Press release
For immediate release on 21st August 2009
The information contained herein is not for publication or distribution to
persons in the United States of America. Any securities referred to herein
have not been and will not be registered under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and may not be offered or sold
without registration thereunder or pursuant to an available exemption
therefrom. Any public offering of securities to be made in the United States
would have to be made by means of a prospectus that would be obtainable from
the issuer or its agents and would contain detailed information about the
issuer of the securities and its management, as well as financial
statements. Neither this document nor the information contained herein
constitutes an offer to sell or the solicitation of an offer to buy any
securities. These materials do not constitute an offer of securities for sale
in the United States. No money, securities or other consideration is being
solicited, and, if sent in response to the information contained herein, will
not be accepted.
Candover Investments plc
Interim results for the six months ended 30th June 2009
Financial headlines
Net assets per share were 902p, a decrease of 12% since 31st December 2008
(1026p) driven by currency movements and exceptional non-recurring costs which
accounted for declines of 13% and 7% respectively
Net assets per share before currency movements and exceptional non-recurring
costs increased by 8% reflecting the stabilisation of the value of the
investment portfolio as equity markets recover
* Net debt reduced to £19.2 million (£54.5 million at 31st December 2008)
following asset realisations; loan to value covenant ratio of 25% (34% at
31st December 2008)
* Realisation proceeds of £41.6m; £36.4m from the sale of Wood Mackenzie,
which crystallised carried interest payments
* Value of future carried interest increased to £25.7m (£19.2m at 31st
December 2008)
* No interim dividend (2008: 22.0p per share)
Strategic review
* Financial position strengthened markedly
* Clear progress to stability made following recent asset realisations and
lowering of the cost base
* Range of strategic options considered; third party proposals not advanced
because no certainty of creating value for shareholders
* Restructuring of Candover Partners completed with management succession
plan implemented and new leadership team now in place
* Review now focused on the interlinked issues of the status of the 2008 Fund
and the ownership structure of Candover Partners
Gerry Grimstone, Chairman of Candover Investments plc, said:
"During the last six months we have made significant progress in terms of
achieving financial stability for Candover. We are in a much stronger position
than previously due to recent asset realisations and the lowering of the cost
base. We continue to focus on enhancing our stability further and resolving
the organisational and structural issues that remain.
"In the short term our portfolio companies continue to operate in a challenging
economic climate, although we see some stability returning. Our priority
remains to ensure that these companies and their management teams have the
resources and expertise to trade through the downturn and are well positioned
to take advantage of growth opportunities when conditions improve. We continue
to believe that there is considerable long-term value within many of Candover's
portfolio companies which, when realised over time, should provide a
substantial enhancement of value for our shareholders."
For further information, please contact:
Tulchan +44 20 7353 4200
Susanna Voyle/Peter Hewer
KEY FINANCIALS
Total net assets
£197.2 million
Total net assets (after currency movements and exceptional non-recurring costs)
were £197.2 million, a decrease of 12.1% for the six months to 30th June 2009
Net assets per share
902p
Net assets per share (after currency movements and exceptional non-recurring
costs) decreased by 12.1% to 902p for the six months to 30th June 2009
Net revenue before exceptional non-recurring costs
£5.2 million
Compares to net revenue of £9.5 million in 2008 and stated before exceptional
non-recurring costs of £15.4 millionincurred on undertaking the strategic
review, restructuring costs and the costs of discontinued operations in Asia
and Eastern Europe
References in this Interim Report to Candover mean Candover Investments plc and/or,
where appropriate, one or more of its subsidiaries, and references to Candover
Partners means Candover Partners Limited.
The information contained herein is not for publication or distribution to
persons in the United States of America. Any securities referred to herein have
not been and will not be registered under the US Securities Act of 1933, as
amended (the Securities Act), and may not be offered or sold without
registration thereunder or pursuant to an available exemption therefrom. Any
public offering of securities to be made in the United States would have to be
made by means of a prospectus that would be obtainable from the issuer or its
agents and would contain detailed information about the issuer of the
securities and its management, as well as financial statements. Neither this
document nor the information contained herein constitutes an offer to sell or
the solicitation of an offer to buy any securities. These materials do not
constitute an offer of securities for sale in the United States. No money,
securities or other consideration is being solicited, and, if sent in response
to the information contained herein, will not be accepted.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to be able to report that the financial position of Candover has
strengthened markedly in the last six months. Your Board is confident that the
Company has made good progress in dealing with the challenges that face it and
in achieving greater financial stability.
In our preliminary announcement in March, I reported to you that Candover was
facing its most challenging period since its foundation in 1980. The financial
position of the Company had weakened significantly during the latter part of
2008, reflecting a combination of external factors, structural aspects unique
to our business model, and the changes to the Company's balance sheet that were
made in 2006 and 2007. I informed you that, in the wake of our decision to
withdraw from our commitment to the Candover 2008 Fund, the Board was
considering a range of strategic options to reinforce our financial position
and maximise value for shareholders.
The challenges we faced included how to deal with a rapid fall in the value of
our assets and how to ensure that the Company had access to sufficient cash and
liquidity to fund both its ongoing operations and to meet its commitments to
invest in the Funds raised and managed by Candover Partners.
Achieving stabilisation
The review of strategic options we undertook was focused on how to put Candover
on a firm footing for the future.
During the review, Candover received a number of expressions of interest
covering a range of options for the business, including potential offers for
the Company. Together with our advisors, we entered into detailed discussions
with a number of parties to establish whether a bid for the entire Company
would deliver superior value for shareholders compared with a realisation of
our underlying portfolio. After careful consideration of all of the options
available and taking into account the progress made in stabilising the overall
financial position of the Company, the Board concluded that none of the
proposals had sufficient certainty of creating enhanced value for shareholders.
These discussions terminated at the end of June.
Various proposals were also made to us that would have resulted in substantial
dilution for existing shareholders but we found none of these appropriate.
We concluded that a reduction in the cost base was essential in the light of
the changed economic situation that we faced, including the suspension of the
Candover 2008 Fund. This meant that we had to make a number of our investment
executives and support staff redundant. This was not an easy process and I
would like to thank all our colleagues for their efforts and support for
Candover. In addition, we have closed our nascent Asian and Eastern European
operations where the efforts by these teams to become self-financing had sadly
not made enough progress.
Asset sales have made a major contribution to our stabilisation. We sold our
interests in three French buyout funds for £5.3 million. The major contribution
to our much firmer financial footing, however, came from the sale of Wood
Mackenzie by Candover Partners for an enterprise value of £553 million. This
generated cash proceeds for the Company of £36.4 million - £19.6 million from
the sale itself and a further £16.8 million as a result of the crystallisation
of carried interest payments from the Candover 2001 Fund. The value of our
carried interest entitlements have increased from £19.6 million to £25.7
million. This reflects the increased certainty as to the crystallisation of
the carry into incremental cash flow, as and when the Candover 2001 Fund
achieves further realisations.
The overall positive impact of these events is reflected in both the reduction
in net debt at 30th June 2009 to £19.2 million from £54.5 million at 31st
December 2008; as well our ability to meet the covenant obligations attached to
our loan notes. As at 30th June 2009, our loan to value ratio as calculated in
accordance with our loan note agreement was 24.8% compared to 33.6% at 31st
December 2008, and was well within the required threshold of 40%. In addition,
the Board is satisfied that Candover continues to have adequate capital to meet
its follow-on commitments to the 2005 Fund which amount to £78.4 million
compared to cash and cash equivalents of £151.9 million.
Two interlinked strategic issues remain - the future of the Candover 2008 Fund
and the ownership structure of Candover Partners.
The Candover 2008 Fund
The Company has always been a cornerstone investor in the funds raised by
Candover Partners. However, because of the issues faced by Candover Investments
plc, we withdrew from our commitment to the Candover 2008 Fund, leading to the
Fund's suspension for up to six months from 6th April 2009. As a result of
Candover's decision not to make any further commitment, discussions began
between Candover, Candover Partners (as manager of the Fund) and the Fund's
Limited Partners regarding the options for the future of the Fund. These talks
are ongoing and we expect them to conclude within the weeks ahead. We hope that
they will lead to the emergence of a smaller Fund but we do not yet know that
this will be the case. In any event, Candover Investments plc will not be an
investor in a new Candover 2008 Fund.
Candover Partners
Our long-standing business model - a listed plc which invests, realises and
recycles profits through an independent but wholly owned private equity fund
manager, Candover Partners - has been severely tested by the global financial
and economic crisis. The stresses that have resulted from this have made it
clear that our ownership of Candover Partners and our co-investing alongside
funds raised by them, have created a set of arrangements that are not
necessarily optimal from the point of view of our shareholders. The fiduciary
duty owed by Candover Partners to the Limited Partners in its funds has the
potential for creating an undesirable conflict between the interests of the
Limited Partners and the shareholders of Candover Investments plc.
The strategic review has therefore focused our minds on whether an alternative
ownership model for Candover Partners (or some other arrangements) may be
merited in the future. This is closely linked to the discussions concerning
the future of the Candover 2008 Fund and we will be concluding our review of
this once the future of that Fund has been settled.
Management
The restructuring of our business team has provided Candover Partners with the
opportunity to bring forward some changes to the senior management of the
business that were envisaged as part of a long-term succession plan. John
Arney, who has been with Candover Partners since 2002, has taken on the
newly-created role of Managing Partner, responsible for both the strategy and
management of Candover Partners. Marek Gumienny has become Chairman of Candover
Partners. Colin Buffin, who has been a driving force in the firm's evolution
since he joined Candover in 1985, will leave the Company once discussions on
the Candover 2008 Fund have concluded. Likewise, Tian Tan, the Finance Director
of Candover Partners, has retired and Matthew Harrison has assumed that role. I
would like again to thank all our departing colleagues for their hard work and
efforts over the years.
I am pleased to say that Malcolm Fallen, who led the strategic review process
on behalf of the Board since joining on an interim basis in March 2009, has
been confirmed as CEO of Candover Investments plc and he will be joining your
board from 9th September. I am confident that Malcolm will continue to drive
the affairs of the Company forward as he has so successfully done over the last
few months.
Our performance
We have seen stabilisation in the underlying value of our investment
portfolio. Whilst unaudited net assets fell over the six months by £27.1
million, this was after providing for exceptional non-recurring costs of £15.4
million, and net currency losses of £29.8 million due to the adverse
translation impact on our non-sterling denominated investments and cash
balances, offset by translation gains on the loan notes and related swaps.
Excluding these items net assets would have increased by £18.1 million (8.1%),
reflecting a steadying in the valuations of the portfolio companies in constant
currency terms.
Net revenue before tax and exceptional non-recurring costs was £5.2 million,
compared to net revenue before tax of £9.5 million in 2008. The reduced
revenue is a result of the impact of lower fee income offset by the benefits of
restructuring our cost base.
Most significantly during the period under review, our net debt has reduced to
£19.2 million from £54.5 million at 31st December 2008, principally due to
realisation proceeds of £41.6 million. Realisation proceeds crystallised in
the first half of 2008 were £31.7 million.
Dividend
At this point in time the Board does not feel it would be appropriate to
recommence paying dividends to shareholders. However, as and when further
clarity arises on the remaining strategic issues, and future realisations
enhance our balance sheet further, the Board would seek to recommence the
process of returning value to shareholders.
Outlook
During the last six months we have made significant progress in terms of
achieving financial stability for Candover. We are now in a much stronger
position due to recent asset realisations and the lowering of the cost base.
We continue to focus on enhancing our stability further and resolving the
organisational and structural issues that remain.
In the short term, our portfolio companies continue to operate in a challenging
economic climate although we see some stability returning. Our priority
remains to ensure that these companies and their management teams have the
resources and expertise to trade through the downturn and are well positioned
to take advantage of growth opportunities when conditions improve. We continue
to believe that there is considerable long-term value within many of Candover's
portfolio companies which, when realised over time, should provide a
substantial enhancement of value for our shareholders.
Gerry Grimstone
Chairman
21st August 2009
INTERIM MANAGEMENT REPORT
Activity in the European buyout market continues to be muted and our focus in
the near term is very much on protecting and growing value in the existing
portfolio. The most significant event in the first half of the year was the
realisation of Wood Mackenzie.
Investments
The European buyout market suffered in the first half of the year from the
difficult market conditions and a lack of availability of debt, with activity
reaching lows not seen for ten years in terms of both volume and value. We
made no new investments during the period due to a lack of investment
opportunities in the first quarter,and, from April onwards, the suspension of
the Candover 2008 Fund.
Realisations
Candover and its managed funds achieved realisation proceeds totalling £218.5
million during the period. Candover's share was £41.6 million.
In May we realised our direct holdings in Ciclad 2, 3 and 4, which the
strategic review had identified as non-core assets. The sale of these three
investments generated proceeds of £5.3 million.
In June, we realised our holding in Wood Mackenzie. The sale generated proceeds
of £36.4 million for Candover (including loan note interest of £0.7 million),
of which £16.8 million resulted from the crystallisation of the carried
interest. The Candover 2001 Fund achieved a return of £173.6 million
(including loan note interest of £5.0 million), bringing the overall investment
multiple to 2.7 times the original investment.
Date of Company Capital Exit route
exit proceeds
Candover Funds
£m £m
May Ciclad 2, 3 and 4 5.3 - Private equity sale
June Wood Mackenzie 18.9 168.6 Private equity sale
Candover 2001 Fund 16.8 - Crystallisation of
Carried Interest carried interest
Other 0.6 2.6
_____ ______
41.6 171.2
Valuations
Over the period under review the portfolio has shown signs of stabilisation.
Of our top ten investments, seven are trading ahead of prior year at the
earnings level on a twelve month basis.
The portfolio is well diversified by region and sector. Whilst the UK
represents 39% of our investments by value, the companies themselves are well
diversified in the regions in which they trade. Industrials remain our largest
sector by exposure, due to our investments in Stork, Qioptiq and Capital
Safety.
The slow down in the private equity markets over the past year has affected our
ability to achieve realisations, and a significant part of our portfolio by
value has now been held for over five years. These investments, Springer,
Ontex and Equity Trust, have all now shown positive growth under our ownership
and we feel they are well positioned to prosper further when the current
climate changes.
The 10 largest companies represent 87% of the portfolio, with the 2001 Fund
Carried Interest representing a further 10%.
Top 10 investments
Analysis by value as at 30th June 2009
By valuation method
1. Multiple of earnings 100%
By region
1. United Kingdom 39%
2. Benelux 26%
3. Spain 13%
4. France 13%
5. Switzerland 5%
6. Germany 4%
By sector
1. Industrials 31%
2. Energy 21%
3. Financials 18%
4. Leisure 13%
5. Health 8%
6. Support services 5%
7. Media 4%
By age
1. <1 year nil%
2. 1-2 years 52%
3. 2-3 years 19%
4. 3-4 years 12%
5. 4-5 years nil%
6. >5 years 17%
Outlook
As part of the ongoing strategic review, we are currently exploring possible
changes to the ownership structure between Candover Investments plc and
Candover Partners. Any change to this structure will depend on the progress of
discussions concerning the future of the 2008 Fund.
Under the terms of the suspension of the Candover 2008 Fund, no new investments
will be made until at least October 2009. However, whilst there are early
indications that the buyout market is starting to recover, we believe that
buyout activity in the second half of 2009 will remain relatively quiet. It is
our view there will be a number of interesting opportunities in 2010 as
developed economies emerge from the recession.
Our focus therefore remains on managing the portfolio through this difficult
economic period, and ensuring that the long-term value of each company is
maximised.
John Arney
Managing Partner
Candover Partners Limited
21st August 2009
10 LARGEST INVESTMENTS
as at 30th June, 2009
Residual Directors' Effective % of Basis of
cost valuation equity interest Candover's valuation
Date of of £m (fully diluted) net assets
Investment Geography investment investment
£m
Expro UK Apr-08 69.5 46.3 See note 23.5% Multiple
International 1 of earnings
Oilfield services
Stork Netherlands Jan-08 48.9 41.3 6.4% 20.9% Multiple
Engineering of earnings
conglomerate
Parques Spain Mar-07 25.7 29.8 5.6% 15.1% Multiple
Reunidos of earnings
Operator of
attraction
parks
AlmaConsulting France Dec-07 20.5 28.9 5.4% 14.7% Multiple
Group of earnings
Cost reduction
and tax
recovery
services
Ontex Belgium January 22.1 17.3 6.3% 8.8% Multiple
Hygienic 2003/ of earnings
disposables Jul-07
Qioptiq UK Dec-05 9.6 15.0 7.2% 7.6% Multiple
Optical of earnings
engineering
Capital Safety UK Jun-07 11.8 13.2 6.4% 6.7% Multiple
Group of earnings
Fall
protection
equipment
Equity Trust UK May-03 8.3 11.9 5.6% 6.0% Multiple
Trust services of earnings
EurotaxGlass's Switzerland Jun-06 17.4 10.8 8.0% 5.5% Multiple
Automotive of earnings
data
intelligence
Springer Germany January/ 0.6 9.0 3.6% 4.5% Multiple
Science + Sep-03 of earnings
Business Media
Academic
publisher
Note 1 - Candover's final investment amount, and therefore its effective
equity interest, will depend on the level of syndication
FINANCIAL REVIEW
Net asset value per share
Net assets per share after currency movements and exceptional items were 902p,
a decrease of 12.1% since 31st December 2008. Candover currently manages its
currency exposure in order to mitigate any adverse impact on its loan to value
covenant through the denomination of its cash balances and swaps. As a result,
currency fluctuations can have a material impact on net assets. See Table 1.
At 30th June 2009, net assets per share before currency movements and
exceptional non-recurring costs were 1109p compared to 1026p at 31st December
2008. The increase of 8.1% over the six month period compares with a fall in
the FTSE All-Share of 1.7% over the same period, reflecting the growing
stabilisation of the portfolio.
Table 1
£ £ p/ p/
million million share share
Net asset value at 31st December 2008 as 224.3 1026
reported
Investment movements (before currency) 22.1 101
Net revenue before exceptional 5.2 24
non-recurring costs
Capitalised expenses net of tax (7.7) (35)
Others (1.5) (7)
_____ ____
242.4 1109
Currency impact:
- Realised and unrealised investments (39.6) (181)
- Restatement of cash and cash equivalents (15.9) (73)
- Translation of loan and swap balances 25.7 118
______ ______
(29.8) (136)
Exceptional non-recurring costs (15.4) (71)
______ _____
Net asset value at 30th June 2009 as 197.2 902
reported
Investments
The valuation of investments, including accrued loan note interest, at 30th
June 2009 was £256.6 million (31st December 2008: £313.9 million). See Table 2.
Table 2
£ million £ million
Investments at 31st December 2008 313.9
Disposals at valuation (46.5)
Additions 0.1
Revaluation of investments:
- Valuation movements before currency 26.1
- Currency impact on unrealised investments (37.0)
_________
(10.9)
______
Investments at 30th June 2009 256.6
Net debt position
Candover's net debt has fallen from £54.5 million at 31st December 2008 to £
19.2 million as at 30th June 2009, principally due to realisation proceeds of £
41.6 million. Realisation proceeds crystallised in the first half of 2008 were
£31.7 million. See Table 3.
Table 3
30th June 2009 31st December 2008
£ million
Loans and borrowings 187.1 217.5
Fair value hedge adjustment (12.0) (21.0)
Deferred costs 1.4 1.6
_______________________
Value of bonds 176.5 198.1
Value of related swaps (5.4) (10.4)
Cash (151.9) (133.2)
_______________________
Net debt 19.2 54.5
The outstanding commitment to the Candover 2005 Fund fell to £78.4 million over
the period from £90.4 million at the year end, largely due to currency.
As disclosed at the year end, Candover has guaranteed an additional €43.2
million investment in Expro, pending its syndication.
Net revenue before tax
For the six month period net revenue before exceptional items and tax was £5.2
million compared to £9.5 million in the comparative period. This resulted from
the impact of lower fee income offset by the benefits of restructuring our cost
base.
Exceptional non-recurring costs of £15.4 million were incurred on undertaking
the strategic review, restructuring costs and the costs of discontinued
operations in Asia and Eastern Europe.
PRINCIPAL RISKS AND UNCERTAINTIES
Details of the principal risks and uncertainties facing the Group were set out
on pages 53 to 59 of the 2008 Annual Report and Accounts, a copy of which is
available on the website. In summary, those risks and uncertainties were as
follows: market risk, currency risk (in particular the euro and US dollar),
interest rate risk, other price risk, liquidity risk, credit risk, fair values
of financial assets and financial liabilities and capital management policies
and procedures.
The principal risks and uncertainties identified in the 2008 Annual Report
remain unchanged and each of them has the potential to affect the Group's
results during the remainder of 2009.
Candover aims to minimise risk by:
- Diversifying the portfolio by size, sector and geography;
- Monitoring the Group's exposure to foreign currencies and fixed
interest securities;
- Using foreign currency borrowing and derivative financial instruments
to reduce the Group's exposure to future exchange rate movements;
- Ensuring full and timely access to relevant information from the
investee companies and attending board meetings;
- Managing cash and non-cash equivalents in such a way that they are
readily realisable to meet investment and operating needs
- Monitoring and reviewing the broad structure of the Group's capital on an
ongoing basis; and
- Hedging market movements where appropriate
Our views on the current market conditions are reflected in the Chairman's
statement and interim management report.
STATEMENT OF DIRECTORS'RESPONSIBILITIES
The directors of Candover Investments plc confirm that, to the best of their
knowledge, the condensed set of financial statements on pages 11 to 14 have
been prepared in accordance with International Accounting Standard 34 'Interim
Financial Reporting' as adopted by the EU, and that the interim management
report on pages 4 and 5 includes a fair review of the information required by
DTR 4.2.4, DTR 4.2.7 and DTR 4.2.8.
The directors of Candover Investments plc are listed on page 16.
By order of the Board
Philip Price
Company Secretary
21st August 2009
INDEPENDENT REVIEW REPORT TO
CANDOVER INVESTMENTS PLC
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30th
June 2009 which comprises the statement of comprehensive income, statement of
changes in equity, statement of financial position, group cash flow statement
and the related notes. We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
set of financial statements.
This report is made solely to the Company in accordance with guidance contained
in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information
performed by the Independent Auditor of the Entity'. Our review work has been
undertaken so that we might state to the Company those matters we are required
to state to them in a review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company, for our review work, for this report, or for the
conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure and Transparency
Rules of the United Kingdom's Financial Services Authority.
As disclosed in Note 2, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, 'Interim Financial Reporting', as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30th June 2009 is not prepared, in
all material respects, in accordance with International Accounting Standard 34
as adopted by the European Union and the Disclosure and Transparency Rules of
the United Kingdom's Financial Services Authority.
Grant Thornton UK LLP
Registered Auditor
London
21st August 2009
STATEMENT OF COMPREHENSIVE INCOME
for the period ended 30th June 2009
£ million Six months to 30th Six months to 30th Year to 31st December
June 2009 June 2008 2008
Unaudited Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes
Gain/(loss) on
financial
instruments at
fair value
through profit
and loss
Realised gains
and losses - (12.4) (12.4) - 15.1 15.1 - 34.3 34.3
Unrealised
gains and
losses - (0.4) (0.4) - 6.6 6.6 - (224.9) (224.9)
__________________________________________________________________
- (12.8) (12.8) - 21.7 21.7 - (190.6) (190.6)
Revenue Management
fees from
managed funds 9.8 - 9.8 20.0 - 20.0 46.4 - 46.4
Investment and
other income 6.5 - 6.5 12.0 - 12.0 (5.2) - (5.2)
___________________________________________________________________
16.3 - 16.3 32.0 - 32.0 41.2 - 41.2
Recurring
administrative
expenses (10.1) (3.6) (13.7) (21.4) (5.8) (27.2) (33.2) (9.0) (42.2)
Exceptional 3
non-recurring
costs (15.4) - (15.4) - - - - - -
_____________________________________________________________________
Profit/(loss)
before finance
costs and
taxation (9.2) (16.4) (25.6) 10.6 15.9 26.5 8.0 (199.6) (191.6)
Finance costs (1.0) (4.1) (5.1) (1.1) (4.7) (5.8) (2.8) (11.1) (13.9)
Movement in
the fair value
of derivatives - (1.0) (1.0) - (14.8) (14.8) - 2.2 2.2
Exchange
movements on
borrowings - 5.8 5.8 - (1.4) (1.4) - (11.8) (11.8)
___________________________________________________________________
Profit/(loss)
before
taxation and
other
comprehensive
income (10.2) (15.7) (25.9) 9.5 (5.0) 4.5 5.2 (220.3) (215.1)
Analysed
between:
Profit/(loss)
before
exceptional
non-recurring
costs 5.2 (15.7) (10.5) 9.5 (5.0) 4.5 5.2 (220.3) (215.1)
Exceptional non-
recurring costs (15.4) - (15.4) - - - - - -
Taxation (0.8) - (0.8) (2.8) 3.0 0.2 (1.4) 3.9 2.5
Other
comprehensive
income:
Exchange
differences on
translation of
foreign
operations (0.4) - (0.4) (0.2) - (0.2) (0.2) - (0.2)
_____________________________________________________________________
Profit/(loss)
attributable
to equity
shareholders (11.4) (15.7) (27.1) 6.5 (2.0) 4.5 3.6 (216.4) (212.8)
Earnings per ordinary share:
Before exceptional non-recurring costs
Basic and
diluted 18p (72)p (54)p 30p (9)p 21p 16p (990)p (974)p
After exceptional non-recurring costs
Basic and diluted (52)p (72)p (124)p 30p (9)p 21p 16p (990)p (974)p
_____________________________________________________________________
Dividends paid
(£ millions) - - - 8.7 - 8.7 13.6 - 13.6
All of the profit for the year and the total comprehensive income for the year
is attributable to the owners of the Company.
The total column of the statement is the Statement of Comprehensive Income of
the Company prepared in accordance with IFRS. The supplementary revenue and
capital columns are presented for information purposes as recommended by the
Statement of Recommended Practice issued by the Association of Investment
Companies.
All items in the above Statement derive from continuing operations. No
operations were acquired or discontinued in the year.
No interim dividend is proposed.
Exceptional non-recurring costs are outlined in Note 3.
STATEMENT OF CHANGES IN EQUITY
for the period ended 30th June 2009
£ million Called Share Other Capital Capital Revenue Total
up premium reserves reserve reserve - reserve equity
share account - unrealised
capital realised
Unaudited
Balance at 1st 5.5 1.2 (0.2) 369.8 (182.1) 30.1 224.3
January 2009
Net revenue - - - - - (11.4) (11.4)
Unrealised loss on - - - - (0.4) - (0.4)
financial
instruments
Realised gain on - - - 24.1 (36.5) - (12.4)
financial
instruments
Movement in fair - - - - (1.0) - (1.0)
value of
derivatives
Exchange movements - - - - 5.8 - 5.8
on borrowing
Costs net of tax - - - (7.7) - - (7.7)
Exchange - - (0.4) - - 0.4 -
differences on
translation of
foreign operations
________________________________________________________
Balance at 30th 5.5 1.2 (0.6) 386.2 (214.2) 19.1 197.2
June 2009
________________________________________________________
£ million Called Share Other Capital Capital Revenue Total
up premium reserves reserve reserve - reserve equity
share account - unrealised
capital realised
Unaudited
Balance at 1st 5.5 1.2 0.6 326.6 77.5 39.9 451.3
January 2008
Dividends - - - - - (8.7) (8.7)
Share based - - 1.2 - - - 1.2
payments
Transactions with - - 1.2 - - (8.7) (7.5)
equity holders
Net revenue - - - - - 6.5 6.5
Unrealised loss on - - - - 6.6 - 6.6
financial
instruments
Realised gain on - - - 40.0 (24.9) - 15.1
financial
instruments
Movement in fair - - - - (14.8) - (14.8)
value of
derivatives
Exchange movements - - - - (1.4) - (1.4)
on borrowing
Costs net of tax - - - (7.5) - - (7.5)
Exchange - - (0.1) - - 0.1 -
differences on
translation of
foreign operations
________________________________________________________
Balance at 30th 5.5 1.2 1.7 359.1 43.0 37.8 448.3
June 2008
__________________________________________________
£ million Called Share Other Capital Capital Revenue Total
up share premium reserves reserve - reserve - reserve equity
capital account realised unrealised
Audited
Balance at 1st 5.5 1.2 0.6 326.6 77.5 39.9 451.3
January 2008
Dividends - - - - - (13.6) (13.6)
Share based - - (0.2) - - - (0.2)
payments
Share buy-backs - - (0.6) - - - (0.6)
Transactions - - (0.8) - - (13.6) (14.4)
with equity
holders
Net revenue - - - - - 3.8 3.8
Unrealised loss - - - - (224.9) - (224.9)
on financial
instruments
Realised gain - - - 59.3 (25.0) - 34.3
on financial
instruments
Movement in - - - - 2.2 - 2.2
fair value of
derivatives
Exchange - - - - (11.9) - (11.9)
movements on
borrowing
Costs net of - - - (16.1) - - (16.1)
tax
___________________________________________________________
Balance at 31st 5.5 1.2 (0.2) 369.8 (182.1) 30.1 224.3
December 2008
STATEMENT OF FINANCIAL POSITION
at 30th June 2009
£ million 30th June 30th June 31st December
Unaudited 2009 2008 2008
Non-current assets Notes
Property, plant and
equipment 3.5 3.9 4.0
Financial investments
designated at
fair value through profit
and loss
Investee companies 4 230.9 425.4 294.3
Other financial investments 4 25.7 24.8 19.6
256.6 450.2 313.9
Trade and other receivables 2.9 - 7.1
Deferred tax asset 5.9 6.1 6.5
268.9 460.2 331.5
Current assets
Trade and other receivables 7.7 7.1 14.1
Derivative financial
instruments 32.9 7.3 58.7
Current tax asset - - 3.9
Cash and cash equivalents 151.9 183.1 133.2
192.5 197.5 209.9
Current liabilities
Trade and other payables (22.0) (26.3) (20.3)
Financial liability on
equity commitments (27.3) - (31.1)
Derivative financial
instruments (27.6) (24.1) (48.2)
Current tax liabilities (0.2) (0.9) -
(77.1) (51.3) (99.6)
Net current assets 115.4 146.2 110.3
Total assets less current
liabilities 384.3 606.4 441.8
Non-current liabilities
Loans and borrowings (187.1) (158.1) (217.5)
Net assets 197.2 448.3 224.3
Equity attributable to
equity holders
Called up share capital 5.5 5.5 5.5
Share premium account 1.2 1.2 1.2
Other reserves (0.6) 1.7 (0.2)
Capital reserve - realised 386.2 359.1 369.8
Capital reserve - unrealised (214.2) 43.0 (182.1)
Revenue reserve 19.1 37.8 30.1
Total equity 197.2 448.3 224.3
Net asset value per share
Basic 902p 2051p 1026p
Diluted 902p 1996p 1026p
GROUP CASH FLOW STATEMENT
for the period ended 30th June 2009
Six months Six months Year
to to to
£ million 30th June 30th June 31st December
Unaudited 2009 2008 2008
Cash flow from operating activities
Cash flow from operations (3.6) (16.9) (22.9)
Interest paid (7.2) (4.8) (11.7)
Tax reclaimed/(paid) 3.9 (1.7) (4.7)
Net cash from operating activities (6.9) (23.4) (39.3)
Cash flows from investing activities
Purchase of property, plant and
equipment - (0.3) (0.9)
Purchase of financial investments (0.1) (103.5) (168.8)
Sale of financial investments* 41.6 31.7 47.4
Net cash (outflow)/inflow from
investing activities 41.5 (72.1) (122.3)
Cash flows from financing
activities
Equity dividends paid - (8.7) (13.6)
Purchase of own shares - - (0.6)
Advances of loans - 33.0 33.2
Net cash from financing activities - 24.3 19.0
(Decrease)/increase in cash and
cash equivalents 34.6 (71.2) (142.6)
Opening cash and cash equivalents 133.2 240.3 240.3
Effect of exchange rates and
revaluation on cash
and cash equivalents (15.9) 14.0 35.5
Closing cash and cash equivalents 151.9 183.1 133.2
*Whilst rolled-up loan note interest is disclosed within "Financial investments
designated at fair value through profit and loss" on the balance sheet, any
interest received or receivable is shown within the revenue column of the
"Statement of comprehensive income" and so included in cash flow from operating
activities above.
NOTES TO THE FINANCIAL STATEMENTS
Note 1 - General information
The information for the year ended 31st December 2008 does not constitute
statutory accounts as defined in Section 240 of the United Kingdom Companies
Act 1985. Comparative figures for 31st December 2008 are taken from the full
accounts, which have been delivered to the Registrar of Companies and contain
an unqualified audit report and did not contain a statement under Section 237
(2) or Section 237(3) of the Companies Act 1985.
Note 2 - Basis of accounting
The Group financial statements are prepared under International Financial
Reporting Standards (IFRS) as adopted by the European Union. This statement has
been prepared using accounting policies and presentation consistent with those
applied in the preparation of the accounts for the Group for the year ended
31st December 2008, and in accordance with IAS 34 'Interim Financial
Reporting', with the exception of:
IAS 1 'Presentation of financial statements'. This revised standard affects
the presentation of changes in equity and the introduction of a Statement of
Comprehensive Income.
Note 3 - Exceptional costs
Exceptional costs are those items that are one-off in nature and create
significant volatility in reported earnings and are therefore reported
separately in the income statement. These include non-recurring costs relating
to the strategic review and restructuring costs that are not regular running
costs of the underlying business.
£ million Western European Asia and Central Total
Buyout Team European Team
Redundancy costs 6.8 1.6 8.4
Advisor costs 2.7 - 2.7
Placing agents' fees written off 1.7 - 1.7
Discontinued operations - 2.6 2.6
Total costs 11.2 4.2 15.4
Note 4 - Financial investments designated at fair value through profit and loss
£ million Six months to Six months to Year to
30th June 30th June 31st December
2009 2008 2008
Opening valuation 313.9 364.4 364.4
Additions at cost 0.1 103.5 168.8
Disposals (46.8) (29.6) (30.1)
Valuation movements (10.6) 11.9 (189.2)
Closing valuation 256.6 450.2 313.9
'Other financial investments' comprise the Company's valuation of its
investment as a Special Limited Partner in managed funds.
The value of rolled-up loan note interest recognised has been reclassified
within "Financial investments designated at fair value through profit and loss"
rather than in accrued income, as the value recognised is based of the overall
value of the investment.
Note 5 - Related party transactions
The Company's interest in the Candover 1997, 2001, 2005 and 2008 Funds is
disclosed in note 10 on page 44 of the 2008 Annual Report and Accounts.
As at 30th June 2009, Candover's investments as a Special Limited Partner in
the Candover 2001, 2005 and 2008 Funds were valued at £25.3 million, £0.3
million and £0.1 million respectively (31st December 2008: Candover 2001 Fund
£19.2 million , Candover 2005 Fund £0.3 million, and Candover 2008 Fund £0.1
million).
The Company's subsidiaries are listed in note 11 on page 46 of the 2008 Annual
Report, which includes a description of the nature of their business.
During the period the Company undertook transactions with Candover Services
Limited which provided investment and administration services to the Company,
for which the Company was charged £3.3 million (2008: £6.7 million).
Note 6 - Outstanding commitments
At 30th June 2009, the Company had an outstanding commitment to fund
investments alongside the Candover 2005 Fund of £78.4 million (31st December
2008: £90.4 million). The reduction in the period was mainly due to currency
movements. As previously communicated because of the issues faced by the
Company, it withdrew from its commitment to the Candover 2008 Fund, leading to
the Fund's suspension for up to six months from 6th April 2009.
FURTHER INFORMATION
Information for shareholders
Share price
The Company's shares are listed on the London Stock Exchange under share code
'CDI'. The share price is quoted daily in the Financial Times, The Daily
Telegraph, The Times, The Independent and the Evening Standard and is also
available on our website at www.candoverinvestments.com/ and
www.candoverinvestments.com/investor-info/price-graph
ISA status
The Board has considered the ISA status of Candover's shares and for the time
being considers that a decision to make Candover's shares eligible for
inclusion in an ISA will impose constraints on the Company's investment
criteria that will not be in the overall interests of shareholders.
Website
For the latest information about Candover Investments plc visit our website:
Home page:
www.candoverinvestments.com
Latest plc news
www.candoverinvestments.com/media/latest-plc-news
Dividend History
www.candoverinvestments.com/financial-performance/dividend-history
Registrars
Enquiries concerning registered shareholdings, including changes of address,
should be referred to:
Capita Registrars
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
West YorkshIre HD8 0LA
Telephone +44 (0)871 664 0300*
Facsimile +44 (0)1484 600911
Email ssd@capitaregistrars.com
* Calls cost 10p per minute plus network extras
Board of directors
G E Grimstone *†
Non-executive Chairman
A P Hichens MBA §*†
Non-executive, nominations committee chairman
Senior Independent Director
Lord Jay of Ewelme GCMG §*†
Non-executive
N M H Jones FCA §*
Non-executive
J Oosterveld §*
Non-executive
C Russell FSIP FCA §*
Non-executive, audit committee chairman
R A Stone FCA §*†
Non-executive, remuneration committee chairman
* Member of the remuneration committee
§ Member of the audit committee
† Member of the nominations committee