Icg Enterprise Trust Plc Gbp · LSE:ICGT
Icg Enterprise Trust Plc Gbp — Graphite Enterprise Trust — H1 2013 Earnings Presentation
28 slides from Icg Enterprise Trust Plc Gbp's earnings presentation, Sep 25, 2013
Slide 1: Graphite Enterprise Trust PLC: Interim results presentation
Graphite Enterprise Trust PLC Investing in long term growth Interim results presentation 25 September 2013
Slide 2: Graphite Enterprise interim results agenda
Graphite Enterprise Interim results presentation – September 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: 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 NAV grew strongly in the half year to July 2013
2. Performance The NAV grew strongly in the half year to July 2013 Jul Jan Change Change 2013 2013 6 months 12 months Net asset value per share 682.3p 631.5p +8.1% +18.2% Share price 489.0p 487.0p +0.4% +27.1% FTSE All-Share Index 3,510 3,287 +6.8% +19.9% ● 99% of the portfolio was valued based on J
Slide 5: The portfolio performed well, increasing by 9.3% in local currencies
2. Performance The portfolio performed well, increasing by 9.3% in local currencies % of opening % of opening 6 months to July 2013 £m portfolio NAV Underlying valuation gains 9.3% 8.3% 38.4 Currency 1.7% 1.6% 7.1 Total portfolio 11.0% 9.9% 45.5 Expenses and other (1.0)% (4.8) Dividend (0.8)% (3.6)
Slide 6: Graphite Enterprise has consistently outperformed the peer group
2. Performance Graphite Enterprise has consistently outperformed the peer group Years to July 20131 1 3 5 10 Total return Graphite Enterprise NAV 19.1% 48.2% 35.7% 183.0% Peer group2 average NAV 5.7% 26.3% 4.2% 169.6% ● This outperformance is despite taking lower balance sheet risk than the peer gro
Slide 7: The Company remained nearly 90% invested, while commitments increased
3. Balance sheet The Company remained nearly 90% invested, while commitments increased Change Jul 2013 Jan to Jul 2013 Jan 2013 £m Jul £m % % Investments 451 +35 89% 88% Net current assets 57 +1 11% 12% Total assets less current liabilities 508 +36 100% 100% Outstanding commitments 154 +27 Undrawn b
Slide 8: Since the half year end, commitments have increased substantially
3. Balance sheet Since the half year end, commitments have increased substantially Pro Change forma1 Jul 2013 Jul to pro £m £m forma £m Investments 441 451 -10 Net current assets 67 57 +10 Total assets less current liabilities 508 508 - Outstanding commitments 251 154 +97 Undrawn bank facility 99 10
Slide 9: Graphite Capital has raised £475m for its latest UK mid-market fund
3. Balance sheet Graphite Capital has raised £475m for its latest UK mid-market fund ● Further commitments are likely to bring the total to over £500m ● Existing investors provided over 85% of the fund ● There is broad geographical spread of investors between the UK, Europe and elsewhere ● Graphite
Slide 10: The rate of realisation is significantly higher than the prior year
4. Investment activity The rate of realisation is significantly higher than the prior year Note: 1. Excludes proceeds from secondary sales 2. YTD to 23.9.13. Includes £8.2m for Vue Entertainment. 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 Half Jan-11 Jan-12 Jan-13 year to Jul-13 Valuation uplift 70% 51% 52% 53% Number of full realisations 6 18 14 16 ● The multiple of original cost remained strong at 2.1x over 5.3 years − In the secondar
Slide 12: Example – Dominion Gas (Graphite Capital realisation)
4. Portfolio Example – Dominion Gas (Graphite Capital realisation) Background Turnover ● Supplier of specialist gases and chemicals to offshore oil & gas clients 200 175 ● Acquired in a primary management buy-out in May-07 150 ● Enterprise value of £37m on acquisition 125 100 Performance 75 ● Acquir
Slide 13: Example – Vue Entertainment (co-investment realisation)
4. Investment activity Example – Vue Entertainment (co-investment realisation) Background ● Vue is the UK’s third largest cinema chain ● Doughty Hanson acquired Vue in a £450m secondary buy-out in Dec-10 ● We were one of only two co-investors alongside Doughty Hanson V ● In Jun-13 we acquired a seco
Slide 14: Secondaries and co-investments have increased new investment in the first half
4. Investment activity Secondaries and co-investments have increased new investment in the first half £22.9m £22.8m Note 1: YTD to 23.9.13 Page 13
Slide 15: Recent activity includes a mix of primary, secondary and co-investment
4. Investment activity Recent activity includes a mix of primary, secondary and co-investment Primary Secondary Co-investment £42.0m £9.0m £2.6m Half year ended 31 Jul 2013 £100.0m £11.3m Since period end ● In the remainder of the year we expect to make further primary commitments ● We also aim to c
Slide 16: Graphite Capital directly manages 22% of the portfolio
5. Portfolio Graphite Capital directly manages 22% of the portfolio Graphite portfolio Third party portfolio Direct co- 22% Funds 71% invests 7% ● 12% of the portfolio was acquired through secondary fund purchases Page 15
Slide 17: 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 355 underlying companies – The top 30 underlying companies represent 43% of the portfolio value Note Geography denotes where a company is headqua
Slide 18: 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 3.7% 2 Supplier and operator of modular buildings USA TDR 3.2% 3 Manufacturer of animal health products France Euromezzanine 3.0% 4
Slide 19: The Top 30 companies continue to perform strongly
5. Portfolio The Top 30 companies continue to perform strongly ● Revenues and EBITDA grew by an average of 6% and 11% respectively (LTM to June 2013) ● By contrast, revenues and EBITDA of the FTSE 250 fell by 3% and 5% respectively in the same period Note: Excludes two top 30 companies (London Squar
Slide 20: The Top 30 were valued on average at 9.5x EBITDA
5. Portfolio The Top 30 were valued on average at 9.5x EBITDA and had 3.3x EBITDA net debt ● Compares with 9.4x EBITDA current valuation of FTSE 250 Note: Excludes two Top 30 companies (Intermediate Capital Group and Guardian Financial). Page 19
Slide 21: The portfolio was valued at 1.4x cost; average maturity 4.8 years
5. Portfolio The portfolio was valued at 1.4x cost and its average maturity was 4.8 years ● The portfolio has considerable upside potential as it matures Note 1. Multiples of cost include amounts realised by current portfolio companies of 0.4 times and reflect managers’ gross valuations. Page 20
Slide 22: The share price has outperformed the FTSE All-Share
6. Share price and discount The share price has outperformed the FTSE All-Share by 13.9% since 31 Jul 2012 Note To the close on 24 Sep 2013 (SP = 512p, FTAS = 3,487.2). Increases from 31 Jul 2012: SP +33.0%, Index +19.1% Page 21
Slide 23: The Company's discount has not reflected its recent NAV outperformance
6. Share price and discount The Company’s discount has not reflected its recent NAV outperformance of the sector • The market was underestimating the NAV at 31 July ─ The share price of 489p represented a 28.3% discount to the NAV just reported • By 24 September, the share price had increased to 512
Slide 24: Outlook: The European buy-out market
7. Outlook The European buy-out market ● New investment activity remained broadly stable on the first half ● Pricing remains relatively high for good quality companies ● Debt availability is improving − But remains variable depending on the quality of company and sponsor ● Fundraising is picking up
Slide 25: Conclusion: Graphite Enterprise is very well positioned to grow further
7. Conclusion Graphite Enterprise is very well positioned to grow further ● The portfolio continues to perform well – The Top 30 companies grew EBITDA in the 12 months to Jun-13 by 11% ● The portfolio is mature and managers will be seeking exits in the short term – 57% is more than 4 years old ● Rec
Slide 26: NAV total return performance: selected peer group companies
Appendix Net asset value total return performance: selected peer group companies Years to 31-Jul-13, % 1 3 5 10 Graphite +19.1 +48.2 +35.7 +183.0 F&C PE +7.4 +33.5 +7.5 +183.8 Pantheon +12.9 +39.6 +20.8 +144.8 Standard Life +5.1 +36.1 -5.3 +180.1 HarbourVest +11.9 +41.4 +22.1 - HgCapital +11.6 +33.6
Slide 27: 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 28: 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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