Icg Enterprise Trust Plc Gbp · LSE:ICGT
Icg Enterprise Trust Plc Gbp — Graphite Enterprise Trust — H1 2012 Earnings Presentation
26 slides from Icg Enterprise Trust Plc Gbp's earnings presentation, Sep 28, 2012
Slide 1: Graphite Enterprise Trust PLC: Investing in long term growth
Graphite Enterprise Trust PLC Investing in long term growth Presentation to analysts 28 September 2012
Slide 2: Presentation to analysts – September 2012 agenda
Graphite Enterprise Presentation to analysts – September 2012 1. Introduction 2. Performance 3. Balance sheet 4. Investment activity 5. Portfolio 6. Share price and discount 7. Outlook Page 1
Slide 3: Graphite Enterprise has a distinct offering in the listed private equity sector
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: The net asset value per share increased by 1.4% to 577.4p
2. Performance The net asset value per share increased by 1.4% to 577.4p 31 July 2012 31 Jan 2012 Change Net asset value per share 577.4p 569.4p +1.4% Share price 384.9p 357.0p +7.8% FTSE All-Share Index 2,927 2,933 -0.2% ● The share price and NAV per share both outperformed a weak Index ● Over the
Slide 5: NAV per share has outperformed the All-Share over 5 and 10 years
2. Performance The net asset value per share has outperformed the All-Share over 5 and 10 years Years to 31 July 2012* 3 5 10 Total return Net asset value per share +47.0% +24.3% +138.1% Share price +41.6% -6.4% +110.2% FTSE All-Share Index +49.4% +3.3% +83.3% ● The NAV per share has outperformed th
Slide 6: The growth in NAV per share was driven by underlying valuation gains
2. Performance The growth in NAV per share was driven by underlying valuation gains in the portfolio % of opening % of opening £m 6 months to 31 July 2012 portfolio NAV Underlying valuation gains 7.2% 6.6% 27.3 Currency (3.4%) (3.1%) (12.9) Total portfolio 3.8% 3.5% 14.4 Dividend (0.9%) (3.6) Expens
Slide 7: The underlying value of the portfolio increased by 7.2% in the first half
2. Performance The underlying value of the portfolio increased by 7.2% in the first half of the year 440 Movement in portfolio 420 +£4.7m +£14.6m 400 +£25.6m -£29.8m -£12.8m +£12.7m 380 360 £392.6m £390.9m £392.6m 340 £377.7m 320 300 Opening Fund Co-investments Disposal Gains from Other gains Curren
Slide 8: Graphite Enterprise has consistently outperformed the peer group
2. Performance Graphite Enterprise has consistently outperformed the peer group Year to 31 July 20121 1 3 5 10 Total return Graphite Enterprise NAV 0.4% 47.0% 24.3% 138.0% Peer group2 average NAV -0.6% 32.3% 11.6% 136.8% ● This outperformance is despite taking lower balance sheet risk than the peer
Slide 9: The balance sheet remains strong
3. Balance sheet The balance sheet remains strong Jul 2012 Jan 2012 Change Jul 2012 Jan 2012 £m £m £m % % Investments 393 378 15 92% 89% Net current assets 36 46 (10) 8% 11% Total assets less current liabilities 429 424 5 100% 100% Outstanding commitments 121 143 (22) Undrawn bank facility1 57 59 (2
Slide 10: Disposal proceeds slowed from the rate seen last year
4. Investment activity Disposal proceeds slowed from the rate seen last year Note: Excludes proceeds from secondary sales Page 9
Slide 11: Realisations continue to generate significant uplifts over prior valuations
4. Investment activity Realisations continue to generate significant uplifts over prior valuations Net Gross Gross valn proceeds multiple uplift on 6 months to July 2012 Number £m of cost exit1 Full realisations 5 17.1 2.8x 65% Partial realisations 21 10.0 Total realisations 27.1 Secondary sales 2.7
Slide 12: The rate of investment is slower than in the prior year
4. Investment activity The rate of investment is slower than in the prior year ● The current drawdown run-rate is similar to the prior year Page 11
Slide 13: Example – CPA Global (Cinven buy-out and direct co-investment)
4. Investment activity Example – CPA Global (Cinven buy-out and direct co-investment) Background ● Provider of patent renewal services and IP management software ● More than 1,500 employees in over 100 countries. Renews over 1.4 million patents annually ● Acquired by Cinven in a secondary buy-out fr
Slide 14: Example – Explore Learning (Graphite Capital buy-out)
4. Investment activity Example – Explore Learning (Graphite Capital buy-out) Background ● UK’s leading provider of after-school tuition to children aged 5 to 14 ● Network of 62 centres nationally, 39 alongside supermarkets ● Over 16,000 children enrolled ● Secondary buy-out completed August 2012 Opp
Slide 15: The portfolio combines Graphite Capital and third party investments
5. Portfolio The portfolio combines Graphite Capital and third party investments Graphite portfolio Third party portfolio Direct co- 23% Funds 70% invests 7% ● 11% of the portfolio was acquired through secondary fund purchases Page 14
Slide 16: The portfolio is balanced and well diversified
5. Portfolio The portfolio is balanced and well diversified ● Exposure to 319 underlying companies ● The portfolio is more diversified than most direct funds, more concentrated than most FoFs – The top 30 underlying companies represent 42% of the portfolio value – Ensures individual winners can make
Slide 17: Graphite Capital directly managed seven of the top ten holdings
5. Portfolio At 31 July 2012, Graphite Capital directly managed seven of the top ten holdings Company Country Manager % of portfolio 1 Distributer and retailer of tyres UK Graphite 3.7% 2 Provider of recruitment services UK Graphite 2.6% 3 Operator of caravan parks UK Graphite 2.3% 4 Provider of fos
Slide 18: The Top 30 companies continue to perform strongly
5. Portfolio The Top 30 companies continue to perform strongly ● Revenues grew by an average of 14% and EBITDA by an average of 11% (LTM June 2012) Note: Excludes three Top 30 Companies: Willowbrook (immature), London Square (asset-based rather then earnings-based) and Preh (valued at deferred proce
Slide 19: The Top 30 were valued at an average of 9.0x EBITDA
5. Portfolio The Top 30 were valued at an average of 9.0x EBITDA and had 4.0x gearing ● Average valuation and net debt multiple remained unchanged from the beginning of the year ● Compares with 8.4x EBITDA current valuation of FTSE 250 Note: Excludes three Top 30 Companies as per page 17. Page 18
Slide 20: The portfolio was valued at 1.3x cost with average maturity of 4 years
5. Portfolio The portfolio was valued at 1.3x cost and had an average maturity of 4 years ● The portfolio has considerable upside potential as it matures Note 1. Multiples of cost include amounts realised by current portfolio companies 2. Average maturity is weighted by value at 31 July 2012. Page 1
Slide 21: The share price outperformed the All-Share Index by 8% in the first half
6. Share price and discount The share price outperformed the All-Share Index by 8% in the first half 31 July Note To the close on 26 September (SP = 389p, FTAS = 3,010) Page 20
Slide 22: 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 26 September the discount was 32.6% (share price 389p) – The average discount in the 17 years prior to the financial crisis was 14% – The average discount in the period since Q
Slide 23: The European buy-out market
7. Outlook The European buy-out market ● Activity remained subdued in the first half of 2012 ● Pricing remains relatively high for good quality companies ● Debt availability remains variable depending on the quality of company and sponsor ● Many new funds are being raised or are expected to launch i
Slide 24: Graphite Enterprise is well positioned to grow further
7. Outlook Graphite Enterprise is well positioned to grow further ● The portfolio continues to perform well ● The balance sheet and level of commitments are appropriate for this point in the cycle - The Company is 92% invested compared with 58% at December 2008 - Liquidity is available to make new c
Slide 25: 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 26: 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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