TIDMMTH
RNS Number : 2037M
Mithras Investment Trust PLC
26 July 2017
MITHRAS INVESTMENT TRUST PLC (the "Company")
Interim Financial Results for the six months ended 30 June
2017
Announcement of Unaudited Results
This announcement contains regulated information.
Financial Summary
Group Financial Highlights
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
Net assets
attributable
to owners of GBP22.7 GBP26.3 GBP31.5
the Company million million million
Number of Ordinary
shares in issue
at end of period 10,030,841 14,228,143 14,228,143
Net Asset Value
("NAV") per
Ordinary share 226.5 pence 185.2 pence 221.2 pence
Mid market
quoted share
price 221.0 pence 152.0 pence 181.3 pence
Discount 2.4% 17.9% 18.0%
Cash distributions to shareholders during
the period (dividends paid plus tender
offers)
- Dividends GBP0.1 GBP0.2 GBP0.2
paid million million million
GBP9.2 GBP9.0 GBP9.0
* Tender offer proceeds million million million
----------------- ----------------- ----------------
GBP9.3 GBP9.2 GBP9.2
million million million
----------------- ----------------- ----------------
- Tender offer
proceeds per
Ordinary share 64.2 pence 45.9 pence 45.9 pence
Net dividends
proposed per - - 1.0 pence
Ordinary share
Total return GBP0.7 GBP1.9 GBP7.0
before tax million million million
Ongoing charges
(annualised)(1) 1.8% 1.6% 1.6%
Total expense
ratio (annualised)(2) 2.7% 2.4% 2.4%
(1) The ongoing charges figures have been calculated using the
Association of Investment Companies' ("AIC") recommended
methodology and relate to the ongoing costs of running the Company.
Subsidiary expenses, such as those incurred by MCP and
non-recurring fees are therefore excluded from the calculation.
(2) The ratio reflects the ongoing expense for the Group. This
follows the AIC guidance in calculating ongoing charges, but
includes ongoing expenses of all subsidiaries.
Performance (% Total Return) at 30 June 2017
Since
6 months 1 Year 3 Year 5 Year Flotation
% % % % %
Share price 22.4 46.1 55.0 122.7 477.4
NAV* 2.8 22.8 49.6 63.8 368.5
FTSE All-Share
Index 5.5 18.1 23.9 65.2 425.2
*Returns based on NAV per share adjusted for dividends paid. The
return since flotation is based on Group total return after tax
before dividends, attributable to owners on opening owners'
equity.
Summary Financial Information Following the Approval of the
Realisation Strategy
Tender
Dividends offer
paid proceeds
per per
Net Share Ordinary Ordinary
assets* NAV price Discount share** share
GBPm P P % P P
31 December
2009 49.8 137.2 69.0 49.7 5.0 -
31 December
2010 53.3 146.8 112.5 23.4 2.0 -
31 December
2011 52.7 145.1 99.5 31.4 2.0 -
31 December
2012 52.0 143.1 112.5 21.4 2.0 -
31 December
2013 44.3 160.4 137.5 14.3 1.0 37.6
31 December
2014 37.8 162.1 142.5 12.1 1.0 24.0
31 December
2015 33.7 173.0 146.5 15.3 1.0 25.8
31 December
2016 31.5 221.2 181.3 18.0 1.0 45.9
30 June 2017 22.7 226.5 221.0 2.4 1.0 64.2
* Attributable to owners of the Company.
** This is the dividend in pence per Ordinary share paid during
the calendar year, declared in the previous year.
Investment Manager's Review
Overview of Results for the Six Months ended 30 June 2017
The Company's NAV increased from 221.2 pence per share to 226.5
pence per share in the six months to 30 June 2017, an increase of
2.4%. This increase is after the final dividend of 1.0 pence per
share paid to shareholders in May 2017. The Company has enjoyed
another period of strong performance, with the exit environment
remaining positive. The Company has made significant progress with
its realisation strategy. Currency movements continue to impact NAV
performance. Whilst the Company benefitted from Sterling weakening
by 2.8% against the Euro, a strengthening in the value of the
Sterling against the US Dollar by 5.1% negatively impacted
performance.
The Company completed its sixth and largest tender offer in
April 2017, buying back 29.5% of the remaining Ordinary shares in
issue, returning GBP9.2 million of cash to shareholders. The
Company has now returned a gross total of GBP44.1 million to
shareholders by way of tender offers which equates to a total
capital return of 119.7 pence per share or the cancellation of
approximately 72% of the original shares in issue.
As with previous Interim Reports, these results are based upon
the 31 March 2017 underlying fund valuations, being the latest
available information. The Board has chosen to make a Directors'
revaluation adjustment at 30 June 2017, making a provision of
GBP0.3 million against the current valuation of the MCF
portfolio.
During the period, the share price increased from 181.3 pence
per share to 221.0 pence per share, an increase of 21.9%. The
Company's discount has narrowed significantly from 18.0% to 2.4%
reflecting the Company's continued progress with its realisation
strategy.
Dividend
As approved by shareholders at the 2017 Annual General Meeting
("AGM"), a final dividend of 1.0 pence per share (2016: 1.0 pence
final) was paid in May 2017 in respect of the year ended 31
December 2016. As we have stated consistently since the adoption of
the realisation strategy, shareholders should expect the bulk of
future returns to be in the form of capital rather than income
distributions.
Investment Activity within MCF
Investment activity within MCF during the first six months of
2017 was limited with just GBP0.2 million of retained distribution
proceeds required to meet ongoing obligations to MCF. In addition
CVC Europe V acquired Medipole as an add-on acquisition to Elsan,
the French private hospital operator, although this add-on
acquisition of GBP0.3 million did not require further capital from
the Company.
Realisations from MCF
MCF's mature portfolio has benefitted from a continuation of a
sellers market for private equity. We highlighted at the recent AGM
that the prospects for distributions in 2017 were excellent. This
was borne out in the first half of 2017, with the Company receiving
gross distribution proceeds of GBP14.2 million (June 2016: GBP6.3
million). OCM Principal Opportunities Fund IV distributed a total
of GBP6.4 million, of which GBP6.3 million related to AdvancePierre
Foods. This exit was completed in two stages; a sell down of shares
post IPO in February 2017 and the subsequent sale to Tyson Foods in
June 2017. CVC Europe V provided the Company with distribution
proceeds of GBP3.8 million relating to a number of distributions
including the sales of Quironsalud for a multiple in excess of 4.0x
cost as well the full disposals of AlixPartners and Leslie's
Holdings. As previously reported in the 2016 Annual Financial
Report, PAI Europe V exited both Xella and Cerba Healthcare at
multiples in excess of 2.0x cost with the Company's share of
distributed proceeds amounting to GBP3.0 million. Doughty Hanson V
exited LM Wind Power providing the Company with distribution
proceeds of GBP0.8 million and Riverside Europe III provided a
small distribution of GBP0.2 million.
Liquidity and Outstanding Commitments
The Group's liquidity position continues to be strong. During
the period the Group's cash position has increased from GBP5.7
million to GBP10.0 million. This is after the return of GBP9.2
million to shareholders from the sixth tender offer in April 2017
and the 1.0 pence per share dividend paid in May 2017.
Excluding subsidiary company cash balances, the Company's cash
balance of GBP9.4 million compares to a maximum outstanding
commitment at 30 June 2017 to MCF of GBP3.2 million although our
current expectation is that only up to GBP0.4 million will be
drawn, leaving a cash surplus of GBP9.0 million at 30 June 2017.
The Company is now giving consideration to the timing of its next
tender offer.
Principal Risks and Uncertainties
The Company's investment activities expose it to various types
of risks that are associated with its investment commitments to
private equity limited partnerships. The principal risks are market
risk, currency risk and liquidity risk in respect of these
investments. Other key risks faced by the Company include
investment strategy, management resources, regulatory, operational
and financial risks. These risks, and the way in which they are
managed, are described in more detail under the heading "Principal
Risks and Uncertainties" within the Strategic Report in the
Company's Annual Financial Report for the year ended 31 December
2016 as well as note 20 entitled "Financial Instruments, Capital
and Risk Management". The Company's principal risks and
uncertainties have not changed materially since the date of that
Report.
Update on the Realisation Strategy
The Company has made significant progress with its realisation
strategy during the first half of 2017. As a result of the
realisations, there has been a significant reduction in the size of
the investment portfolio to GBP13.0 million after carried interest
(December 2016: GBP26.1 million). The sale of AdvancePierre Foods
has reduced the proportion of pre-2010 vintage investments and the
Company's residual underlying portfolio within MCF now comprises 31
portfolio companies.
MCF has moved swiftly through the carried interest catch up
phase as highlighted at the 2017 AGM. This means that all future
gains on investment will be allocated on a more conventional 90:10
split in favour of investors in MCF. The Company's current share of
the carried interest provision within the MCF valuation is GBP3.0
million.
We expect to make one or two more tender offers before we
commence the final stages of the realisation strategy. This should
be sometime during the latter half of 2018. We therefore still
believe it is appropriate to adopt the going concern basis for this
Interim Report.
Outlook
The Company has enjoyed a strong start to 2017 both in terms of
share price performance and cash generation. With MCF having moved
through the carried interest catch up phase, the Company is now
well placed for further growth in NAV. We have good visibility on
the remaining residual MCF portfolio. We believe that the remaining
portfolio is well positioned to deliver further distributions
during the remainder of 2017. The Company's performance remains
sensitive to currency movements, although this is now principally
Sterling against the Euro. Whilst the political and economic
environment remains uncertain, we are confident that the Company
will continue to make further progress in delivering the
realisation strategy.
Mithras Capital Partners LLP
Investment Manager
26 July 2017
Consolidated Investment Portfolio
At 30 June 2017
Fair Value % of
Investments at Fair Value GBP'000 Portfolio*
MCF limited partnership
fund investments
CVC European Equity Partners
V 6,234 39
Doughty Hanson & Co V 3,661 23
PAI Europe V 2,591 16
OCM Principal Opportunities
Fund IV 2,200 14
Riverside Europe Fund III 1,602 10
Net current assets held 76 -
in MCF
(341) (2)
Directors' revaluation adjustment --------- ---------
Investment portfolio excluding
MCF carried interest provision 16,023 100
=====
MCF carried interest provision (2,985)
---------
Total investment portfolio 13,038
=====
Geographical spread of investments
by fund currency exposure
Continental Europe (EUR) 13,747 86
North America (USD) 2,200 14
United Kingdom (GBP) 76 -
--------- ---------
16,023 100
=====
MCF carried interest provision (2,985)
---------
Total investment portfolio 13,038
=====
* Investment portfolio excluding MCF carried interest
provision.
Listed below are the ten largest underlying investments by value
which account for 73% of the consolidated investment portfolio. All
of these investments are held indirectly through the Company's
commitment to MCF.
Top Ten Largest Underlying Investments within MCF
Portfolio Underlying Year % of
Company Sector Country Fund of Investment Portfolio
-------------- ------------- ------------- ---------------- ---------------- -----------
Doughty
Hanson
& Co
TMF Group Services Netherlands V 2008 19%
OCM Principal
Opportunities
Cyanco Basic United Fund
Holdings Resources States IV 2008 8%
CVC European
Equity
Partners
Ista Services Germany V 2013 7%
Food United PAI Europe
Froneri & Beverage Kingdom V 2013 7%
CVC European
Travel, Equity
Sky Betting Leisure United Partners
& Gaming & Retail Kingdom V 2015 6%
Riverside
Europe
OrthoD United Fund
Group Healthcare Kingdom III 2008 6%
CVC European
Travel, Equity
Leisure Partners
Ahlsell & Retail Sweden V 2012 6%
PAI Europe
ADB Safegate Services Belgium V 2013 5%
OCM Principal
Dayton Industrial Opportunities
Superior Goods United Fund
Corporation & Services States IV 2008 5%
CVC European
Equity
Partners
Elsan Healthcare France V 2014 4%
Consolidated Investment Portfolio Analysis
Underlying Investments by Year of Investment (by valuation)
Year %
Pre-2010 41
2011 7
2012 8
2013 27
2014 11
2015 6
Underlying Investments by Continent (by valuation)
Continent %
Europe
including
UK 84
North
America 16
Underlying Investments by Sector (by valuation)
Sector %
Services 33
Travel, Leisure
& Retail 15
Industrial Goods
& Services 13
Food & Beverage 11
Healthcare 10
Basic Resources 8
Telecoms, Media
& Technology 6
Oil, Gas & Chemicals 2
Building Materials
& Others 1
Financial Services
& Insurance 1
Underlying Investments by Country (by valuation)
Country %
UK 25
Benelux 23
North America 16
France 13
Germany 8
Scandinavia 7
Italy 4
Czech Republic 4
Unaudited Condensed Consolidated Statement of Comprehensive
Income
Six months ended
30 June 2017
Revenue Capital Total
return return return
Notes GBP'000 GBP'000 GBP'000
Income
Net gains on investments 9 - 519 519
Investment income 365 - 365
224 - 224
Other income 5 --------- --------- ---------
589 519 1,108
--------- --------- ---------
Expenses
(375) - (375)
Operating expenses 6 --------- --------- ---------
Profit before taxation 214 519 733
(95) - (95)
Taxation --------- --------- ---------
Profit and total comprehensive
income for the 119 519 638
period ===== ===== =====
Attributable to:
Owners of the Company 103 519 622
Non-controlling Interests 16 - 16
Basic and diluted earnings
per Ordinary share (pence) 8 0.8 4.1 4.9
===== ===== =====
The total column of this statement represents the Consolidated
Statement of Comprehensive Income, prepared in accordance with
International Financial Reporting Standards ("IFRS"). The
supplementary revenue return and capital return columns are both
prepared under the guidance published by the AIC.
The notes form an integral part of these Condensed Consolidated
Interim Financial Statements.
Six months ended
30 June 2016
Revenue Capital Total
return return return
Notes GBP'000 GBP'000 GBP'000
Income
Net gains on investments 9 - 2,013 2,013
Investment income 21 - 21
232 - 232
Other income 5 --------- --------- ---------
253 2,013 2,266
--------- --------- ---------
Expenses
(374) - (374)
Operating expenses 6 --------- --------- ---------
(Loss)/proft before taxation (121) 2,013 1,892
(3) - (3)
Taxation --------- --------- ---------
(Loss)/profit and total
comprehensive income (124) 2,013 1,889
for the period ===== ===== =====
Attributable to:
Owners of the Company (140) 2,013 1,873
Non-controlling Interests 16 - 16
Basic and diluted (loss)/earnings
per Ordinary share (pence) 8 (0.8) 11.4 10.6
===== ===== =====
The total column of this statement represents the Consolidated
Statement of Comprehensive Income, prepared in accordance with
International Financial Reporting Standards ("IFRS"). The
supplementary revenue return and capital return columns are both
prepared under the guidance published by the AIC.
The notes form an integral part of these Condensed Consolidated
Interim Financial Statements.
Unaudited Condensed Consolidated
Statement of Changes in Equity
For the six months ended 30 June
2017
Total
equity
attributable
Capital to owners Non-
Share redemption Capital Revenue of the controlling Total
capital reserve reserve reserve Company interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2017 285 550 26,185 4,458 31,478 21 31,499
Profit
and total
comprehensive
income
for the
period - - 519 103 622 16 638
--------- --------- --------- --------- --------- --------- ---------
Contributions
by and
distributions
to owners
Dividends
(note
7) - - - (142) (142) - (142)
Profit
share
paid to
members
in a
subsidiary - - - - - (18) (18)
Cost of
shares
purchased
for
cancellation
under
tender
offer (84) 84 (9,237) - (9,237) - (9,237)
--------- --------- --------- --------- --------- --------- ---------
Total
contributions
by and
distributions (84) 84 (9,237) (142) (9,379) (18) (9,397)
to owners --------- --------- --------- --------- --------- --------- ---------
At 30 201 634 17,467 4,419 22,721 19 22,740
June 2017 ===== ===== ===== ======= ===== ===== ======
The notes form an integral part of these Condensed
Consolidated Interim Financial Statements.
Unaudited Condensed Consolidated
Statement of Changes in Equity
For the six months ended 30 June
2016
Total
equity
attributable
Capital to owners Non-
Share redemption Capital Revenue of the controlling Total
capital reserve reserve reserve Company interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2016 390 445 28,239 4,644 33,718 21 33,739
Profit/(loss)
and total
comprehensive
income
for the
period - - 2,013 (140) 1,873 16 1,889
--------- --------- --------- --------- --------- --------- ---------
Contributions
by and
distributions
to owners
Dividends
(note
7) - - - (195) (195) - (195)
Profit
share
paid to
members
in a
subsidiary - - - - - (18) (18)
Cost of
shares
purchased
for
cancellation
under
tender (105) 105 (9,051) - (9,051) - (9,051)
offer --------- --------- --------- --------- --------- --------- ---------
Total
contributions
by and
distributions (105) 105 (9,051) (195) (9,246) (18) (9,264)
to owners --------- --------- --------- --------- --------- --------- ---------
At 30 285 550 21,201 4,309 26,345 19 26,364
June 2016 ===== ===== ===== ======= ===== ===== ======
The notes form an integral part of these Condensed
Consolidated Interim Financial Statements.
Unaudited Condensed Consolidated Balance Sheet
Unaudited Audited Unaudited
30 June 31 December 30 June
2017 2016 2016
Notes GBP'000 GBP'000 GBP'000
Non-current assets
Investments at
fair value through 13,038 26,113 23,155
profit or loss 9 ---------- ---------- ----------
Current assets
Receivables 29 20 28
Current tax receivable - 42 -
10,029 5,691 3,562
Cash and cash equivalents ---------- ---------- ----------
10,058 5,753 3,590
---------- ---------- ----------
23,096 31,866 26,745
Total assets ---------- ---------- ----------
Current liabilities
Payables (117) (154) (139)
(39) (13) (42)
Current tax liability ---------- ---------- ----------
(156) (167) (181)
---------- ---------- ----------
Total assets less 22,940 31,699 26,564
current liabilities ===== ===== =====
Non-current liabilities
Retention arrangement
for key management
personnel 12 (200) (200) (200)
====== ====== ======
Net assets 22,740 31,499 26,364
====== ====== ======
Equity attributable
to owners of the
Company
Share capital 201 285 285
Capital redemption
reserve 634 550 550
Capital reserve 17,467 26,185 21,201
4,419 4,458 4,309
Revenue reserve ----------- ----------- ---------
Equity attributable
to owners of the
Company 22,721 31,478 26,345
Non-controlling 19 21 19
Interest ----------- ----------- ----------
Total equity 22,740 31,499 26,364
===== ===== =====
Net assets per
Ordinary share
(pence) 226.5 221.2 185.2
* basic and diluted 10 ===== ===== =====
The notes form an integral part of these Condensed Consolidated
Interim Financial Statements.
Unaudited Condensed Consolidated Cash Flow Statement
Six months Six months
ended ended
30 June 30 June
2017 2016
Notes GBP'000 GBP'000
Cash flows from operating
activities
Investment income
received 365 21
Interest income received 6 15
Investment management
fees received 218 219
Cash paid to service
providers (349) (317)
Compensation to key
management personnel (75) (75)
Taxation (paid)/received (27) 55
Calls on commitment 9 (297) (159)
Proceeds on partial 13,891 6,235
disposal of investment 9 --------- ---------
Net cash flow from 13,732 5,994
operating activities --------- ---------
Cash flows from financing
activities
Equity dividends
paid (142) (195)
Profit share distributed
to Non-controlling
Interest (18) (18)
Tender offer proceeds (9,234) (9,043)
--------- ---------
Net cash flow from (9,394) (9,256)
financing activities --------- ---------
Net increase/(decrease)
in cash and cash
equivalents 4,338 (3,262)
Cash and cash equivalents 5,691 6,824
at beginning of period --------- ---------
Cash and cash equivalents 10,029 3,562
at end of period ===== =====
The notes form an integral part of these Condensed Consolidated
Interim Financial Statements.
Notes to the Interim Financial Statements
1. General Information
Mithras Investment Trust plc is a company incorporated and
domiciled in the United Kingdom. The Condensed Consolidated Interim
Financial Statements of the Group for the six months ended 30 June
2017 comprise the Company and its subsidiaries, Mithras Investments
Limited ("MIL"), Mithras Capital Holdings Limited ("MCH"), Mithras
Capital Partners LLP ("MCP"), Mithras Capital Partners GP Limited
("MCGP") and Mithras Capital Scottish GP LLP ("MCSGP") together
referred to as the "Group". The nature of the Group's operations
and its principal activities are set out in note 4 Segment
Reporting.
The Group's organisational structure is unchanged from the
structure set out in note 17 of the Company's Annual Financial
Report for the year ended 31 December 2016.
2. Statement of Compliance
These Condensed Consolidated Interim Financial Statements have
been prepared in accordance with the Disclosure Guidance and
Transparency and Listing Rules of the Financial Conduct Authority
("FCA") and with International Accounting Standard 34, 'Interim
Financial Reporting' as adopted by the EU. They do not include all
the information required for a full Annual Financial Report and
should be read in conjunction with the Consolidated Financial
Statements of the Group for the year ended 31 December 2016, which
have been prepared in accordance with IFRS as adopted by the
EU.
The Directors have reviewed the guidance issued by the Financial
Reporting Council in order to determine whether the going concern
basis should be used in preparing the Financial Statements for the
six months ended 30 June 2017. In doing so, the Directors have
reviewed the likely operational costs and cash flows for the Group
for the twelve months from the date of signing this Report and are
of the opinion that the Group has adequate resources to continue in
operational existence for the foreseeable future. The Directors
have agreed that it is appropriate to continue to adopt the going
concern basis in the preparation of the Financial Statements as the
Company follows its realisation strategy. After due consideration,
no material uncertainties have been identified that would cast
significant doubt over the ability of the Group to continue as a
going concern.
The Condensed Consolidated Interim Financial Statements were
authorised and approved for issue by the Board of Directors on 26
July 2017.
The Condensed Consolidated Interim Financial Statements do not
comprise Statutory Accounts within the meaning of Section 434 of
the Companies Act 2006. Statutory Accounts for the year ended 31
December 2016 were approved by the Board of Directors on 23
February 2017 and delivered to the Registrar of Companies. The
Auditors' report on those Financial Statements was unqualified, did
not contain an emphasis of matter paragraph and did not contain any
statement under Section 498 of the Companies Act 2006.
The Interim Report and Financial Statements are being sent to
shareholders and copies will be made available to the public at the
Registered Office of the Company at 10 Harewood Avenue, London NW1
6AA and on the Company's website
www.mithrasinvestmenttrust.com.
3. Significant Accounting Policies
The accounting policies and estimates applied are consistent
with those of the Annual Financial Report for the year ended 31
December 2016. Those standards which have become applicable during
the period have had no significant impact on the Group.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual
earnings.
Nothing has been noted in the Update on the Realisation Strategy
section of the Investment Manager's Review which would be expected
to have a material impact on the accounting policies for the year
ended 31 December 2017.
4. Segment Reporting
The chief operating decision-maker has been identified as the
Board of Directors. The Board reviews the Group's internal
reporting in order to assess performance and allocate resources.
The Board has determined the operating segments based on these
reports.
The Board considers the operating segments to be investment
holdings and private equity fund-of-funds management. The Board
assesses the performance of the Group based upon the KPI's as
stated in the Strategic Report on pages 12 to 15 of the 2016 Annual
Financial Report.
Investment holdings represent the Group and Company's operations
and commitment to MCF. Comprehensive income for this segment is
derived from gains and losses on investments, income from
investments, interest income and other income. The private equity
fund-of-funds management business is undertaken by MCP. Revenue for
this segment is primarily derived from management services provided
to MCF.
Private
equity
Investment fund-of-funds
holdings management Consolidated
30 June 2017 GBP'000 GBP'000 GBP'000
Net gains on investments 519 - 519
Investment income 365 - 365
Interest income 6 - 6
Other income - 218 218
(239) (136) (375)
Operating expenses ---------- ----------- -----------
Profit before taxation 651 82 733
(95) - (95)
Taxation ---------- ----------- -----------
Profit for the 556 82 638
period ===== ====== ======
Segment assets 22,955 141 23,096
(345) (11) (356)
Segment liabilities ---------- ----------- -----------
Net segment assets 22,610 130 22,740
at 30 June 2017 ===== ====== ======
Private
equity
Investment fund-of-funds
holdings management Consolidated
31 December 2016 GBP'000 GBP'000 GBP'000
Net gains on investments 6,992 - 6,992
Investment income 300 - 300
Interest income 19 - 19
Other income - 440 440
(468) (260) (728)
Operating expenses ---------- ----------- -----------
Profit before taxation 6,843 180 7,023
12 - 12
Taxation ---------- ----------- -----------
Profit for the 6,855 180 7,035
period ====== ======= =======
Segment assets 31,707 159 31,866
(349) (18) (367)
Segment liabilities ---------- ----------- -----------
Net segment assets
at 31 December 31,358 141 31,499
2016 ====== ======= =======
Private
equity
Investment fund-of-funds
holdings management Consolidated
30 June 2016 GBP'000 GBP'000 GBP'000
Net gains on investments 2,013 - 2,013
Investment income 21 - 21
Interest income 13 - 13
Other income - 219 219
(241) (133) (374)
Operating expenses ---------- ----------- -----------
Profit before taxation 1,806 86 1,892
(3) - (3)
Taxation ---------- ----------- -----------
Profit for the 1,803 86 1,889
period ===== ====== ======
Segment assets 26,607 138 26,745
(370) (11) (381)
Segment liabilities ---------- ----------- -----------
Net segment assets 26,237 127 26,364
at 30 June 2016 ===== ====== ======
5. Other Income
Six months Six months
ended ended
30 June 2017 30 June
2016
GBP'000 GBP'000
Investment management
fee income* 218 219
6 13
Deposit interest ----------- -----------
224 232
====== ======
*Investment management fee income is derived from priority
profit share paid by MCF to MCGP. This is calculated at
0.4% of commitments to MCF.
6. Operating Expenses
Six months Six months
ended ended
30 June 2017 30 June
2016
GBP'000 GBP'000
Auditors' remuneration
- audit of the Consolidated
and Parent Company Financial
Statements 15 15
Auditor's remuneration
- audit of the Company's
subsidiaries 10 10
Auditor's remuneration
- audit related assurance
services 13 13
Directors' emoluments 59 59
Compensation to key
management personnel
(note 12) 75 75
Other administrative
expenses 203 202
----------- -----------
375 374
====== ======
Compensation to key management personnel includes payments made
to members of MCP but excludes Directors' emoluments.
All expenses include VAT where applicable, with the exception of
audit fees which are shown net.
Auditors' remuneration for audit assurance services related to
the interim review and fees relating to regulatory reporting. There
were no other non-audit services provided by the Auditors.
Other administrative expenditure includes: administration fees,
legal and professional fees, general office costs.
The split of expenses incurred by the Company and MCP is
disclosed in note 4 above.
7. Dividends
The following dividends were declared by the Company:
Six months Six months
ended ended
30 June 30 June
2017 2016
GBP'000 GBP'000
Final paid in relation to
the year ended 31 December
2016: 1.0 pence (2015: 1.0
pence) per Ordinary 2.0 pence
share 142 195
====== ======
The final dividend of 1.0 pence per Ordinary share, for the year
ended 31 December 2016, was paid on 5 May 2017 on 14,228,143
shares.
8. Earnings per Ordinary Share
The calculation of the basic and diluted earnings per Ordinary
share is based on the following data:
Six months Six months ended
ended
30 June 2017 30 June 2016
Revenue Capital Revenue Capital
return return Total return return Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Earnings for the
purpose of basic
earnings per Ordinary
share being net
profit attributable 103 519 622 (140) 2,013 1,873
to owners ====== ====== ====== ====== ====== ======
Weighted average
number of Ordinary
shares for the purpose
of calculating basic
earnings per Ordinary 12,744,014 17,640,070
share ========= =========
There is no dilution effect and therefore no difference between
the diluted earnings per Ordinary share and the basic earnings per
Ordinary share stated above.
9. Investments at Fair Value Through Profit and Loss
Six months Year ended Six months
ended 30 31 December ended
June 2016 30 June
2017 2016
GBP'000 GBP'000 GBP'000
Opening cost at
beginning of period 20,940 26,277 26,277
Gains at beginning 5,173 941 941
of period ---------- ---------- ----------
Opening fair value 26,113 27,218 27,218
at beginning of ======= ======= =======
period
Movements in the
period:
Call on commitment 297 209 159
Proceeds on partial
disposal of
investment (13,891) (8,306) (6,235)
Gains on partial
disposal of investment 9,087 2,760 1,656
Unrealised fair (8,568) 4,232 357
value movements ---------- ---------- ----------
Closing fair value 13,038 26,113 23,155
at end of period ---------- ---------- ----------
Closing cost at
end of period 16,433 20,940 21,857
Gains at end of (3,395) 5,173 1,298
period ======= ======= =======
Closing fair value 13,038 26,113 23,155
at end of period ======= ======= =======
Analysis of net
gain/(loss) on
investments
Gains on partial
disposal of investment 9,087 2,760 1,656
Fair value movements (8,568) 4,232 357
--------- --------- ---------
519 6,992 2,013
====== ====== ======
The Group is required to classify fair value measurements using
a fair value hierarchy that reflects the significance of the inputs
used in making the measurements. The fair value hierarchy has the
following levels:
-- 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); and
-- Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs) (level
3).
The level of the fair value hierarchy, within which the fair
value measurement is categorised, is determined on the basis of the
lowest level input that is significant to the fair value of the
investment.
All investments of the Group are classified within level 3 for
the six months ended 30 June 2017 and for the 2016 financial
year.
The valuation of the Group's interest in MCF is calculated in
accordance with International Private Equity and Venture Capital
Guidelines and is based upon the NAV's of the five Underlying Funds
in which MCF has invested. As a starting point, MCF's provisional
valuation is based upon the sum of its pro rata share of each of
the Underlying Fund's NAV. The Underlying Funds NAV's are
themselves derived from the fair value of the 31 portfolio
companies held by MCF and are computed by the Underlying Fund
investment managers using the most appropriate valuation technique
for each individual portfolio company.
The Board then considers whether this MCF NAV requires further
adjustment. The Investment Manager prepares a valuation paper at
the interim and year end reporting date. This valuation paper
considers the valuation processes and techniques of each Underlying
Fund investment manager and also the specific valuation methodology
of the ten largest investments. This review also considers market
conditions and any subsequent investments or realisations post
balance sheet. The principal regular adjustment to the provisional
MCF NAV is in respect of non co-terminous reporting periods. There
is usually a significant delay in the receipt of Underlying Fund
reporting and where this is the case, the Investment Manager will
seek indications from Underlying Fund investment managers as to the
expected valuation movements between the latest available
Underlying Fund NAV and the reporting date. The Board then reviews
the valuation paper along with any proposed adjustments in respect
of non co-terminus reporting periods and these amounts are
aggregated to represent a fair value adjustment to the MCF
provisional NAV. These represent the Directors' revaluation
adjustment. As at 30 June 2017, this represents 3% of the Limited
Partnership fair value balance and therefore the Directors' believe
that this is not so significant as to warrant further disclosure
other than as outlined above. The Investment Manager has visibility
over the valuation methodology for over 99% of the underlying
portfolio companies in terms of their fair value and the value they
contribute to the MCF NAV.
MCF has a carried interest scheme where carried interest of 10%
could become payable once MCF has returned all capital contributed
by LPs in addition to exceeding a net MCF IRR of 8%. As at 30 June
2017, MCF has a net MCF IRR in excess of 8% and therefore a
provision has been made by MCF within its valuation for carried
interest. The Company's share of this carried interest provision is
GBP3.0 million.
Given the number of underlying investments, the Directors have
not presented a sensitivity analysis at an individual input level
for these investments as they do not deem it to be material. The
Investment Manager does not prepare an aggregated input sensitivity
analysis at a private equity fund level for all of MCF's underlying
fund investments or at the limited partnership level. This is
because the Company has a diversified mature investment portfolio
and a change in the estimate of one input on an individual
portfolio company would not be significant in terms of the overall
valuation of MCF. While the portfolio companies are concentrated in
certain sectors, these portfolio companies within the sectors are
located in different countries. Furthermore, the valuation
methodology for the portfolio companies has been consistent over
time.
There were no transfers between levels for the six months ended
30 June 2017, nor for the year ended 31 December 2016.
10. Net Assets per Ordinary Share
The basic total net assets per Ordinary share is based on the
net assets attributable to owners shown in the Balance Sheet as at
30 June 2017, and on 10,030,841 Ordinary shares, being the number
of Ordinary shares in issue at 30 June 2017 (30 June 2016:
14,228,143; 31 December 2016: 14,228,143).
There is no dilution effect and therefore no difference between
the diluted total net assets per Ordinary share and the basic total
net assets per Ordinary share stated above.
11. Guarantees and Commitments
(a) Guarantees
The Company has agreed to provide such financial support to MIL
as it may require to continue trading as a going concern.
(b) Commitments
The Company has a maximum outstanding commitment of GBP3.2
million to MCF at 30 June 2017 (30 June 2016: GBP3.3 million; 31
December 2016: GBP3.5 million). This will take the form of capital
calls.
12. Related Party Transactions and Disclosures
The following note provides details of the Group and Company's
related party disclosures and related party transactions during the
period:
(a) Under the Investment Management Agreement, dated 27 March
2009, the Company paid fees of GBP32,000 (30 June 2016: GBP32,000;
31 December 2016: GBP64,000) to MCP, of which GBP16,000 was
outstanding at 30 June 2017 (30 June 2016: GBP16,000; 31 December
2016: GBP16,000).
(b) Legal & General Assurance Society Limited held 31.51% of
the Ordinary share capital of the Company as at 30 June 2017 (30
June 2016: 32.92%; 31 December 2016: 32.92%).
(c) Mr Boylan, the Managing Partner and Designated Member of
MCP, in his personal capacity held 0.40% (30 June 2016: 0.39%; 31
December 2016: 0.39%) of the Ordinary share capital of the Company
as at 30 June 2017. Mr Boylan is a member of MCP and has a profit
entitlement of 15% of the profits in MCP (30 June 2016: 15%; 31
December 2016: 15%).
(d) Under a Retention Arrangement dated 5 November 2014, Mr
Boylan will become entitled, on completion of the realisation
strategy, to a sum of GBP200,000 in consideration for acquiring his
15% minority interest in MCP (referred to as the Non-controlling
Interest within the Consolidated Financial Statements). The
circumstances that will give rise to the completion of the
realisation strategy could vary depending upon the choice of exit
route taken by the Company and the arrangement is subject to good
leaver provisions.
(e) The compensation payable to key management personnel (which
includes members of MCP but excludes Directors of the Company)
amounted to GBP75,000 (30 June 2016: GBP75,000; 31 December 2016:
GBP149,000) paid as guaranteed drawings. Profit share distributed
to the Non-controlling Interests (members of MCP) amounted to
GBP18,000 (30 June 2016: GBP18,000; 31 December 2016:
GBP34,000).
(f ) The Company invests in MCF, which is managed by MCP. A
carried interest scheme operates for the benefit of the founder
partners in the scheme. The founder partners are Ms Gillian Brown,
Mr Adrian Johnson and Mr Boylan. Carried interest of 10% of
investment profits could become payable once MCF has returned all
capital contributed by investors as well as exceeding a net IRR of
8% per annum. As at 30 June 2017, MCF's net fund IRR was 8.6% and a
provision of GBP3.0 million was made against the valuation of MCF.
No carried interest payments were made during the period or have
been since the inception of MCF.
Statement of Directors' Responsibilities
In respect of the Interim Report and Financial Statements for
the six months ended 30 June 2017, we confirm that to the best of
our knowledge:
-- The Interim Report and Financial Statements have been
prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting' issued by the International
Accounting Standards Board, as adopted by the EU and give a true
and fair view of the assets, liabilities, financial position and
profit of the Company as required by DTR 4.2.4R of the Disclosure
Guidance and Transparency Rules;
-- The Investment Manager's Review includes a true and fair
review of the information required by DTR 4.2.7R of the Disclosure
Guidance and Transparency Rules, being an indication of the
important events that have occurred during the first six months of
the financial year and their impact on the Interim Report and
Financial Statements;
-- In accordance with DTR 4.2.8R of the Disclosure Guidance and
Transparency Rules and as disclosed in note 12 above, there have
been no changes in the nature or magnitude of the related party
transactions that have taken place in the first six months of the
current financial year and, therefore, there is nothing to report
on any material effect by such a transaction on the financial
position or the performance of the Company during the period;
and
-- In accordance with DTR 4.2.7R of the Disclosure Guidance and
Transparency Rules, the description of the principal risks and
uncertainties as disclosed in the Investment Manager's Review is a
fair review of the information required under DTR 4.2.7R for the
remaining six months of the year.
On behalf of the Board
Mithras Investment Trust plc
Company Number: 2478424
William Maltby
Chairman
26 July 2017
Interim Report and Financial Statements
The Company's Interim Report and Financial Statements for the
six months ended 30 June 2017 will be posted to shareholders in
August 2017. Copies of the Interim Report and Financial Statements
will be available from the Registered Office of the Company at 10
Harewood Avenue, London NW1 6AA and on the website,
www.mithrasinvestmenttrust.com, which is a website maintained by
the Company's Investment Manager, MCP. A copy of the Interim Report
and Financial Statements for the six months ended 30 June 2017 has
been submitted to the National Storage Mechanism of the UK Listing
Authority and will shortly be available for inspection at:
www.Hemscott.com/nsm.do.
For further information, please contact:
Susan Gledhill
Company Secretary
For and on behalf of
BNP Paribas Secretarial Services Limited
Tel: 020 7410 5971
26 July 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BUGDRRUDBGRL
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