RNS Number:5439C
New Star Private Equity Inv.Tst PLC
21 August 2007
NEW STAR PRIVATE EQUITY INVESTMENT TRUST PLC (the "Company")
for the six months ended 30 June 2007
Chairman's Statement
These accounts cover the six months ended 30 June 2007, just prior to the
completion of the reconstruction of the Company (detailed below).
INVESTMENT REVIEW AND HALF YEAR RESULTS
During the period 1 January 2007 to 30 June 2007 the net asset value per share
increased from 330.4 pence to 345.1 pence, an increase of 4.4 per cent. The
capital return was a gain of 17.7 pence per share for the six month period
compared to 27.5 pence per share for the six months ended 30 June 2006. The
revenue return was 2.2 pence compared to 2.2 pence per share for the comparable
period in 2006.
DIVIDENDS
As stated in the prospectus published in connection with the reconstruction, the
Company will only pay dividends to the extent necessary to maintain investment
trust status. Therefore, to the extent there is net income in any accounting
period, the Directors intend to declare dividends such that no more than 15 per
cent. of the Company's income for the accounting period is retained. Such
dividends will be declared in March following the financial year ended December
and paid in May.
COMPANY RECONSTRUCTION
The Directors wrote to shareholders in May 2007 setting out a number of
proposals which were implemented on 2 July 2007.
The Company has now entered a new phase and the Board wishes to thank the team
at August Equity LLP ("AEL") for their management of the Company over the last
six years and welcomes New Star Asset Management Limited as Manager. The Board
also wishes to welcome shareholders who previously held Rutland Trust plc
shares, and under its reconstruction, received shares in the Company.
Following the reconstruction:
- the Company's investment policy is to produce capital gains through
exposure to private equity investments in a diversified portfolio of
private equity investment companies;
- the Company has an interest in The Rutland Fund I;
- New Star Asset Management Limited acts as Manager of the Company;
- the Company is named New Star Private Equity Investment Trust PLC;
- John Duffield, Chairman of New Star Asset Management Limited, is a
Director of the Company and Ravi Anand, a director of New Star Asset
Management Limited, has been appointed as an alternate director to
John Duffield;
- the Company's registered office is 1 Knightsbridge Green, London SW1X 7NE;
- the Company has a loan and overdraft facility of #30 million; and
- the Company's shares trade under the code "NSPE".
As the reconstruction was completed after the period under review, the
information in these interim accounts does not reflect the Company's investment
strategy going forward.
INITIAL PORTFOLIO
The initial net assets of the Company following the reconstruction were
approximately #68.7 million. Based on their valuation at 29 June 2007, the
initial assets comprised:
#m
August Equity Partners I ("AEP I") and other funds managed by AEL 24.2
The Rutland Fund I ("Rutland") 24.5
Parallel Ventures 2006 LP ("Parallel") 17.0
Other limited partnerships and direct investments 2.0
Cash and other net assets 1.0
-------
68.7
=======
In addition to remaining commitments to AEP I, Rutland and Parallel, the Company
has also entered into a #30 million commitment to August Equity Partners II
("AEP II") and a commitment to Rutland Fund II of #10 million.
SUBSEQUENT EVENTS
Following the reconstruction, the Manager has deployed surplus cash and utilised
borrowing facilities to invest in listed private equity investment companies and
to meet the Company's drawdown commitments.
Late June through to early August has also been exceptionally active for the
Company's portfolio. In this period realisations have totalled #19.0 million
and commitments of #12.8 million were drawn.
Investments
In July 2007 your Company invested, via AEP I, #5.9 million (adjusted for
subsequent syndication) in Lifeways Community Care Limited ("Lifeways").
Lifeways is a market leading provider of supported living for people with
complex needs and the only provider offering nationwide coverage. Lifeways
offers specialist care to over 900 people with challenging needs, including
autism, psychiatric or learning disabilities and acquired brain injuries, in
their own home or a community setting.
Your Company also invested, via AEP II, #3.0 million in 4Projects Holdings
Limited, the UK's market leading provider of project collaboration software with
a particular strength in the architecture, engineering and construction sectors.
Rutland Fund II has drawn #1.4 million to acquire Pulse Home Products Limited
(conditional on shareholder approval), a leading provider of branded goods to
the UK home products market and Attends Healthcare Group, a healthcare product
manufacturer.
Realisations
In late June 2007, Parallel announced that Tuja, a temporary employment agency,
had been sold for a consideration of approximately 3.7 times the original
investment in March 2006. This uplift was included in the Company's net asset
value at 30 June 2007. In addition, in early August, Parallel announced the
sale of Marken, a pharmaceutical trial logistics company, at a consideration
(including previous proceeds) of 2.5 times the original cost. Final proceeds to
the Company of approximately #2.5 million will be received, compared to a
valuation at 29 June 2007 of #0.7 million.
In late June 2007, Rutland Partners LLP announced the disposal by one of
Rutland's holdings, Wolstenholme, of its metallic pigment and ink business. Out
of the proceeds to the Company of approximately #8.0 million, #3.1 million is
expected to be received in the last quarter of 2007, following the receipt of
relevant clearances from German and UK competition authorities, and the balance
over the next 18 months. In August 2007, Rutland announced the sale of Svensk
Pantbelaning ("SP"), a Swedish pawnbroker acquired in September 2004, providing
the Company with proceeds of approximately #2.5 million.
On 20 August 2007, the Company agreed to sell 50 per cent. of its limited
partnership interests in AEP I for a consideration of #15.4 million with
immediate settlement. This represents a premium to the book value of the
interests at 29 June 2007 together with an adjustment for subsequent cash flows
and the sale resulted in an enhancement of 2.5 per cent. to the Company's net
asset value at 29 June 2007. The remaining interests in AEP I continue to be
held at their 29 June 2007 book value. The sale price demonstrates the
considerable growth potential within AEP I's portfolio, which the Company will
continue to benefit from through its remaining interest. The sale also allows
the Company to employ the proceeds to diversify the portfolio.
The Board is pleased that the Company has successfully completed the
reconstruction and with the level of subsequent activity. The Company currently
has close to 50 underlying portfolio companies which have the potential for
considerable upside over the coming months.
Following the completion of all the above transactions, the estimated net asset
value+ at 3 August 2007 is 363 pence per share, being a 5.2 per cent. increase
in the net asset value per share at 30 June 2007 and the Company's portfolio
would comprise:
Valuation+
#m
AEP I 15.9
AEP II 3.0
Rutland 22.1
Rutland Fund II 1.4
Parallel 9.2
Other limited partnerships and direct investments 2.3
Listed investments 3.8
Cash and other net assets 14.1
--------
71.8
========
+ based on valuations of unquoted investments at 29 June 2007 adjusted for
subsequent cashflows, expected sale proceeds on Tuja, Marken and SP and the sale
of 50% of the limited partnership interest in AEP I.
The Manager is reviewing a number of investment opportunities to deploy the cash
from realisations with the intention of diversifying the Company's exposure to
different private equity managers and maintaining a fully invested and over
committed portfolio.
The Company's focus on Pan-European mid-market private equity provides exposure
to good quality companies which can grow without the need to employ excessive
leverage. In addition, short term volatility could provide the opportunity for
our underlying managers to acquire such companies on reasonable valuations.
As a result, we remain positive about the prospects of the Company for the
remainder of the year.
J D Mackie CBE
Chairman
21 August 2007
INCOME STATEMENT
for the six months ended 30 June 2007
Six months ended Six months ended Twelve months ended
30 June 2007 30 June 2006 31 December 2006
Revenue Capital Total Revenue Capital Total Revenue Capital Total
# # # # # # # # #
Gains on - 4,802,532 4,802,532 - 7,519,628 7,519,628 - 11,523,995 11,523,995
investments held
at fair value
through profit
or loss
Income 1,589,581 - 1,589,581 1,479,515 - 1,479,515 3,919,520 - 3,919,520
Investment
management
fees (504,993) - (504,993) (460,216) - (460,216) (927,654) - (927,654)
Admini-
stration
expenses (114,567) - (114,567) (119,902) - (119,902) (468,485) - (468,485)
--------- -------- --------- --------- -------- --------- -------- --------- ---------
Return on
ordinary
activities
before
taxation 970,021 4,802,532 5,772,553 899,397 7,519,628 8,419,025 2,523,381 11,523,995 14,047,376
--------- -------- --------- --------- -------- --------- -------- --------- ---------
Taxation (375,901) - (375,901) 294,124) - (294,124) (741,362) - (741,362)
--------- -------- --------- --------- -------- --------- -------- --------- ---------
Return on
ordinary
activities
after
taxation 594,120 4,802,532 5,396,652 605,273 7,519,628 8,124,901 1,782,019 11,523,995 13,306,014
======= ========= ========= ======= ========= ========= ========= ========== ==========
Return
per share
(based on
average number
of shares in
issue during
the period) 2.2p 17.7p 19.9p 2.2p 27.5p 29.7p 6.5p 42.2p 48.7p
Number of
shares
in issue
at the
period
end 27,079,500 27,389,500 27,079,500
Average
number
of shares
during
the
period 27,079,500 27,389,500 27,312,897
BALANCE SHEET
at 30 June 2007
30 June 2007 30 June 2006 31 December 2006
# # #
FIXED ASSETS
Investments 43,233,086 83,231,870 84,423,977
CURRENT ASSETS
Debtors 762,778 691,867 1,611,861
Cash at bank 50,292,980 1,926,238 4,195,454
---------------- ---------------- ----------------
51,055,758 2,618,105 5,807,315
CREDITORS
Amounts falling due within one (837,595) (473,398) (755,021)
year
---------------- ---------------- ----------------
NET ASSETS 93,451,249 85,376,577 89,476,271
========= ======== ========
CAPITAL AND RESERVES
Called-up share capital 1,353,975 1,369,475 1,353,975
Share premium account 5,145,492 5,145,492 5,145,492
Capital redemption reserve 158,025 142,525 158,025
CAPITAL RESERVES
Realised 63,298,517 73,242,831 70,886,887
Unrealised 21,661,787 3,786,572 9,270,885
----------------- ----------------- -----------------
84,960,304 77,029,403 80,157,772
Revenue reserve 1,833,453 1,689,682 2,661,007
----------------- ----------------- -----------------
SHAREHOLDERS' FUNDS 93,451,249 85,376,577 89,476,271
========= ========= =========
NET ASSET VALUE PER SHARE 345.1p 311.7p 330.4p
CASH FLOW STATEMENT
for the six months ended 30 June 2007
30 June 2007 30 June 2006 31 December 2006
# # #
NET CASH INFLOW FROM OPERATING 2,066,124 634,143 1,175,779
ACTIVITIES
TAXATION
Tax paid - - (3,260)
FINANCIAL INVESTMENT
Purchase of listed fixed asset - (15,714,550) (21,708,093)
investments
Purchase of unlisted fixed asset (6,770,047) (15,083,642) (29,245,158)
investments
---------------------- ---------------------- ----------------------
(6,770,047) (30,798,192) (50,953,251)
Disposal of listed fixed asset 44,162,646 9,923,649 15,128,800
investments
Disposal of unlisted fixed asset 8,060,478 22,129,425 39,891,592
investments
--------------------- ---------------------- ----------------------
52,223,124 32,053,074 55,020,392
NET CASH INFLOW FROM FINANCIAL 45,453,077 1,254,882 4,067,141
INVESTMENTS
EQUITY DIVIDENDS PAID (1,421,674) (2,328,107) (2,533,528)
NET CASH INFLOW BEFORE FINANCING 46,097,527 (439,082) 2,706,132
FINANCING
Purchase of shares for cancellation - - (875,998)
-------------------- ---------------------- ----------------------
INCREASE/(DECREASE) IN CASH 46,097,527 (439,082) 1,830,134
========== =========== ===========
This interim statement and the annual report and accounts for the year ended 31
December 2006 are presented in accordance with the Statement of Recommended
Practice: "Financial Statements of Investment Trust Companies" which was revised
in December 2005.
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
Called-up Share Capital Realised Unrealised
share capital premium redemption capital capital Revenue Shareholders'
account reserve reserve reserve reserve funds
# # # # # # #
Balance at
1 January 2007 1,353,975 5,145,492 158,025 70,886,887 9,270,885 2,661,007 89,476,271
Net loss on
listed
investments - - - (1,297,754) - - (1,297,754)
Net gain on
unlisted
investments - - - (336,543) - - (336,543)
Transfer on
disposal of
investments - - - (5,954,074) 5,954,074 - -
Increase in
unrealised
appreciation on
unlisted
investments - - - - 6,436,829 - 6,436,829
Dividends paid - - - - - (1,421,674) (1,421,674)
Revenue
attributable to
shareholders - - - - - 594,120 594,120
Share buy-backs - - - - - - -
------------- ------------- --------------- --------------- --------------- -------------- ------------------
Balance at 1,353,975 5,145,492 158,025 63,298,516 21,661,788 1,833,453 93,451,249
30 June 2007
======= ======= ========= ======== ======== ======== =========
Called-up Share Capital Realised Unrealised
share capital premium redemption capital capital Revenue Shareholders'
account reserve reserve reserve reserve funds
# # # # # # #
Balance at
1 January
2006 1,369,475 5,145,492 142,525 62,800,526 6,709,249 3,412,516 79,579,783
Net loss on
listed
investments - - - (141,013) - - (141,013)
Net gain on
unlisted
investments - - - 8,080,946 - - 8,080,946
Transfer on
disposal of
investments - - - 2,502,372 (2,502,372) - -
Decrease in
unrealised
appreciation
on unlisted
investments - - - - (895,200) - (895,200)
Increase in
unrealised
appreciation
on unlisted
investments - - - - 474,895 - 474,895
Dividends
paid - - - - - (2,328,107) (2,328,107)
Revenue
attributable
to
shareholders - - - - - 605,273 605,273
------------- ------------- ---------------- --------------- -------------- -------------- ------------------
Balance at 1,369,475 5,145,492 142,525 73,242,831 3,786,572 1,689,682 85,376,577
30 June 2006
======= ======= ========= ======== ======== ======== =========
Copies of the annual and interim reports are available from the Company
Secretary
BNP Paribas Secretarial Services Limited
Tel: +44 (0) 20 7410 5971
Fax: +44 (0) 20 7477 5849
Email: secretarialservice@uk.bnpparibas.com
21 August 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
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