In This Article:
ICG Enterprise Trust plc
Unaudited Interim Results for the six months ended 31 July 2024
8 October 2024
| Highlights
|
| Oliver Gardey | ||||
| Head of Private Equity Fund Investments, ICG | ||||
| For the six months to 31 July 2024 our Portfolio Return on a Local Currency Basis was 3.8% and we report a NAV per Share of 1,946p at period end. | ||||
PERFORMANCE OVERVIEW
| Annualised | ||||||
| Performance to 31 July 2024 | 3 months | 6 months | 1 year | 3 years | 5 years | 10 years |
| Portfolio Return on a Local Currency Basis | 3.2% | 3.8% | 5.9% | 11.5% | 15.9% | 13.6% |
| NAV per Share Total Return | 1.6% | 2.8% | 4.0% | 10.3% | 12.5% | 13.2% |
| Share Price Total Return | 11.4% | 10.3% | 17.3% | 10.1% | 11.7% | 11.5% |
| FTSE All-Share Index Total Return | 4.3% | 11.8% | 13.5% | 8.3% | 5.8% | 6.3% |
| Half-year ended: | Jul 2020 | Jul 2021 | Jul 2022 | Jul 2023 | Jul 2024 | |
| Fund performance | Portfolio return (local currency) | (3.6)% | 14.9% | 7.4% | 4.6% | 3.8% |
| Portfolio return (sterling) | 0.1% | 12.8% | 12.4% | 1.6% | 2.6% | |
| NAV | £775m | £1,044m | £1,269m | £1,290m | £1,274m | |
| NAV per Share Total Return (%) | (1.0)% | 11.1% | 10.9% | 0.8% | 2.8% | |
| Investment activity | New Investments | £52m | £133m | £144m | £64m | £104m |
| As % opening Portfolio | 6% | 14% | 12% | 5% | 8% | |
| Total Proceeds | £94m | £185m | £107m | £94m | £86m | |
| As % opening Portfolio | 12% | 19% | 9% | 7% | 6% | |
| Shareholder experience | Closing share price | 790p | 1,084p | 1,166p | 1,174p | 1,340p |
| Total dividends per share for HY | 10p | 12p | 14p | 16p | 17p | |
| Share Price Total Return | (16.9)% | 13.7% | (1.6)% | 2.9% | 10.3% | |
| Total shareholder distributions | £10m | £12m | £15m | £17m | £33m | |
| - o/w distributions dividends (%) | 92% | 78% | 100% | 63% | 34% | |
| - o/w distributions buybacks (%) | 8% | 22% | —% | 37% | 66% | |
| Total shareholder distributions as % | ||||||
| - Total Proceeds | 10% | 7% | 14% | 18% | 38% | |
| - Opening NAV | 1.2% | 1.3% | 1.3% | 1.3% | 2.5% | |
| Portfolio activity overview for H1 FY25 | Primary | Direct | Secondary | Total | ICG-managed |
| Local Currency return | 3.6% | 5.0% | 2.5% | 3.8% | 2.1% |
| Sterling return | 2.4% | 3.7% | 1.4% | 2.6% | 1.0% |
| New Investments | £58m | £44m | £3m | £104m | £17m |
| Total Proceeds | £51m | £9m | £26m | £86m | £50m |
| New Fund Commitments | £52m | - | £20m | £72m | £20m |
| Closing Portfolio value | £739m | £444m | £219m | £1,402m | £410m |
| % Total Portfolio | 52.7% | 31.7% | 15.6% | 100.0% | 29.2% |
COMPANY TIMETABLE
A presentation for investors and analysts will be held at 10:00 GMT today. A link for the presentation can be found on the Results & Reports page of the Company website. A recording of the presentation will be made available on the Company website after the event.
| FY25 Second Interim Dividend | |
| Ex-dividend date | 14 November 2024 |
| Record date | 15 November 2024 |
| Dividend payment date | 29 November 2024 |
ENQUIRIES
Institutional investors and analysts: Martin Li, Shareholder Relations +44 (0) 20 3545 1816
Nathan Brown, Deutsche Numis +44 (0) 20 7260 1426
David Harris, Cadarn Capital +44 (0) 20 7019 9042
Media: Cat Armstrong, Corporate Communications +44 (0) 20 3545 1850
ABOUT ICG ENTERPRISE TRUST
ICG Enterprise Trust is a leading listed private equity investor focused on creating long-term growth by delivering consistently strong returns through selectively investing in profitable, cash-generative private companies, primarily in Europe and the US, while offering the added benefit to shareholders of daily liquidity.
We invest in companies directly as well as through funds managed by Intermediate Capital Group ('ICG') and other leading private equity managers who focus on creating long-term value and building sustainable growth through active management and strategic change.
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 International Financial Reporting Standards (“IFRS”) measures, where appropriate.
In the 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
The information contained herein and on the pages that follow does not constitute an offer to sell, or the solicitation of an offer to acquire or subscribe for, any securities in any jurisdiction where such an offer or solicitation is unlawful or would impose any unfulfilled registration, qualification, publication or approval requirements on ICG Enterprise Trust PLC (the "Company") or its affiliates or agents. Equity securities in the Company have not been and will not be registered under the applicable securities laws of the United States, Australia, Canada, Japan or South Africa (each an “Excluded Jurisdiction”). The equity securities in the Company referred to herein and on the pages that follow may not be offered or sold within an Excluded Jurisdiction, or to any U.S. person ("U.S. Person") as defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or to any national, resident or citizen of an Excluded Jurisdiction.
The information on the pages that follow may contain forward looking statements. Any statement other than a statement of historical fact is a forward looking statement. Actual results may differ materially from those expressed or implied by any forward looking statement. The Company does not undertake any obligation to update or revise any forward looking statements. You should not place undue reliance on any forward looking statement, which speaks only as of the date of its issuance.
CHAIR’S FOREWORD
ICG Enterprise Trust has delivered a 2.8% NAV per Share Total Return and 10.3% Share Price Total Return in the first half of the year. This solid NAV per Share growth and sustained returns for our shareholders, in a half-year with continued economic and political headwinds, is supported by robust underlying earnings growth (LTM EBITDA growth1: 14%), an active capital allocation policy and prudent balance sheet management.
Over the five years to 31 July 2024, the investment strategy has generated an annualised NAV per Share Total Return of 12.5% and Share Price Total Return of 11.7%. The volatility of our share price has reduced over this time period and liquidity has increased. I believe these factors enable ICG Enterprise Trust to have an increasingly meaningful role in an investor’s long-term portfolio.
Capital allocation remains a priority for the Board and in this period we returned £33m (2.5% of opening NAV) to shareholders through:
-
Dividends: we remain committed to a progressive dividend policy, announcing today a Q2 dividend of 8.5p per share and reaffirming the Board’s intention to pay total dividends of at least 35p per share for FY25;
-
Long-term share buyback programme: returned £11m across 46 separate trading days at a weighted-average discount to NAV of 38.3%; and
-
FY25 opportunistic share buyback programme: returned £10m across four separate trading days at a weighted-average discount to NAV of 37.2%.
The combined buyback programmes in aggregate increased NAV per Share by 19p (~1%) during the period.
We are pleased to see a continued increase in shareholder engagement, and the evolution in recent quarters of our sales and marketing programme is yielding benefits. I enjoyed meeting a number of shareholders at our Shareholder Seminar in June, and look forward to more engagement before year-end.
The Board welcomes the new FCA announcement on reporting of costs, and as a result the Manager is reviewing ICG Enterprise Trust's disclosures.
As we look to the second half of the financial year and beyond, geopolitical headwinds persist. However, the Board maintains its positive outlook that private equity remains a strong engine of growth to outperform public markets.
Jane Tufnell
Chair
7 October 2024
MANAGER’S REVIEW
Alternative Performance Measures
The Board and the Manager monitor the financial performance of the Company on the basis of Alternative Performance Measures (APM), which are non-IFRS measures. The APM predominantly form the basis of the financial measures discussed in this review, which the Board believes assists shareholders in assessing their investment and the delivery of the investment strategy.
The Company holds certain investments in subsidiary entities. The substantive difference between APM and IFRS is the treatment of the assets and liabilities of these subsidiaries. The APM basis “looks through” these subsidiaries to the underlying assets and liabilities they hold, and it reports the investments as the Portfolio APM. Under IFRS, the Company and its subsidiaries are reported separately. The assets and liabilities of the subsidiaries are presented on the face of the IFRS balance sheet as a single carrying value. The same is true for the IFRS and APM basis of the Cash flow statement.
The following table sets out IFRS metrics and the APM equivalents:
| IFRS (£m) | 31 July 2024 | 31 July 2023 | APM (£m) | 31 July 2024 | 31 July 2023 |
| Investments | 1,362.0 | 1,342.7 | Portfolio | 1,401.8 | 1,398.8 |
| NAV | 1,273.5 | 1,290.3 | |||
| Cash flows from the sale of portfolio investments | 9.3 | 15.7 | Total Proceeds | 86.4 | 94.1 |
| Cash flows related to the purchase of portfolio investments | 23.3 | 15.5 | Total New Investment | 104.4 | 64.1 |
The Glossary includes definitions for all APM and, where appropriate, a reconciliation between APM and IFRS.
Our investment strategy
We focus on investing in buyouts of profitable, cash-generative businesses in developed markets that exhibit defensive growth characteristics which we believe support strong and resilient returns across economic cycles.
We take an active approach to portfolio construction, with a flexible mandate that enables us to deploy capital in Primary, Secondary and Direct investments. Geographically we focus on the developed markets of North America and Europe which have deep and mature private equity markets supported by a robust corporate governance ecosystem.
| Medium-term target | Five-year average | 31 July 2024 | |
| 1. Target Portfolio composition 1 | |||
| Investment category | |||
| Primary | ~50% | 59% | 52% |
| Direct | ~25% | 28% | 32% |
| Secondary | ~25% | 13% | 16% |
| Geography2 | |||
| North America | ~50% | 42% | 44% |
| Europe (inc. UK) | ~50% | 51% | 49% |
| Other | — | 7% | 7% |
| 2. Balance sheet | |||
| Net cash/(Net debt)3 | ~0% | —% | (6)% |
| 1 As percentage of Portfolio; 2 As percentage of Portfolio; 3 Net cash/(net debt) as a percentage of NAV | |||
ICG Enterprise Trust benefits from access to ICG-managed funds and Direct investments, which represented 29.2% of the Portfolio value at period end and generated a 2.1% return on a local currency basis.
Performance overview
At 31 July 2024, our Portfolio was valued at £1,402m, and the Portfolio Return on a Local Currency Basis for the first half of the financial year was 3.8% (H1 FY24: 4.6%).
Due to the geographic diversification of our Portfolio, the reported value is impacted by changes in foreign exchange rates. During the period, FX movements affected the Portfolio negatively by £(16.1)m, driven by Sterling appreciation versus both the Euro and US Dollar. In Sterling terms, Portfolio growth during the period was 2.6%.
The net result for shareholders was that ICG Enterprise Trust generated a NAV per Share Total Return of 2.8% during H1 FY25, ending the period with a NAV per Share of 1,946p.
| Movement in the Portfolio | Six months to | Six months to |
| Opening Portfolio1 | 1,349 | 1,406 |
| Total New Investments | 104 | 64 |
| Total Proceeds | (86) | (94) |
| Portfolio net cashflow | 18 | (30) |
| Valuation movement2 | 51 | 65 |
| Currency movement | (16) | (43) |
| Closing Portfolio | 1,402 | 1,399 |
| 1 Refer to the Glossary | ||
| NAV per Share Total Return | Six months to | Six months to |
| % Portfolio growth (local currency) | 3.8% | 4.6% |
| % currency movement | (1.2)% | (3.0%) |
| % Portfolio growth (Sterling) | 2.6% | 1.6% |
| Impact of (net cash)/net debt | 0.1% | 0.1% |
| Management fee and other expenses | (0.9)% | (1.0)% |
| Co-investment Incentive Scheme Accrual | (0.1)% | (0.2)% |
| Impact of share buybacks and dividend reinvestment | 1.0% | 0.3% |
| NAV per Share Total Return | 2.8% | 0.8% |
For Q2 the Portfolio Return on a Local Currency Basis was 3.2% and the NAV per Share Total Return was 1.6%.
Executing our investment strategy
| Commitments | Total New Investments | Growth | Total Proceeds |
| Making commitments to funds, which expect to be drawn over 3 to 5 years | Cash deployments into portfolio companies, either through funds or directly | Driving growth and value creation of our portfolio companies | Cash realisations of investments in Portfolio companies, plus Fund Disposals |
| £72m | £104m | £51m | £86m |
Commitments
Our evergreen structure and flexible investment mandate enables us to commit through the cycle, maintaining vintage diversification for our Portfolio and sowing the seeds for future growth.
During the period we made five new fund Commitments totalling £72.0m, including £19.8m to funds managed by ICG plc, as detailed below:
| Fund | Manager | Commitment during the period | |
| Local currency | £m | ||
| ICG Strategic Equity V | ICG | $25.0m | £19.8m |
| Investindustrial VIII | Investindustrial | €15.0m | £12.9m |
| Leeds VIII | Leeds Equity | $20.0m | £15.7m |
| Oak Hill VI | Oak Hill | $15.0m | £11.9m |
| Thoma Bravo XVI | Thoma Bravo | $15.0m | £11.7m |
At 31 July 2024, ICG Enterprise Trust had outstanding Undrawn Commitments of £575m:
| Movement in outstanding Commitments | Six months to 31 July 2024 (£m) |
| Undrawn Commitments as at 1 February 2024 | 552 |
| New Fund Commitments | 72 |
| New Commitments relating to Co-investments | 54 |
| Drawdowns | (104) |
| Currency and other movements, including repayment of commitments which can be reinvested | 2 |
| Undrawn commitments as at 31 July 2024 | 575 |
Total Undrawn Commitments at 31 July 2024 represented £452m of Undrawn Commitments to funds within their Investment Periods, with £123m to funds outside their Investment Periods.
| 31 July 2024 | 31 July 2023 | |
| Undrawn Commitments – funds in Investment Period | 452 | 429 |
| Undrawn Commitments – funds outside Investment Period | 123 | 119 |
| Total Undrawn Commitments | 575 | 549 |
| Total available liquidity (including facility) | (126) | (159) |
| Overcommitment net of total available liquidity | 449 | 390 |
| Overcommitment % of net asset value | 35.3% | 30.2% |
Commitments are made in the funds' underlying currencies. The currency split of the undrawn commitments at 31 July 2024 was as follows:
| 31 July 2024 | 31 July 2023 | |||
| Undrawn Commitments | £m | % | £m | % |
| US Dollar | 325 | 56.6% | 272 | 49.4% |
| Euro | 221 | 38.4% | 261 | 47.6% |
| Sterling | 29 | 5.0% | 16 | 3.0% |
| Total | 575 | 100.0% | 549 | 100.0% |
Investments
Total new investments of £104m during the period, of which 16% (£17.0m) were alongside ICG. New investment by category detailed in the table below:
| Investment Category |
| % of New Investments |
| Primary | £57.8m | 55.4% |
| Direct | £43.8m | 42.0% |
| Secondary | £2.7m | 2.6% |
| Total | £104.4m | 100.0% |
The five largest underlying new investments in the period were as follows:
| Investment | Description | Manager | Country | Cost £m1 |
| Datasite | Provider of SaaS software focused on virtual data rooms | ICG | United States | 24.6 |
| Visma | Provider of business management software and outsourcing services | HgCapital | Norway | 14.9 |
| Audiotonix | Manufacturer of audio mixing consoles | PAI Partners | United Kingdom | 12.8 |
| Eque2 | Developer of enterprise resource planning software intended for construction and contracting industries | Bowmark | United Kingdom | 3.4 |
| Multiversity | Provider of online higher education | CVC | Italy | 2.9 |
| Total of top 5 largest underlying new investments | 58.6 | |||
1 Represents ICG Enterprise Trust's indirect investment (share of fund cost) plus any direct investments in the period.
Growth
The portfolio grew by £51 million (+3.8%) on a Local Currency Basis in the six months to 31 July 2024.
Growth across the Portfolio was split as follows:
-
By investment type: growth was spread across Primary (3.6%), Secondary (2.5%) and Direct (5.0%)
-
By geography: North America and Europe experienced similar growth
The growth in the Portfolio is underpinned by the performance of our Portfolio companies, which delivered robust financial performance during the period:
| Top 30 | Enlarged Perimeter | |
| Portfolio coverage | 40% | 63% |
| Last Twelve Months ('LTM') revenue growth | 6.8% | 9.4% |
| LTM EBITDA growth | 10.4% | 13.9% |
| Net Debt / EBITDA | 4.3x | 4.4x |
| Enterprise Value / EBITDA | 15.3x | 14.9x |
| Note: values are weighted averages for the respective portfolio segment; see Glossary for definition and calculation methodology | ||
Quoted company exposure
We do not actively invest in publicly quoted companies but gain listed investment exposure when IPOs are used as a route to exit an investment. In these cases, exit timing typically lies with the manager with whom we have invested.
At 31 July 2024, ICG Enterprise Trust’s exposure to quoted companies was valued at £60m, equivalent to 4.3% of the Portfolio value (31 January 2024: 4.8%). Across the Portfolio, quoted positions resulted in a £4m increase in Portfolio NAV during the period. The share price of our largest listed exposure, Chewy, increased by 36% in local currency (USD) during the period. This positively impacted the Portfolio Return on a Local Currency Basis by approximately 0.5%.
At 31 July 2024 Chewy was the only quoted investment that individually accounted for 0.5% or more of the Portfolio value:
| Company | Ticker | 31 July 2024 |
| Chewy | CHWY-US | 1.6% |
| Other companies | 2.7% | |
| Total | 4.3% |
Realisations
During the first half of FY25, the ICG Enterprise Trust Portfolio generated Total Realisation Proceeds of £86m.
Realisation activity during the period included nine Full Exits generating proceeds of £48.7m. These were completed at a weighted average Uplift to Carrying Value of 25.8% and represent a weighted average Multiple to Cost of 3.1x for those investments.
The five largest underlying realisations in the period were as follows:
| Realisation | Description | Manager | Country | Proceeds £m |
| Vettafi | Provider of financial indices and data | ICG | United States | 10.3 |
| Visma | Provider of business management software | ICG | Norway | 8.2 |
| Datasite | Provider of SaaS software focused on virtual data rooms | ICG | United States | 7.8 |
| Compass Community | Provider of children's fostering services | Graphite | United Kingdom | 7.4 |
| Iris | Provider of software for the accountancy and payroll sectors | ICG | United Kingdom | 7.0 |
| Total of 5 largest underlying realisations | 40.7 | |||
Balance sheet and liquidity
Net assets at 31 July 2024 were £1,274m, equal to 1,946p per share.
At 31 July 2024, the drawn debt was £93.3m (31 January 2024: £20.0m), resulting in a net debt position of £76.4m (31 January 2024: £8.8m). At 31 July 2024, the Portfolio represented 110.1% of net assets (31 January 2024: 105.1%).
| £m | % of net assets | |
| Portfolio | 1,402 | 110.1% |
| Cash | 17 | 1.3% |
| Drawn debt | (93) | (7.3%) |
| Co-investment Incentive Scheme Accrual | (47) | (3.7%) |
| Other net current liabilities | (5) | (0.4%) |
| Net assets | 1,274 | 100.0% |
Our objective is to be fully invested through the cycle, while ensuring that we have sufficient financial resources to be able to take advantage of attractive investment opportunities as they arise.
At 31 July 2024, ICG Enterprise Trust had a cash balance of £16.9m (31 January 2024: £11.2m) and total available liquidity of £125.7m (31 January 2024: £195.9m).
| £m | |
| Cash at 31 January 2024 | 11 |
| Total Proceeds | 86 |
| New investments | (104) |
| Debt drawn down | 74 |
| Shareholder returns | (33) |
| Management fees | (8) |
| FX and other expenses | (10) |
| Cash at 31 July 2024 | 17 |
| Available undrawn debt facilities | 109 |
| Total available liquidity | 126 |
Dividend and share buyback
ICG Enterprise Trust has a progressive dividend policy alongside two share buyback programmes to return capital to shareholders.
Progressive dividend policy (since 2017)
The Board has declared a dividend of 8.5p per share in respect of the second quarter, taking total dividends for the period to 17p (H1 FY24: 16p). It remains the Board's intention to declare total dividends of at least 35p per share for the financial year, implying an increase of 6% on the previous financial year (FY24: 33p).
Long-term share buyback programme (since 2022)
The following purchases have been made under the Company's long-term share buyback programme:
| Buyback activity summary | H1 FY25 | Since 19 October 20221 |
| Number of shares purchased | 920,000 | 2,432,188 |
| Aggregate consideration | £11.0m | £28.5m |
| Weighted average discount to last reported NAV | 38.3% | 38.7% |
| 1 Being the date the long-term share buyback programme was announced, up to and including 1 October 2024 | ||
The Board believes the buyback programme demonstrates the Manager’s discipline around capital allocation; underlines the Board’s confidence in the long-term prospects of the Company, its cashflows and NAV; will enhance the NAV per share; and, over time, may positively influence the volatility of the Company’s discount and its trading liquidity.
Opportunistic share buyback programme (since May 2024)
During the period, the Board announced an opportunistic share buyback programme for FY25 of up to £25m. This will enable us to take advantage of current trading levels, when the ability to purchase shares in meaningful size at a significant discount presents itself. The following purchases have been made under this programme:
| Buyback activity summary | H1 FY25 | Since 8 May 20241 |
| Number of shares purchased | 835,000 | 993,000 |
| Aggregate consideration | £10.0m | £11.9m |
| Weighted average discount to last reported NAV | 37.2% | 37.2% |
| 1 Being the date the opportunistic share buyback programme was announced, up to and including 1 October 2024 | ||
Foreign exchange rates
The details of relevant FX rates applied in this report are provided in the table below:
| Average rate 6 months to | Period end rate | |||
| 31 July 2024 | 31 July 2023 | 31 July 2024 | 31 July 2023 | |
| GBP:EUR | 1.1738 | 1.1465 | 1.1875 | 1.1671 |
| GBP:USD | 1.2678 | 1.2445 | 1.2856 | 1.2836 |
| EUR:USD | 1.0801 | 1.0854 | 1.0826 | 1.0997 |
Activity since the period end
Notable activity between 1 August 2024 and 31 August 2024 included:
-
No new fund commitments
-
New investments of £3.5m
-
Realisation Proceeds of £9.2m
ICG Private Equity Fund Investments Team
7 October 2024
SUPPLEMENTARY INFORMATION
This section presents supplementary information regarding the Portfolio (see Manager’s Review and the Glossary for further details and definitions).
Portfolio composition
| Portfolio by calendar year of investment | % of value of underlying investments | % of value of underlying investments |
| 2024 | 6.7% | —% |
| 2023 | 7.4% | 2.3% |
| 2022 | 17.7% | 17.0% |
| 2021 | 26.2% | 27.4% |
| 2020 | 9.5% | 10.7% |
| 2019 | 11.6% | 12.7% |
| 2018 | 8.0% | 10.7% |
| 2017 | 2.6% | 6.2% |
| 2016 | 2.9% | 4.0% |
| 2015 and older | 7.4% | 9.0% |
| Total | 100.0% | 100.0% |
| Portfolio by sector | % of value of underlying investments | % of value of underlying investments |
| TMT | 28.7% | 24.1% |
| Consumer goods and services | 18.3% | 20.9% |
| Healthcare | 10.7% | 13.2% |
| Business services | 12.9% | 12.9% |
| Industrials | 8.2% | 8.1% |
| Education | 5.3% | 5.4% |
| Financials | 7.6% | 6.0% |
| Leisure | 4.4% | 4.8% |
| Other | 3.9% | 4.6% |
| Total | 100.0% | 100.0% |
| Portfolio by fund currency1 | 31 July 2024 | 31 July 2024 | 31 July 2023 | 31 July 2023 |
| US Dollar | 701.0 | 50.0% | 671.3 | 48.0% |
| Euro | 566.2 | 40.4% | 612.0 | 43.8% |
| Sterling | 134.6 | 9.6% | 115.2 | 8.2% |
| Other | 0.0 | —% | 0.3 | —% |
| Total | 1,401.8 | 100.0% | 1,398.8 | 100.0% |
| 1 Currency exposure by reference to the reporting currency of each fund . | ||||
Portfolio Dashboard
The tables below provide disclosure on the composition and dispersion of financial and operational performance for the Top 30 and the Enlarged Perimeter. At 31 July 2024, the Top 30 Companies represented 40% of the Portfolio by value and the Enlarged Perimeter represented 63% of total Portfolio value. This information is prepared on a value-weighted basis, based on contribution to Portfolio value at 31 July 2024.
| % of value at 31 July 2024 | ||
| Sector exposure | Top 30 | Enlarged Perimeter |
| TMT | 33.0% | 28.6% |
| Industrials | 16.0% | 9.0% |
| Consumer goods and services | 15.7% | 18.1% |
| Business services | 10.8% | 14.8% |
| Healthcare | 8.2% | 10.3% |
| Leisure | 6.9% | 5.4% |
| Education | 6.0% | 6.4% |
| Financials | 3.4% | 4.1% |
| Other | — % | 3.3% |
| Total | 100.0% | 100.0% |
| % of value at 31 July 2024 | ||
| Geographic exposure1 | Top 30 | Enlarged Perimeter |
| North America | 40.3% | 43.5% |
| Europe | 53.6% | 52.1% |
| Other | 6.1% | 4.4% |
| Total | 100.0% | 100.0% |
| 1 Geographic exposure is calculated by reference to the location of the headquarters of the underlying Portfolio companies | ||
| % of value at 31 July 2024 | |||
| LTM revenue growth | Top 30 | Enlarged Perimeter | |
| <0% | 20.2% | 21.0% | |
| 0-10% | 48.6% | 38.9% | |
| 10-20% | 25.9% | 24.5% | |
| 20-30% | 5.3% | 8.8% | |
| >30% | —% | 4.1% | |
| n.a. | —% | 2.6% | |
| Weighted average | 6.8% | 9.4% | |
| Note: for consistency, any excluded investments are excluded for all dispersion analysis. | |||
| % of value at 31 July 2024 | |||
| LTM EBITDA growth | Top 30 | Enlarged Perimeter | |
| <0% | 21.4% | 22.7% | |
| 0-10% | 23.2% | 20.1% | |
| 10-20% | 31.4% | 26.2% | |
| 20-30% | 11.1% | 11.1% | |
| >30% | 13.0% | 17.0% | |
| n.a | —% | 2.9% | |
| Weighted average | 10.4% | 13.9% | |
| Note: for consistency, any excluded investments are excluded for all dispersion analysis. | |||
| % of value at 31 July 2024 | |||
| EV/EBITDA multiple | Top 30 | Enlarged Perimeter | |
| 0-10x | 8.3% | 10.3% | |
| 10-12x | 25.9% | 21.6% | |
| 12-13x | 2.5% | 4.5% | |
| 13-15x | 22.5% | 21.2% | |
| 15-17x | 18.9% | 18.0% | |
| 17-20x | 5.4% | 7.8% | |
| >20x | 16.5% | 13.3% | |
| n.a. | —% | 3.4% | |
| Weighted average | 15.3x | 14.9x | |
| Note: for consistency, any excluded investments are excluded for all dispersion analysis. | |||
| % of value at 31 July 2024 | |||
| Net Debt / EBITDA | Top 30 | Enlarged Perimeter | |
| <2x | 23.6% | 18.5% | |
| 2-4x | 20.0% | 21.0% | |
| 4-5x | 8.1% | 12.5% | |
| 5-6x | 13.8% | 14.9% | |
| 6-7x | 18.5% | 15.2% | |
| >7x | 16.1% | 14.1% | |
| n.a. | —% | 3.8% | |
| Weighted average | 4.3x | 4.4x | |
| Note: for consistency, any excluded investments are excluded for all dispersion analysis. | |||
Top 30 companies
The table below presents the 30 companies in which ICG Enterprise Trust had the largest investments by value at 31 July 2024. The valuations are gross of underlying managers fees and carried interest.
| Company | Manager | Year of investment | Country | Value as a % of Portfolio | |
| 1 | Minimax | ||||
| Supplier of fire protection systems and services | ICG | 2018 | Germany | 3.4% | |
| 2 | Froneri | ||||
| Manufacturer and distributor of ice cream products | PAI Partners | 2013 / 2019 | United Kingdom | 2.5% | |
| 3 | Datasite Global Corporation | ||||
| Provider of SaaS software focused on virtual data rooms | ICG | 2024 | United States | 2.1% | |
| 4 | Leaf Home Solutions | ||||
| Provider of home maintenance services | Gridiron | 2016 | United States | 1.7% | |
| 5 | Visma | ||||
| Provider of business management software and outsourcing services | Hg/ | 2024 | Norway | 1.7% | |
| 6 | Chewy | ||||
| Retailer of pet products and services | BC Partners | 2014 / 2015 | United States | 1.6% | |
| 7 | European Camping Group | ||||
| Operator of premium campsites and holiday parks | PAI Partners | 2021 / 2023 | France | 1.6% | |
| 8 | Newton | ||||
| Provider of management consulting services | ICG | 2021 / 2022 | United Kingdom | 1.5% | |
| 9 | Precisely | ||||
| Provider of enterprise software | Clearlake/ | 2021 / 2022 | United States | 1.4% | |
| 10 | Curium Pharma | ||||
| Supplier of nuclear medicine diagnostic pharmaceuticals | ICG | 2020 | United Kingdom | 1.4% | |
| 11 | Davies Group | ||||
| Provider of speciality business process outsourcing services | BC Partners | 2021 | United Kingdom | 1.4% | |
| 12 | IRI 2 | ||||
| Provider of mission-critical data and predictive analytics to consumer goods manufacturers | New Mountain | 2022 | United States | 1.3% | |
| 13 | PSB Academy | ||||
| Provider of private tertiary education | ICG | 2018 | Singapore | 1.2% | |
| 14 | Ambassador Theatre Group | ||||
| Operator of theatres and ticketing platforms | ICG | 2021 | United Kingdom | 1.2% | |
| 15 | Yudo | ||||
| Designer and manufacturer of hot runner systems | ICG | 2017 / 2018 | South Korea | 1.2% | |
| 16 | Domus | ||||
| Operator of retirement homes | ICG | 2017 / 2021 | France | 1.2% | |
| 17 | David Lloyd Leisure | ||||
| Operator of premium health clubs | TDR | 2013 / 2020 | United Kingdom | 1.2% | |
| 18 | Crucial Learning | ||||
| Provider of corporate training courses focused on communication skills and leadership development | Leeds Equity | 2019 | United States | 1.2% | |
| 19 | ECA Group | ||||
| Provider of autonomous systems for the aerospace and maritime sectors | ICG | 2022 | France | 1.1% | |
| 20 | Planet Payment | ||||
| Provider of integrated payments services focused on hospitality and luxury retail | Advent/ | 2021 | Ireland | 1.0% | |
| 21 | Ivanti | ||||
| Provider of IT management solutions | Charlesbank/ | 2021 | United States | 1.0% | |
| 22 | Class Valuation | ||||
| Provider of residential mortgage appraisal management services | Gridiron | 2021 | United States | 1.0% | |
| 23 | Vistage | ||||
| Provider of CEO leadership and coaching for small and mid-size businesses in the US | Gridiron/ | 2022 | United States | 0.9% | |
| 24 | Audiotonix | ||||
| Manufacturer of audio mixing consoles | PAI Partners | 2024 | United Kingdom | 0.9% | |
| 25 | KronosNet | ||||
| Provider of tech-enabled customer engagement and business solutions | ICG | 2022 | Spain | 0.9% | |
| 26 | Brooks Automation | ||||
| Provider of semiconductor manufacturing solutions | THL | 2021 / 2022 | United States | 0.9% | |
| 27 | DigiCert | ||||
| Provider of enterprise security solutions | ICG | 2021 | United States | 0.9% | |
| 28 | AML RightSource | ||||
| Provider of compliance and regulatory services and solutions | Gridiron | 2020 | United States | 0.8% | |
| 29 | Archer Technologies | ||||
| Operator of private hospitals | Cinven | 2023 | United States | 0.8% | |
| 30 | AMEOS Group | ||||
| Operator of private hospitals | ICG | 2021 | Switzerland | 0.7% | |
| Total of the 30 largest underlying investments | 39.7% |
The 30 largest fund investments by value
The table below presents the 30 largest fund investments by value at 31 July 2024. The valuations are net of underlying managers’ fees and carried interest.
| Fund | Year of commitment | Value £m | Outstanding commitment £m | |
| 1 | PAI Strategic Partnerships ** | |||
| Mid-market and large buyouts | 2019 | 32.2 | 0.2 | |
| 2 | ICG Strategic Equities Fund III | |||
| GP-led secondary transactions | 2018 | 31.1 | 10.8 | |
| 3 | CVC European Equity Partners VII | |||
| Large buyouts | 2017 | 29.4 | 1.1 | |
| 4 | ICG Strategic Equities Fund IV | |||
| GP-led secondary transactions | 2021 | 27.6 | 9.9 | |
| 5 | Gridiron Capital Fund III | |||
| Mid-market buyouts | 2016 | 26.4 | 4.0 | |
| 6 | ICG Europe VII | |||
| Mezzanine and equity in mid-market buyouts | 2018 | 29.3 | 5.0 | |
| 7 | ICG Ludgate Hill (Feeder B) SCSp | |||
| Secondary portfolio | 2021 | 24.8 | 13.7 | |
| 8 | PAI Europe VII | |||
| Mid-market and large buyouts | 2017 | 24.4 | 2.6 | |
| 9 | Gridiron Capital Fund IV | |||
| Mid-market buyouts | 2019 | 24.0 | 0.6 | |
| 10 | Resolute IV | |||
| Mid-market buyouts | 2018 | 23.3 | 1.0 | |
| 11 | ICG Augusta Partners Co-Investor ** | |||
| Secondary fund restructurings | 2018 | 21.9 | 17.1 | |
| 12 | Seventh Cinven | |||
| Large buyouts | 2019 | 20.2 | 0.7 | |
| 13 | ICG Ludgate Hill III | |||
| Secondary portfolio | 2022 | 20.0 | 5.5 | |
| 14 | ICG Europe VIII | |||
| Mezzanine and equity in mid-market buy-outs | 2021 | 19.3 | 16.9 | |
| 15 | Oak Hill V | |||
| Mid-market buyouts | 2019 | 18.2 | 0.9 | |
| 16 | Advent Global Private Equity IX | |||
| Large buyouts | 2019 | 17.0 | 0.8 | |
| 17 | Graphite Capital Partners IX | |||
| Mid-market buyouts | 2018 | 17.0 | 3.0 | |
| 18 | Graphite Capital Partners VIII * | |||
| Mid-market buyouts | 2013 | 20.9 | 1.8 | |
| 19 | Resolute V | |||
| Mid-market buy-outs | 2021 | 16.1 | 1.3 | |
| 20 | AEA VII | |||
| Mid-market buyouts | 2019 | 16.1 | 0.5 | |
| 21 | Sixth Cinven Fund | |||
| Large buyouts | 2016 | 15.3 | 2.9 | |
| 22 | ICG Ludgate Hill (Feeder) II Boston SCSp | |||
| Secondary portfolio | 2022 | 14.9 | 5.2 | |
| 23 | Permira VII | |||
| Large buyouts | 2019 | 14.0 | 1.3 | |
| 24 | Investindustrial VII | |||
| Mid-market buyouts | 2019 | 13.8 | 4.3 | |
| 25 | BC European Capital X | |||
| Large buyouts | 2016 | 13.3 | 1.4 | |
| 26 | ICG LP Secondaries Fund I LP | |||
| LP-led secondary transactions | 2022 | 13.0 | 38.2 | |
| 27 | New Mountain Partners VI | |||
| Mid-market buy-outs | 2020 | 12.4 | 1.2 | |
| 28 | Bowmark Capital Partners VI | |||
| Mid-market buyouts | 2018 | 12.3 | 3.4 | |
| 29 | New Mountain Partners V | |||
| Mid-market buyouts | 2017 | 11.4 | 1.1 | |
| 30 | CVC Capital Partners VIII | |||
| Large buyouts | 2020 | 11.4 | 2.2 | |
| Total of the largest 30 fund investments | 591.1 | 158.6 | ||
| Percentage of total investment Portfolio | 42.0% | - |
* Includes the associated top up funds
** All or part of interest acquired through a secondary purchase
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 2024 which was approved by the Board on 7 May 2024.
The Company considers its principal risks (as well as several underlying risks comprising each principal risk) in four categories:
Investment risks: the risk to performance resulting from ineffective or inappropriate investment selection, execution or monitoring.
External risks: the risk of failing to deliver the Company’s investment objective and strategic goals due to external factors beyond the Company’s control.
Operational risks: the risk of loss resulting from inadequate or failed internal processes, people or systems and external event, including regulatory risk.
Financial risks: the risks of adverse impact on the Company due to having insufficient resources to meet its obligations or counterparty failure and the impact any material movement in foreign exchange rates may have on underlying valuations.
A comprehensive risk assessment process is undertaken regularly to re-evaluate the impact and probability of each risk materialising and the strategic, financial and operational impact of the risk. Where the residual risk is determined to be outside of appetite, appropriate action is taken.
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. The Board also regularly considers the evolution of requirements and standards
relating to ESG and responsible investing.
Related Party Transactions
There have been no material changes in the related party transactions described in the 31 January 2024 Annual Report.
Directors’ Responsibility Statement
The Directors are responsible for preparing the Interim Report, in accordance with applicable laws and regulations. The Directors confirm that, to the best of their knowledge:
-
The condensed interim financial statements have been prepared in accordance with UK-adopted IAS 34 Interim condensed financial statements and gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Company;
-
The Chair’s Statement and Manager’s Review includes a fair review of the information required by DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year; and
-
The interim financial statements include a fair review of the information required by DTR 4.28R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or performance of the Company during that period, and any changes in the related party transactions described in the last Annual Report that could do so.
The Interim Report was approved by the Board and the above Directors’ Responsibility Statement was signed on its behalf by the Chair.
Jane Tufnell
Chair
7 October 2024
Unaudited Interim Financial Statements for the period ended 31 July 2024
INTERIM CONDENSED FINANCIAL STATEMENTS
Income statement
| Half year to 31 July 2024 | Half year to 31 July 2023 | ||||||
| Notes | Revenue | Capital return | Total | Revenue | Capital return | Total | |
| Investment returns | |||||||
| Income, gains and losses on investments | 254 | 34,697 | 34,951 | 481 | 19,267 | 19,748 | |
| Deposit interest | 29 | - | 29 | 324 | - | 324 | |
| Other income | 5 | - | 5 | 78 | - | 78 | |
| Foreign exchange gains and losses | - | 741 | 741 | - | 38 | 38 | |
| 288 | 35,438 | 35,726 | 883 | 19,305 | 20,188 | ||
| Expenses | |||||||
| Investment management charges | (797) | (7,172) | (7,969) | (802) | (7,219) | (8,021) | |
| Other expenses including finance costs | (1,283) | (3,481) | (4,764) | (1,320) | (3,899) | (5,219) | |
| (2,080) | (10,653) | (12,733) | (2,122) | (11,118) | (13,240) | ||
| Profit/(loss) before tax | (1,792) | 24,785 | 22,993 | (1,239) | 8,187 | 6,948 | |
| Taxation | - | - | - | 1,837 | (1,837) | - | |
| Profit/(loss) for the period | (1,792) | 24,785 | 22,993 | 598 | 6,350 | 6,948 | |
| Attributable to: | |||||||
| Equity shareholders | (1,792) | 24,785 | 22,993 | 598 | 6,350 | 6,948 | |
| Basic and diluted earnings per share | 34.67p | 10.21p | |||||
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 guidance published by the AIC. There is no Other Comprehensive Income.
All profits are from continuing operations.
The notes on pages 25 to 27 form an integral part of the interim financial statements.
Balance sheet
|
|
|
| |
| Non-current assets | |||
| Investments held at fair value | 7 | 1,362,012 | 1,296,382 |
| Current assets | |||
| Cash and cash equivalents | 9,789 | 9,722 | |
| Prepayments and receivables | 1,920 | 2,258 | |
| 11,709 | 11,980 | ||
| Current liabilities | |||
| Borrowings | (93,305) | (20,000) | |
| Payables | (6,894) | (5,139) | |
| (100,199) | (25,139) | ||
| Net current assets/(liabilities) | (88,490) | (13,159) | |
| Total assets less current liabilities | 1,273,522 | 1,283,223 | |
| Capital and reserves | |||
| Share capital | 7,292 | 7,292 | |
| Capital redemption reserve | 2,112 | 2,112 | |
| Share premium | 12,936 | 12,936 | |
| Capital reserve | 1,255,707 | 1,263,616 | |
| Revenue Loss | (4,525) | (2,733) | |
| Total equity | 1,273,522 | 1,283,223 | |
| Net asset value per share (basic and diluted) | 6 | 1,946.4p | 1,909.4 |
The notes on pages 25 to 27 form an integral part of the interim financial statements.
The financial statements on pages 21 to 27 were approved by the Board of Directors on 7 October 2024 and signed on its behalf by:
Jane Tufnell Alastair Bruce
Director Director
Cash flow statement
| Half year to | Half year to | |
| Operating activities | ||
| Sale of portfolio investments | 9,287 | 15,737 |
| Purchase of portfolio investments | (23,295) | (13,705) |
| Cash flow to subsidiaries' investments | (89,643) | (52,921) |
| Cash flow from subsidiaries' investments | 72,870 | 77,331 |
| Interest income received from portfolio investments | 200 | 294 |
| Dividend income received from portfolio investments | 52 | 296 |
| Other income received | 34 | 401 |
| Investment management charges paid | (8,006) | (7,488) |
| Other expenses paid | (1,007) | (2,892) |
| Net cash (outflow)/ inflow from operating activities | (39,508) | 17,053 |
| Financing activities | ||
| Bank facility fee paid | (1,362) | (1,628) |
| Interest paid | (414) | (2,903) |
| Credit Facility utilised | 92,378 | 90,087 |
| Credit Facility repaid | (18,412) | (82,476) |
| Purchase of shares into treasury | (21,456) | (6,477) |
| Equity dividends paid | (11,238) | (10,886) |
| Net cash inflow/ (outflow) from financing activities | 39,496 | (14,282) |
| Net (decrease)/ increase in cash and cash equivalents | (12) | 2,771 |
| Cash and cash equivalents at beginning of year | 9,722 | 20,694 |
| Net (decrease)/ increase in cash and cash equivalents | (12) | 2,771 |
| Effect of changes in foreign exchange rates | 79 | 39 |
| Cash and cash equivalents at end of period | 9,789 | 23,504 |
The notes on pages 25 to 27 form an integral part of the interim financial statements.
Statement of changes in equity
|
| Capital redemption |
|
|
| Total | |
| Half year to 31 July 2024 | ||||||
| Opening balance at 1 February 2024 | 7,292 | 2,112 | 12,936 | 1,263,616 | (2,733) | 1,283,223 |
| Profit for the period and total comprehensive income | — | — | — | 24,785 | (1,792) | 22,993 |
| Dividends paid or approved | — | — | — | (11,238) | — | (11,238) |
| Purchase of shares into treasury | — | — | — | (21,456) | — | (21,456) |
| Closing balance at 31 July 2024 | 7,292 | 2,112 | 12,936 | 1,255,707 | (4,525) | 1,273,522 |
|
| Capital redemption |
| Capital reserve |
| Total | |
| Half year to 31 July 2023 | ||||||
| Opening balance at 1 February 2023 | 7,292 | 2,112 | 12,936 | 1,279,751 | (1,473) | 1,300,618 |
| Profit for the period and total comprehensive income | — | — | — | 6,350 | 597 | 6,948 |
| Dividends paid or approved | — | — | — | (10,886) | — | (10,886) |
| Purchase of shares into treasury | — | — | — | (6,420) | — | (6,420) |
| Closing balance at 31 July 2023 | 7,292 | 2,112 | 12,936 | 1,268,795 | (875) | 1,290,260 |
The notes on pages 25 to 27 form an integral part of the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 July 2024
1 GENERAL INFORMATION
These interim condensed financial statements relate to ICG Enterprise Trust Plc (‘the Company’). ICG Enterprise Trust Plc is registered in England and Wales and is incorporated in the United Kingdom. The Company is domiciled in the United Kingdom and its registered office is Procession House, 55 Ludgate Hill, London EC4M 7JW. The Company’s objective is to provide long-term growth by investing in private companies managed by leading private equity managers.
2 FINANCIAL INFORMATION
The interim condensed financial statements are unaudited and do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Within the notes to the interim condensed financial statements, all current and comparative data covering the period to (or as at) 31 July 2024 is unaudited. Data given in respect of the year to 31 January 2024
is audited. The statutory accounts for the year to 31 January 2024 have been reported on by Ernst & Young LLP and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not contain an emphasis of matter paragraph, and (iii) did not contain any statements under section 498(2) or (3) of the Companies Act 2006.
3 BASIS OF PREPARATION
The interim financial statements have been prepared in accordance with UK-adopted IAS 34 Interim financial Reporting (IAS 34) and on the basis of the accounting policies and methods of computation set out in the financial statements of the Company for the year to 31 January 2024.
The financial information for the year ended 31 January 2024 was prepared in accordance with UK-adopted International Accounting Standards (‘UK-IAS’) and the Statement of Recommended Practice ('SORP') for investment trusts issued by the Association of Investment Companies in July 2022.
The Company comprises one operating segment which is also a reporting segment.
Going concern
These financial statements have been prepared on a going concern basis. In making their going concern assessment, the Directors have considered the potential impact of principal risks on the Company’s business activities; the Company’s net cash position; the availability of the Company’s credit facility and compliance with its covenants; and the Company’s cash flow projections, in particular those arising from committed but undrawn commitments.
The Directors have concluded based on the above assessment that the preparation of the interim condensed financial statements on a going concern basis, to 31 October 2025, a period of more than 12 months from the signing of the interim condensed financial statements, continues to be appropriate.
4 DIVIDENDS
| Half year to | Half year to | |
| Third Quarterly dividend in respect of year ended 31 January 2024 of 8.0p per share (2023: 7.0p) | 5,345 | 4,781 |
| Final dividend in respect of year ended 31 January 2024 of 9.0p per share (2023: 9.0p) | 5,894 | 6,105 |
| Total | 11,239 | 10,886 |
The Board has approved an interim dividend for the quarter to 30 April 2024 of 8.5p per share (totalling £5.56m) which has been paid on 30 August to shareholders on the register on 16 August 2024. The Board has proposed a second interim dividend of 8.5p per share in respect of the year ended 31 January 2025 which will be paid on 29 November 2024 to shareholders on the register at the close of business on 15 November 2024.
5 EARNINGS PER SHARE
| Earnings per share | Half year to 31 July 2024 | Half year to 31 July 2023 |
| Revenue return per ordinary share | (2.70)p | 0.88p |
| Capital return per ordinary share | 37.38p | 9.33p |
| Earnings per ordinary share (basic and diluted) | 34.67p | 10.21p |
| Weighted average number of shares | 66,310,774 | 68,040,279 |
Revenue return per ordinary share is calculated by dividing the revenue return attributable to equity shareholders of £-1.8m (2023: £0.6m) by the weighted average number of ordinary shares outstanding during the year.
Capital return per ordinary share is calculated by dividing the capital return attributable to equity shareholders of £24.8m (2023: £6.4m) by the weighted average number of ordinary shares outstanding during the year.
Basic and diluted earnings per ordinary share are calculated by dividing the earnings attributable to equity shareholders of £23.0m (2023: £6.9m) by the weighted average number of ordinary shares outstanding during the year..
The weighted average number of ordinary shares outstanding (excluding those held in treasury) during the year was 66,310,774 (2023: 68,040,279). There were no potentially dilutive shares, such as options or warrants, in either year.
6 NET ASSET VALUE PER SHARE
The net asset value per share is calculated on equity attributable to equity holders of £1,273.5m (31 January 2024: £1,300.6m) and on 65,429,867 (31 January 2024: 67,204,867) ordinary shares in issue at the period end. There were no potentially dilutive shares, such as options or warrants, at either year end. Calculated on both the basic and diluted basis the net asset value per share was 1,946.4p (31 January 2024: 1,909.4p).
7 FAIR VALUE 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 3 assets are described in note 1(c) of the annual financial statements. No investments were categorised as level 1 or level 2.
The Company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels at the end of the reporting year when they are deemed to occur.
The following table presents the assets that are measured at fair value at 31 July 2024 and 31 January 2024:
| Level 1 | Level 2 | Level 3 | Total | ||||
| 31 July 2024 | £’000 | £’000 | £’000 | £’000 | |||
| Investments held at fair value | |||||||
| Unquoted investments | - | - | 281,766 | 281,766 | |||
| Quoted investments | - | - | - | - | |||
| Subsidiary undertakings | - | - | 1,080,246 | 1,080,246 | |||
| Total investments held at fair value | - | - | 1,362,012 | 1,362,012 |
| Level 1 | Level 2 | Level 3 | Total | ||||
| 31 January 2024 | £’000 | £’000 | £’000 | £’000 | |||
| Investments held at fair value | |||||||
| Unquoted investments | - | - | 260,296 | 260,296 | |||
| Quoted investments | - | - | - | - | |||
| Subsidiary undertakings | - | - | 1,036,086 | 1,036,086 | |||
| Total investments held at fair value | - | - | 1,296,382 | 1,296,382 |
All unquoted and quoted investments are valued at fair value in accordance with IFRS 13. The Company has no quoted investments as at 31 July 2024; quoted investments held by subsidiary undertakings are reported within Level 3.
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, with adjustments made to the statements to take account of cash flow events occurring after the date of the manager’s valuation, such as realisations or liquidity adjustments.
The following tables present the changes in level 3 instruments for the period ended 31 July 2024 and 31 July 2023.
| Half year to | Half year to | |
| Opening balances | 1,296,382 | 1,349,075 |
| Additions | 104,356 | 64,055 |
| Disposals | (82,158) | (86,090) |
| Gains and losses recognised in profit or loss | 43,432 | 15,617 |
| Closing balances | 1,362,012 | 1,342,657 |
GLOSSARY
| Term | Short form | Definition |
| Alternative Performance Measures | APMs | Alternative Performance Measures are a term defined by the European Securities and Markets Authority as “financial measures of historical or future performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework”. |
| Carried Interest | Carried interest is equivalent to a performance fee. This represents a share of the profits that will accrue to the underlying private equity managers, after achievement of an agreed Preferred Return. | |
| Cash drag | Cash drag is the negative impact on performance arising as a result of the allocation of a portion of the entity’s assets to cash. | |
| Co-investment | Co-investment is a Direct Investments in a company alongside a private equity fund. | |
| Co-investment Incentive Scheme Accrual | Co-investment Incentive Scheme Accrual represents the estimated value of interests in the Co-investment Incentive Scheme operated by the subsidiary partnerships of the Company. | |
| Commitment | Commitment represents the amount of capital that each investor agrees to contribute to a fund or a specific investment. | |
| Compound Annual Growth Rate | CAGR | The rate of return that would be required for an investment to grow from its beginning balance to its ending balance, assuming the profits were reinvested at the end of each period of the investment's life span. |
| Deployment | Please see ‘Total new investment’. | |
| Direct Investments | An investment in a portfolio company held directly, not through a private equity fund. Direct Investments are typically co-investments with a private equity fund. | |
| Discount | Discount arises when the Company’s shares trade at a price below the Company’s NAV per Share. In this circumstance, the price that an investor pays or receives for a share would be less than the value attributable to it by reference to the underlying assets. The Discount is the difference between the share price and the NAV, expressed as a percentage of the NAV. For example, if the NAV was 100p and the share price was 90p, the Discount would be 10%. | |
| Dividend | Dividend is a distribution of a portion of a Company’s earnings to its shareholders. Dividends are usually paid in cash, and are determined by the Company’s board of directors. | |
| Drawdowns | Drawdowns are amounts invested by the Company when called by underlying managers in respect of an existing Commitment. | |
| EBITDA | Stands for earnings before interest, tax, depreciation and amortisation, which is a widely used performance measure in the private equity industry. | |
| Enlarged Perimeter | As well as performance metrics for our Top 30 companies, we include data for our "Enlarged Perimeter", which represents the aggregate value of the Top 30 Companies and as many of the managers from within the Top 30 funds as practicable. | |
| Enterprise Value | EV | Enterprise Value is the aggregate value of a company’s entire issued share capital and Net Debt. |
| Exclusion List | The Exclusion List defines the business activities which are excluded from investment. | |
| FTSE All-Share Index Total Return | The change in the level of the FTSE All-Share Index, assuming that dividends are re-invested on the day that they are paid. | |
| Full Exits | Full Exits are exit events (e.g., trade sale, sale by public offering, or sale to a financial buyer) following which the residual exposure to an underlying company is zero or immaterial; this does not include Fund Disposals. See ‘Fund Disposals’. | |
| Fund Disposals | Fund Disposals are where the Company receives sales proceeds from the full or partial sale of a fund position within the secondary market. | |
| General Partner | GP | The General Partner is the entity managing a private equity fund. This is commonly referred to as the manager. |
| Hedging | Hedging is an investment technique designed to offset a potential loss on one investment by purchasing a second investment that is expected to perform in the opposite way. | |
| Initial Public Offering | IPO | An Initial Public Offering is an offering by a company of its share capital to the public with a view to seeking an admission of its shares to a recognised stock exchange. |
| Internal Rate of Return | IRR | Internal Rate of Return is a measure of the rate of return received by an investor in a fund. It is calculated from cash drawn from and returned to the investor, together with the residual value of the investment. |
| Investment Period | Investment Period is the period in which funds are able to make new investments under the terms of their fund agreements, typically up to five years after the initial Commitment. | |
| Last Twelve Months | LTM | Last Twelve Months refers to the timeframe of the immediately preceding 12 months in reference to financial metrics used to evaluate the Company’s performance. |
| Limited Partner | LP | The Limited Partner is an institution or individual who commits capital to a private equity fund established as a Limited Partnership. These funds are generally protected from legal actions and any losses beyond the original investment. |
| Limited Partnership | A Limited Partnership includes one or more General Partners, who have responsibility for managing the business of the partnership and have unlimited liability, and one or more Limited Partners, who do not participate in the operation of the partnership and whose liability is ordinarily capped at their capital and loan contribution to the partnership. In typical fund structures, the General Partner receives a priority share ahead of distributions to Limited Partners. | |
| Net Asset Value per Share | NAV per Share | Net Asset Value per Share is the value of the Company’s net assets attributable to one Ordinary share. It is calculated by dividing ‘shareholders’ funds’ by the total number of ordinary shares in issue. Shareholders’ funds are calculated by deducting current and long-term liabilities, and any provision for liabilities and charges, from the Company’s total assets. |
| Net Debt | Net Debt is calculated as the total short-term and long-term debt in a business, less cash and cash equivalents. | |
| Ongoing Charges | Ongoing Charges are calculated in line with guidance issued by the Association of Investment Companies (‘AIC’) and capture management fees and expenses, excluding finance costs, incurred at the Company level only. The calculation does not include the expenses and management fees incurred by any underlying funds. | |
| Other Net Liabilities | Other Net Liabilities at the aggregated Company level represent net other liabilities per the Company’s balance sheet. Net other liabilities per the balance sheet of the subsidiaries include amounts payable under the Co-investment Incentive Scheme Accrual. | |
| Overcommitment | Overcommitment refers to where private equity fund investors make Commitments exceeding the amount of cash immediately available for investment. When determining the appropriate level of Overcommitment, careful consideration needs to be given to the rate at which Commitments might be drawn down, and the rate at which realisations will generate cash from the existing Portfolio to fund new investment. |
| Portfolio | Portfolio represents the aggregate of the investment Portfolios of the Company and of its subsidiary Limited Partnerships. This APM is consistent with the commentary in previous annual and interim reports. The Board and the Manager consider that disclosing our Portfolio assists shareholders in understanding the value and performance of the underlying investments selected by the Manager. It is shown before the Co-investment Incentive Scheme Accrual to avoid being distorted by certain funds and Direct Investments on which ICG Enterprise Trust Plc does not incur these costs (for example, on funds managed by ICG plc). Portfolio is related to the NAV, which is the value attributed to our shareholders, and which also incorporates the Co-investment Incentive Scheme Accrual as well as the value of cash and debt retained on our balance sheet. | |||||
| 31 July 2024 £m | IFRS Balance sheet fair value | Net assets of subsidiary limited partnerships | Co-investment Incentive Scheme Accrual | Total Company and subsidiary Limited Partnership | ||
| Investments1 | 1,362.0 | (7.5) | 47.3 | 1,401.8 | ||
| Cash | 9.8 | 9.8 | ||||
| Other Net Liabilities | (98.3) | 7.5 | (47.3) | (138.0) | ||
| Net assets | 1,273.5 | 1,273.5 | ||||
| 31 January 2024 £m | IFRS Balance sheet fair value | Balances receivable from subsidiary Limited Partnerships | Co-investment Incentive Scheme Accrual | Total Company and subsidiary Limited Partnership | ||
| Investments1 | 1,296.4 | (1.9) | 54.4 | 1,349.0 | ||
| Cash | 9.7 | 9.7 | ||||
| Other Net Liabilities | (22.9) | 1.9 | (54.4) | (75.5) | ||
| Net assets | 1,283.2 | — | — | 1,283.2 | ||
| 1Investments as reported on the IFRS balance sheet at fair value comprise the total of assets held by the Company and the net asset value of the Company’s investments in the subsidiary Limited Partnerships. | ||||||
| Portfolio Return on a Local Currency Basis | Portfolio Return on a Local Currency Basis represents the change in the valuation of the Company’s Portfolio before the impact of currency movements and Co-investment Incentive Scheme Accrual. The Portfolio return is calculated as follows: | |||||
| £m | 31 July 2024 | 31 July 2023 | ||||
| Income, gains and losses on Investments | 74.2 | 19.7 | ||||
| Foreign exchange (losses) and gains included in losses and gains on investments | (16.1) | 43.4 | ||||
| Incentive accrual valuation movement | (7.2) | 1.9 | ||||
| Total gains on Portfolio investments excluding impact of foreign exchange | 50.9 | 65.0 | ||||
| Opening Portfolio valuation | 1,349.0 | 1,406.4 | ||||
| Portfolio Return on a Local Currency Basis | 3.8% | 4.6% | ||||
| Term | Short form | Definition | |||
| Portfolio Company | Portfolio Company refers to an individual company in an investment portfolio. | ||||
| Premium | Premium occurs when the share price is higher than the NAV and investors would therefore be paying more than the value attributable to the shares by reference to the underlying assets. | ||||
| Primary Investment | A Primary Investment is a Commitment to a private equity fund. | ||||
| Quoted Company | A Quoted Company is any company whose shares are listed or traded on a recognised stock exchange. | ||||
| Realisation Proceeds | Realisation Proceeds are amounts received in respect of underlying realisation activity from the Portfolio and exclude any inflows from the sale of fund positions via the secondary market. | ||||
| Realisations - Multiple to Cost | Realisations - Multiple to Cost is the average total return from Full Exits from the Portfolio in the period on a primary investment basis, weighted by total cumulative proceeds (including proceeds received in prior periods). This measure excludes publicly listed companies that were exited via sell downs of their shares. | ||||
| £m | 31 July 2024 | 31 July 2023 | |||
| Realisation Proceeds from Full Exits in the year-to-date | 48.7 | 63.3 | |||
| Cost | 32.9 | 16.0 | |||
| Average total Multiple to Cost | 3.1x | 4.0x | |||
| Realisations – Uplift To Carrying Value | Realisations – Uplift To Carrying Value is the aggregate uplift on Full exits from the Portfolio in the period comparing realisation proceeds to the most recent valuation prior to the announcements of the disposal. This measure excludes publicly listed companies that were exited via sell downs of their shares. | ||||
| £m | 31 July 2024 | 31 July 2023 | |||
| Realisation Proceeds from Full Exits in the year-to-date | 48.7 | 63.3 | |||
| Prior Carrying Value (most recent valuation prior to the announcement of the disposal) | 38.7 | 53.7 | |||
| Realisations – Uplift To Carrying Value | 25.8% | 17.7% | |||
| Secondary Investments | Secondary Investments occur when existing private equity fund interests and Commitments are purchased from an investor seeking liquidity. | ||||
| Share buyback | Share buybacks, or stock repurchases, occur when a company uses its own funds to buy its outstanding shares in the open market, thereby reducing the number of shares in circulation. As a result of buybacks, existing shareholders own a greater percentage of the company’s assets and profits. If share buybacks are executed at a discount to NAV, the buyback will increase the NAV per Share of the remaining shares outstanding. | ||||
| Share Price Total Return | Share Price Total Return is the change in the Company’s share price, assuming that dividends are re-invested on the day that they are paid. | ||||
| Total New Investment | Total New Investment is the total of direct Co-investment and fund investment Drawdowns in respect of the Portfolio. In accordance with IFRS 10, the Company’s subsidiaries are deemed to be investment entities and are included in subsidiary investments within the financial statements. | ||||
| £m | 31 July 2024 | 31 July 2023 | |||
| Purchase of Portfolio investments per cash flow statement | 23.3 | 15.5 | |||
| Purchase of Portfolio investments within subsidiary investments | 81.1 | 48.6 | |||
| Total New Investment | 104.4 | 64.1 | |||
| Term | Short form | Definition | ||||
| Total Proceeds | Total Proceeds are amounts received by the Company in respect of the Portfolio, which may be in the form of capital proceeds or income such as interest or dividends. In accordance with IFRS 10, the Company’s subsidiaries are deemed to be investment entities and are included in subsidiary investments within the financial statements. | |||||
| £m | 31 July 2024 | 31 July 2023 | ||||
| Sale of Portfolio investments per cash flow statement | 9.3 | 15.7 | ||||
| Sale of Portfolio investments, interest received, and dividends received within subsidiary investments | 76.8 | 77.3 | ||||
| Interest income per cash flow statement | 0.2 | 0.3 | ||||
| Dividend income per cash flow statement | 0.1 | 0.3 | ||||
| Other income per cash flow statement | 0.0 | 0.50 | ||||
| Total Proceeds | 86.4 | 94.1 | ||||
| Fund Disposals | — | 0.0 | ||||
| Realisation Proceeds | 86.4 | 94.1 | ||||
| Undrawn Commitments | Undrawn Commitments are Commitments that have not yet been drawn down (please see ‘Drawdowns’). | |||||
| Unquoted Company | An Unquoted Company is any company whose shares are not listed or traded on a recognised stock exchange. | |||||
| Valuation Date | The date of the valuation report issued by the underlying manager. | |||||
| Valuation Multiples | Valuation Multiples are earnings (EBITDA), or revenue multiples applied in determining the value of a business enterprise. | |||||
1 Based on Enlarged Perimeter covering 63% of the Portfolio. See page 9