12.4%.
The net result for shareholders was that ICG Enterprise Trust
generated a NAV per Share Total Return of 10.9% during H1 FY23,
ending the period with a NAV per Share of 1,852p.
Movement in the Portfolio Six months to Six months to
GBPm 31 July 2022 31 July 2021
------------------------------------------------ ------------- -------------
Opening Portfolio 1,172.2 949.2
------------- -------------
Total New Investments 143.7 133.3
Total Proceeds (106.8) (184.7)
------------- -------------
Net (proceeds)/investments 36.9 (51.4)
Valuation movement(1) 87.0 141.6
Currency movement 57.6 (20.4)
------------------------------------------------ ------------- -------------
Closing Portfolio 1,353.7 1,019.0
------------------------------------------------ ------------- -------------
% Portfolio growth (local currency) 7.4% 14.9%
% currency movement 5.0% (2.1)%
------------------------------------------------ ------------- -------------
% Portfolio growth (Sterling) 12.4% 12.8%
Impact of (net cash)/net debt 0.2% (0.0)%
------------------------------------------------ ------------- -------------
Expenses and other income (0.9)% (1.1)%
------------------------------------------------ ------------- -------------
Co-investment Incentive Scheme Accrual (0.8)% (0.8)%
------------------------------------------------ ------------- -------------
Impact of share buybacks and dividend
reinvestment 0.0% 0.2%
------------------------------------------------ ------------- -------------
NAV per Share Total Return 10.9% 11.1%
------------------------------------------------ ------------- -------------
(1) 99.6% of the Portfolio has a Valuation Date of
30 June 2022 or later (July 2021: 98.9%).
During the first half, High Conviction Investments generated a
9.2% Portfolio Return on a Local Currency Basis (H1 FY22: 9.6%).
Within this, ICG LP Secondaries was the largest contributor to
performance among fund investments. A number of Direct Investments
also performed strongly during the period, including ECG and
Endeavour Schools (driven by strong operational performance) and
IRI (which completed its merger with NPD on 1 August 2022).
Third Party Funds generated a 5.7% Portfolio Return on a Local
Currency Basis for the period (H1 FY22: 20.3%), driven by a strong
performance of a number of funds including those managed by
Bowmark, Graphite and Gridiron supported by a combination of
underlying performance and signed Realisations
Performance of Portfolio companies
Our largest 30 underlying companies ("Top 30 companies")
represented 40.6% of the Portfolio by value at 31 July 2022 (31
January 2022: 39.0%). There were 3 new entrants to our Top 30
companies within the period: Newton (#17), EG Group (#27), and
Travel Nurse Across America (#30). All of these were existing
holdings in the Portfolio prior to the start of the financial year.
The inclusion of Newton within the Top 30 is primarily a result of
a new investment into the company during the period. More
information on new investments made during the period can be found
on page 8. The inclusion of EG Group and Travel Nurse in the Top 30
reflects a combination of Portfolio reweighting due to realisation
activity and strong operational performance.
The Top 30 companies continued to deliver impressive operational
performance during the period, reporting double-digit LTM revenue
and EBITDA growth, along with some EBITDA margin expansion. The net
leverage of the Portfolio companies has remained broadly in-line
with levels at year-end.
Top 30 companies performance overview 31 July 2022 31 January 2022
-------------------------------------- ------------ ---------------
LTM revenue growth(1) 27.5% 27.1%
-------------------------------------- ------------ ---------------
LTM EBITDA growth(1) 26.3% 29.6%
-------------------------------------- ------------ ---------------
LTM EBITDA margin(2) 27.0% 26.6%
-------------------------------------- ------------ ---------------
Net Debt / EBITDA(3) 4.3x 4.3x
-------------------------------------- ------------ ---------------
Enterprise Value / EBITDA(3) 14.5x 14.6x
-------------------------------------- ------------ ---------------
Total % of Portfolio 40.6% 39.0%
-------------------------------------- ------------ ---------------
(1) Growth rates exclude Ambassador Theatre Group
(#11/30), for which prior year comparators are not
meaningful
(2) EBITDA margin excludes MoMo Online Mobile Services
(#26/30) as EBITDA is not a relevant metric
(3) Petsmart/Chewy (#1/30) and MoMo Online Mobile
Services (#26/30)were excluded from this analysis,
as EBITDA is not an appropriate valuation metric
More detailed disclosure on the financial and operating
performance of the Portfolio can be found on page 13.
Quoted Companies
We do not actively invest in publicly quoted companies but gain
listed investment exposure when IPOs are used as a route to exit an
investment. In these cases, exit timing typically lies with the
third party manager alongside whom we have invested.
At 31 July 2022, ICG Enterprise Trust's exposure to quoted
companies was valued at GBP119.1m, equivalent to 8.8% of the
Portfolio value. The period saw broad-based selldowns across public
equity markets, which impacted our quoted investments including our
largest listed exposure, Chewy, whose share price fell 18.4% in
local currency (USD) during the period. ICG Enterprise Trust's
investment in PetSmart (which includes Chewy) has delivered a
strong return on investment for our shareholders and remains our
largest underlying exposure. Across the Portfolio, local currency
losses from declines in public market values were largely offset in
sterling terms by positive FX gains.
At 31 July 2022 there was one quoted investment that
individually accounted for 0.5% or more of the Portfolio value:
31 July 2022 % of
Company Ticker Portfolio value
----------------------------------------- --------------- ---------------------
Chewy (part of PetSmart)(1) CHWY-US 3.4%
----------------------------------------- --------------- ---------------------
Other 5.4%
---------------------------------------------------------- ---------------------
Total 8.8%
---------------------------------------------------------- ---------------------
(1) % of Portfolio value includes entire holding of
PetSmart and Chewy. Majority of value is within Chewy
Realisation activity
After a slower first quarter, we saw a number of larger
realisations during the second quarter, resulting in Total Proceeds
for the first half of GBP106.8m. There were 30 Full Exits of
Portfolio holdings during the period, generating proceeds of
GBP73.2m. Full Exits were completed at an average Multiple to Cost
of 3.3x, and an average Uplift To Carrying Value of 25.2%. We
believe that the ability to continue to sell assets at an uplift to
NAV reflects the continuing demand for high quality assets and
underpins our confidence in the valuation of our Portfolio. Partial
exits generated Realisation Proceeds of GBP33.6m during the
period.
The largest exit during the period was Random42, a scientific
animation and digital media services company, which was realised
via trade sale to a specialist medical communications company in
June. The 10 largest underlying realisations in the period can be
seen in the table below:
Proceeds
Investment Description Manager Country GBPm
-------------- ----------------------------------------------------------- --------- ------------ --------
Random42 Provider of medical animation and digital media services Graphite UK 5.6
proAlpha Provider of application software services ICG Germany 5.1
Park Holidays
UK Operator of UK campsites and holiday parks ICG UK 4.9
Romans Provider of residential sales & letting services Bowmark UK 4.3
Pirum Systems Provider of financial services technology Bowmark UK 4.2
Provider of logistics systems integration and warehouse Thomas H.
Fortna execution software Lee US 4.1
Leeds
Exterro Provider of information governance software Equity US 4.0
Refresco
Holding Provider of global independent beverage solutions PAI Netherlands 3.7
The Instant
Group Provider of property outsourcing services Bowmark UK 3.5
Manufacturer, designer and distributor of fixing/fastening
Etanco systems ICG France 3.4
-------------- ----------------------------------------------------------- --------- ------------ --------
Total of 10 largest underlying realisations 42.8
-------------------------------------------------------------------------------------- ------------ --------
New investment activity
In total during the period, we invested GBP143.7m, of which
GBP86.4m (60.1%) was in High Conviction Investments and GBP57.3m
was Drawdowns from Third Party Funds.
6 months to 31 July 2022
Investment Category Cost GBPm % of new investments
------------------------------ ------------------------ --------------------
High Conviction Investments 86.4 60.1%
------------------------------ ------------------------ --------------------
Drawdowns from Third Party
Funds 57.3 39.9%
------------------------------ ------------------------ --------------------
Total 143.7 100%
------------------------------ ------------------------ --------------------
GBP64.4m of new investments during the period were Primary fund
drawdowns, of which GBP57.3m was to Third Party managers and the
remainder (GBP7.1m) was to ICG managed funds. On top of this, we
made Secondary Investments of GBP49.2m and Direct Investments of
GBP30.1m
6 months to 31 July 2022 6 months to 31 July 2022
Investment Category Cost GBPm % of new investments
-------------------- ------------------------ ------------------------
Primary 64.4 44.8%
-------------------- ------------------------ ------------------------
Secondary 49.2 34.2%
-------------------- ------------------------ ------------------------
Direct 30.1 21.0%
-------------------- ------------------------ ------------------------
Total 143.7 100%
-------------------- ------------------------ ------------------------
During the period we completed two Direct Investments: Precisely
(a GBP15.6m investment alongside Clearlake Capital and Insight
Partners), and Newton (a GBP12.8m investment alongside ICG). Both
transactions were structured with enhanced downside protection, and
both represent co-investments into existing holdings, giving us
deeper understanding of the underlying businesses. The balance of
new Direct Investments is comprised of GBP1.7m of incremental
drawdowns across 5 existing Direct Investments.
The 10 largest underlying new investments in the period were as
follows:
Cost
Investment Description Manager Country GBPm(1)
----------- ----------------------------------------------------- ---------- -------- -------
Precisely Provider of enterprise software Clearlake US 15.6
Newton Provider of management consulting services ICG UK 12.8
proAlpha II Provider of application software services ICG Germany 2.7
BC
CeramTec Manufacturer of high performance ceramics Partners Germany 2.0
Vertical
Supply Provider of technical equipment, tools, and personal
Group protective equipment (PPE) Gridiron US 1.7
Retailer of pet foods, accessories and health and
Arcaplanet grooming products Cinven Italy 1.5
Ufinet Operator of fibre network communications Cinven Brazil 1.5
Veonet European ophthalmological clinics PAI Germany 1.4
McAfee
Associates Supplier of anti-virus software Permira US 1.3
Brooks Thomas H.
Automation Provider of semiconductor manufacturing solutions Lee US 1.2
----------- ----------------------------------------------------- ---------- -------- -------
Top 10 largest underlying new investments 41.7
(1) Represents ICG Enterprise Trust's indirect investment
(share of fund cost) plus any amounts paid for Co-investments
in the period.
Commitments
During the first half, we made new Commitments to funds of
GBP164.1m. This includes commitments to two ICG-managed funds
totalling GBP65.9m. Both of these were to funds focussed on
Secondary Investments, as part of our strategic ambition to
increase our exposure to the secondary market.
Commitments to Third Party Funds during the period totalled
GBP98.2m. We maintained our diligence in identifying leading
managers who complement our long-term strategic objectives, are
committed to values aligned to our Responsible Investing framework,
and have an investment approach that suits our defensive growth
focus. A number of commitments were made to managers with whom we
have longstanding relationships and who have a strong track record
of offering us attractive co-investment opportunities, such as PAI
and Gridiron. At the same time, we continued to originate new
opportunities to work with leading managers, and during the period
committed GBP8.0m to Thoma Bravo XV, a US-based manager focusing on
global mid-market and large buyouts with a focus on
subscription-based software businesses.
The breakdown of new Commitments to funds was as follows:
Fund Manager Focus Geography Commitment
during the
period
-------------- -------------- -------------- -------------- --------------
ICG LP ICG LP-led Europe/North $60.0m
Secondaries secondary America (GBP45.5m)
Fund I transactions
-------------- -------------- -------------- -------------- --------------
ICG Ludgate ICG Secondary Europe/North $25.0m
Hill III portfolio America (GBP20.4m)
-------------- -------------- -------------- -------------- --------------
PAI Europe PAI Mid-market and Europe EUR25.0m
VIII large buyouts (GBP20.9m)
-------------- -------------- -------------- -------------- --------------
Advent X Advent Large buyouts Europe EUR20.0m
(GBP16.8m)
-------------- -------------- -------------- -------------- --------------
Gridiron V Gridiron Mid-market North America $20.0m
buyouts (GBP15.0m)
-------------- -------------- -------------- -------------- --------------
Permira VIII Permira Large buyouts Global EUR15.0m
(GBP12.6m)
-------------- -------------- -------------- -------------- --------------
Bain Capital Bain Capital Mid-market and Europe EUR15.0m
Europe VI large buyouts (GBP12.6m)
-------------- -------------- -------------- -------------- --------------
Thoma Bravo XV Thoma Bravo(1) Mid-market and Global $10.0m
large buyouts (GBP8.0m)
-------------- -------------- -------------- -------------- --------------
Bain Tech Bain Capital Mid-market North America $5.0m
Opportunities buyouts (GBP4.1m)
II
-------------- -------------- -------------- -------------- --------------
Hg Genesis X Hg Capital Mid-market Europe EUR5.0m
buyouts (GBP4.2m)
-------------- -------------- -------------- -------------- --------------
Hg Saturn III Hg Capital Mid-market and Europe $5.0m
large buyouts (GBP4.0m)
-------------- -------------- -------------- -------------- --------------
(1) New manager relationship during the period
Balance sheet and financing
At 31 July 2022 we had a cash balance of GBP12.7m (31 January
2022: GBP41.3m) and total available liquidity of GBP173.9m. At 31
July 2022, the drawn debt was GBP39.1m (31 January 2022:
GBP0.0m).
During the period, we increased the size of our Revolving Credit
Facility ("RCF") to EUR240m (from EUR200m previously), in keeping
with the Company's higher net asset value. In addition, the
maturity of the RCF was extended by one year to February 2026. The
other key terms remain unchanged. The RCF is available for general
corporate purposes, including short-term financing of investments
such as the Drawdown of Commitments to funds. We do not intend to
be geared other than for short-term working capital purposes.
GBPm
-------------------------------------------------- ------
Cash at 31 January 2022 41.3
Realisation Proceeds 106.8
Fund Disposals -
Third Party Fund Drawdowns (57.3)
High Conviction Investments (86.4)
Shareholder returns (15.1)
FX and other 23.4
-------------------------------------------------- ------
Cash at 31 July 2022 12.7
-------------------------------------------------- ------
Available undrawn debt facilities 161.2
-------------------------------------------------- ------
Cash and undrawn debt facilities (total available
liquidity) 173.9
-------------------------------------------------- ------
At 31 July 2022 the Portfolio represented 106.7% of net assets
(31 January 2022: 101.2%).
31 July 2022 31 January 2022
GBPm GBPm
---------------------------------------- ------------ ---------------
Portfolio 1,353.7 1,172.2
Cash 12.7 41.3
Co-investment Incentive Scheme Accrual (57.1) (49.1)
Other Net Liabilities(1) (40.5) (6.4)
Net assets 1,268.8 1,158.0
---------------------------------------- ------------ ---------------
(1) Other Net Liabilities include GBP39.1m of drawn
debt.
At 31 July 2022, we had Undrawn Commitments of GBP528.1m (31
January 2022: GBP418.6m) of which 17.9% (GBP94.6m) were to funds
outside of their Investment Period.
31 July 2022 31 January 2022
GBPm GBPm
----------------------------------------------- ------------ ---------------
Undrawn Commitments -- funds in Investment
Period 433.5 322.8
Undrawn Commitments -- funds outside Investment
Period 94.6 95.8
----------------------------------------------- ------------ ---------------
Total Undrawn Commitments 528.1 418.6
Total available liquidity (including facility) (173.9) (208.4)
----------------------------------------------- ------------ ---------------
Overcommitment (including facility) 354.2 210.2
----------------------------------------------- ------------ ---------------
Overcommitment % of net asset value 27.9% 18.2%
----------------------------------------------- ------------ ---------------
Our objective is to be fully invested through the cycle, while
ensuring that we have sufficient liquidity to be able to take
advantage of attractive investment opportunities as they arise.
Drawdowns of commitments are funded from Total Proceeds and, where
appropriate, the debt facility.
Dividend and share buyback
In line with ICG Enterprise Trust's progressive dividend policy,
the Board has declared a dividend of 7p per share in respect of the
second quarter, taking total dividends for the period to 14p (H1
FY22: 12p). It remains the Board's intention, in the absence of any
unforeseen circumstances, to declare total dividends of at least
30p per share for the financial year, implying an increase of 11.1%
on the previous financial year.
In addition, as part of its ongoing focus on optimising the
return that the Company delivers for its shareholders, the Board
has resolved to commence a long-term programme of share buybacks.
This programme, effective as of this announcement, will sit
alongside the Company's existing progressive dividend policy and
may be executed at any discount to NAV.
The Board believes the buyback programme demonstrates the
Manager's discipline around capital allocation; underlines the
Board's confidence in the long-term prospects of the Company, its
cashflows and NAV; will enhance the NAV per share; and, over time,
may positively influence the volatility of the Company's discount
and its trading liquidity.
The Board will review quarterly the size, impact and mandate of
the buyback programme in conjunction with its advisers to help
ensure it is working in the long-term interests of shareholders and
in line with the objectives outlined above.
The Board retains absolute discretion as to the execution,
pricing and timing of any share buybacks, subject to the conditions
set out in the authority to execute share buybacks approved at the
Company's 2022 annual general meeting. Any shares repurchased by
the Company will be held in treasury. Any repurchase of shares will
be announced no later than 7.30 a.m. on the business day following
the calendar day on which the repurchase occurred.
Activity since the period end
Notable activity between 1 August 2022 and 31 August 2022 has
included:
-- Realisation Proceeds of GBP45.2m
-- New investments of GBP9.4m, which included a new Direct Investment in
Vistage Worldwide alongside Gridiron Capital
-- One new Fund Commitment of $20.0m
In September, ICG Enterprise Trust completed a Direct Investment
of EUR14.9m into ECA Group.
Outlook
We remain alert to the evolving inflationary pressures and
macroeconomic challenges that companies must navigate, as well as
the ongoing volatility impacting certain foreign exchange rates .
Importantly, the operating performance of our portfolio companies
remains resilient thus far.
We have a high bar for executing transactions in today's
environment. We are particularly focussed on assessing risks around
GDP-linked revenue, discretionary spending, and inflation, and
identifying differentiated investments that can reduce the risk of
unknown variables.
With our clear investment approach and flexible mandate executed
by a dedicated and experienced investment team, we believe ICG
Enterprise Trust remains well-positioned to implement its strategy
in these uncertain market conditions.
ICG Private Equity Fund Investments Team
11 October 2022
SUPPLEMENTARY INFORMATION
This section presents supplementary information regarding the
Portfolio (see Manager's Review and the Glossary for further
details and definitions).
Portfolio composition
We have a flexible mandate that enables us to deploy capital in
primary, secondary and Direct Investments. Investments managed by
ICG account for 29.2% of the Portfolio.
31 July 2022
Investment Category GBPm % of Portfolio
-------------------- ------------ --------------
Primary 718.3 53.1%
-------------------- ------------ --------------
Secondary 263.1 19.4%
-------------------- ------------ --------------
Direct 372.3 27.5%
-------------------- ------------ --------------
Total 1,353.7 100.0%
-------------------- ------------ --------------
The Portfolio is actively managed and structured to strike a
balance between both concentration, so that Direct Investments can
meaningfully impact performance, and diversification, so that we
are not overly exposed to the risks of individual portfolio
companies or sectors. We also seek to ensure appropriate Portfolio
diversification by vintage, by sector and by geography.
Portfolio by
calendar
year of % of value of underlying investments % of value of underlying investments
investment 31 July 2022 31 January 2022
------------ ------------------------------------ ------------------------------------
2022 9.5% 0.1%
2021 27.2% 25.1%
2020 10.8% 12.3%
2019 14.2% 15.4%
2018 15.5% 17.9%
2017 6.9% 9.6%
2016 4.8% 5.9%
2015 4.9% 6.6%
2014 and
older 6.2% 7.1%
------------ ------------------------------------ ------------------------------------
Total 100.0% 100.0%
------------ ------------------------------------ ------------------------------------
Portfolio by % of value of underlying investments % of value of underlying investments
sector 31 July 2022 31 January 2022
------------ ------------------------------------ ------------------------------------
TMT 23.9% 24.1%
Consumer
goods and
services 19.6% 20.8%
Healthcare 14.7% 16.6%
Business
services 11.7% 11.0%
Industrials 8.0% 8.3%
Financials 7.3% 5.5%
Education 5.9% 5.1%
Leisure 4.1% 3.9%
Other 4.8% 4.7%
------------ ------------------------------------ ------------------------------------
Total 100.0% 100.0%
------------ ------------------------------------ ------------------------------------
Portfolio by % of value of underlying investments % of value of underlying investments
geography(1) 31 July 2022 31 January 2022
---------------- ------------------------------------ ----------------------------------------
North America 45.4% 41.4%
Europe 29.1% 32.1%
UK 18.3% 18.6%
Other 7.2% 7.9%
Total 100.0% 100.0%
---------------- ------------------------------------ ----------------------------------------
(1) Geographic exposure is calculated by reference
to the location of the headquarters of the underlying
Portfolio companies
Portfolio by 31 July 31 January 31 January
fund 2022 31 July 2022 2022
currency(1) GBPm 2022 % GBPm %
---------------- ------------------------------------ ---------- ------------- -------------
US Dollar 660.2 48.8% 508.7 43.4%
Euro 568.3 42.0% 558.5 47.6%
Sterling 125.2 9.2% 105.0 9.0%
---------------- ------------------------------------ ---------- ------------- -------------
Total 1,353.7 100.0% 1,172.2 100.0%
---------------- ------------------------------------ ---------- ------------- -------------
(1) Currency exposure by reference to the reporting
currency of each fund .
Top 30 Portfolio Dashboard
The Top 30 underlying investments in the Portfolio ('the Top
30') represented 41.8% of the Portfolio value at 31 July 2022. The
tables below provide enhanced disclosure on the dispersion of
financial and operational performance among the Top 30 on a
value-weighted basis.
% of value of Top 30
Sector exposure 31 July 2022
---------------------------- --------------------
TMT 29.6%
Consumer goods and services 22.1%
Business services 15.9%
Healthcare 11.5%
Education 10.5%
Leisure 5.5%
Industrials 4.9%
Financials -
Total 100.0%
---------------------------- --------------------
% of value of Top 30
Geographic exposure(1) 31 July 2022
------------------------------ -------------------------
North America 48.3%
Europe (ex-UK) 21.7%
UK & Other 30.0%
Total 100.0%
------------------------------ -------------------------
(1) Geographic exposure is calculated by reference
to the location of the headquarters of the underlying
Portfolio companies
% of value of Top 30
LTM revenue growth 31 July 2022
----------------------------------------- ----------------------
<0% 7.5%
0-10% 17.4%
10-20% 30.6%
20-30% 20.4%
>30% 21.2%
n.a/n.m(1) 3.0%
Total 100.0%
--------------------------------------- --------------------
n.a/n.m reflects Ambassador Theatre Group (#11/30),
for which prior year comparators are not meaningful
Top 30 average LTM revenue growth: 27.5% (weighted average,
based on contribution to Portfolio value at 31 July 2022; any
exclusions from average calculation are detailed in the footnotes
to the table).
% of value of Top 30 31
LTM EBITDA growth July 2022
------------------------------------------------------ ------------------------
<0% 18.1%
0-10% 31.1%
10-20% 15.8%
20-30% 11.6%
>30% 20.4%
n.a/n.m(1) 3.0%
Total 100.0%
---------------------------------------------------- ----------------------
n.a/n.m reflects Ambassador Theatre Group (#11/30),
for which prior year comparators are not meaningful
Top 30 average LTM EBITDA growth: 26.3% (weighted average, based
on contribution to Portfolio value at 31 July 2022; any exclusions
from average calculation are detailed in the footnotes to the
table).
% of value of Top 30 31
LTM EBITDA margin July 2022
-------------------------------------------------------- ------------------------
<10% 8.4%
10-20% 25.9%
20-30% 24.5%
30-40% 23.1%
>40% 16.4%
n.a/n.m(1) 1.8%
Total 100.0%
------------------------------------------------------ ----------------------
(1) EBITDA margin excludes MoMo Online Mobile Services
(#26/30) as EBITDA is not a relevant metric
Top 30 average LTM EBITDA margin: 27.0% (weighted average, based
on contribution to Portfolio value at 31 July 2022; any exclusions
from average calculation are detailed in the footnotes to the
table).
% of value of Top 30
EV/EBITDA multiple 31 July 2022
----------------------------------------- --------------------
0-10x 6.3%
10-12x 14.2%
12-13x 21.2%
13-15x 14.4%
15-17x 16.9%
17-20x 9.7%
>20x 7.2%
n.a/n.m(1) 10.2%
Total 100.0%
----------------------------------------- --------------------
(1) n.a/n.m reflects Petsmart/Chewy (#1/30) and MoMo
Online Mobile Services (#26/30), for which EBITDA
is not an appropriate valuation metric
Top 30 average EV/EBITDA multiple: 14.5x (weighted average,
based on contribution to Portfolio value at 31 July 2022; any
exclusions from average calculation are detailed in the footnotes
to the table).
% of value of Top 30
Net Debt/EBITDA multiple dispersion 31 July 2022
----------------------------------------------- --------------------
<2x 10.1%
2-4x 23.7%
4-5x 26.9%
5-7x 15.6%
>7x 13.5%
n.a/n.m(1) 10.2%
Total 100.0%
----------------------------------------------- --------------------
(1) n.a/n.m reflects Petsmart/Chewy (#1/30) and MoMo
Online Mobile Services (#26/30), for which EBITDA
is not an appropriate valuation metric
Top 30 average ND/EBITDA multiple: 4.3x (weighted average, based
on contribution to Portfolio value at 31 July 2022; any exclusions
from average calculation are detailed in the footnotes to the
table).
Top 30 companies
The table below presents the 30 companies in which ICG
Enterprise Trust had the largest investments by value at 31 July
2022.
The valuations are gross of underlying managers fees and Carried
interest.
Value as
Year of a % of
Company Manager investment Country Portfolio
----------------------------------------------------------- ------------ ----------- ------------ ---------
1 PetSmart
Retailer of pet products and services BC Partners 2015 United States 3.4%
2 IRI
Provider of mission-critical data and predictive analytics
to consumer goods manufacturers New Mountain 2018 United States 2.9%
3 Minimax
Supplier of fire protection systems and services ICG 2018 Germany 2.7%
4 Endeavor Schools
Provider of paid private schooling Leeds Equity 2018 United States 2.3%
5 Yudo
Designer and manufacturer of hot runner systems ICG 2017 / 2018 South Korea 2.0%
6 Leaf Home Solutions
Provider of home maintenance services Gridiron 2016 United States 1.9%
7 Precisely
Provider of enterprise software Clearlake 2021 /2022 United States 1.8%
8 Froneri
Manufacturer and distributor of ice cream products PAI 2013 / 2019 United Kingdom 1.7%
9 DOC Generici
Manufacturer of generic pharmaceutical products ICG 2019 Italy 1.7%
10 AML RightSource
Provider of compliance and regulatory services and
solutions Gridiron 2020 United States 1.2%
11 Ambassador Theatre Group
ICG /
Operator of theatres and ticketing platforms Providence 2021 United Kingdom 1.2%
12 DomusVi
Operator of retirement homes ICG 2017 / 2021 France 1.2%
13 David Lloyd Leisure
Operator of premium health clubs TDR 2013 / 2020 United Kingdom 1.2%
14 DigiCert
Provider of enterprise internet security solutions ICG 2021 United States 1.2%
15 Curium Pharma
Supplier of nuclear medicine diagnostic pharmaceuticals ICG 2020 United Kingdom 1.1%
16 Visma
Provider of business management software and outsourcing HgCapital /
services ICG 2017 / 2020 Norway 1.1%
17 Newton
Provider of management consulting services ICG 2021 / 2022 United Kingdom 1.1%
18 European Camping Group
Operator of premium campsites and holiday parks PAI 2021 France 1.1%
19 Ivanti
Charlesbank
Provider of IT management solutions / ICG 2021 United States 1.1%
20 PSB Academy
Provider of private tertiary education ICG 2018 Singapore 1.0%
21 Crucial Learning
Provider of corporate training courses focused on
communication skills and leadership development Leeds Equity 2019 United States 1.0%
22 Planet Payment
Provider of integrated payments services focused on Advent /
hospitality and luxury retail Eurazeo 2021 Ireland 0.9%
23 Brooks Automation
Thomas H.
Provider of semiconductor manufacturing solutions Lee 2021 / 2022 United States 0.9%
24 Class Valuation
Provider of residential mortgage appraisal management
services Gridiron 2021 United States 0.8%
25 Davies Group
Specialty business process outsourcing service provider BC Partners 2021 United Kingdom 0.8%
26 MoMo Online Mobile Services
Operator of remittance and payment services via mobile
e-wallet ICG 2019 Vietnam 0.7%
27 EG Group
Operator of petrol stations TDR 2014 United Kingdom 0.7%
28 RegEd
Provider of SaaS-based governance, risk and compliance
enterprise software solutions Gryphon 2018 / 2019 United States 0.6%
29 AMEOS Group
Operator of private hospitals ICG 2021 Switzerland 0.6%
30 Travel Nurse Across America
Provider of travel nurse staffing services Gridiron 2016 United States 0.6%
----------------------------------------------------------- ------------ ----------- ---------------- ---------
Total of the 30 largest underlying investments 40.6%
---------------------------------------------------------------------------------------------------- ---------
The 30 largest fund investments
The table below presents the 30 largest funds by value at 31
July 2022. The valuations are net of underlying managers' fees and
Carried interest.
Outstanding
Year of Country/ commitment
Fund commitment region Value GBPm GBPm
--------------- -------------- -------------- ---------- ------------
ICG Ludgate
1 Hill I
Secondary Europe/North
portfolio 2021 America 42.5 13.8
ICG Strategic
Equity Fund
2 III
GP-led
secondary
transactions 2018 Global 35.5 11.0
Graphite
Capital
3 Partners VIII
Mid-market
buyouts 2013 UK 36.2 4.4
4 ICG Europe VII
Mezzanine and
equity in
mid-market
buyouts 2018 Europe 36.1 10.1
ICG LP
Secondaries
5 Fund I
LP-led
secondary Europe/North
transactions 2023 America 35.7 13.2
Gridiron
Capital Fund
6 III
Mid-market
buyouts 2016 North America 32.4 4.3
CVC European
Equity Partners
7 VII
Europe/North
Large buyouts 2017 America 29.6 2.1
CVC European
Equity Partners
8 VI
Europe/North
Large buyouts 2013 America 27.1 2.1
PAI Strategic
9 Partnerships
Mid-market and
large buyouts 2019 Europe 22.8 0.6
Sixth Cinven
10 Fund
Large buyouts 2016 Europe 22.2 1.3
ICG Ludgate
11 Hill III
Secondary Europe/North
portfolio 2023 America 21.7 -
Gridiron
Capital Fund
12 IV
Mid-market
buyouts 2019 North America 21.6 2.8
BC European
13 Capital IX
Europe/North
Large buyouts 2011 America 21.1 0.7
Advent Global
Private Equity
14 IX
Europe/North
Large buyouts 2019 America 18.8 3.8
Thomas H Lee
Equity Fund
15 VIII
Mid-market and
large buyouts 2017 North America 18.3 3.6
16 Resolute IV
Mid-market
buyouts 2018 North America 18.2 1.7
17 Oak Hill V
Mid-market
buyouts 2019 North America 17.9 1.8
New Mountain
18 Partners V
Mid-market
buyouts 2017 North America 17.1 1.9
19 PAI Europe VII
Mid-market and
large buyouts 2017 Europe 16.8 10.3
Advent Global
Private Equity
20 VIII
Europe/North
Large buyouts 2016 America 16.4 -
BC European
21 Capital X
Large buyouts 2016 Europe 16.4 2.5
22 TDR Capital III
Mid-market and
large buyouts 2013 Europe 14.5 1.6
23 Gryphon V
Mid-market
buyouts 2019 North America 14.3 1.9
ICG Ludgate
24 Hill II
Secondary
portfolio 2022 North America 14.2 5.7
25 AEA VII
Mid-market
buyouts 2019 North America 13.6 4.1
ICG Augusta
Partners
26 Co-Investor
Secondary fund
restructurings 2018 Global 13.6 18.9
Resolute II
Continuation
27 Fund
Secondary fund
restructuring 2018 North America 13.1 2.2
28 Permira V
Europe/North
Large buyouts 2013 America 12.6 0.4
29 Resolute V
Mid-market
buy-outs 2021 North America 12.2 6.5
ICG Strategic
30 Equity Fund IV
GP-led
secondary
transactions 2021 Global 12.1 18.6
Total of the largest 30 fund investments 644.7 151.8
Percentage of total investment Portfolio 47.6%
----------------------------------------------- ---------- ------------
Commitments analysis
The following tables reflect Commitments at 31 July 2022.
Original foreign currency Commitments are translated at 31 July
2022 exchange rates.
Original Outstanding Average
Commitment Commitment Drawdown % of
Total Commitments GBPm GBPm % Commitments
--------------------------- ----------- ----------- --------- ------------
Funds in Investment Period 886.7 433.5 51.1% 82.1%
Funds post Investment
Period 670.0 94.6 85.9% 17.9%
--------------------------- ----------- ----------- --------- ------------
Total 1,556.7 528.1 66.1% 100.0%
--------------------------- ----------- ----------- --------- ------------
6 months to 31 July 2022
Movement in outstanding Commitments GBPm
---------------------------------------------------- ------------------------
As at 1 February 2022 418.6
New Fund Commitments 164.1
New Commitments relating to Co-investments 42.4
Drawdowns (143.7)
Commitments released from Fund Disposals -
Currency and other movements, including repayment
of commitments which remain available to draw down 96.7
---------------------------------------------------- ------------------------
As at 31 July 2022 528.1
---------------------------------------------------- ------------------------
Commitments currency exposure
31 July 31 July 31 January 31 January
2022 2022 2022 2022
Outstanding Commitments GBPm % GBPm %
------------------------ ------- ------- ---------- ----------
-- Sterling 21.5 4.1% 28.7 6.8%
-- Euro 256.7 48.6% 200.4 47.9%
-- US Dollar 249.9 47.3% 189.5 45.3%
Total 528.1 100% 418.6 100%
------------------------ ------- ------- ---------- ----------
Foreign exchange rates
31 July 2022 spot rate
-------- ----------------------
GBP:EUR 1.1911
GBP:USD 1.2171
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties facing the Company are
substantially the same as those disclosed in the Strategic Report
and in the notes to the Financial Statements in the Company's
latest Annual Report for the year ended 31 January 2022 which was
approved by the Board on 11 May 2022.
The Company considers its principal risks (as well as several
underlying risks comprising each principal risk) in four
categories:
Investment risks: the risk to performance resulting from
ineffective or inappropriate investment selection, execution or
monitoring.
External risks: the risk of failing to deliver the Company's
investment objective and strategic goals due to external factors
beyond the Company's control.
Operational risks: the risk of loss resulting from inadequate or
failed internal processes, people or systems and external event,
including regulatory risk.
Financial risks: the risks of adverse impact on the Company due
to having insufficient resources to meet its obligations or
counterparty failure and the impact any material movement in
foreign exchange rates may have on underlying valuations.
A comprehensive risk assessment process is undertaken regularly
to re-evaluate the impact and probability of each risk
materialising and the strategic, financial and operational impact
of the risk. Where the residual risk is determined to be outside of
appetite, appropriate action is taken.
In addition to these, emerging risks are regularly considered to
assess any potential impact on the Company and to
determine whether any actions are required. The Board also
regularly considers the evolution of requirements and standards
relating to ESG and responsible investing.
Related Party Transactions
There have been no material changes in the related party
transactions described in the 31 January 2022 Annual Report.
Directors' Responsibility Statement
The Directors are responsible for preparing the Interim Report,
in accordance with applicable laws and regulations. The Directors
confirm that, to the best of their knowledge:
-- The condensed interim financial statements have been prepared in
accordance with UK-adopted IAS 34 Interim condensed financial statements
and gives a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company;
-- The Chair's Statement and Manager's Review includes a fair review of the
information required by DTR 4.2.7R of the Disclosure Guidance and
Transparency Rules, being an indication of important events that have
occurred during the first six months of the financial year and their
impact on the condensed interim financial statements, and a description
of the principal risks and uncertainties for the remaining six months of
the year; and
-- The interim financial statements include a fair review of the information
required by DTR 4.28R of the Disclosure Guidance and Transparency Rules,
being related party transactions that have taken place in the first six
months of the financial year and that have materially affected the
financial position or performance of the Company during that period, and
any changes in the related party transactions described in the last
Annual Report that could do so.
The Interim Report was approved by the Board and the above
Directors' Responsibility Statement was signed on its behalf by the
Chair.
Jane Tufnell
Chair
10 October 2022
INTERIM CONDENSED FINANCIAL STATEMENTS
Income statement
Half year to 31 July 2021
Half year to 31 July 2022 (Unaudited) (Unaudited)
Revenue Revenue
return Capital return Total return Capital return Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP,000
-------- ----------------- --------- -------- ----------------- ------------
Investment returns
Income, gains and
losses on
investments 1,489 135,029 136,518 7,619 105,351 112,970
Deposit interest - - - 1 - 1
Other income - - - - - -
Foreign exchange
gains and losses - 46 46 - (601) (601)
------------------- -------- ----------------- --------- -------- ----------------- ------------
1,489 135,075 136,564 7,620 104,750 112,370
-------- ----------------- --------- -------- ----------------- ------------
Expenses
Investment
management
charges (814) (7,323) (8,137) (620) (5,586) (6,206)
Other expenses (1,115) (1,394) (2,509) (1,266) (1,094) (2,360)
------------------- -------- ----------------- --------- -------- ----------------- ------------
(1,929) (8,717) (10,646) (1,886) (6,680) (8,556)
-------- ----------------- --------- -------- ----------------- ------------
Profit/(loss)
before tax (440) 126,358 125,918 5,734 98,070 103,804
-------- ----------------- --------- -------- ----------------- ------------
Taxation 464 (464) - (45) 45 -
------------------- -------- ----------------- --------- -------- ----------------- ------------
Profit/(loss) for
the period 24 125,894 125,918 5,689 98,115 103,804
-------- ----------------- --------- -------- ----------------- ------------
Attributable to:
------------------- -------- ----------------- --------- -------- ----------------- ------------
Equity shareholders 24 125,894 125,918 5,689 98,115 103,804
------------------- -------- ----------------- --------- -------- ----------------- ------------
Basic and diluted
earnings per
share 183.78 150.96
------------------- -------- ----------------- --------- -------- ----------------- ------------
The columns headed 'Total' represent the income statement for
the relevant financial years and the columns headed 'Revenue
return' and 'Capital return' are supplementary information, in line
with the Statement of Recommended Practice (SORP) for Financial
Statements of Investment Trust Companies and Venture Capital Trusts
issued by the Association of Investment Companies. There is no
Other Comprehensive Income.
The notes on pages 24 to 27 are an integral part of the interim
condensed financial statements.
Balance sheet
31 July 31 January
2022 2022
(unaudited) (audited)
Notes GBP'000 GBP'000
------------------------------------------- ------ ------------ -----------
Non-current assets
Investments held at fair value 7 1,298,053 1,123,747
Current assets
Cash and cash equivalents 12,691 41,328
Receivables 2,682 2,205
------------------------------------------- ------ ------------ -----------
15,373 43,533
------------ -----------
Current liabilities
Payables 5,537 9,303
Borrowings 39,066 -
------------ -----------
44,603 9,303
------------ -----------
Net current assets / (liabilities) (29,230) 34,230
------------------------------------------- ------ ------------ -----------
Total assets less current liabilities 1,268,823 1,157,977
------------ -----------
Capital and reserves
Share capital 7,292 7,292
Capital redemption reserve 2,112 2,112
Share Premium 12,936 12,936
Capital reserve 1,246,483 1,135,637
Revenue reserve - --
------------------------------------------- ------ ------------ -----------
Total equity 1,268,823 1,157,977
------------------------------------------- ------ ------------ -----------
Net Asset Value per Share (basic and 6 1,851.8p 1,690.1p
diluted)
------------------------------------------- ------ ------------ -----------
The notes on pages 24 to 27 are an integral part of the interim
condensed financial statements.
Cash flow statement
Half year to Half year to
31 July 2022 31 July 2021
(unaudited) (unaudited)
GBP'000 GBP'000
---------------------------------------------- ------------- -------------
Operating activities
Sale of Portfolio investments 18,183 121,998
Purchase of Portfolio investments (29,644) (82,203)
Net cash flows to subsidiary investments (27,526) (43,512)
Interest income received from Portfolio
investments 1,338 3,260
Dividend income received from Portfolio
investments 151 4,359
Other income received - 1
Investment management charges paid (11,114) (2,915)
Other expenses paid (1,723) (2,990)
---------------------------------------------- ------------- -------------
Net cash (outflow) from operating activities (50,335) (2,002)
---------------------------------------------- ------------- -------------
Financing activities
Bank facility fee (2,018) (871)
Interest paid (332) (11)
Purchase of own shares into treasury - (2,679)
Credit Facility utilised 56,737 -
Credit Facility repaid (17,671) -
Equity dividends paid to shareholders (15,074) (9.628)
Net cash inflow/(outflow) from financing
activities 21,642 (13,189)
---------------------------------------------- ------------- -------------
Net (decrease) in cash and cash equivalents (28,693) (15,191)
---------------------------------------------- ------------- -------------
Cash and cash equivalents at beginning of
period 41,328 45,143
Net (decrease) in cash and cash equivalents (28,693) (15,191)
Effect of changes in foreign exchange rates 56 (603)
---------------------------------------------- ------------- -------------
Cash and cash equivalents at end of period 12,691 29,349
---------------------------------------------- ------------- -------------
The notes on pages 24 to 27 are an integral part of the interim
condensed financial statements.
Statement of changes in equity
Total
Capital redemption Capital Revenue shareholders'
Share capital reserve Share Premium reserve reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- -------------- ------------------------ -------------- --------- -------- --------------
Half year to 31 July 2022
(unaudited)
Opening balance at 1 February
2022 7,292 2,112 12,936 1,135,637 - 1,157,977
Profit for the period and total
comprehensive income -- -- -- 125,896 24 125,920
Dividends paid -- -- -- (15,049) (24) (15,074)
Purchase of own shares into
treasury -- -- -- - - -
-------------------------------- -------------- ------------------------ -------------- --------- -------- --------------
Closing balance
at 31 July 2022 7,292 2,112 12,936 1,246,484 - 1,268,823
-------------------------------- -------------- ------------------------ -------------- --------- -------- --------------
Total
Capital redemption Capital Revenue shareholders'
Share capital reserve Share Premium reserve reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- -------------- ------------------------ -------------- --------- -------- --------------
Half year to 31 July 2021
(unaudited)
Opening balance at 1 February
2021 7,292 2,113 12,936 929,676 - 952,016
Profit for the period and total
comprehensive income -- - - 98,115 5,689 103,804
Dividends paid -- - - (3,938) (5,689) (9,627)
Purchase of own shares into
Treasury -- - - (2,679) - (2,679)
-------------------------------- -------------- ------------------------ -------------- --------- -------- --------------
Closing balance
at 31 July 2021 7,292 2,113 12,936 1,021,174 - 1,043,514
-------------------------------- -------------- ------------------------ -------------- --------- -------- --------------
The notes on pages 24 to 27 are an integral part of the interim
condensed financial statements.
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 July 2022
1. General information
These interim condensed financial statements relate to ICG
Enterprise Trust Plc ('the Company'). ICG Enterprise Trust Plc is
registered in England and Wales and is incorporated in the United
Kingdom. The Company is domiciled in the United Kingdom and its
registered office is Procession House, 55 Ludgate Hill, London EC4M
7JW. The Company's objective is to provide long-term growth by
investing in private companies managed by leading private equity
managers.
2. Financial information
The interim condensed financial statements are unaudited and do
not comprise statutory accounts within the meaning of section 434
of the Companies Act 2006. Within the notes to the interim
condensed financial statements, all current and comparative data
covering the period to (or as at) 31 July 2022 is unaudited. Data
given in respect of the year to 31 January 2022 is audited. The
statutory accounts for the year to 31 January 2022 have been
reported on by Ernst & Young LLP and delivered to the Registrar
of Companies. The report of the auditors was (i) unqualified, (ii)
did not contain an emphasis of matter paragraph, and (iii) did not
contain any statements under section 498(2) or (3) of the Companies
Act 2006.
3. Basis of preparation
The interim financial statements have been prepared in
accordance with UK-adopted IAS 34 Interim financial Reporting (IAS
34) and on the basis of the accounting policies and methods of
computation set out in the financial statements of the Company for
the year to 31 January 2022.
The financial statements for the year to 31 January 2022 which
were prepared in accordance with UK-adopted International
Accounting Standards (IAS) and the Statement of Recommended
Practice (SORP) for investment trusts issued by the Association of
Investment Companies in April 2021.
The Company comprises one operating segment which is also a
reporting segment.
Going concern
These financial statements have been prepared on a going concern
basis and on the historical cost basis of accounting, modified for
the revaluation of certain assets at fair value. In making their
going concern assessment, the Directors have considered the
potential impact of principal risks on the Company's business
activities; the Company's net cash position; the availability of
the Company's credit facility and compliance with its covenants;
and the Company's cash flow projections, in particular those
arising from committed but undrawn commitments.
The Directors have concluded based on the above assessment that
the preparation of the interim condensed financial statements on a
going concern basis, to 31 October 2023, a period of more than 12
months from the signing of the interim condensed financial
statements, continues to be appropriate.
NOTES TO THE FINANCIAL STATEMENTS
4. Dividends
Half year to Half year to
31 July 31 July
2022 2021
GBP'000 GBP'000
----------------------------------------------------------- ------------
Third quarterly dividend in respect of prior year
6.0p per share (2021: 5.0p per share) 4,111 3,438
Final dividend in respect of year ended 31 January
2022: 9p per share (2021: 9.0p) 6,167 6,189
First quarterly dividend in respect of year ended
31 January 2023: 7.0p per share (2022: 6.0p) 4,796 -
--------------------------------------------------- ------ ------------
Total 15,074 9,627
--------------------------------------------------- ------ ------------
The Board has approved an interim dividend for the quarter to 30
April 2022 of 7.0p per share (totalling GBP4.8m) which has been
paid on 22 July 2022 to shareholders on the register on 8 July
2022. The Board has proposed a second interim dividend of 7.0p per
share in respect of the year ended 31 January 2023 which will be
paid on 2 December 2022 to shareholders on the register at the
close of business on 18 November 2022.
5. Earnings per share
Half year to Half year to
31 July 31 July
Earnings per share 2022 2021
Revenue return per ordinary share 0.04p 8.27p
Capital return per ordinary share 183.74p 142.69p
Earnings per ordinary share (basic and diluted) 183.78p 150.96p
Weighted average number of shares 68,517,055 68,761,530
------------------------------------------------ ------------ ------------
The earnings per share figures are based on the weighted average
numbers of shares set out above.
At 31 July 2022, the Company held 4,395,945 shares in treasury
(31 July 2021: 4,395,945) leaving 68,517,055 (31 July 2021:
68,517,055) shares outstanding, all of which have equal voting
rights.
6. Net Asset Value per Share
The Net Asset Value per Share is calculated as the net assets
attributable to shareholders of GBP1,268.8m (31 January 2022:
GBP1,158.0m) and 68,517,055 (31 January 2022: 68,517,055) ordinary
shares in issue at the period end. There were no potentially
dilutive ordinary shares, such as options or warrants, at either
year end. Calculated on both the basic and diluted basis, the Net
Asset Value per Share was 1,851.8p (31 January 2022: 1,690.1p).
NOTES TO THE FINANCIAL STATEMENTS
7. Fair Value estimation
IFRS 13 requires disclosure of fair value measurements of
financial
instruments categorised according to the following fair value measurement hierarchy:
-- Quoted prices (unadjusted) in active markets for identical assets or
liabilities (level 1).
-- Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as
prices) or indirectly (that is, derived from prices) (level 2).
-- Inputs for the asset or liability that are not based on observable market
data (that is, unobservable inputs) (level 3).
The valuation techniques applied are described in note 1 of the
annual financial statements. No investments were categorised as
level 1 or level 2.
The Company has no direct exposure to Level 1 assets. The fair
value of the Company's investment in subsidiary undertakings
includes the valuation of Level 1 assets held by the subsidiary
undertakings.
The following tables present the assets that are measured at
fair value at 31 July 2022 and 31 January 2022. The Company had no
financial liabilities measured at fair value at those dates.
Level 1 Level 2 Level 3 Total
31 July 2022 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- -------- --------- ---------
Investments held at fair
value
Unquoted investments -- -- 238,718 238,718
Quoted investments -- -- - -
Subsidiary undertakings -- -- 1,059,335 1,059,335
---------------------------- --------- --------- --------- ---------
Total investments held at
fair value -- -- 1,298,053 1,298,053
---------------------------- --------- --------- --------- ---------
Level 1 Level 2 Level 3 Total
31 January 2022 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- -------- --------- ---------
Investments held at fair
value
Unquoted investments -- -- 202,009 202,009
Quoted investments -- -- --
Subsidiary undertakings -- -- 921,738 921,738
---------------------------- --------- --------- --------- ---------
Total investments held at
fair value -- -- 1,123,747 1,123,747
---------------------------- --------- --------- --------- ---------
All quoted and unquoted investments are measured in accordance
with IFRS 13.
NOTES TO THE FINANCIAL STATEMENTS
7. Fair Value estimation (continued)
Investments in level 3 securities are in respect of ICG-managed
funds, Third Party Funds and Direct Investments. These are held at
fair value and are calculated using valuations provided by the
underlying manager of the investment and reviewed by ICG, with
adjustments made to the statements to take account of cash flow
events occurring after the date of the manager's valuation, such as
realisations or liquidity adjustments. A 30% increase/(decrease) in
the value of these assets (including those assets held within
subsidiary undertakings) would result in a rise and fall in NAV of
GBP384.8m and GBP(380.0)m or 29.7% and (29.3)% respectively (31
January 2022: rise and fall in NAV of GBP319.4m and GBP331.0m
respectively or 27.6% and (28.6%)).
The following table presents the changes in level 3 instruments
for the periods to 31 July 2022 and 31 January 2022.
Half year to Half year to
31 July 2022 31 July 2021
GBP'000 GBP'000
---------------------------------------------- ------------- -------------
Opening Balance 1 February 1,123,747 871,860
Additions 57,170 82,203
Disposals (18,183) (85,911)
Gains and losses recognised in profit or loss 135,319 148,085
---------------------------------------------- ------------- -------------
Closing balance 1,298,053 1,016,237
---------------------------------------------- ------------- -------------
GLOSSARY
Term
Short form
Definition
Alternative Performance Measures
APMs
Alternative Performance Measures are a term defined by the
European Securities and Markets Authority as "financial measures of
historical or future performance, financial position, or cash
flows, other than a financial measure defined or specified in the
applicable financial reporting framework".
APMs are used in this report if considered by the Board and the
Manager to be the most relevant basis for shareholders in assessing
the overall performance of the Company and for comparing the
performance of the Company to its peers, taking into account
industry practice.
Definitions and reconciliations to IFRS measures are provided in
the main body of the report or in this Glossary, where
appropriate.
Carried interest
Carried interest is equivalent to a performance fee. This
represents a share of the profits that will accrue to the
underlying private equity managers, after achievement of an agreed
Preferred Return.
Cash drag
Cash drag is the negative impact on performance arising as a
result of the allocation of a portion of the entity's assets to
cash.
Co-investment
Co-investment is a Direct Investment in a company alongside a
private equity fund.
Co-investment Incentive Scheme Accrual
Co-investment Incentive Scheme Accrual represents the estimated
value of interests in the Co-investment Incentive Scheme operated
by the subsidiary partnerships of the Company.
Commitment
Commitment represents the amount of capital that each investor
agrees to contribute to a fund or a specific investment.
Deployment
Please see 'Total new investment'.
Direct Investments
An investment in a portfolio company held directly, not through
a private equity fund. Direct Investments are typically
co-investments with a private equity fund.
Discount
Discount arises when the Company's shares trade at a price below
the Company's NAV per Share. In this circumstance, the price that
an investor pays or receives for a share would be less than the
value attributable to it by reference to the underlying assets. The
Discount is the difference between the share price and the NAV,
expressed as a percentage of the NAV. For example, if the NAV was
100p and the share price was 90p, the Discount would be 10%.
Drawdowns
Drawdowns are amounts invested by the Company when called by
underlying managers in respect of an existing Commitment.
EBITDA
Stands for earnings before interest, tax, depreciation and
amortisation, which is a widely used performance measure in the
private equity industry.
Enterprise Value
EV
Enterprise Value is the aggregate value of a company's entire
issued share capital and Net Debt.
Exclusion List
The Exclusion List defines the business activities which are
excluded from investment.
FTSE All-Share Index Total Return
The change in the level of the FTSE All-Share Index, assuming
that dividends are re- invested on the day that they are paid.
Full Exits
Full Exits are exit events (e.g., trade sale, sale by public
offering, or sale to a financial buyer) following which the
residual exposure to an underlying company is zero or immaterial;
this does not include Fund Disposals. See 'Fund Disposals'.
Fund Disposals
Fund Disposals are where the Company receives sales proceeds
from the full or partial sale of a fund position within the
secondary market.
General Partner
GP
The General Partner is the entity managing a private equity
fund. This is commonly referred to as the manager.
Hedging
Hedging is an investment technique designed to offset a
potential loss on one investment by purchasing a second investment
that is expected to perform in the opposite way.
High Conviction Investments
High Conviction Investments comprise Direct Investments, as well
as investments in ICG-managed funds and Secondary Investments.
Initial Public Offering
IPO
An Initial Public Offering is an offering by a company of its
share capital to the public with a view to seeking an admission of
its shares to a recognised stock exchange.
Internal Rate of
Return
IRR
Internal Rate of Return is a measure of the rate of return
received by an investor in a fund. It is calculated from cash drawn
from and returned to the investor, together with the residual value
of the investment.
Investment Period
Investment Period is the period in which funds are able to make
new investments under the terms of their fund agreements, typically
up to five years after the initial Commitment.
Last Twelve Months
LTM
Last Twelve Months refers to the time frame of the immediately
preceding 12 months in reference to a financial metricised to
evaluate the Company's performance.
Limited Partner
LP
The Limited Partner is an institution or individual who commits
capital to a private equity fund established as a Limited
Partnership. These funds are generally protected from legal actions
and any losses beyond the original investment.
Limited Partnership
A Limited Partnership includes one or more General Partners, who
have responsibility for managing the business of the partnership
and have unlimited liability, and one or more Limited Partners, who
do not participate in the operation of the partnership and whose
liability is ordinarily capped at their capital and loan
contribution to the partnership. In typical fund structures, the
General Partner receives a priority share ahead of distributions to
Limited Partners.
Net Asset Value
per Share
NAV per Share
Net Asset Value per Share is the value of the Company's net
assets attributable to one Ordinary share. It is calculated by
dividing 'shareholders' funds' by the total number of ordinary
shares in issue. Shareholders' funds are calculated by deducting
current and long-term liabilities, and any provision for
liabilities and charges, from the Company's total assets.
Net Asset Value
per Share Total
Return
Net Asset Value per Share Total Return is the change in the
Company's Net Asset Value per Share, assuming that dividends are
re- invested at the end of the quarter in which the dividend was
paid.
Net Debt
Net Debt is calculated as the total short-term and long-term
debt in a business, less cash and cash equivalents.
Ongoing Charges
Ongoing Charges are calculated in line with guidance issued by
the Association of Investment Companies ('AIC') and capture
management fees and expenses, excluding finance costs, incurred at
the Company level only. The calculation does not include the
expenses and management fees incurred by any underlying funds.
Other Net Liabilities
Other Net Liabilities at the aggregated Company level represent
net other liabilities per the Company's balance sheet. Net other
liabilities per the balance sheet of the subsidiaries include
amounts payable under the Co-investment Incentive Scheme
Accrual.
Overcommitment
Overcommitment refers to where private equity fund investors
make Commitments exceeding the amount of cash immediately available
for investment. When determining the appropriate level of
Overcommitment, careful consideration needs to be given to the rate
at which Commitments might be drawn down, and the rate at which
realisations will generate cash from the existing Portfolio to fund
new investment.
Portfolio
Portfolio represents the aggregate of the investment Portfolios
of the Company and of its subsidiary Limited Partnerships. This APM
is consistent with the commentary in previous annual and interim
reports. The Board and the Manager consider that disclosing our
Portfolio assists shareholders in understanding the value and
performance of the underlying investments selected by the Manager.
It is shown before the Co-investment Incentive Scheme Accrual to
avoid being distorted by certain funds and Direct Investments on
which ICG Enterprise Trust Plc does not incur these costs (for
example, on funds managed by ICG plc). Portfolio is related to the
NAV, which is the value attributed to our shareholders, and which
also incorporates the Co-investment Incentive Scheme Accrual as
well as the value of cash and debt retained on our balance
sheet.
The value of the Portfolio at 31 July 2022 is GBP1,353.7m (31
January 2022: GBP1,172.2m).
Portfolio (continued)
The closest equivalent amount reported on the balance sheet is
'investments at fair value'. A reconciliation of these two measures
along with other figures aggregated for the Company and its
subsidiary Limited Partnerships is presented below:
Total Company
Net assets Co-investment and
IFRS Balance of subsidiary Incentive subsidiary
31 July 2022 sheet fair limited Scheme Limited
GBPm value partnerships Accrual Partnerships
--------------- -------------- -------------- -------------- -------------
Investments(1) 1,298.1 (1.5) 57.1 1,353.7
Cash 12.7 - - 12.7
Other Net
Liabilities (41.9) 1.5 (57.1) (97.5)
--------------- -------------- -------------- -------------- -------------
Net assets 1,268.9 - - 1,268.9
--------------- -------------- -------------- -------------- -------------
Balances
receivable
from Co-investment Total Company
IFRS Balance subsidiary Incentive and subsidiary
31 January 2022 sheet fair Limited Scheme Limited
GBPm value Partnerships Accrual Partnerships
--------------- -------------- ------------- -------------- --------------
Investments(1) 1,123.7 (0.6) 49.1 1,172.2
Cash 41.3 - - 41.3
Other Net
Liabilities (7.1) 0.6 (49.1) (55.6)
--------------- -------------- ------------- -------------- --------------
Net assets 1,157.9 - - 1,157.9
--------------- -------------- ------------- -------------- --------------
(1) Investments as reported on the IFRS balance sheet at fair
value comprise the total of assets held by the Company and the net
asset value of the Company's investments in the subsidiary Limited
Partnerships.
Portfolio Return on a Local Currency Basis
Portfolio Return on a Local Currency Basis represents the change
in the valuation of the Company's Portfolio before the impact of
currency movements and Co-investment Incentive Scheme Accrual. The
Portfolio return of 7.4% is calculated as follows:
31 July 31 July
GBPm 2022 2021
------------------------------------------------------ ---------- ----------
Income, gains and losses on Investments 136.5 113.0
Foreign exchange gains and losses included in gains
and losses on investments (60.6) 20.4
Incentive accrual valuation movement 11.1 8.2
------------------------------------------------------ ---------- ----------
Total gains on Portfolio investments excluding impact
of foreign exchange 87.0 141.6
------------------------------------------------------ ---------- ----------
Opening Portfolio valuation 1,172.2 949.2
------------------------------------------------------ ---------- ----------
Portfolio Return on a Local Currency Basis 7.4% 14.9%
------------------------------------------------------ ---------- ----------
Term
Short form
Definition
Portfolio Return on a Local Currency Basis
(continued)
A reconciliation between the Portfolio Return on Local Currency
Basis and NAV per Share Total Return is disclosed under 'Total
Return'.
Portfolio Company
Portfolio Company refers to an individual company in an
investment portfolio.
Preferred Return
Preferred Return is the preferential rate of return on an
individual investment or a portfolio of investments, which is
typically 8% per annum.
Premium
Premium occurs when the share price is higher than the NAV and
investors would therefore be paying more than the value
attributable to the shares by reference to the underlying
assets.
Quoted Company
A Quoted Company is any company whose shares are listed or
traded on a recognised stock exchange.
Realisation Proceeds
Realisation Proceeds are amounts received in respect of
underlying realisation activity from the Portfolio and exclude any
inflows from the sale of fund positions via the secondary
market.
Realisations - Multiple to Cost
Realisations - Multiple to Cost is the average return from Full
Exits from the Portfolio in the period on a primary investment
basis, weighted by cost.
GBPm 31 July 2022 31 July 2021
-------------------------------------------------- ------------ ------------
Realisation Proceeds from Full Exits in the
year-to-date 73.2 143.6
Cost 32.5 52.0
-------------------------------------------------- ------------ ------------
Average return Multiple to Cost 3.3x 2.8x
-------------------------------------------------- ------------ ------------
Realisations -- Uplift To Carrying Value
Realisations -- Uplift To Carrying Value is the aggregate uplift
on Full exits from the Portfolio in the period excluding publicly
listed companies that were exited via sell downs of their
shares.
31 July 31 July
GBPm 2022 2021
------------------------------------------------------ ---------- ----------
Realisation Proceeds from Full Exits in the
year-to-date 73.2 97.2
Prior Carrying Value (at previous quarterly valuation
prior to exit) 58.5 77.2
------------------------------------------------------ ---------- ----------
Realisations -- Uplift To Carrying Value 25.2% 25.8%
------------------------------------------------------ ---------- ----------
Secondary Investments
Secondary Investments occur when existing private equity fund
interests and Commitments are purchased from an investor seeking
liquidity.
Share Price Total Return
Share Price Total Return is the change in the Company's share
price, assuming that dividends are re-invested on the day that they
are paid.
Total New Investment
Total New Investment is the total of direct Co-investment and
fund investment Drawdowns in respect of the Portfolio. In
accordance with IFRS 10, the Company's subsidiaries are deemed to
be investment entities and are included in subsidiary investments
within the financial statements.
Movements in the cash flow statement within the financial
statements reconcile to the movement in the Portfolio as
follows:
31 July 31 July
GBPm 2022 2021
---------------------------------------------------- ----------- -----------
Purchase of Portfolio investments per cash flow
statement 29.6 82.2
Purchase of Portfolio investments within subsidiary
investments 114.1 51.1
Total New Investment 143.7 133.3
---------------------------------------------------- ----------- -----------
Total Proceeds
Total Proceeds are amounts received by the Company in respect of
the Portfolio, which may be in the form of capital proceeds or
income such as interest or dividends. In accordance with IFRS 10,
the Company's subsidiaries are deemed to be investment entities and
are included in subsidiary investments within the financial
statements.
31 July 31 July
GBPm 2022 2021
------------------------------------------------------ ---------- ----------
Sale of Portfolio investments per cash flow statement 18.2 122.0
Sale of Portfolio investments, interest received,
and dividends received within subsidiary investments 87.1 55.0
Interest income per cash flow statement 1.3 3.3
Dividend income per cash flow statement 0.2 4.4
------------------------------------------------------ ---------- ----------
Total Proceeds 106.8 184.7
------------------------------------------------------ ---------- ----------
Fund Disposals - 9.4
------------------------------------------------------ ---------- ----------
Realisation Proceeds 106.8 175.3
------------------------------------------------------ ---------- ----------
Total Return
Total Return is a performance measure that assumes the notional
re-investment of dividends. This is a measure commonly used by the
listed private equity sector and listed companies in general.
The table below sets out the share price and the Net Asset Value
per Share growth figures for periods of one, three, five and ten
years to the balance sheet date on an annualised Total Return
basis:
Total Return performance in years to 31 July 2022 1 3 5 10
(annualised) year years years years
-------------------------------------------------- ----- ----- ----- -----
Net Asset Value per Share 24.2% 18.6% 16.9% 14.5%
Share price 10.0% 12.8% 12.2% 14.4%
FTSE All-Share Index 5.5% 3.2% 4.0% 7.2%
-------------------------------------------------- ----- ----- ----- -----
The table below shows the breakdown of the one-year Net Asset
Value per Share Total Return for the period:
Change in NAV (% of opening NAV) 31 July 2022 31 July 2021
-------------------------------------------------- ------------ ------------
Portfolio Return on a Local Currency Basis 7.4% 14.9%
Currency movements on the Portfolio 5.0% (2.1%)
-------------------------------------------------- ------------ ------------
Portfolio return in sterling 12.4% 12.8%
Impact of (net cash)/net debt 0.2% (0.0%)
-------------------------------------------------- ------------ ------------
Impact of net portfolio movement on net asset
value 12.6% 12.8%
Expenses and other income (0.9)% (1.1%)
Incentive accrual valuation movement (0.8)% (0.8%)
-------------------------------------------------- ------------ ------------
Increase in Net Asset Value per Share before buy
backs 10.9% 10.9%
Impact of share buy backs & dividend reinvestment 0.0% 0.2%
-------------------------------------------------- ------------ ------------
Net Asset Value per Share Total Return 10.9% 11.1%
-------------------------------------------------- ------------ ------------
Undrawn Commitments
Undrawn Commitments are Commitments that have not yet been drawn
down (please see 'Drawdowns').
Unquoted Company
An Unquoted Company is any company whose shares are not listed
or traded on a recognised stock exchange.
Valuation Date
The date of the valuation report issued by the underlying
manager.
Valuation Multiples
Valuation Multiples are earnings (EBITDA), or revenue multiples
applied in determining the value of a business enterprise.
(1) In the Chair's Foreword, Manager's Review and Supplementary
Information, reference is made to the Portfolio. This is an
APM.
(END) Dow Jones Newswires
October 11, 2022 02:00 ET (06:00 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
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