TIDMICGT
ICG Enterprise Trust plc
5 October 2021
Unaudited Interim Results for the six months ended 31 July
2021
Portfolio grows to milestone valuation of GBP1bn,
NAV per Share of 1,523p
Highlights
-- NAV per Share of 1,523p, NAV per Share Total Return
of 11.1%1 during the period; 37.5% over the last
twelve months
-- Portfolio Return on a Local Currency Basis during the
period of 14.9%1 (Sterling return: 12.8%); 48.5% over
the last twelve months. Portfolio valued at GBP1,019m
on 31 July 2021
-- Realisation Proceeds of GBP175m in the period, higher
than the average annual Realisation Proceeds for the
last five years
-- 34 Full Exits generated 26%1 Uplift to Carrying Value
and 2.8x1 Multiple to Cost
-- GBP133m of investments in the period, 76% into High
Conviction Investments including five Direct
Investments
-- Second quarter dividend of 6p per share, taking total
for the period to 12p. Intention reaffirmed to
declare total dividends of at least 27p per share
during the financial year ending 31 January 2022, an
increase of 12.5% per share compared to the previous
financial year
Oliver Gardey
Head of Private Equity Fund Investments, ICG
We are delighted to report another strong period for
ICG Enterprise Trust. NAV per Share stood at 1,523p
at the period end, delivering NAV per Share Total
Return of 11.1% in the first half of the year.
Our Portfolio has performed well, generating a 14.9%
Return on a Local Currency Basis within the period
and 48.5% over the last twelve months. We are proud
that the Portfolio has grown to the GBP1bn milestone.
Growth was broad-based, underpinned by strong performance
of our investments across the Portfolio as well as
by realisation activity. Realisations continue to
be at a significant Uplift to Carrying Value. This
is a testament to our focused investment strategy
and the quality of the Portfolio we have actively
constructed.
Investment activity during the second quarter was
particularly elevated, in particular in High Conviction
Investments. As well as five new direct investments,
we co-invested alongside ICG in a substantial LP secondary
investment into an attractive portfolio of mature
funds. This transaction further demonstrates the benefits
we enjoy by being part of the broader ICG platform.
Looking ahead, we continue to see a strong pipeline
of exciting opportunities to generate attractive risk-adjusted
returns. I am therefore confident we remain well placed
to deliver further long-term shareholder value.
PERFORMANCE OVERVIEW
3 6
months months 1 year 3 years 5 years 10 years
------------ ------ ------ ------------- ------------- ------------- -------------
Performance
to 31 July
2021
NAV per
Share Total
Return 9.3% 11.1% 37.5% 57.2% 111.3% 213.3%
Share Price
Total
Return 0.9% 13.7% 40.7% 37.6% 109.0% 246.7%
FTSE
All-Share
Index Total
Return 1.8% 12.6% 26.6% 5.5% 32.3% 90.7%
Six months to Six months to 12 months to 12 months to
31 July 2021 31 July 2020 31 July 2021 31 July 2020
Portfolio
Return on a
Local
Currency
Basis 14.9% (3.6)% 48.5% 1.5%
NAV per
Share Total
Return 11.1% (1.0)% 37.5% (2.2)%
Realisation GBP175m GBP39m GBP273m GBP112m
Proceeds
Total New GBP133m GBP52m GBP220m GBP147m
Investment
ENQUIRIES
Investor / Analyst enquiries:
Oliver Gardey, Head of Private Equity Fund Investment, ICG: +44
(0) 20 3545 2000
Colm Walsh, Managing Director, Private Equity Fund Investments,
ICG
James Caddy, Investor Relations, ICG
Media enquiries:
Clare Glynn, Corporate Communications, ICG: +44 (0) 20 3545
1395
Ed Gascoigne Pees, Georgina Whittle, Camarco: +44 (0) 20 3757
4987
Website:
www.icg-enterprise.co.uk
Company timetable
Ex-dividend date: 12 November 2021
Record date: 12 November 2021
Payment of dividend: 3 December 2021
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 private
companies, primarily in Europe and the US.
As a listed private equity investor, our purpose is to provide
shareholders with access to the attractive long-term returns
generated by investing in private companies, with the added benefit
of daily liquidity.
We invest in companies directly via co-investments and 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
("APMs"). APMs 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
The backdrop for private equity investments has been strong
during the first half of the year despite continued fall-out from
the COVID-19 pandemic and other macro uncertainties. We experienced
a record period of deal activity globally, both in terms of deal
value and volume. Performance dispersion between sectors continued,
with the leisure and travel sectors still heavily impacted by
government restrictions. Technology, healthcare, and other more
defensive sectors on the whole continued to perform well.
In this context, I am pleased to report that your Company's NAV
per Share Total Return during the period was 11.1% and at 31 July
2021 NAV stood at 1,523p per share. The Portfolio(2) has performed
strongly, recording a Portfolio Return on a Local Currency Basis of
14.9% for the six months to 31 July 2021. It continues to be well
constructed and in line with our strategic objectives, with High
Conviction Investments representing 48% of the Portfolio and 41% of
the Portfolio being invested in the US.
An ICG Enterprise Trust share generated a total return of 13.7%
during the period and the Board has declared a dividend of 6p per
share in respect of the second quarter. In July the Board approved
a buyback of 250,000 of the Company's shares. This decision
demonstrates the Board's focus on shareholder returns and on
capital allocation to optimise long-term growth in NAV per
share.
As we look to the second half of the financial year and beyond,
significant macro uncertainties persist and, in some cases, are
increasing. However, our investment strategy is clear, our track
record continues to grow and our Portfolio is robust.
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.
Jane Tufnell
4 October 2021
MANAGER'S REVIEW
Performance overview
Consistently strong Portfolio performance
Despite continued volatility as a result of the COVID-19
pandemic within the period, the strength of our business model and
highly focused investment strategy remains. Over the six month
period to 31 July 2021 the Portfolio generated a 14.9% Portfolio
Return on a Local Currency Basis and 48.5% over the last twelve
months. Over the last five years, the Portfolio has generated
Portfolio Return on a Local Currency Basis of 21% p.a.
We aim to deliver attractive risk-adjusted returns by executing
our focused and differentiated investment strategy. We focus on
buyouts in developed markets, targeting mid-market and larger
deals. We look for businesses that are profitable, cash generative
and with strong defensive growth characteristics. We find these
characteristics in a range of sectors and invest in these
businesses directly, through ICG managed funds and through third
party private equity managers. When combined, we believe this
results in a uniquely balanced portfolio with attractive growth
characteristics.
The strength of performance during the period was broad-based,
with only one single portfolio company contributing over 5% of
gains. Realisation activity has also continued to support Portfolio
performance during the period, with an average Uplift to Carrying
Value on realisation of 26%.
Movement in the Portfolio Six months to 31 July 2021 Six months to 31 July 2020
GBPm GBPm GBPm
-------------------------- -------------------------- --------------------------
Opening Portfolio* 949.2 806.4
-------------------------- --------------------------
Total New Investments 133.3 52.4
Total Proceeds (184.7) (94.4)
-------------------------- --------------------------
Net cash (inflow)/outflow (51.4) (42.0)
Valuation Movement** 141.6 (28.7)
Currency movement (20.4) 29.3
-------------------------- -------------------------- --------------------------
Closing Portfolio* 1,019.0 765.0
% Portfolio growth (local
currency) 14.9% (3.6)%
-------------------------- -------------------------- --------------------------
% currency movement (2.1)% 3.7%
-------------------------- --------------------------
% Portfolio growth
(Sterling) 12.8% 0.1%
Expenses and other (1.7)% (1.1)%
-------------------------- -------------------------- --------------------------
NAV per share Total Return 11.1% (1.0)%
* Refer to the Glossary for reconciliation to the
Portfolio balance presented in the unaudited results.
** 99% of the Portfolio is valued using 30 June 2021
(or later) valuations (31 January 21: 95%).
High Conviction Investments underpinned by investments in
leading Third Party Funds
High Conviction Investments are those where ICG has actively
selected the underlying companies. We seek to enhance returns and
increase visibility on underlying performance drivers. Over the
last five years, this part of the Portfolio has generated a
Portfolio Return on a Local Currency Basis of 25% p.a.
High Conviction Investments represented 48% of the Portfolio
value at 31 July 2021 (31 January 2021: 51%), and we anticipate
these investments will represent 50% - 60% of the Portfolio in the
medium term. High Conviction Investments generated 10% Portfolio
Return on a Local Currency Basis for the period. Key contributors
to the strength of performance were from businesses in the
technology sector, in particular IRI and Visma. IRI, a provider of
mission-critical data and predictive analytics to consumer goods
manufacturers, performed extremely well during the period and its
valuation was marked up following a partial realisation. Visma, a
provider of business management software and outsourcing services,
also displayed strong operational performance in the period. Our
direct investment in Visma is held alongside Hg Capital and ICG. A
number of ICG funds also generated broad-based valuation
increases.
Third Party Funds provide a base of strong diversified returns.
They also play an important strategic role by providing direct and
secondary investment opportunities. Over the last five years, this
element of the Portfolio has generated a Portfolio Return on a
Local Currency Basis of 18% p.a.
Third Party Funds represented 52% of total Portfolio value at 31
July 2021 (31 January 2021: 49%). Our Third Party Funds generated
20% Portfolio Return on a Local Currency Basis for the period. The
most significant contributor to these returns was U-POL Ltd
("U-POL"). U-POL's valuation was increased by 132% compared to its
carrying value at 30 April 2021, reflecting an agreed sale
price.
31 July 2021 31 July 2021 31 July 2020
Investment category GBPm % of Portfolio % of Portfolio
------------------------------ ------------ --------------- ---------------
ICG managed investments 274 27% 23%
Third party Direct Investments 155 15% 16%
Third party Secondary
Investments 63 6% 5%
------------------------------ ------------ --------------- ---------------
High Conviction Investments 492 48% 44%
------------------------------ ------------ --------------- ---------------
Third Party Funds 527 52% 56%
------------------------------ ------------ --------------- ---------------
Total 1,019 100% 100%
------------------------------ ------------ --------------- ---------------
Top 30 companies report another period of double-digit revenue
and earnings growth
Our largest 30 underlying companies ("Top 30 companies")
represented 43% of the Portfolio by value at 31 July 2021 (31
January 2021: 52%). They performed well in the period, underpinned
by strong operational performance, and reported LTM revenue growth
of 23%.
Of the Top 30 companies, EBITDA is a relevant metric for 27(3) ,
which in aggregate represent 34% of the Portfolio by value. These
companies reported LTM revenue and EBITDA growth of 18% and 26%
respectively. Their Enterprise Value / EBITDA multiples were 14.4x
(31 January 2021: 14.0x) and the Net Debt/EBITDA ratio was 3.9x (31
January 2021: 4.3x). Our Top 30 companies are heavily weighted
towards developed private equity markets. 47% of the Top 30 by
Portfolio value is invested in the US, 28% in Europe and 18% in the
UK.
There were seven new entrants to our Top 30 companies within the
period, of which five were High Conviction Investments. Two,
DigiCert and ProAlpha, are ICG managed investments whilst Ivanti
and Class Valuation are third party Direct Investments. The fifth,
Pharmathen, is a third party Secondary Investment. The two new
entrants from Third Party Funds were Rough Country and Synlab.
Realisation activity
Realisations at significant Uplifts to Carrying Value and
cost
Realisation momentum experienced in the first quarter continued
apace into the second quarter, with Realisation Proceeds for the
six month period higher than the average annual Realisation
Proceeds for the last five years.
Total Proceeds for the period amounted to GBP184m. This was
comprised of GBP175m generated from the realisation of individual
companies (either held directly or through funds) and GBP9m of
proceeds from Fund Disposals.
There were 34 Full Exits completed in the period which realised
GBP143m of proceeds. These realisations were completed at an
average of 26% Uplift to Carrying Value and an average Multiple to
Cost of 2.8x. A further GBP32m of proceeds were received from
partial exits.
Five of our Top 30 companies at the beginning of the financial
year were fully realised during the period. The largest exit was
Telos, the 2(nd) largest investment at the start of the financial
year, which we fully realised early in the period at a slight
uplift to the 31 January 2021 carrying value. Our investment in
DomusVi (the third largest underlying company at the start of the
year) alongside ICG Europe Fund VI was fully realised in the
period. Given the strength of the business and continued
opportunity for growth, we subsequently decided to make a partial
reinvestment in DomusVi alongside ICG Europe Fund VII. Other
notable realisations included the exit of another ICG investment,
Supporting Education Group (which was the 10(th) largest underlying
portfolio company at the start of the year), System One and
Cognito. Also in the period, third party manager Graphite Capital
entered into an agreement to sell U-POL to US-listed Axalta Coating
Systems. We anticipate the transaction will close in the second
half of the year, generating cash proceeds of c.GBP24m.
A small number of Fund Disposals were also completed during the
period, generating GBP9m of proceeds and releasing GBP10m of
Undrawn Commitments.
New investment activity
Executing against a substantial investment pipeline
We deployed substantial capital in the period, particularly into
High Conviction Investments. In total we invested GBP133m, of which
GBP101m (76%) was in High Conviction Investments and GBP32m was in
the form of drawdowns from Third Party Funds.
Over 25 potential direct investment opportunities were generated
in the period from our Third Party Funds and the ICG platform. Of
these, we selectively completed five new Direct Investments for a
total of GBP37m. These new investments were made in:
Company Manager Company sector / description ICG
Enterprise
Trust
investment
during the
period
--------- ----------- -------------------------------------------------------- ----------
AMEOS ICG Private hospital operator in the DACH region GBP4m
Group
--------- ----------- -------------------------------------------------------- ----------
Class Gridiron Provider of residential mortgage appraisal management GBP7m
Valuation Capital services
--------- ----------- -------------------------------------------------------- ----------
DigiCert ICG Internet security software platform and leading provider GBP7m
of secure sockets layer ("SSL") certificates
--------- ----------- -------------------------------------------------------- ----------
DomusVi ICG Operator of retirement homes GBP10m
--------- ----------- -------------------------------------------------------- ----------
Ivanti Charlesbank Provider of enterprise IT software GBP9m
--------- ----------- -------------------------------------------------------- ----------
In addition, the investment team utilised their secondary
investment network and unique access to the ICG platform to execute
a GBP32m secondary investment alongside our Manager into an LP
secondary portfolio of mature private equity funds. Secondary
investments form an important part of our investment strategy and
over the long term we expect these investments to represent 10-20%
of the Portfolio value (31 July 2021: 12%).
The remaining GBP32m of High Conviction Investments made in the
period were through ICG funds (GBP30m) and add-on investments for
existing Direct Investments (GBP2m).
Nine new fund Commitments to both existing and new manager
relationships
We continued to benefit from the broader ICG platform,
committing GBP64m to two ICG funds in the period. These were in
attractive strategies we have invested in previously. We also
selectively committed to a number of leading third party private
equity managers who complement our long-term strategic objectives,
share values which are aligned to our ESG framework and have an
investment approach that suits our defensive growth focus. We
completed seven new Third Party Fund Commitments in the period
totalling GBP69m. Four of these Commitments were to managers with
whom we have not invested before, demonstrating our ability to
source and execute new opportunities to work with leading
managers.
In total we made GBP133m of Commitments as follows:
Fund Focus ICG
Enterprise
Trust
Commitment
during the
period
------------------ ------------------------------------------------------ ----------
BC Partners XI European and North American mid-market buyouts EUR15m
(GBP13m)
------------------ ------------------------------------------------------ ----------
Bregal European mid-market buyouts EUR10m
Unternehmerkapital (GBP9m)
III*
------------------ ------------------------------------------------------ ----------
GHO Capital III* European and North American mid-market buyouts EUR10m
(GBP9m)
------------------ ------------------------------------------------------ ----------
GI Partners VI-A* North American mid-market buyouts $10m
(GBP7m)
------------------ ------------------------------------------------------ ----------
Hellman and North American mid-market and large buyouts $10m
Friedman X* (GBP7m)
------------------ ------------------------------------------------------ ----------
ICG Europe Fund European structured and equity financing in mid-market EUR40m
VIII buy-outs (GBP35m)
------------------ ------------------------------------------------------ ----------
ICG Strategic Secondary fund restructurings $40m
Equity IV (GBP29m)
------------------ ------------------------------------------------------ ----------
Resolute V North American mid-market buyouts $15m
(GBP11m)
------------------ ------------------------------------------------------ ----------
TH Lee IX North American mid-market and large buyouts $20m
(GBP14m)
------------------ ------------------------------------------------------ ----------
* New manager relationship during the period
Portfolio analysis at 31 July 2021
The Top 30 contribute 43% of the Portfolio value. The Portfolio
is appropriately diversified by sector and geography. This strikes
a good balance between 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.
Focus on developed markets
The Portfolio is focused on developed private equity markets,
invested across the US (41%), continental Europe (33%) and the UK
(18%).
Focus on sectors with defensive growth characteristics
The Portfolio is well diversified and weighted towards sectors
with defensive growth characteristics. Technology (18%), Healthcare
(16%), Business Services (13%) and Education (5%) make up 52% of
the Portfolio. We feel these are particularly attractive sectors,
benefitting from structural growth trends. Within our exposure to
the Consumer and Industrial sectors (26% and 8% respectively), we
have a bias to companies with more defensive business models,
non-cyclical growth drivers and high recurring revenue streams. We
have relatively low exposure to the Financials (6%) and Leisure
(3%) sectors.
Quoted Companies
We do not invest in publicly quoted companies but gain listed
investment exposure when IPOs are used as a route to exit an
investment. We therefore have exposure to listed businesses within
our Portfolio. In these cases, exit timing typically lies with the
third party manager we have invested alongside.
Our managers took advantage of the currently attractive market
conditions for initial public offerings during the period. A total
of seven underlying portfolio companies were listed, generating a
combined gross valuation uplift of GBP8m compared to their
valuation at 31 January 2021.
At 31 July 2021, we had 40 underlying investments in quoted
companies, representing 14.2% of the Portfolio value compared to
20.4% at 31 January 2021. The reduction was largely driven by the
realisation of our entire stake in Telos during February as well as
by the fall in Chewy's share price, partially offset by new
IPOs.
At 31 July 2021 there were three investments that each accounted
for 0.5% or more of the Portfolio value:
Company Ticker % value of Portfolio
----- --------------------------- ------- --------------------
1 Chewy (part of PetSmart)(1) CHWY-US 7.5%
----- --------------------------- ------- --------------------
2 Allegro ALE-WA 1.0%
----- --------------------------- ------- --------------------
3 Synlab* SYAB-F 0.6%
----- --------------------------- ------- --------------------
Other 5.1%
----- --------------------------- ------- --------------------
Total 14.2%
----- --------------------------- ------- --------------------
(1) % value of Portfolio includes entire holding of
PetSmart and Chewy. Majority of value is within Chewy
* Company listed during the period
Balance sheet and financing
Our liquidity position is robust, with a period-end cash balance
of GBP70m(4) (31 January 2021: GBP45m). At 31 July 2021 we had
total available liquidity of GBP241m, comprising GBP70m cash and
GBP171m undrawn revolving credit facility.
GBPm
-------------------------------------------------- -----
Cash at 31 January 2021 45
Realisation Proceeds 175
Fund Disposals 9
Third Party Fund drawdowns (32)
High Conviction Investments (101)
Shareholder returns (12)
FX and other (15)
-------------------------------------------------- -----
Cash at 31 July 2021 70
-------------------------------------------------- -----
Available undrawn debt facilities 171
-------------------------------------------------- -----
Cash and undrawn debt facilities (total available
liquidity) 241
-------------------------------------------------- -----
At 31 July 2021 the Portfolio represented 98% of net assets (31
January 2021: 100%).
31 July 2021 31 January 2021
GBPm GBPm
----------------------- ------------ ---------------
Portfolio* 1,019 949
Cash 70 45
Other net liabilities* (45) (42)
----------------------- ------------ ---------------
Net assets 1,044 952
----------------------- ------------ ---------------
*Refer to the Glossary for reconciliation from the Investments
at fair value presented on the balance sheet to the Portfolio
balance and calculation of other net liabilities
At 31 July 2021, we had Undrawn Commitments of GBP485m (31
January 2021: GBP418m) of which 17% (GBP81m) were to funds outside
of their Investment Period.
31 July 2021 31 January 2021
GBPm GBPm
----------------------------------------------- ------------ ---------------
Undrawn Commitments -- funds in Investment
Period 404 341
Undrawn Commitments -- funds outside Investment
Period 81 77
----------------------------------------------- ------------ ---------------
Total Undrawn Commitments 485 418
Total available liquidity (including facility) (241) (201)
----------------------------------------------- ------------ ---------------
Overcommitment (including facility) 244 217
----------------------------------------------- ------------ ---------------
Overcommitment % of net asset value 24% 23%
----------------------------------------------- ------------ ---------------
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. We
do not intend to be geared other than for short-term working
capital purposes.
Activity since the period end (for the one month to 31 August
2021)
The momentum experienced across the business in the first half
of the year has continued with the following activity taking
place:
-- Realisation Proceeds of GBP22m
-- Including proceeds from the sale by Gridiron Capital of Rough
Country to TSG Consumer Partners
-- Deployment
-- Invested GBP13m (GBP10m Drawdowns of existing third party fund
Commitments, GBP3m High Conviction Investments)
ICG Private Equity Fund Investments Team
4 October 2021
SUPPLEMENTARY INFORMATION (UNAUDITED)
This section presents supplementary information regarding the
Portfolio (see Manager's Review and the Glossary for further
details and definitions).
Top 30 companies
The table below presents the 30 companies in which ICG
Enterprise had the largest investments by value at 31 July 2021.
These investments may be held directly or through funds, or in some
cases through both routes. The valuations are gross of underlying
managers fees and Carried Interest and are shown as a percentage of
the total investment Portfolio.
Value as
Year of a % of
Company Manager investment Country Portfolio
----------------------------------------------------------- ------------- ------------ ----------- ---------
1 PetSmart/Chewy+^
United
Retailer of pet products and services BC Partners 2015 States 7.5%
2 Minimax+
Supplier of fire protection systems and services ICG 2018 Germany 3.1%
3 U-POL^
Manufacturer and distributor of automotive refinishing Graphite United
products Capital 2010 Kingdom 2.7%
4 Visma+
Provider of business management software and outsourcing ICG /
services HgCapital 2017 / 2020 Norway 2.6%
5 IRI+
Provider of mission-critical data and predictive analytics New Mountain United
to consumer goods manufacturers Capital 2018 States 2.4%
6 Leaf Home Solutions
Gridiron United
Provider of gutter protection solutions Capital 2016 States 2.0%
7 DOC Generici+
Retailer of pharmaceutical products ICG 2019 Italy 1.9%
8 Froneri+
United
Manufacturer and distributor of ice cream products PAI Partners 2019 Kingdom 1.9%
9 Yudo+
Manufacturer of components for injection moulding ICG 2017 Hong Kong 1.8%
10 Berlin Packaging+
Oak Hill United
Provider of global packaging services and supplies Capital 2018 States 1.7%
11 Endeavor Schools+
Leeds Equity United
Provider of paid private schooling Partners 2018 States 1.4%
12 DomusVi+
Operator of retirement homes ICG 2021 France 1.4%
13 AML RightSource+
Provider of compliance and regulatory services and Gridiron United
solutions Capital 2020 States 1.1%
14 PSB Academy+
Provider of private tertiary education ICG 2018 Singapore 1.1%
Value as a
Year of % of
Company Manager investment Country Portfolio
------------------------------------------------------------ ------------- ------------ ---------- -----------
15 Allegro
Cinven /
Operator of an online marketplace and price comparison Permira
website Advisers 2017 Poland 1.0%
16 Ivanti+
Charlesbank
Capital
Provider of IT management software solutions Partners 2021 United States 1.0%
17 Curium Pharma+
Supplier of nuclear medicine diagnostic pharmaceuticals ICG 2020 United Kingdom 0.8%
18 Class Valuation+
Provider of residential mortgage appraisal management Gridiron
services Capital 2021 United States 0.8%
19 David Lloyd Leisure+
Operator of premium health clubs TDR Capital 2013 / 2020 United Kingdom 0.8%
20 VitalSmarts+
Provider of corporate training courses focused on Leeds Equity
communication skills and leadership development Partners 2019 United States 0.8%
21 DigiCert+
Provider of enterprise security solutions ICG 2021 United States 0.7%
22 Springer^
Publisher of professional and academic media BC Partners 2013 / 2021 Germany 0.6%
23 RegEd+
Provider of Saas-based governance, risk and compliance Gryphon
enterprise software solutions Investors 2018 United States 0.6%
24 Synlab
Operator of medical diagnostic laboratories Cinven 2015 Germany 0.6%
25 proALPHA
Developer and vendor of resource planning software ICG 2017 Germany 0.5%
26 IRIS Accountancy Solutions
Provider of business critical software and services
for the accountancy and payroll sectors ICG 2018 United Kingdom 0.5%
27 Rough Country
Provider of branded off-road suspension products and Gridiron
accessories Capital 2017 United States 0.5%
28 EG Group
Operator of petrol station forecourts TDR Capital 2014 United Kingdom 0.5%
29 Compass Community
Provider of fostering services and children residential Graphite
care Capital 2017 United Kingdom 0.5%
30 Pharmathen^
Manufacturer of pharmaceutical products BC Partners 2015 Greece 0.5%
------------------------------------------------------------ ------------- -------------- -----------
Total of the 30 largest underlying investments 43.3%
------------------------------------------------------------ ------------- ------------ -------------- -----------
* All or part of this investment is held directly as a
Co-investment or other Direct Investment
^ All or part of this investment was acquired as part of a
secondary purchase
The 30 largest fund investments
The table below presents the 30 largest funds by value at 31
July 2021. The valuations are net of underlying managers fees and
Carried Interest.
Outstanding
commitment
Fund Year of commitment Country/ region Value GBPm GBPm
---------------------- ------------------ --------------------- ------------- -----------
BC European Capital IX
1 **
Large buyouts 2011 Europe/North America 41.8 2.0
2 ICG Europe VII
Mezzanine and equity
in mid-market
buyouts 2018 Europe 33.5 10.3
3 ICG Waterfall **
LP secondary portfolio 2021 Europe/North America 31.8 6.6
ICG Strategic Equities
4 Fund III
Secondary fund
restructurings 2018 Global 30.7 9.6
Graphite Capital
5 Partners VII * / **
Mid-market buyouts 2007 UK 28.8 2.8
Gridiron Capital Fund
6 III
Mid-market buyouts 2016 North America 28.7 3.9
Graphite Capital
7 Partners VIII *
Mid-market buyouts 2013 UK 27.9 4.4
8 Sixth Cinven Fund
Large buyouts 2016 Europe 25.3 2.0
CVC European Equity
9 Partners VI
Large buyouts 2013 Europe/North America 21.3 2.6
Advent Global Private
10 Equity VIII
Large buyouts 2016 Europe/North America 20.3 0.6
CVC European Equity
11 Partners VII
Large buyouts 2017 Europe/North America 19.9 7.3
PAI Strategic
12 Partnerships **
Mid-market and large
buyouts 2019 Europe 18.3 0.6
13 ICG Europe VI **
Mezzanine and equity
in mid-market
buyouts 2015 Europe 17.6 4.3
14 PAI Europe VI
Mid-market and large
buyouts 2013 Europe 16.9 1.4
15 BC European Capital X
Large buyouts 2016 Europe/North America 16.5 1.8
New Mountain Partners
16 V
Mid-market buyouts 2017 North America 15.2 1.0
Thomas H Lee Equity
17 Fund VIII
Mid-market and large
buyouts 2017 North America 15.1 6.8
18 One Equity Partners VI
Mid-market buyouts 2016 Europe/North America 14.2 0.6
19 Permira V
Large buyouts 2013 Europe/North America 13.4 0.4
20 Permira VI
Large buyouts 2016 Europe 12.9 1.9
21 Gryphon V
Mid-market buyouts 2019 North America 12.8 1.4
ICG Asia Pacific Fund
22 III
Mezzanine and equity
in midmarket buyouts 2016 Asia Pacific 12.3 2.8
23 PAI Europe VII
Mid-market and large
buyouts 2017 Europe 12.2 11.7
24 Resolute IV
Mid-market buyouts 2018 North America 11.8 2.1
Charterhouse Capital
25 Partners X
Large buyouts 2015 Europe 11.6 3.8
26 TDR Capital III
Mid-market and large
buyouts 2013 Europe 10.7 1.6
Leeds Equity Partners
27 VI
Mid-market buyouts 2017 North America 10.6 0.7
Gridiron Capital Fund
28 IV
Mid-market buyouts 2019 North America 10.5 4.1
Egeria Private Equity
29 Fund IV
Mid-market buyouts 2012 Netherlands 10.1 1.0
ICG Strategic Equities
30 Fund IV
Secondary fund
restructurings 2021 Global 9.6 19.1
Total of the largest 30 fund investments 562.4 119.4
Percentage of total investment Portfolio 55.2%
----------------------------------------------------------------- ------------- -----------
* Includes the associated Top Up funds.
** All or part of an interest acquired through a secondary
fund purchase.
Portfolio analysis
Closing Portfolio by value
% of value of % of value of
underlying underlying
investments investments
Portfolio by investment type 31 July 2021 31 January 2021
----------------------------- ------------- ----------------
Large buyouts 56.5% 56.3%
Mid-market buyouts 34.9% 33.5%
Small buyouts 8.6% 10.2%
Total 100.0% 100.0%
----------------------------- ------------- ----------------
Portfolio by
calendar
year of % of value of underlying investments % of value of underlying investments
investment 31 July 2021 31 January 2021
------------ ------------------------------------ ------------------------------------
2021 11.1% 0.4%
2020 11.0% 10.1%
2019 19.0% 18.3%
2018 19.7% 18.4%
2017 13.0% 17.1%
2016 7.7% 9.6%
2015 9.8% 11.2%
2014 3.2% 6.0%
2013 1.5% 1.6%
2012 0.9% 0.9%
2011 0.0% 0.0%
2010 2.6% 1.4%
2009 0.1% 0.2%
2008 0.0% 0.0%
2007 0.4% 0.5%
2006 and
before 0.0% 4.3%
------------ ------------------------------------ ------------------------------------
Total 100.0% 100.0%
------------ ------------------------------------ ------------------------------------
Portfolio by % of value of underlying investments % of value of underlying investments
sector 31 July 2021 31 January 2021
------------ ------------------------------------ ------------------------------------
Consumer
goods and
services 26.2% 25.4%
TMT 18.4% 19.2%
Healthcare 16.2% 17.8%
Business
services 12.6% 12.5%
Industrials 8.3% 6.9%
Education 5.0% 6.4%
Financials 6.0% 4.7%
Leisure 2.8% 4.5%
Other 4.5% 2.6%
------------ ------------------------------------ ------------------------------------
Total 100.0% 100.0%
------------ ------------------------------------ ------------------------------------
% of value of % of value of
underlying underlying
Portfolio by geographic distribution based on location investments investments
of company headquarters 31 July 2021 31 January 2021
Europe 33.0% 31.8%
UK 18.0% 18.9%
North America 40.9% 42.0%
Rest of world 8.1% 7.3%
------------------------------------------------------- ------------- ----------------
Total 100.0% 100.0%
------------------------------------------------------- ------------- ----------------
Commitments analysis
The following tables analyses Commitments at 31 July 2021.
Original Commitments are translated at 31 July 2021 exchange
rates.
Total Undrawn Commitments
Original Outstanding Average
Commitment Commitment drawdown % of
GBP'000 GBP'000 percentage Commitments
------------------------- ----------- ----------- ----------- ------------
Investment period not
commenced 12,806 12,806 0.0% 2.6%
Funds in investment
period 536,076 342,599 36.1% 70.6%
Funds post investment
period 697,948 130,181 81.3% 26.8%
------------------------- ----------- ----------- ----------- ------------
Total 1,246,830 485,586 61.1% 100.0%
------------------------- ----------- ----------- ----------- ------------
Movement in outstanding Commitments in period ended
31 July 2021 GBPm
--------------------------------------------------------- ----------------
As at 1 February 2021 418.5
New primary Commitments 132.9
New Commitments relating to Co-investments and secondary
purchases 26.2
Drawdowns (77.4)
Commitments released from Fund Disposals (9.8)
Currency and other movements (4.8)
--------------------------------------------------------- ----------------
As at 31 July 2021 485.6
--------------------------------------------------------- ----------------
New Commitments during the 6 months ended 31 July 2021
Fund Strategy Geography GBPm
----------------------- ----------------------- --------------------- -----
Primary Commitments
Mezzanine and equity in
ICG Europe VIII mid-market buy-outs Europe 34.8
ICG Strategic Equity Secondary fund
Fund IV restructurings Global 28.8
Mid-market and large
TH Lee IX buyouts North America 14.1
BC Partners XI Large Buyouts Europe/North America 12.8
Resolute V Mid-market buy-outs North America 10.9
GHO Capital III Mid-market buyouts Europe/North America 8.6
Bregal
Unternehmerkapital
III Mid-market buyouts Europe 8.6
GI Partners VI Mid-market buyouts North America 7.2
Mid-market and large
Hellman Friedman X buyouts North America 7.1
Total primary Commitments 132.9
Commitments relating to Co-investments and Secondary
Investments 26.2
----------------------------------------------------------------------- -----
Total new Commitments 159.1
----------------------------------------------------------------------- -----
Currency exposure
31 July 31 July 31 January 31 January
2021 2021 2021 2021
Portfolio(1) GBPm % GBPm %
----------------- -------- -------- ---------- ----------
Sterling 195.7 19.2% 197.4 20.8%
Euro 225.8 22.2% 208.3 21.9%
US Dollar 408.4 40.1% 380.5 40.1%
Other European 89.0 8.7% 73.9 7.8%
Other 100.1 9.8% 89.1 9.4%
----------------- -------- -------- ---------- ----------
Total 1,019.0 100.0% 949.2 100.0%
----------------- -------- -------- ---------- ----------
(1) Currency exposure is calculated by reference to
the location of the underlying Portfolio companies'
headquarters.
31 July 31 July 31 January 31 January
2021 2021 2021 2021
Outstanding Commitments GBPm % GBPm %
------------------------ ------- ------- ---------- ----------
-- Sterling 32.9 6.8 43.7 10.4
-- Euro 241.7 49.8 195.9 46.8
-- US Dollar 211.0 43.4 178.2 42.6
-- Other European 0.0 0.0 0.7 0.2
------------------------ ------- ------- ---------- ----------
Total 485.6 100.0 418.5 100.0
------------------------ ------- ------- ---------- ----------
Realisation activity
Year of Proceeds
Investment Manager investment Realisation type Exit GBPm
-------------- ------------ ----------- ----------------- -------- --------
Directly
held Public sell down
Telos investment 1998 post IPO Full 44.5
Domus ICG 2017 Financial buyer Full 36.3
Education
Personnel ICG 2014 Trade Full 14.7
Thomas H.
Lee
System One Partners 2016 Financial buyer Full 11.8
Graphite
Cognito Capital 2002 Trade Full 10.9
Leaf Home Gridiron
Solutions Capital 2016 Recapitalisation Partial 4.4
Sabre The Jordan
Industries Company 2019 Financial buyer Full 2.6
Node4 Bowmark 2016 Financial buyer Full 2.5
Oxford
International Bowmark 2014 Trade Full 2.1
Thomas H.
Lee
AutoStore Partners 2019 Financial buyer Partial 1.9
-------------- ------------ ----------- ----------------- -------- --------
Total of 10 largest
underlying realisations 131.6
---------------------------- -------------------------------------- --------
Realisation Proceeds 175.3
Fund Disposals 9.4
---------------------------- -------------------------------------- --------
Total Proceeds 184.7
--------------- ----------------------------------------------------- --------
Investment activity
Cost(1)
Investment Description Manager Country GBPm
------------ ------------------------------------------------------ ------------ ------------ -------
Domus Operator of retirement homes ICG France 13.8
Charlesbank
Capital
Ivanti Provider of IT management software solutions Partners USA 9.6
Class Provider of residential mortgage appraisal management Gridiron
Valuation services Capital USA 8.1
DigiCert Provider of enterprise security solutions ICG USA 6.7
AMEOS Group Provider of health care services ICG Switzerland 4.2
Kee Safety Provider of fall protection solutions ICG USA 3.1
Datamars Provider of data solutions for farming and textiles ICG Switzerland 2.5
Trinity
Consultants Provider of air quality consulting and compliance Oak Hill
Holdings services Capital USA 1.7
Broadstone Provider of pensions and employee benefits ICG UK 1.4
AIT
Worldwide The Jordan
Logistics Provider of end-to-end supply chain services Company USA 1.2
------------ ------------------------------------------------------ ------------ ------------ -------
Total of 10 largest underlying new investments 52.2
------------------------------------------------------------------------------------------------ -------
Total New Investment 133.3
------------------------------------------------------------------------------------------------ -------
(1) Represents ICG Enterprise Trust's indirect exposure
(share of fund cost) plus any amounts paid for Co-investments
in the period.
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 2021 which was
approved by the Board on 27 April 2021.
The principal risks and uncertainties can be divided into the
following areas:
-- Investment performance;
-- Valuation;
-- Political and macroeconomic uncertainty;
-- Private equity sector;
-- Regulatory, legislative and taxation compliance;
-- People;
-- The Manager and other third party advisers;
-- Information security;
-- The manager and other third party advisers;
-- Foreign exchange; and
-- Financing.
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.
The Board's ongoing view of the impact of the COVID-19 outbreak
is that although significant and may prove to have long-term
effects on the markets in which the Company operates, it does not
change the long term view of the Company's principal risks.
INTERIM FINANCIAL STATEMENTS
Income statement
Half year to 31 July 2021 Half year to 31 July 2020
(unaudited) (unaudited)
Revenue Revenue
return Capital return return Capital return
Notes GBP'000 GBP'000 GBP'000 GBP'000
-------- ----------------- ----------- -----------------
Total Total
GBP'000 GBP'000
-------------------------------------- -------- ----------------- ------------ ----------- ----------------- ------------
Investment returns
Income, gains and losses on
investments 7,619 105,351 112,970 2,127 (3,964) (1,837)
Deposit interest 1 -- 1 24 -- 24
Other income -- -- -- 46 -- 46
Foreign exchange gains and losses -- (601) (601) -- (89) (89)
-------- ----------------- ------------ ----------- ----------------- ------------
7,620 104,750 112,370 2,197 (4,053) (1,856)
-------- ----------------- ------------ ----------- ----------------- ------------
Expenses
Investment management charges (620) (5,586) (6,206) (1,247) (3,741) (4,988)
Other expenses (1,266) (1,094) (2,360) (1,392) (648) (2,040)
-------- ----------------- ------------ ----------- ----------------- ------------
(1,886) (6,680) (8,566) (2,639) (4,389) (7,028)
-------- ----------------- ------------ ----------- ----------------- ------------
Profit/(loss) before tax 5,734 98,070 103,804 (442) (8,442) (8,884)
-------- ----------------- ------------ ----------- ----------------- ------------
Taxation (45) 45 -- -- -- --
-------- ----------------- ------------ ----------- ----------------- ------------
Profit/(loss) for the period 5,689 98,115 103,804 (442) (8,442) (8,884)
-------- ----------------- ------------ ----------- ----------------- ------------
Attributable to:
-------- ----------------- ------------ ----------- ----------------- ------------
Equity shareholders 5,689 98,115 103,804 (442) (8,442) (8,884)
-------- ----------------- ------------ ----------- ----------------- ------------
Basic and diluted earnings per share 150.96p (12.91p)
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 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 25 to 28 are an integral part of the
condensed interim financial statements.
Balance sheet
31 July 31 January
2021 2021
(unaudited) (audited)
Notes GBP'000 GBP'000
Non-current assets
Investments held at fair value 7 1,017,427 907,562
Current assets
Cash and cash equivalents 29,349 45,143
Receivables 1,945 163
------------ -----------------------------------
31,294 45,305
------------ -----------------------------------
Current liabilities
Payables 5,207 851
Net current assets 26,087 44,454
------------ -----------------------------------
Total assets less current liabilities 1,043,514 952,016
------------ -----------------------------------
Capital and reserves
Share capital 7,291 7,291
Capital redemption reserve 2,113 2,113
Share premium 12,936 12,936
Capital reserve 1,021,174 929,676
Revenue reserve - --
------------ -----------------------------------
Total equity 1,043,514 952,016
------------ -----------------------------------
Net asset value per share (basic and diluted) 6 1,523.0p 1,384.4p
The notes on pages 25 to 28 are an integral part of the
condensed interim financial statements.
Cash flow statement
Half year to Half year to
31 July 2021 (unaudited) 31 July 2020 (unaudited)
GBP'000 GBP'000
Operating activities
Sale of portfolio investments 121,998 74,934
Purchase of portfolio investments (82,203) (31,590)
Net cash flows to subsidiary investments (43,512) (4,383)
Interest income received from portfolio
investments 3,260 867
Dividend income received from portfolio
investments 4,359 1,281
Other income received 1 39
Investment management charges paid (2,915) (5,082)
Other expenses paid (2,990) (861)
------------------------- -------------------------
Net cash inflow/(outflow) from operating
activities (2,002) 35,205
------------------------- -------------------------
Financing activities
Bank facility fee (871) (613)
Interest paid (11) (421)
Purchase of own shares into treasury (2,679) (775)
Credit Facility utilised - 40,000
Credit Facility repaid - (40,000)
Equity dividends paid to shareholders (9,628) (8,945)
Net cash outflow from financing activities (13,189) (10,754)
------------------------- -------------------------
Net increase/(decrease) in cash and cash
equivalents (15,191) 24,451
------------------------- -------------------------
Cash and cash equivalents at beginning of period 45,143 14,469
Net increase/(decrease) in cash and cash
equivalents (15,191) 24,451
Effect of changes in foreign exchange rates (603) (89)
------------------------- -------------------------
Cash and cash equivalents at end of period 29,349 38,831
------------------------- -------------------------
The notes on pages 25 to 28 are an integral part of the
condensed interim financial statements.
Statement of changes in equity
Capital redemption Total shareholders'
Share capital reserve Share premium Capital reserve Revenue reserve equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- -------------- ------------------------ -------------- ---------------- ----------------- ----------------------
Half year to 31 July 2021 (unaudited)
Opening balance at 1 February
2021 7,291 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 7,291 2,113 12,936 1,021,174 -- 1,043,514
Capital redemption Total shareholders'
Share capital reserve Share premium Capital reserve Revenue reserve equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------- -------------- ------------------------ -------------- ---------------- ---------------- ----------------------------
Half year to 31 July 2020 (unaudited)
Opening balance at 1 February
2020 7,291 2,113 12,936 771,205 -- 793,545
Profit for the period and total
comprehensive income -- -- -- (8,442) (442) (8,884)
Dividends paid -- -- -- (8,945) _ (8,945)
Purchase of own shares into
treasury -- -- -- (775) -- (775)
Closing balance
at 31 July 2020 7,291 2,113 12,936 753,043 (442) 774,941
The notes on pages 25 to 28 are an integral part of the
condensed interim financial statements.
NOTES TO THE FINANCIAL STATEMENTS(UNAUDITED)
For the period ended 31 July 2021
1. General information
ICG Enterprise Trust plc ("the Company") is registered in
England and Wales and domiciled in England. The registered office
is Procession House, 55 Ludgate Hill, London, EC4M 7JW. The
Company's objective is to provide shareholders with long term
capital growth through investment in unquoted companies, mostly
through private equity funds but also directly.
2. Unaudited Interim report
This interim financial report does not comprise statutory
accounts within the definition of section 434 of the Companies Act
2006. The financial information for the period ended 31 January
2021 has been extracted from the statutory accounts for that year
which were approved by the Board of Directors on 27 April 2021 and
delivered to the Registrar of Companies. The report of the auditors
on those accounts was unqualified, did not contain an emphasis of
matter paragraph and did not contain any statements under section
498(2) or (3) of the Companies Act 2006.
3. Basis of preparation
The annual financial statements of the Company will be prepared
in accordance with United Kingdom adopted International Accounting
Standards. The condensed set of financial statements included in
this half-yearly financial report has been prepared in accordance
with United Kingdom adopted International Accounting Standard 34,
"Interim Financial Reporting".
This interim financial report does not include all the
information and disclosures required in the annual financial
statements and should be read in conjunction with the annual
financial statements for the year ended 31 January 2021, which have
been prepared in accordance with United Kingdom adopted
international accounting Standards.
The accounting policies applied are consistent with those of the
annual financial statements for the year to 31 January 2021, as
described in those annual financial statements. In order to reflect
the activities of an investment trust company, supplementary
information which analyses the income statement between items of a
revenue and capital nature has been presented alongside the income
statement. In analysing total income between capital and revenue
returns, the Directors of the Company have followed the guidance
contained in the Statement of Recommended Practice ('SORP') for
investment trusts issued by the Association of Investment Companies
in April 2021.
Change in allocation of expenses between revenue and capital
Effective 1 February 2021 the Company made changes to its
expenses accounting estimate. In prior periods investment
management and bank facility charges were being allocated 75% to
the capital column of the income statement and 25% to the revenue
column. On reassessment of the Company's long-term total returns
the Board agreed that an allocation of 90% to the capital column
and 10% to the revenue column would better reflect the Company's
current and future return profile.
4. Dividends
Half year to Half year to
31 July 31 July
2021 2020
GBP'000 GBP'000
----------------------------------------------------------- ------------
Third quarterly dividend in respect of year ended
31 January 2021 of 5.0p per share (2020: 5.0p) 3,438 3,444
Final dividend in respect of year ended 31 January
2021 of 9.0p per share (2020: 8.0p) 6,189 5,501
------ ------------
Total 9,627 8,945
------ ------------
The Board has approved an interim dividend for the quarter to 30
April 2021 of 6.0p per share (totalling GBP4.1m) which has been
paid on 3 September 2021 to shareholders on the register on 13
August 2021. The Board has proposed a second interim dividend of
6.0p per share in respect of the year ending 31 January 2022 which,
if approved by shareholders, will be paid on 3 December 2021 to
shareholders on the register of members at the close of business on
12 November 2021.
5. Earnings per share
Half year to 31 July
Earnings per share 2021 Half year to 31 July 2020
Revenue return per
ordinary share 8.27p (0.64p)
Capital return per
ordinary share 142.69p (12.27p)
Earnings per ordinary
share (basic and
diluted) 150.96p (12.91p)
------------------------ -------------------------
Weighted average number
of shares 68,761,530 68,796,506
The earnings per share figures are based on the weighted average
numbers of shares set out above.
During the half year, 250,000 shares were bought back in the
market and held in treasury (31 January 2021: 110,000 shares). At
31 July 2021, the Company held 4,395,945 shares in treasury (31
January 2021: 4,145,945) leaving 68,517,055 (31 January 2021:
68,767,055) 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 GBP1,043.5m (31 January 2021:
GBP952.0m) and 68,517,055 (31 January 2021: 68,767,055) ordinary
shares in issue at the period end. There were no potentially
dilutive ordinary shares, such as options or warrants, at either
period end. Calculated on both the basic and diluted basis the net
asset value per share was 1,523.0p (31 January 2021: 1,384.4p).
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 to level 1 and level 3 assets
are described in note 1 of the annual financial statements. No
investments were categorised as level 2.
The following tables present the assets that are measured at
fair value at 31 July 2021 and 31 January 2021. The Company had no
financial liabilities measured at fair value at those dates.
Level 1 Level 2 Level 3 Total
31 July 2021 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ------- ------- --------- ---------
Investments held at fair value
Unquoted investments -- -- 202,235 202,325
Quoted investments 1,190 -- -- 1,190
Subsidiary undertakings(1) -- -- 813,912 813,912
Total investments held at fair
value 1,190 -- 1,016,237 1,017,427
------- ------- --------- ---------
Level 1 Level 2 Level 3 Total
31 January 2021 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ ------- ------- ------- -------
Investments held at fair value
Unquoted investments -- -- 604,306 604,306
Quoted investments 35,702 -- -- 35,702
Subsidiary undertakings -- -- 267,554 267,554
Total investments held at fair value 35,702 -- 871,860 907,562
------- ------- ------- -------
All quoted and unquoted investments are measured in accordance
with IFRS 9.
1. During the six months to 31 July 2021, approximately GBP469m of assets
were transferred at fair value to the Company's wholly owned subsidiary
ET Holdings LP. ET Holdings LP was incorporated on 15 December 2020 in
order to hold investments in a single entity to provide security for the
Company's credit facility with Credit Suisse. All investments continue to
be held at fair value. The fair value of investments held in ET Holdings
LP as at 31 July 2021 is GBP514m.
Investments in level 3 securities are in respect of 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 cashflow events occurring after the
date of the manager's valuation, such as realisations or liquidity
adjustments. The valuations of unquoted investments provided by
underlying managers are calculated in accordance with the 2018 IPEV
Guidelines, which primarily use earnings multiple methodology. 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 GBP304.8m or 29.2% respectively (31 January
2021: rise and fall in NAV of GBP252.0m and GBP254.8m respectively
or 26.5% and 26.8%).
The following tables present the changes in level 3 instruments
for the periods to 31 July 2021 and 31 July 2020.
Half year to Half year to
31 July 31 July
2021 2020
GBP'000 GBP'000
---------------------------------------------------------- ------------
Opening Balance 1 February 871,860 777,185
Additions 82,203 37,949
Disposals (85,911) (74,934)
Gains and losses recognised in profit or loss 148,085 (4,339)
---------------------------------------------- ---------- ------------
Closing balance 1,016,237 735,861
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors confirm that the interim financial statements have
been prepared in accordance with United Kingdom adopted
International Accounting Standard IAS 34 'Interim Financial
Reporting' and that the business review includes a fair review of
the information required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the first six months of the financial year and their impact on the
interim financial statements, and a description of the principal
risks and uncertainties for the remaining six months of the
financial year; and
-- that there were no changes in the transactions or
arrangements with related parties as described in the last annual
report that would have a material impact on the interim financial
statements
The Directors of ICG Enterprise Trust plc are listed in the ICG
Enterprise Trust plc Annual Report & Accounts for the year
ended 31 January 2021, with the exception of Lucinda Riches who
stepped down from the Board at the AGM on 21 June 2021.
A list of current directors is maintained on the ICG Enterprise
Trust plc website:
http://www.icg-enterprise.co.uk/about-us/the-board.
GOING CONCERN
In assessing the appropriateness of continuing to adopt the
going concern basis of accounting, the Board has assessed the
financial position and prospects of the Company over the next 12
months. As part of this review, the Board assessed the ongoing and
potential impact of principal risks and the COVID-19 pandemic on
the Company's business activities.
As part of the Board's assessment of going concern a range of
stressed scenarios and sensitivity analyses were examined to
identify conditions that might result in the facility's covenants
being breached. This included the consideration of possible
remedial action that the Company could undertake to avoid such
breaches. The diversification and defensive characteristics of the
Portfolio were also considered. The output from the scenario
analysis is sensitive to the reduction in Portfolio value which is
dependent on external factors. The Company continues not to be in
breach of any of its facility covenants, has sufficient headroom
and is well placed to manage the Portfolio cash flows and its level
of undrawn commitments, even in an extreme downside scenario. Based
on this assessment, the Board expects that the Company will be able
to continue in operation and meet its liabilities as they fall due
for a period of at least 12 months. Therefore, it is appropriate to
continue to adopt the going concern basis of preparation of the
Company's interim financial statements
INDEPENT REVIEW REPORT TO ICG ENTERPRISE TRUST PLC
Conclusion
We have been engaged by ICG Enterprise Trust plc (the 'Company')
to review the condensed set of financial statements in the
half-yearly financial report for the six months ended 31 July 2021
which comprises the Balance Sheet, Income Statement, Cash Flow
Statement, Statement of Changes in Equity and the related Notes 1
to 7. We have read the other information contained in the half
yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
July 2021 is not prepared, in all material respects, in accordance
with UK adopted International Accounting Standard 34 and the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements 2410 (UK and Ireland) "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board. A review of
interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
As disclosed in note 3, the annual financial statements of the
Company will be prepared in accordance with UK adopted
international accounting standards. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with UK adopted International Accounting
Standard 34, "Interim Financial Reporting".
Responsibilities of the directors
The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority
Auditor's responsibilities for the review of the financial
information
In reviewing the half-yearly report, we are responsible for
expressing to the Company a conclusion on the condensed set of
financial statements in the half-yearly financial report. Our
conclusion is based on procedures that are less extensive than
audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company, for our work, for this report, or for the conclusions we
have formed.
Ernst & Young LLP
London
4 October 2021
GLOSSARY (UNAUDITED)
Term
Short form
Definition
Alternative Performance Measures
APMs
APMs 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 denoted (1) 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.
Co-investment
Co-investment is a direct investment in a company alongside a
private equity fund.
Co-investment Incentive Scheme Accrual
Represents the estimated value of interests in the co-investment
incentive scheme operated by the Company.
Commitment
Represents the amount of capital that each limited partner
agrees to contribute to the fund which can be drawn at the
discretion of the general partner
Deployment
Please see 'Total new investment'
Direct Investments
Please see 'Co-investment'.
Discount(1)
Arises when the Company's shares trade at a discount to NAV. 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
The amounts invested by the Company into funds 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
The aggregate value of a company's entire issued share capital
and net debt.
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
The 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
Where the Company receives sales proceeds from the full or
partial sale of a fund position within the secondary market.
General Partner
GP
The entity managing a private equity fund that has been
established as a limited partnership. This is commonly referred to
as the Manager.
Hedging
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(1)
Comprises Direct investments, ICG managed funds and Secondary
investments.
Initial Public Offering
IPO
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
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
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
The time frame of the immediately preceding 12 months in
reference to a financial metric used to evaluate the company's
performance.
Limited Partner
LP
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
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 profit share ahead of distributions to limited
partners.
Net asset value
per share(1)
NAV per share
The value of the Company's 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(1)
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
Calculated as the total short-term and long-term debt in a
business, less cash and cash equivalents.
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(1)
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 are amounts payable under the
co-incentive scheme accrual.
Overcommitment(1)
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(1)
The aggregate of the investment Portfolios of the Company and of
its subsidiary limited partnerships. This is consistent with the
commentary in previous annual and interim reports. The Board and
the Manager consider that this is the most relevant basis for
shareholders to assess the overall performance of the Company and
comparison with its peers.
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:
Balances
Fair receivable Aggregated
Value Cash held by from Co-investment Company and
per subsidiary subsidiary Incentive subsidiary
31 July 2021 balance limited limited scheme limited
GBPm sheet partnerships partnerships accrual partnerships
------------ ------- ------------ ------------ ------------- ------------
Investments 1,017.4 (40.2) (0.9) 42.7 1,019.0
Cash 29.3 40.2 - - 69.5
------------ ------- ------------ ------------ ------------- ------------
Other net
liabilities (3.2) - 0.9 (42.7) (45.0)
------------ ------- ------------ ------------ ------------- ------------
Net assets 1,043.5 - - - 1,043.5
------------ ------- ------------ ------------ ------------- ------------
Balances
Fair receivable Aggregated
Value Cash held by from Co-investment Company and
per subsidiary subsidiary Incentive subsidiary
31 January balance limited limited scheme limited
2021 GBPm sheet partnerships partnerships accrual partnerships
------------ ------- ------------ ------------ ------------- ------------
Investments 907.6 - (0.2) 41.8 949.2
Cash 45.2 - - - 45.2
------------ ------- ------------ ------------ ------------- ------------
Other net
liabilities (0.7) - 0.2 (41.8) (42.3)
------------ ------- ------------ ------------ ------------- ------------
Net assets 952.1 - - - 952.1
------------ ------- ------------ ------------ ------------- ------------
Portfolio Return on a Local Currency Basis(1)
Represents the change in the valuation of the Company's
Portfolio, before the impact of currency movements and
co-investment scheme accrual. The Portfolio return of 14% is
calculated as follows:
GBPm 31 Jul 2021 FY 2021
------------------------------------------------------ ----------- -------
Income, gains and losses on Investments 113.0 190.6
Foreign exchange gains and losses included in gains
and losses on investments 20.4 (12.2)
------------------------------------------------------ ----------- -------
Incentive accrual valuation movement 8.2 22.2
------------------------------------------------------ ----------- -------
Total gains on Portfolio investments excluding impact
of foreign exchange 141.6 200.6
------------------------------------------------------ ----------- -------
Opening Portfolio valuation 949.2 806.4
------------------------------------------------------ ----------- -------
Portfolio return on a Local Currency Basis 14.9% 24.9%
------------------------------------------------------ ----------- -------
A reconciliation between the Portfolio return on local currency
basis and NAV per share Total Return is disclosed overleaf, see
'Total Return'.
Portfolio Company
An individual company in an investment portfolio.
Preferred Return
Is the preferential rate of return on an individual investment
or a portfolio of investments, which is typically 8% per annum
Premium
Occurs when the share price is higher than the NAV and investors
would therefore be paying more than the value attributable to the
share by reference to the underlying assets.
Quoted company
Any company whose shares are listed or traded on a recognised
stock exchange.
Realisation proceeds(1)
Amounts received in respect of underlying realisation activity
from the Portfolio and excludes any inflows from the sale of fund
positions via the secondary market.
Realisations -- Multiple to Cost(1)
The average return from full exits from the Portfolio in the
period on a primary investment basis, weighted by cost.
GBPm 31 Jul 2021 FY 2021
--------------------------------------------------- ----------- -------
Cumulative realisation proceeds from full exits in
the year 143.6 85.7
Cost 52.0 35.6
--------------------------------------------------- ----------- -------
Average return Multiple to Cost 2.8x 2.4x
--------------------------------------------------- ----------- -------
Realisations -- uplift to carrying
value(1)
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.
GBPm 31 Jul 2021 FY 2021
------------------------------------------------- ----------- -------
Realisation proceeds from full exits in the year 97.2 78.0
Prior carrying value 77.2 59.7
------------------------------------------------- ----------- -------
Average return Multiple to Cost 26% 31%
------------------------------------------------- ----------- -------
Secondary investments
These occur when existing private equity fund interests and
commitments are purchased from an investor seeking liquidity.
Share Price Total Return(1)
The change in the Company's share price, assuming that dividends
are re-invested on
the day that they are paid.
Total new investment(1)
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 condensed interim
financial statements.
GBPm 31 Jul 2021 31 Jan 2021
---------------------------------------------------- ----------- -----------
Purchase of portfolio investments (per cashflow
statement) 82.2 86.1
Purchase of portfolio investments within subsidiary
investments 51.1 53.1
Total New Investment 133.3 139.2
---------------------------------------------------- ----------- -----------
Total Proceeds(1)
The 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 Jul
GBPm 2021 31 Jan 2021
----------------------------------------------------- ---------- -----------
Sale of Portfolio investments (per cashflow
statement) 122.0 147.5
Sale of Portfolio investments, interest received and
dividends received within subsidiary investments 55.0 55.1
Interest income 3.3 1.2
Dividend income 4.4 5.4
----------------------------------------------------- ---------- -----------
Total Proceeds 184.7 209.2
----------------------------------------------------- ---------- -----------
Fund Disposals 9.4 71.9
----------------------------------------------------- ---------- -----------
Realisation Proceeds 175.3 137.3
----------------------------------------------------- ---------- -----------
Total Return(1)
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 a Total Return basis:
Total Return performance in years to 31
July 2021 1 year 3 years 5 years 10 years
------------------------------------------ ------ ------- ------- --------
Net asset value per share 37.5% 57.2% 111.3% 213.3%
Share price 40.7% 37.6% 109.0% 246.7%
FTSE All-Share Index 26.6% 5.5% 32.3% 90.7%
------------------------------------------ ------ ------- ------- --------
The table below shows the breakdown of the Net Asset Value per
Share Total Return for the period:
Change in NAV (% of opening NAV) 31 Jul 2021
------------------------------------------------------- -----------
Portfolio Return on a Local Currency Basis 14.9%
Currency movements on the Portfolio (2.1%)
------------------------------------------------------- -----------
Portfolio return in sterling 12.8%
Effect of cash drag (0.1%)
------------------------------------------------------- -----------
Impact of net portfolio movement on net asset value 12.7%
Expenses and other income (1.0%)
Incentive accrual valuation movement (0.8%)
------------------------------------------------------- -----------
Increase in net asset value per share before buy backs 10.9%
Impact of share buy backs & dividend reinvestment 0.2%
------------------------------------------------------- -----------
Net Asset Value per Share Total Return 11.1%
------------------------------------------------------- -----------
Undrawn commitments
Commitments that have not yet been drawn down (see definition of
drawdowns).
Unquoted company
Any company whose shares are not listed or traded on a
recognised stock exchange.
Valuation Multiples
Are earnings (EBITDA) or revenue multiples applied in valuing a
business enterprise.
Venture Capital
Refers to investing in companies at a point in that company's
life cycle that is either at the concept, start-up or early stage
of development.
(1) Alternative Performance Measure
(2) In the Chair's Foreword, Manager's Review and Supplementary
Information, reference is made to the "Portfolio". This is an
APM.
(3) PetSmart/Chewy, Allegro and Ivanti were excluded from this
analysis as EBITDA growth is not a relevant metric for these
companies in the period
(4) Cash for liquidity purposes includes GBP40.2m held within
the Company's wholly owned subsidiaries. Subsidiaries are held at
fair value under IFRS 10 Consolidated Financial Statements.
Attachment
-- 211005_ICGT 31 July 2021 Result_FINAL
https://ml-eu.globenewswire.com/Resource/Download/506d64d6-d8ea-4205-b072-ef0219e932f0
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