Icg Enterprise Trust Plc Gbp · LSE:ICGT
Icg Enterprise Trust Plc Gbp — Graphite Enterprise Trust — Investor Presentation (March 2013)
29 slides from Icg Enterprise Trust Plc Gbp's investor presentation, Mar 28, 2013
Slide 1: Graphite Enterprise Trust PLC: Presentation to analysts
Graphite Enterprise Trust PLC Investing in long term growth Presentation to analysts 28 March 2013
Slide 2: Analysts presentation – March 2013
Graphite Enterprise Analysts presentation – March 2013 1. Introduction 2. Performance 3. Balance sheet 4. Investment activity 5. Portfolio 6. Share price and discount 7. Outlook Page 1
Slide 3: Introduction: a distinct offering in listed private equity
1. Introduction Graphite Enterprise has a distinct offering in the listed private equity sector HYBRID MODEL FOCUSED STRATEGY Investor in funds and directly into European buy-outs – mature, profitable companies companies HIGHLY EXPERIENCED TEAM CONSISTENTLY STRONG PERFORMANCE RECORD The senior team
Slide 4: NAV per share increased by 10.9% to 631.5p over the year
2. Performance The net asset value per share increased by 10.9% to 631.5p over the year 31 Jan 2013 Change in Change in 12 months 3 months Net asset value per share 631.5p +10.9% +6.5% Share price 487.0p +36.4% +16.4% FTSE All-Share Index 3,287 +12.1% +8.7% ● The share price significantly outperform
Slide 5: NAV per share has outperformed the All-Share over 3, 5 and 10 years
2. Performance The net asset value per share has outperformed the All-Share over 3, 5 and 10 years Years to 31 January 2013* 3 5 10 Total return Net asset value per share +38.4% +26.8% +171.5% Share price +64.0% +9.3% +178.2% FTSE All-Share Index +32.1% +20.4% +146.4% ● The net asset value has incre
Slide 6: Portfolio continues to perform strongly, increasing by 14.3% in local currencies
2. Performance The portfolio continues to perform strongly, increasing by 14.3% in local currencies % of opening % of opening Year to 31 Jan 2013 £m portfolio NAV Underlying valuation gains 14.3% 13.0% 54.1 Currency 1.7% 1.6% 6.3 Total portfolio 16.0% 14.6% 60.4 Dividend (0.9)% (3.6) Expenses and ot
Slide 7: Consistently outperformed the peer group average
2. Performance Graphite Enterprise has consistently outperformed the peer group average Year to 31 Jan 20131 1 3 5 10 Total return Graphite Enterprise NAV 11.8% 38.4% 26.8% 171.5% Peer group2 average NAV 3.5% 26.6% 3.5% 152.9% ● This outperformance is despite taking lower balance sheet risk than the
Slide 8: An increase to the bank facility of £40 million has been agreed
3. Balance sheet An increase to the bank facility of £40 million has been agreed ● The new tranche has a term of 4 years to March 2017: 2 years beyond the existing facility ● The cost is significantly lower than the original facility (see below) ● We have also achieved savings on the original facili
Slide 9: The balance sheet remains strong
3. Balance sheet The balance sheet remains strong Jan 2013 Jan 2012 Change Jan 2013 Jan 2012 £m £m £m % % Investments 415 378 +37 88% 89% Net current assets 56 46 +10 12% 11% Total assets less current liabilities 471 424 +47 100% 100% Outstanding commitments 127 143 Undrawn bank facility1 100 59 Tot
Slide 10: We expect to increase commitments significantly in the coming year
3. Balance sheet We expect to increase commitments significantly in the coming year ● New commitments will include a commitment to Graphite Capital’s next buy-out fund – At least as much as the £70m committed to Fund VII in 2007 ● New primary commitments will help ensure the Company stays close to f
Slide 11: Balance sheet management will continue to be conservative
3. Balance sheet Balance sheet management will continue to be conservative ● We have a strong record of conservative balance sheet management – At the end of 2008 the Company had cash of 42% whereas the peer group was geared ● Overcommitment is only one of several relevant metrics ● Others include:
Slide 12: Disposal proceeds lower than prior year but higher than expected
4. Investment activity Disposal proceeds were lower than the prior year but higher than expected ● Prior year figure included several of the largest holdings, so we expected proceeds to fall Note: Excludes proceeds from secondary sales Page 11
Slide 13: Realisations continue to generate significant uplifts over prior valuations
4. Investment activity Realisations continue to generate significant uplifts over prior valuations Gross Gross valuation multiple uplift on Full realisations No. of cost exit1 13 months to January 2011 6 2.3x 70% Year to January 2012 18 2.5x 51% Year to January 2013 14 2.7x 52% ● Eight investments w
Slide 14: Example – NES Group (Graphite Capital disposal)
4. Investment activity Example – NES Group (Graphite Capital disposal) Background ● International technical recruitment group ● Places highly skilled contract engineers with blue chip, multi-national clients ● Acquired in a secondary management buy-out in September 2006 ● Enterprise value of £70 mil
Slide 15: Example – Data Explorers (Co-investment disposal)
4. Investment activity Example – Data Explorers (Co-investment disposal) Background ● Provider of securities lending and short selling data to global financial markets ● Acquired by Bowmark in April 2007 ● Graphite Enterprise co-invested £4m alongside Bowmark Fund III – total cost £4.5m Performance
Slide 16: New investment was lower as fewer secondaries and co-investments completed
4. Investment activity New investment was lower as we completed fewer secondaries and co-investments ● Drawdowns were only slightly lower than last year Page 15
Slide 17: A mix of primary commitments and co-investments in the year
4. Investment activity We completed a mix of primary commitments and co-investments in the year ● We made 4 new primary commitments totalling £27.3m – DBAG VI (€10m) – ICG V (€10m) – Egeria IV (€10m) – Advent GPE VII (€4m) ● We completed 3 co-investments totalling £5.2m – CPA Global, alongside Cinve
Slide 18: Graphite Capital directly manages 23% of the portfolio
5. Portfolio Graphite Capital directly manages 23% of the portfolio Graphite portfolio Third party portfolio Direct co- 23% Funds 71% invests 6% ● 12% of the portfolio was acquired through secondary fund purchases Page 17
Slide 19: The portfolio is balanced and well diversified
5. Portfolio The portfolio is balanced and well diversified ● The portfolio strikes a good balance between diversification and concentration – Exposure to 336 underlying companies – The top 30 underlying companies represent 43% of the portfolio value Note Geography denotes where a company is headqua
Slide 20: Six of the top ten holdings are managed directly by Graphite Capital
5. Portfolio Six of the top ten holdings are managed directly by Graphite Capital Company Country Manager % of portfolio 1 Distributer and retailer of tyres UK Graphite 3.6% 2 Supplier and operator of modular buildings USA TDR 3.0% 3 Provider of recruitment process outsourcing UK Graphite 2.6% 4 Ope
Slide 21: The Top 30 companies continue to perform strongly
5. Portfolio The Top 30 companies continue to perform strongly ● Revenues grew by an average of 12% and EBITDA by an average of 13% (LTM to Dec 2012) ● By contrast, revenues of the FTSE 250 fell by 4% whilst EBITDA grew by 2% in 2012 Note: Excludes one Top 30 Company (London Square: immature) where
Slide 22: Top 30 valued on average at 9.1x EBITDA with 3.5x net debt
5. Portfolio The Top 30 were valued on average at 9.1x EBITDA and had 3.5x EBITDA net debt ● Valuation and net debt multiples were little changed in the year (9.0x and 3.8x at Jan-12) ● Compares with 9.2x EBITDA current valuation of FTSE 250 Note: Excludes one Top 30 Company as per page 20. Page 21
Slide 23: Portfolio valued at 1.4x cost; average maturity 4.5 years
5. Portfolio The portfolio was valued at 1.4x cost and its average maturity was 4.5 years ● The portfolio has considerable upside potential as it matures Note 1. Multiples of cost include amounts realised by current portfolio companies and reflect managers’ gross valuations. Page 22
Slide 24: Share price outperformed the FTSE All-Share by 24.3%
6. Share price and discount The share price outperformed the FTSE All-Share by 24.3% in the financial year Note To the close on 27 March 2013 (SP = 472.5p, FTAS = 3,367.36). Increases from 31 Jan 2012: SP +32.4%, Index +14.8% Page 23
Slide 25: Discount is closely correlated with the listed private equity sector
6. Share price and discount Graphite Enterprise’s discount is closely correlated with the listed private equity sector • At 27 March 2013, the discount was 25.2% (share price 472.5p) – The Company’s average discount in the 15 years prior to the financial crisis was 10% – The average discount in the
Slide 26: The European buy-out market
7. Outlook The European buy-out market ● Activity remained relatively subdued in 2012 ● Pricing remains relatively high for good quality companies ● Debt availability remains variable depending on the quality of company and sponsor ● Fundraising is picking up ● Many new funds are being raised or are
Slide 27: Graphite Enterprise is well positioned to grow further
7. Outlook Graphite Enterprise is well positioned to grow further ● The portfolio continues to perform well – Average annualised underlying growth of 18% over 4 years ● European economies are likely to remain depressed for some time – But the portfolio has proved to be resilient ● Significant capaci
Slide 28: Useful information
Useful information Structure: Company registered in England and Wales Ticker: GPE.LN Investment trust tax status ISIN: GB0003292009 Registered company number: 01571089 SEDOL: 0329200 Listing: Premium London listing Broker: J.P.Morgan Cazenove Angus Wilton (sales): + 44 (0) 20 7155 8122 Website: www.
Slide 29: Legal notice
Legal notice What this document is for This document has been prepared by Graphite Capital Management LLP (“Graphite Capital”) as manager of Graphite Enterprise Trust PLC (“Graphite Enterprise”). The information and any views contained in this document are provided for general information only. It i
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