ICG Enterprise Trust Plc: Unaudited Interim Results for the six months ended 31 July 2020
*7 October 2020*
*ICG Enterprise Trust Plc*
*Unaudited Interim Results for the six months ended 31 July 2020*
*FOCUS ON DEFENSIVE GROWTH DRIVES RESILIENT PERFORMANCE *
· *NAV per share of 1,126.9p – total return of -1.0% *
· Ahead of the FTSE All-Share, which returned -17.8% over the same period
· Portfolio began to recover in Q2, +3.2% total return versus -4.1% in Q1
· *Diversified Portfolio alongside top-tier managers demonstrating resilience in volatile markets*
· +0.1% Sterling return on the Portfolio; -3.6% local currency return
· +15% average LTM earnings growth from Top 30 underlying companies which represents 47% of the Portfolio
· This compares to -24% LTM EBITDA growth for the FTSE All-Share
· *Continued realisation and secondary** sales activity generates £94m of proceeds*
· £39m of proceeds from realisations; 7% uplift to carrying value; 2.0x multiple to cost
· £55m of proceeds received and £21m of undrawn commitments released by secondary sales
· Further selective secondary sales completed post period end to re-balance the Portfolio and expand investment capacity
· *Strong balance sheet and available liquidity*
· £197m of available liquidity to fund uncalled commitments and capitalise on new investment opportunities
· Disciplined investment selection maintained with five new primary fund commitments to top-tier managers
· Strong pipeline of high conviction investments
· *Quarterly dividend of 5p per share maintained*
· Dividends for Q1 and Q2 of 5p per share; total dividends 10p
*Performance to 31 July 2020* * * *3 months* *6 months* *1 year* *3 year* *5 year* *10 year*
Net asset value per share (total return) +3.2% -1.0% -2.2% +28.0% +77.8% +182.7%
Share price (total return) +8.5% -16.9% -7.4% +14.6% +51.9% +248.9%
FTSE All-Share Index (total return) +1.2% -17.8% -17.8% -9.1% +8.4% +73.0%
*Oliver Gardey, Head of Private Equity Fund Investments, ICG, commented:*
“We have been pleased by the performance, realisation activity and resilience of the portfolio through a period of extraordinary disruption caused by the COVID-19 pandemic. These results demonstrate the benefit of our focus on investing in market-leading, defensive growth companies, alongside top-tier private equity managers. They also highlight, more broadly, the benefit of the private equity model – its focus on long term investing means we are well suited to managing through challenging economic cycles such as these.
“We have constructed a portfolio with strong defensive characteristics, focused on mature buyouts in Europe and North America. Despite the disruption caused by the pandemic, we have been able to continue our realisation and selective secondary sales activity to help re-balance the Portfolio and expand investment activity. It was particularly pleasing to report PAI’s agreed sale of Roompot from our high conviction portfolio, which resulted in a significant uplift to the value of our holding in the company.
“I would like to take this opportunity to thank our team for their incredibly hard work during this challenging period. I take great pride in their ability to react to changes in working environments and to ensure continuity in actively managing the Portfolio. They have done this superbly over the past six months.
“Previous crises have demonstrated that market dislocation and volatility can also create opportunities. We have continued to focus on selecting new commitments to leading fund managers and built a pipeline of exciting high conviction investment opportunities. We believe the decisive action we have taken in the last six months, the strength of the current Portfolio and our commitments to some of the world’s leading buyout managers leave us well placed to continue delivering long-term shareholder value.”
*Enquiries*
**Analyst / Investor enquiries: **+44 (0) 20 3545 2000
Oliver Gardey, Head of Private Equity Fund Investments, ICG
Colm Walsh, Managing Director, Private Equity Fund Investments, ICG
James Caddy, Investor Relations, ICG
*Media:*
Alicia Wyllie, Co-Head of Corporate Communications, ICG +44 (0) 20 3545 1338
Ed Gascoigne Pees, Eddie Livingstone-Learmonth, Camarco +44 (0) 20 3757 4993
*Website:*
www.icg-enterprise.co.uk
**Comparison to prior financial year**
*Six months to/as at*
*31 July 2020* *12 months to/as at*
*31 January 2020*
*NAV per share* 1,126.9p 1,152.1p
*Realisations in the period (including secondary sales)* £94m £149m
*Realisations – uplift to carrying value* 7% 37%
*Realisations – multiple to cost* 2.0x 2.4x
*Capital deployed* £52m £159m
*% of Capital deployed into high conviction investments* 10% 39%
*New primary fund commitments* £35m £156m
** **
** **
**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 IFRS measures, where appropriate. The rationale for the APMs is discussed in detail in the Manager’s Review.
In the Chairman’s Statement, Manager’s Review and Supplementary Information, reference is made to the “Portfolio”. This is an APM. The Portfolio is defined as the aggregate of the investment portfolios of the Company and of its subsidiary limited partnerships. The rationale for this APM is discussed in detail in the Manager’s Review. The Glossary includes a reconciliation of the Portfolio to the most relevant IFRS measure. In the Chairman’s Statement, 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*
In my first foreword as your Chair, I am pleased to report that your Company has continued to demonstrate resilient performance in a period that has been defined by severe economic contraction and stock market volatility.
At 31 July net asset value (NAV) stood at £775m, or 1,127p per share (31 Jan 20: £794m, 1,152p). Total return over the six months to 31 July was -1.0%, ahead of the FTSE All-Share’s total return of -17.8%. Our performance in this challenging period has been a reflection of the Company’s defensive growth investment policy; we have a well diversified global Portfolio that is weighted towards resilient sectors. Furthermore, our Portfolio has a bias to some of the world’s best private equity managers who have a strong operational focus and demonstrable experience of successfully managing investments through periods of economic stress.
Despite the incredibly volatile macroeconomic backdrop to the period, we have continued to demonstrate progress against our strategic goals. High conviction investments now represent 44% of the Portfolio and are an increasingly important driver of long-term outperformance. Our exposure to the US, which stood at 24% just two years ago, now represents 35% of the Portfolio. This progress has been driven by strong performance, new investments and selective secondary sales.
I would like to thank my predecessor, Jeremy Tigue, for his stewardship as Chairman over the last three years and as Board member for 12 years. I would also like to thank Emma Osborne, who is standing down from her senior adviser role, for her support in overseeing the transition of leadership in the investment team. We wish them both well for the future.
We regret to announce that due to current government guidelines we have had to postpone our plans for an in-person shareholder meeting until 2021. We will inform shareholders of any updates in due course. Any further shareholder questions should therefore continue to be sent to icg-enterprise@icgam.com.
Whilst the current environment remains challenging and the outlook is far from certain, your Company is extremely well placed to navigate the challenges ahead. The substantial expertise of the investment team and ICG’s long track record of managing private companies through multiple financial and economic cycles are invaluable resources. As we emerge from the current crisis, market dislocation is likely to present attractive investment opportunities. I am confident that through ICG Enterprise Trust’s differentiated investment approach we will take advantage of such opportunities and continue to generate value over the long term for our shareholders.
*Jane Tufnell*
*Chair*
*6 October 2020*
*Manager’s Review*
*Performance overview*
*Robust Portfolio performance*
This has been an extraordinary six-month period, with the COVID-19 pandemic impacting all of our lives and having a far-reaching impact on global economies. Against this backdrop, the benefit of our long-standing investment approach of investing with well-established managers, in resilient sectors with defensive growth characteristics has been evident. Over the first half of the financial year the Portfolio generated a +0.1% gain in Sterling, or an underlying decline of -3.6%, significantly outperforming the FTSE-All Share over the same period.
On a quarter by quarter basis, the period February to April 2020 (Q1), saw the sharpest decline in the value of the Portfolio being the period of the greatest market uncertainty. In this period, we saw a -7.0% underlying local currency decline and had anticipated that the impact from COVID-19 would continue to weigh on company valuations in the second quarter. However, as public markets stabilised and company earnings rebounded, performance recovered and it is therefore encouraging to report an underlying local currency gain of 3.7% in the second quarter.
Our Portfolio is constructed with a focus on defensive growth and companies with non-cyclical growth drivers, such as demographics, increasing regulation and the shift towards Software-as-a-Service. The defensive growth theme has contributed significantly to the resilience of the Portfolio during this period.
The strength of our performance in the first half was driven by some noteworthy contributors from our high conviction portfolio and US investments. This included the performance of Chewy (the listed portion of the leading US pet retailer PetSmart) within our high conviction portfolio. As an online retailer and market leader in its space, the company benefited significantly from a migration of demand towards online retail channels amid the pandemic. This was evidenced by a 98% increase in its listed share price during the period.
Outside of our high conviction portfolio, another notable contributor to performance was Leaf Home Solutions. The business is a branded direct to consumer platform focused on providing guttering protection and other home safety solutions. It is part of the Gridiron III portfolio. Throughout the period the company experienced minimal disruption to trading and continued to deliver consistent growth. Leaf Home Solutions is now the fifth largest company in the Portfolio.
Realisation activity has continued in the first half of the year generating, £94m of proceeds of which £39m related to sales from our underlying managers. We also executed several selective secondary sales including the partial disposal of our sizeable holding in Graphite VIII. These secondary transactions reduced the concentration of our portfolio and expand our capacity to make new investments aligned to our strategic goals.
*Six months* *Year ended*
*Movement in the Portfolio* * * *to 31 July* *31 Jan*
*£m* * * *2020* *2020*
Opening Portfolio* 806.4 694.8 Third party funds Portfolio drawdowns 47.1 97.4 High conviction drawdowns – ICG funds, secondary investments and co-investments 5.3 61.2
Total new investment*** 52.4 158.6
Realisation Proceeds (94.4) (148.8)
Net cash (inflow)/outflow (42.0) 9.8
Underlying Valuation Movement** (28.7) 115.4
Currency movement 29.3 (13.6)
*Closing Portfolio** * * *765.0* 806.4
% underlying Portfolio growth (local currency) (3.6%) 16.6%
% currency movement 3.7% (2.0%)
% underlying Portfolio growth (Sterling) 0.1% 14.6%
* Refer to the Glossary for reconciliation to the Portfolio balance presented in the unaudited results.
** 96% of the Portfolio is valued using 30 June 2020 (or later) valuations (31 Jan 20: 95%).
*** Includes £2.7m of unpaid drawdowns accrued at the period end
*Portfolio Overview*
*
High conviction investments underpinned by a Portfolio of leading funds*
Our strategy is focused on investing in larger companies, those with leading market positions and strong management teams as we believe they will generate the most consistently strong returns through the cycle. Our Portfolio combines investments managed by ICG and those managed by third parties, in both cases directly and through funds. At 31 July 2020 the Portfolio was valued at £765m (31 Jan 2020: £806m).
Third party funds were valued at £425m (31 Jan 2020: £477m) and underpin our strategy by providing both a base of strong diversified returns and deal flow for the third-party direct co-investments and secondary investments in our high conviction Portfolio. The underlying funds are focused on mid-market and large-cap European and US private equity managers and over the last five years this Portfolio has generated a local currency return of 11% p.a.
High conviction investments were valued at £340m (31 Jan 2020: £329m). The common characteristic of our high conviction investments is that ICG selects the underlying companies, in contrast to a conventional fund of funds in which third party managers make all of the underlying investment decisions.
Our high conviction portfolio, which is weighted towards investments in our Top 30 underlying companies, allows us to proactively increase exposure to companies that benefit from long-term structural trends, those which we believe would be more resilient in an economic downturn, like the one we are currently experiencing. We are able to enhance returns and increase visibility on underlying performance drivers, and we mitigate the more concentrated risk through a highly selective approach and a focus on defensive growth companies. Over the last five years, high conviction investments have generated a net return of 18% p.a. in local currencies. High conviction investments now represent 44% of the Portfolio (31 Jan 2020: 41%) and we have a strategic goal to increase the weighting to these investments towards 50% - 60% of the Portfolio.
* * * * *31 July*
*2020* *31 January 2020*
*Investment category* * * *% of Portfolio* *% of Portfolio*
*High conviction investments*
ICG managed investments
23
22
Third party co-investments 16 14
Third party secondary investments 5 5
*Total High conviction investments* * * *44* *41*
*Third party primary funds* *56* *59*
*Total* * * *100* *100*
*Our top 30 companies have reported another period of double-digit revenue and earnings growth*
Our top 30 underlying companies, which represent 47% of the Portfolio by value and are biased towards high conviction investments, continue to perform well, reporting aggregate LTM revenue and EBITDA growth of 11% and 15%, respectively. This compares to LTM revenue and EBITDA growth of -9% and -24% respectively for the FTSE All-Share. Over the six months, valuation multiples increased from 11.7x to 13.0x, which is largely a reflection of the change of mix and weightings in the Top 30 underlying companies with a modest increase in aggregate multiples overall. The EBITDA multiples used to value our Top 30 companies not only reflect the high quality of these companies and the strong momentum in EBITDA growth, but also public market comparable multiples. The net debt/EBITDA ratio has increased to 4.4x.
*Realisation activity*
*Lower realisation activity in light of COVID-19 pandemic*
As expected, given the backdrop, realisations slowed during the period, with 14 full exits from the Portfolio compared to 25 in the six months to 31 July 2019. Total proceeds received were £39m, of which full exits accounted for £18m (or 45%). A number of these realisations were already in progress before the impact of the pandemic became more acute. Despite this, realisations continued to attract uplifts to previous carrying value, with an average uplift of 7% over the period and an average return multiple of 2.0x cost.
During the first half of the financial year, PAI Partners reached an agreement to sell Roompot, the 3rd largest company in the Portfolio. Roompot is an operator and developer of holiday parks in Northern Europe. It was sold to KKR at a significant uplift to the value of the Company’s holding in the business. This illustrates that the demand for high quality businesses at pre-COVID-19 valuations remains strong. Several other Top 30 underlying companies were partially realised in the period including Gerflor, which returned £6m of proceeds. The French vinyl floor manufacturer was the 12th largest underlying company at the start of the year, held via two ICG funds. In addition, partial sales by the managers of the listed investments in Ceridian and TeamViewer returned a further £6m.
In addition to sales by our underlying managers, we took advantage of our in-house secondary market expertise to execute several selective secondary sales. The sales, which highlight our active approach to managing the Portfolio, generated £55m of proceeds, and released £21m of undrawn commitments. We worked alongside the previous Manager of the Company (Graphite Capital) to facilitate the most significant secondary sale in the period, being the partial disposal of our sizeable holding in Graphite VIII, a fund focussed on small to mid-sized UK buyouts.
*New investment activity*
*Continued selective investment activity *
We have continued to commit selectively to top-tier managers through the first half of the financial year. A key area of focus in our selection and due diligence process has been assessing and understanding the performance of managers during periods of significant financial stress. We invested £52m in the six months with 10% of investments into our high conviction portfolio, reflecting the decline in co-investment opportunities and lower levels of deal activity. This compares to £64m invested in the first six months of 2019.
We completed five new primary fund commitments in the six months totalling £35m. These third party fund commitments were raised by managers we have backed successfully before: two European funds (Hg Genesis 9 and Saturn 2), two global funds (CVC VIII and Apax X), and one US fund (Bain Capital Tech Opportunities). The managers we back tend to raise funds which are often oversubscribed and therefore difficult to access to new investors. The calibre of these managers speaks to the relationships which we have built with these firms over many years.
We made the following commitments to funds with investment mandates which are aligned with our long-term strategic objectives as well as a bias towards sectors which are aligned with our defensive growth focus:
· €15m (£14m) to CVC VIII, a European buyout strategy. CVC is one of our longest standing manager relationships
· Two commitments to Hg (Genesis 9 and Saturn 2) totalling £9m. These funds are focussed on predominantly Northern European software and services businesses
· $5m (£4m) to Bain Capital Tech Opportunities, a fund focused on mid-market buyouts and late stage growth capital in technology and technology-enabled businesses, predominantly in North America
· €10m (£9m) commitment to Apax X, a global buyout fund focused on the technology & telecoms, services, healthcare, and consumer sectors
We will continue to be highly disciplined in our investment approach focusing on high quality, defensive businesses. We remain well placed to take advantage of attractive investment opportunities as they arise.* Portfolio analysis*
We have exposure to over 600 underlying companies, of which the Top 30 contributes 47% of the Portfolio value. This strikes an appropriate balance between concentration, so that high conviction investments can meaningfully impact performance, and diversification, so that we are not overly exposed to the risks of individual portfolio companies.
*Focus on mid-market and large companies*
The Portfolio is weighted towards the mid-market (37%) and large deals (53%), which we view as more defensive than smaller deal sizes, benefiting from stronger management teams and often market leading positions. A total of 95% of the Portfolio is invested in buyouts.
*Focus on developed markets*
The Portfolio is focused on developed private equity markets, with 93% invested across continental Europe (37%), the US (35%) and the UK (21%). We have minimal emerging markets exposure. In line with one of our strategic objectives, our weighting to the US has increased from 14% at the time of moving to ICG in 2016. Over the same period, the UK weighting has reduced from 45%.
*Focus on sectors with defensive growth characteristics*
The Portfolio is well diversified and weighted towards sectors with defensive growth characteristics. Healthcare (18%) and education (6%) make up 24% of the Portfolio and are particularly attractive sectors. Elsewhere the Portfolio is broadly spread across the industrials (14%), business services (13%), consumer goods and services (18%) and technology (16%) sectors. Within our exposure to the consumer and industrial sectors, we have a bias to companies with more defensive business models, non-cyclical growth drivers and high recurring revenue streams. The Company has a minimal exposure to the leisure (7%) and financials (6%) sectors.
*Well-balanced vintage year exposure*
Our vintage year exposure is well-balanced with 62% of the value of the Portfolio in investments made since 2017 or later. These vintages have yet to see significant realisation activity unlike investments made in 2016 or earlier which make up the remaining 38% of the Portfolio.
*Balance sheet and financing*
Our liquidity position was strengthened significantly, with the Portfolio generating a net cash inflow of £45m during the period. After allowing for dividends and expenses, the outstanding cash balance increased to £39m at the end of the period (31 Jan 2020: £14m). In March, we drew down £40m from our bank facility as a precautionary measure at the onset of the COVID-19 pandemic. This was deemed surplus to requirements and repaid in full prior to the period end.
At the period end the Portfolio represented 99% of net assets, compared to 102% at 31 January 2020.
*£m* *31 Jul 2020* *31 Jan 2020*
Portfolio* 765 806
Cash 39 14
Net obligations* (29) (26)
*Net assets * *775* *794*
* Refer to the Glossary for reconciliation to the portfolio balance presented in the preliminary results and definition and calculation of net obligations.
At 31 July 2020, we had uncalled commitments of £439m, 20% (£86m) of which were to funds outside of their investment period. Against these uncalled commitments we had available liquidity of £197m (including £158m of undrawn bank lines).
*£m* *31 Jul 2020* *31 Jan 2020*
Outstanding commitments – funds in investment period 353 377
Outstanding commitments – funds outside investment period 86 82
Total outstanding commitments 439 459
Total available liquidity (including facility) (197) (162)
Overcommitment (including facility) 242 297
Overcommitment % of net asset value 31% 37%
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. Outstanding commitments tend to be drawn down over a four to six-year period with approximately 10%–15% retained at the end of the investment period to fund follow-on investments and expenses. If outstanding commitments were to follow a linear drawdown rate to the end of their respective remaining investment periods, approximately £83m would be called over the next 12 months.
*Activity since the period end*
Since the period end the Portfolio has continued to generate cash proceeds and undertake selective investment activity. In total £41m of distributions have been received in the two months to 30 September 2020, including that of Roompot. A further two secondary transactions have also been agreed at attractive prices, further reducing our outstanding commitments. Had these realisations and secondary transactions been completed by 31 July 2020, the overcommitment ratio at that date would have stood at 27%. The valuation impact of secondary sales completed post period end is reflected in the 31 July 2020 NAV.
We have invested £22m, including a $5m co-investment in Visma alongside Hg in the world’s largest ever software buyout. In addition, we have continued the expansion of our US programme with two primary commitments; $10m commitments to both Bain XIII and Clayton Dubilier & Rice XI, the latter being a new manager relationship.
*Outlook*
We are encouraged by the strength and resilience of our Portfolio in this unprecedented period of uncertainty and are well placed to withstand further uncertainty and volatility. ICG Enterprise has a well diversified Portfolio, investing in companies with strong defensive growth characteristics and weighted towards more resilient sectors. Furthermore, by investing with leading managers in the US and Europe which focus on mid-market and larger buyouts, we are investing with managers who have significant experience in managing companies through periods of economic stress.
We believe the private equity model is especially well suited to dealing with current market conditions, with an ability to act quickly and decisively where required and importantly with a focus on long-term value creation. We have the utmost confidence that our managers will be able to adapt to future events. Our flexible mandate, and our high conviction approach, allows us to be nimble and adapt the mix of new investments to evolving market conditions. With this differentiated investment approach at our disposal we are well placed to take advantage of attractive opportunities as they arise and continue to generate long-term shareholder value.
*ICG Private Equity Funds Investment Team*
*6 October 2020*
*Supplementary information*
This section presents unaudited supplementary information regarding the Portfolio (see Manager’s Review and the Glossary for further details and definitions).
*The 30 largest underlying companies*
The table below presents the 30 companies in which ICG Enterprise had the largest investments by value at 31 July 2020. These investments may be held directly or through funds, or in some cases in both ways. The valuations are gross and are shown as a percentage of the total investment Portfolio.
*Company* *Manager* *Year of investment* *Country* *Value as a % of Portfolio*
*1* *PetSmart +* Retailer of pet products and services BC Partners 2015 USA 4.3%
*2* *DomusVi +* Operator of retirement homes ICG 2017 France 4.1%
*3* *Roompot +* Operator and developer of holiday parks PAI Partners 2016 Netherlands 3.6%
*4* *Minimax +* Supplier of fire protection systems and services ICG 2018 Germany 3.3%
*5* *Leaf Home Solutions* Provider of gutter protection solutions Gridiron 2016 USA 3.1%
*6* *Doc Generici +* Retailer of pharmaceutical products ICG 2019 Italy 2.2%
*7* *Visma +* Provider of business critical software such as accounting, payroll, HR and other ERP software ICG 2017 Norway 2.1%
*8* *City & County Healthcare Group* Provider of home care services Graphite Capital 2013 UK 2.0%
*9* *Froneri^* Manufacturer and distributor of ice cream products PAI Partners 2019 UK 1.9%
*10* *Supporting Education Group +^* Provider of temporary staff for the education sector ICG 2014 UK 1.9%
*11* *Yudo +* Manufacturer of components for injection moulding ICG 2018 Hong Kong 1.8%
*12* *IRI +* Provider of data and predictive analytics to consumer goods manufacturers New Mountain 2018 USA 1.6%
*13* *System One +* Provider of specialty workforce solutions Thomas H Lee Partners 2016 USA 1.5%
*14* *Endeavor Schools +* Operator of schools Leeds Equity Partners 2018 USA 1.4%
*15* *Berlin Packaging +* Provider of global packaging services and supplies Oak Hill Capital Partners 2019 USA 1.4%
*16* *VitalSmarts +* Provider of corporate training courses focused on communication skills and leadership development Leeds Equity Partners 2019 USA 1.1%
*17* *PSB Academy +* Provider of private tertiary education ICG 2018 Singapore 1.1%
*18* *U-POL^* Manufacturer and distributor of automotive refinishing products Graphite Capital 2010 UK 1.0%
*19* *Cognito +^* Supplier of communications equipment, software & services Graphite Capital 2002/2014 UK 0.8%
*20* *EG Group* Operator of petrol station forecourts TDR Capital 2014 UK 0.8%
*21* *Compass Community* Provider of fostering services and children residential care Graphite Capital 2017 UK 0.8%
*22* *nGAGE* Provider of recruitment services Graphite Capital 2014 UK 0.7%
*23* *RegEd +* Provider of regulatory compliance and management software products Gryphon Investors 2019 USA 0.6%
*24* *David Lloyd Leisure +* Operator of premium health clubs TDR Capital 2013 UK 0.6%
*25* *Beck & Pollitzer* Provider of industrial machinery installation and relocation Graphite Capital 2016 UK 0.6%
*26* *Allegro* Operator of an online marketplace and price comparison website Cinven / Permira 2017 Poland 0.6%
*27* *YSC* Provider of leadership consulting and management assessment services Graphite Capital 2017 UK 0.6%
*28* *ICR Group* Provider of repair and maintenance services to the energy industry Graphite Capital 2014 UK 0.6%
*29* *Alerian^* Provider of data and investment products focused on natural resources ICG 2018 USA 0.6%
*30* *IRIS* Provider of business critical software and services to the accountancy and payroll sectors ICG 2018 UK 0.6% *Total of the 30 largest underlying investments* 47.3% ⁺ 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 2020. The valuations are net of any carried interest provision.
*Fund* *Year of commitment* *Country/ region* *Value £m* *Outstanding commitment £m*
*1* *Graphite Capital Partners VIII ** Mid-market buyouts 2013 UK 46.6 10.6
*2* *Gridiron Capital Fund III* Mid-market buyouts 2016 North America 29.1 4.2
*3* *BC European Capital IX *** Large buyouts 2011 Europe/USA 19.5 1.6
*4* *ICG Europe VI ***
* * Mezzanine and equity in mid-market buyouts 2015 Europe 19.3 3.6
*5* *CVC European Equity Partners VI* Large buyouts 2013 Europe/USA 18.1 3.1
*6* *Thomas H Lee Equity Fund VII* Mid-market and large buyouts 2015 USA 17.8 1.5
*7* *ICG Europe VII* Mezzanine and equity in mid-market buyouts 2018 Europe 17.2 22.1
*8* *Sixth Cinven Fund* Large buyouts 2016 Europe 17.1 3.2
*9* *Advent Global Private Equity VIII* Large buyouts 2016 Europe/USA 17.1 0.8
*10* *PAI Europe VI* Mid-market and large buyouts 2013 Europe 16.5 1.4
*11* *PAI Strategic Partnerships *** Mid-market and large buyouts 2019 Europe 14.8 1.6
*12* *BC European Capital X* Large buyouts 2016 Europe 13.2 2.2
*13* *Graphite Capital Partners VII * / *** Mid-market buyouts 2007 UK 12.2 2.8
*14* *Permira V* Large buyouts 2013 Europe/USA 11.7 0.9
*15* *CVC European Equity Partners VII* Large buyouts 2017 Europe/North America 11.5 10.8
*16* *One Equity Partners VI* Mid-market buyouts 2016 Europe/USA 11.5 0.7
*17* *ICG Strategic Secondaries Fund II* Secondary fund restructurings 2016 Europe/USA 11.5 16.0
*18* *TDR Capital III* Mid-market and large buyouts 2013 Europe 10.6 1.7
*19* *Gryphon V* Mid-market buyouts 2019 North America 10.3 2.1
*20* *ICG Asia Pacific Fund III* Mezzanine and equity in mid-market buyouts 2016 Asia Pacific 10.0 2.7
*21* *New Mountain Partners V* Mid-market buyouts 2017 North America 9.6 2.7
*22* *Charterhouse Capital Partners X* Large buyouts 2015 Europe 9.5 4.6
*23* *Resolute II *** Mid-market buyouts 2018 USA 9.3 1.8
*24* *Permira VI* Large buyouts 2016 Europe 9.2 0.9
*25* *IK VIII* Mid-market buyouts 2016 Europe 9.2 0.5
*26* *Oak Hill Capital Partners IV* Mid-market buyouts 2017 USA 8.8 2.7
*27* *Thomas H Lee Equity Fund VIII* Mid-market and large buyouts 2017 USA 8.5 9.4
*28* *Resolute IV* Mid-market buyouts 2018 USA 8.3 5.4
*29* *Graphite Capital Partners IX* Mid-market buyouts 2018 UK 8.0 20.6
*30* *Bain Capital Europe IV* Mid-market buyouts 2014 Europe 7.3 1.3 *Total of the largest 30 fund investments* *423.3* * 143.5 * *Percentage of total investment Portfolio* *55.3%* * * * Includes the associated Top Up funds. ** All or part of an interest acquired through a secondary fund purchase.
*Portfolio analysis*
*Closing Portfolio by value at 31 July 2020 *
*Portfolio by investment type* * * *% of value of *
*underlying *
*investments*
*31 July 2020* *% of value of*
*underlying*
*investments*
*31 January 2020*
Large buyouts 52.6% 46.4%
Mid-market buyouts 36.8% 42.2%
Small buyouts 9.8% 8.7%
Other 0.8% 2.7%
*Total* *100.0%* *100.0%*
*Portfolio by calendar year of investment* * * * * *% of value of *
*underlying *
*investments*
*31 July 2020* *% of value of*
*underlying*
*investments*
*31 January 2020*
2020 3.3% 0.1%
2019 19.4% 17.2%
2018 20.8% 19.7%
2017 18.4% 19.2%
2016 15.4% 16.2%
2015 7.6% 7.7%
2014 6.9% 8.5%
2013 4.1% 5.5%
2012 1.2% 1.4%
2011 0.1% 0.9%
2010 1.2% 1.3%
2009 0.4% 0.6%
2008 and before 1.2% 1.7%
*Total* * * * * *100.0%* *100.0%*
*Portfolio by sector* *% of value of underlying investments
31 July 2020* *% of value of underlying investments
31 January 2020*
Healthcare and education 24.0% 23.2%
Consumer goods and services 17.8% 15.1%
Technology, Media & Telecommunications 15.5% 13.6%
Industrials 14.4% 15.5%
Business services 12.5% 15.4%
Leisure 6.7% 7.7%
Financials 5.6% 5.3%
Other 3.5% 4.2%
*Total* *100.0%* *100.0%*
*Portfolio by geographic distribution based on location of company headquarters* *% of value of *
*underlying *
*investments
31 July 2020* *% of value of *
*underlying *
*investments
31 January 2020*
Europe 37.3% 36.7%
UK 20.8% 27.1%
North America 34.9% 29.9%
Rest of world 7.0% 6.3%
*Total* *100.0%* *100.0%*
*Commitments analysis*
The following tables analyse commitments at 31 July 2020. Original commitments are translated at 31 July 2020 exchange rates.
*Total undrawn commitments*
* * *Original
commitment
£’000* *Outstanding
commitment
£’000* *Average*
*drawdown*
*percentage* *% of outstanding*
*commitments*
Investment period not commenced 18,003 18,003 0.0% 4.1%
Funds in investment period 479,375 335,216 30.1% 76.3%
Funds post investment period 767,384 86,064 88.8% 19.6%
*Total* 1,264,762 439,283 65.3% 100.0%
*Movement in outstanding commitments in 6 months to 31 July 2020* *£m*
As at 1 February 2020 458.6
New primary commitments 34.9
Drawdowns (51.8)
Secondary disposals (20.5)
Currency and other movements 18.1
*As at 31 July 2020* *439.3*
*New commitments during the six months to 31 July 2020*
*Fund* *Strategy * *Geography* *£m*
Primary commitments
CVC VIII Large buyouts Europe/North America 13.5
Apax X Mid-market buyouts Global 8.7
Hg Genesis 9 Mid-market buy-outs Europe 4.5
Hg Saturn 2 Mid-market and large buy-outs Europe 4.2
Bain Tech Opportunities Mid-market buyouts North America 4.0
Total primary commitments 34.9
Commitments relating to co-investments and secondary investments -
*Total new commitments* * * * * *34.9**Currency exposure*
*Portfolio^1* *31 July*
*2020*
*£m* *31 July*
*2020*
*%* *31 January*
*2020*
*£m* *31 January*
*2020*
*%*
Sterling 177.3 23.2 246.0 30.5
Euro 216.7 28.3 226.6 28.1
US Dollar 249.2 32.6 224.2 27.8
Other European 55.7 7.3 59.6 7.4
Other 66.1 8.6 50.0 6.2
*Total* *765.0* *100.0* *806.4* *100.0*
^1 Currency exposure is calculated by reference to the location of the underlying Portfolio companies’ headquarters.
*Outstanding commitments* *31 July*
*2020*
*£m* *31 July*
*2020*
*%* *31 January*
*2020*
*£m* *31 January*
*2020*
*%*
– Euro 221.0 50.3 213.0 46.5
– US Dollar 170.5 38.8 178.5 38.9
– Sterling 47.1 10.7 65.3 14.2
– Other European 0.7 0.2 1.8 0.4
*Total* *439.3* *100.0* *458.6* *100.0*
*Realisation activity*
*Investment * *Manager* *Year of investment* *Realisation type* *Exit* *Proceeds £m*
Gerflor* ICG 2011 Financial buyer Full 6.2
Ceridian Thomas H Lee Partners 2007 Sell down post IPO Partial 4.4
TeamViewer Permira 2014 Sell down post IPO Partial 2.2
Marston ICG 2016 Financial buyer Partial 2.1
Give & Go Thomas H Lee Partners 2016 Trade Full 2.1
Cerelia IK Investment Partners 2015 Financial buyer Full 1.9
CID Lines IK Investment Partners 2016 Trade Full 1.8
P&I Permira 2016 Financial buyer Partial 1.6
Offerco Graphite Capital 2009 Dividend Partial 1.5
Dent Wizard Gridiron 2015 Trade Full 1.4
*Total of 10 largest underlying realisations* * * * * * * *25.2*
*Total realisations (excluding secondary sales)*
* *
* *
* * * * * * *39.1*
*Note: Gerflor was fully exited from ICG European Fund 2006B, partially exited from ICG Recovery Fund 2008B*Investment activity*
*Investment* *Description* *Manager* *Country* *Cost^1*
*£m*
Profi Operator of a convenience supermarket chain ICG Romania 2.1
LCG Manufacturer of life sciences tools Cinven UK 1.4
Diagnostyka Provider of laboratory diagnostics ICG Poland 1.3
Pageant Media Provider of information solutions and events to the alternative asset management industry ICG UK 1.2
Armacell Manufacturer of advanced insulation and engineered foam products PAI Luxembourg 1.2
Dealer Tire Distributor of replacement tyres for automotive dealerships Gridiron USA 1.1
AmeriLife Provider of marketing and distribution solutions for insurance and retirement planning Thomas H Lee Partners USA 1.1
Golden Goose Manufacturer of sneakers Permira Italy 1.0
Focus Group Provider of communications and IT solutions Bowmark UK 1.0
Prime Focus Provider of creative/technology services to the entertainment industry ICG India 0.9
*Total of 10 largest underlying new investments** * *12.3*
*Total new investment** * *52.4*
^1 Represents ICG'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 2020 which was approved by the Board on 27 April 2020.
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;
· 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. Emerging risks include those related to regulatory/ legislative change and macro-economic and political change, which in the current year have included the impact of ESG on the Company and the UK’s trade negotiations with the EU.
As disclosed in the Annual Report, following the year ended 31 January 2020, there have been significant developments in relation to the COVID-19 outbreak. These developments have been unprecedented and have had a material impact on a number of our principal risks, in particular on investment performance risk and valuation risk. Throughout the period, the Manager and the Board have worked closely to understand and mitigate the immediate and potential future impact of the COVID-19 pandemic, and its economic fallout, on the Company. This work continues, and the Manager is in regular contact with the underlying managers, who have a strong operational focus, to understand the ongoing impact on their portfolios and mitigating actions that they may take.
The ongoing and unprecedented nature of this crisis means it remains difficult to fully assess the impact of COVID-19 on the Company at this stage, and accordingly a number of risks remain heightened.
*Interim financial statements*
*Income statement*
* * *Half year to 31 July 2020*
*(unaudited)* *Half year to 31 July 2019*
*(unaudited)* *Notes* *Revenue*
* return*
* £’000* *Capital*
* return*
* £’000* *Total*
* £’000* *Revenue*
* return*
* £’000* *Capital*
* return*
* £’000* *Total*
* £’000*
*Investment returns*
Income, gains and losses on investments 2,127 (3,964) (1,837) 5,257 89,622 94,879
Deposit interest 24 – 24 202 – 202
Other income 46 – 46 22 – 22
Foreign exchange gains and losses – (89) (89) – 1,210 1,210 * * * 2,197 * * (4,053)* * (1,856)* *5,481* *90,832* *96,313*
*Expenses*
Investment management charges (1,247) (3,741) (4,988) (1,154) (3,464) (4,618)
Other expenses (1,392) (648) (2,040) (833) (773) (1,606) * * * (2,639)* * (4,389)* * (7,028)* *(1,987)* *(4,237)* *(6,224)*
*(Loss)/profit before tax* * * * (442)* * (8,442)* * (8,884)* *3,494* *86,595* *90,089*
Taxation – – – (605) 605 –
*(Loss)/profit for the period* * * * (442)* * (8,442)* * (8,884)* *2,889* *87,200* *90,089*
*Attributable to:* * * * * * * * * * * * * * *
*Equity shareholders* * * * (442)* * (8,442)* * (8,884)* *2,889* *87,200* *90,089*
* * * * * * * * * * * * * * * *
*Basic and diluted earnings per share * * * * * * * *(12.91p)* * * * * *130.30p*
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 below are an integral part of the condensed interim financial statements.*Balance sheet*
* * *Notes* *31 July*
*2020*
*(unaudited)*
* £’000* *31 January*
*2020*
*(audited)*
* £’000*
*Non-current assets*
*Investments held at fair value* 7 * 737,468 * * 778,416 *
* *
*Current assets*
Cash and cash equivalents 38,831 14,470
Receivables 993 1,142 * * * 39,824 * * 15,612 *
*Current liabilities*
Payables 2,351 483
*Net current assets* * 37,473 * * 15,129 *
*Total assets less current liabilities* * * * 774,941 * * 793,545 *
*Capital and reserves*
Share capital 7,292 7,292
Capital redemption reserve 2,112 2,112
Share premium 12,936 12,936
Capital reserve 753,043 771,205
Revenue reserve (442) –
*Total equity* * * * 774,941 * * 793,545 *
*Net asset value per share (basic and diluted)* *6* *1,126.9p* *1,152.1p*
The notes below are an integral part of the condensed interim financial statements.*Cash flow statement*
*Half year to*
*31 July 2020*
*(unaudited)*
*£’000* *Half year to*
*31 July 2019*
*(unaudited)*
*£’000*
*Operating activities*
Sale of portfolio investments 74,934 48,186
Purchase of portfolio investments (31,590) (40,656)
Net cash flows to subsidiary investments (4,383) (11,329)
Interest income received from portfolio investments 867 4,349
Dividend income received from portfolio investments 1,281 756
Other income received 39 224
Investment management charges paid (5,082) (4,384)
Other expenses paid (861) (799)
*Net cash inflow/(outflow) from operating activities* * 35,205 * * (3,653)*
*Financing activities*
Proceeds from short-term borrowings 40,000 –
Repayments of short-term borrowings (40,000) –
Bank facility fee (613) (1,871)
Interest paid (421) –
Purchase of own shares into treasury (775) (1,294)
Equity dividends paid to shareholders (8,945) (8,298)
*Net cash outflow from financing activities* * (10,754)* * (11,463)*
*Net increase/(decrease) in cash and cash equivalents* * 24,451 * * (15,116)*
Cash and cash equivalents at beginning of period 14,469 60,626
Net increase/(decrease) in cash and cash equivalents 24,451 (15,116)
Effect of changes in foreign exchange rates (89) 1,210
*Cash and cash equivalents at end of period* * 38,831 * * 46,720 *
The notes below are an integral part of the condensed interim financial statements.
*Statement of changes in equity*
* *
*Share capital*
*£000* *Capital *
* redemption reserve*
*£000* * *
*Share premium*
*£000* * *
*Capital reserve*
*£000* * *
*Revenue reserve*
*£000* *Total *
* shareholders’ equity*
*£000*
*Half year to 31 July 2020 (unaudited)*
Opening balance at 1 February 2020 7,292 2,112 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 7,292 2,112 12,936 753,043 (442) 774,941 * * * * * * * * * *
* *
*Share capital*
*£000* *Capital *
* redemption reserve*
*£000* * *
*Share premium*
*£000* * *
*Capital reserve*
*£000* * *
*Revenue reserve*
*£000* *Total *
* shareholders’ equity*
*£000*
*Half year to 31 July 2019 (unaudited)*
Opening balance at 1 February 2019 7,292 2,112 12,936 708,520 – 730,860
Profit for the period and total
comprehensive income – – – 87,200 2,889 90,089
Dividends paid – * * – * * – * * (5,409) * * (2,889) * * (8,298)
Purchase of own shares into treasury – – – (1,294) – (1,294)
Closing balance at 31 July 2019 7,292 2,112 12,936 789,017 – 811,357 * * * * * * * * * *
The notes below are an integral part of the condensed interim financial statements.*Notes to the financial statements (unaudited)*
*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 meaning of section 434 of the Companies Act 2006. The financial information for the year ended 31 January 2020 has been extracted from the statutory accounts for that year which were approved by the Board of Directors on 27 April 2020 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 interim financial report for the six months ended 31 July 2020, comprising the condensed interim financial statements, has been prepared in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority and in accordance with IAS 34, ‘Interim financial reporting’ as adopted by the European Union.
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 2020, which has been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as adopted by the European Union.
The accounting policies applied are consistent with those of the annual financial statements for the year to 31 January 2020, 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 have followed the guidance contained in the Statement of Recommended Practice ('SORP') for investment trusts issued by the Association of Investment Companies in October 2019.
*4)** **Dividends*
* * *Half year to *
* 31 July *
* 2020 *
* £’000* *Half year to *
* 31 July *
* 2019 *
* £’000*
Third quarterly dividend in respect of year ended 31 January 2020 of 5.0p per share (2019: 5.0p) 3,444 3,459
Final dividend in respect of year ended 31 January 2020 of 8.0p per share (2019: 7.0p) 5,501 4,839
*Total* 8,945 8,298
The Company paid an interim dividend of 5p per share (totalling £3.4m) in September 2020 in respect of the quarter to 30 April 2020. The Board has approved a further interim dividend for the quarter to 31 July 2020 of 5p per share (totalling £3.4m) which will be paid on 4 December 2020 to shareholders on the register on 13 November 2020.
*5)** **Earnings per share* *Half year to* *Half year to* *31 July
2020* *31 July
2019*
Revenue return per ordinary share (0.64p) 4.18p
Capital return per ordinary share (12.27p) 126.12p
Earnings per ordinary share (basic and diluted) (12.91p) 130.30p
Weighted average number of shares 68,796,506 69,140,038
The earnings per share figures are based on the weighted average numbers of shares set out above.
*6)** **Net asset value per share*
The net asset value per share is calculated as the net assets attributable to shareholders of £774.9m (31 January 2020: £793.5m) and 68,767,055 (31 January 2020: 68,877,055) 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 1,126.9p (31 January 2020: 1,152.1p).
*7)** **Fair Values 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 2020 and 31 January 2020. The Company had no financial liabilities measured at fair value at those dates.
*Level 1 * *Level 2 * *Level 3 * * * *Total *
*31 July 2020* *£’000* * * *£’000* * * *£’000* * * *£’000*
*Investments held at fair value*
Unquoted investments – indirect – – 391,850 391,850
Unquoted investments – direct – – 125,469 125,469
Quoted investments – direct 1,189 – – 1,189
Subsidiary undertakings – – 218,960 218,960
*Total investments held at fair value* 1,189 – 736,279 737,468
*Level 1 * * * *Level 2 * *Level 3 * *Total *
*31 January 2020* *£’000* * * *£’000* * * *£’000* *£’000*
Investments held at fair value * * * *
Unquoted investments – indirect – – 454,586 454,586
Unquoted investments – direct – – 116,557 116,557
Quoted investments – direct 1,231 – – 1,231
Subsidiary undertakings – – 206,042 206,042
*Total investments held at fair value* 1,231 – 777,185 778,416
All unquoted and quoted investments are valued at fair value in accordance with IFRS 9.
Investments in level 3 securities are in respect of private equity fund investments and co-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 an earnings multiple methodology. A 30% increase/(decrease) in the value of these assets would result in a rise and fall in NAV of £216.1m and £213.5m respectively or 27.9% and 27.5% (31 January 2020: rise and fall in NAV of £223.4m and £228.1m respectively or 28.2% and 28.7%).
The following tables present the changes in level 3 instruments for the periods to 31 July 2020 and 31 January 2020.
*Unquoted investments (indirect) at fair value through profit or loss* *Unquoted investments (direct) at fair value through profit or loss* *Subsidiary undertakings* *Total*
*Six months to 31 July 2020 * *£’000* *£’000* *£’000* *£’000*
Opening balance at 1 February 2020 454,586 116,557 206,042 777,185
Additions 33,246 321 4,383 37,950
Disposals (72,227) (2,707) – (74,934)
Gains and losses recognised in profit or loss (23,755) 11,298 8,535 (3,922)
Closing balance at 31 July 2020 391,850 125,469 218,960 736,279
*Total gains included in income statement for assets held at the end of the period* 5,919 13,656 8,535 28,110
*Unquoted investments (indirect) at fair value through profit or loss* *Unquoted investments (direct) at fair value through profit or loss* *Subsidiary undertakings* *Total*
*Year ended 31 January 2020 * *£’000* *£’000* *£’000* *£’000*
Opening balance at 1 February 2019 410,970 108,836 148,611 668,417
Additions 79,227 15,930 34,446 129,603
Disposals (77,597) (28,596) – (106,193)
Gains and losses recognised in profit or loss 41,986 20,387 22,985 85,358
Closing balance at 31 January 2020 454,586 116,557 206,042 777,185
*Total gains included in income statement for assets held at the end of the period* 37,117 10,570 22,985 70,672*Statement of Directors’ Responsibilities*
*Statement of Directors’ Responsibilities*
The directors confirm that the interim financial statements have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’ as adopted by the European Union 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 2020, with the exception of Jeremy Tigue who stepped down from the Board at the AGM on 17 June 2020. 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
On