Half year results 30 June 2005

Transcription

1 Half year results 30 June 2005

2 SVG Capital NAV growth vs. peer group 160 SVG Capital Pantheon Graphite Ent Electra 3i Candover 140 HG CAPITAL TRUST FTSE World Index FTSE All Share Sep-00 Mar-01 Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Compound growth in NAV since listing in May 1996 of 12.8%*- outperforming the FTSE All-Share by 9.4% p.a. over the same period 1 Source: Datastream estimates * at 30 June 2005 and at IPEVC Valuation Guidelines values

3 IFRS and IPEVC Valuation Guidelines International Financial Reporting Standards (IFRS) key impacts: Remove discounts from quoted investments uplift of 41.2 million (28.1p per share) Reclassify 2013 convertible bonds into debt and equity reduction in debt of 6.3 million in favour of equity Account for the fair value of share options issued an expense of 0.7 million (to reserves) no effect on net assets International Private Equity and Venture Capital (IPEVC) Valuation Guidelines Supersedes AFIC, BVCA and EVCA guidelines No material change in valuation guidelines from BVCA Portfolio analysis based on IPEVC Valuation Guidelines assuming IFRS compliance was not a requirement 2

4 NAV reconciliation December 2004 June 2005* million IFRS adjustment (19.6) (8.3)** (8.4) 4.1 (0.2) * IFRS convertible interest and net finance costs Growth in portfolio companies Provision for PEII carry FX loss Underlying fund management fees * excluding 36 million of new share capital issued to Permira ** 4.7 million on portfolio valuation and 3.6 million on money market funds Finance costs (bonds & loans) Net capital costs Operating results Gain in net assets 3

5 Portfolio highlights - IPEVC Valuation Guidelines 7.4% increase in fully diluted net assets per share to 579.7p (IPEVC Valuation Guidelines) Significant distributions million - ahead of total distributions for 2004 Increases in earnings and a focus on cash-flow generation and debt repayment have had a positive impact on portfolio company valuations Strong performance of the quoted portfolio Several material uplifts in valuations New Look, Intelsat, debitel, Memec (Avnet) and Inmarsat 4

6 Portfolio highlights - IPEVC Valuation Guidelines (continued) Most significant being: New Look (cash + value) million p Inmarsat million p Intelsat (cash + value) million - 8.1p Memec (Avnet) million - 7.6p debitel (cash + value) million - 7.5p Most significant write-down: Kiekert ( 5.7) million - (3.9p) 5

7 Portfolio highlights - IPEVC Valuation Guidelines (continued) million 180 Distributions Favourable equity and debt capital markets % from recapitalisations and 24% from flotations Distributions in 1H ahead of total distributions for Since June 2005 a further 41.8 million of distributions received months to December months to June 2005 July - August 2005 Average uplift to previous valuation on distributions since inception is approximately 35% (41% excluding recapitalisations) 6

8 Cashflow Calls of 36.5 million paid Permira made no new investments in 1H High cash position of million at June 2005 (22% of gross assets) million at 5 September 2005 Since June: 2.4 million of calls paid, and 91 million of investments announced distributions of 41.8 million Uncalled commitments of million (30 June 2005) Strong cash position underlines performance of portfolio Cash balances will be used to meet uncalled commitments 7

9 Valuation bases - IPEVC Valuation Guidelines 33% of the portfolio valued on an earnings basis after a range of discounts, the weighted average earnings multiples used: average discounts applied to investments valued on an earnings basis 33% on a like for like basis average multiples increased 28% of the portfolio valued on a quoted basis at June average discounts applied 19% increased to 35% after completion of acquisition of Memec by Avnet (July) 4% of the portfolio (by value) written-down June 2005 December 2004 Overall portfolio

10 Portfolio analysis - IPEVC Valuation Guidelines (30 June 2005) EVCA sector analysis (30 June 2005) Portfolio valuation basis (30 June 2005) Analysis by market (30 June 2005) Consumer and leisure 48% (22% leisure, 14% retail, 6% media & 6% other consumer) 2. Medical / health 13% 3. Computer / other electronics 23% 4. Chemicals 1% 5. Industrial products / services 6% 6. Other manufacturing 2% 7. Other services 7% 1. Cost 22% 2. Earnings 30% 3. Written-down - earnings 3% 4. Written-down 1% 5. Third-party 16% 6. Quoted 28% 1. Multinational 26% 2. Continental Europe 32% 3. UK 23% 4. North America 8% 5. Far East / Asia Pacific 11% 9

11 20 largest underlying companies (IFRS) 30 June 2005 Company SEAT Pagine Gialle Ferretti Premiere Memec Date July 2003 October 2002 February 2003 October 2000 Business A telephone directories, business information and directory assistance company Luxury motor yachts Pay-TV operator Semi conductor distribution business Head office Italy Italy Germany UK June 05 value Valuation basis % of net assets 49.9 million Quoted 6.1% 46.8 million Earnings 5.7% 43.1 million Quoted 5.3% 40.9 million Third-party 5.0% Company Travelodge & Little Chef Inmarsat AA austriamicrosystems Date February 2003 December 2003 September 2004 June 2000 Business Second largest operator of budget hotels in the UK. Little Chef is the largest roadside restaurant chain Provider of global mobile satellite communication services Roadside recovery, insurance, personal loans, service centres, mobile tyre fitting, publishing and driving schools Mixed signal ASICS semi conductors for telecom, industrial and automotive sectors Head office UK UK UK Austria June 05 value Valuation basis % of net assets 33.9 million Earnings 4.2% 32.2 million Quoted 4.0% 28.2 million Cost 3.5% 25.7 million Quoted 3.2% 10

12 20 largest underlying companies (IFRS) 30 June 2005 Company New Look DinoSol Supermercados Parkway Holdings Vendex Date April 2004 December 2004 December 1999 September 2004 Business Leading UK fashion retailer Formerly Ahold Supermercados, operate 600 stores in Spain and the Canary Islands Private healthcare provider in Singapore Largest non-food retailer in the Benelux region Head office UK Spain Singapore Benelux June 05 value Valuation basis % of net assets 22.6 million Earnings 2.8% 21.4 million Cost 2.6% 21.0 million Quoted 2.6% 19.2 million Cost 2.4% Company Grammer Intelsat Marrazzi Grandi Navi Veloci Date May 2001 January 2005 December 2004 October 2004 Business Seating equipment for the automotive / commercial vehicle industry Leading provider of satellite communications services World s largest manufacturer of ceramic tiles Leading European ferry company Head office Germany US Italy Italy June 05 value Valuation basis % of net assets 17.5 million Third-party 2.2% 15.4 million Earnings 1.9% 14.3 million Cost 1.8% 12.1 million Cost 1.5% 11

13 20 largest underlying companies (IFRS) 30 June 2005 Company EEMS Hogg Robinson Strides Arcolab Washtec Date May 1999 June 2000 January 2002 February 1988 Business Assembly and test services for DRAM and flash memory chips Corporate travel business Manufacturer of generic drugs and tablets Manufacturer of car wash equipment Head office Italy UK India Germany June 05 value Valuation basis % of net assets 12.1 million Earnings 1.5% 11.8 million Earnings 1.4% 10.5 million Quoted 1.3% 10.3 million Quoted 1.3% 12

14 Outlook Continued availability of debt competitive pricing discipline and value creation more important high quality assets are available Permira have announced four new investments since June driven by long sourcing process Increased competition, including trade Exit market resilient strong distributions from the portfolio in 1H 13

15 Average European LBO purchase price 9.0 All Transactions EBITDA multiple (x) x x x 7.0x x x x LTM (31/03/05) Purchase price Fees / expenses Observations: (33) (40) (37) (52) (66) (77) (75) Source: Standard & Poor s 14

16 Capital structure of European LBOs Q05 EBITDA multiple (x) x 7.3x 7.1x 7.0x 6.8x 7.6x 7.8x Q05 Senior debt / EBITDA Sub debt / EBITDA Equity / EBITDA Pricing has been driven by increasing leverage and lower interest rates Source: Standard & Poor s 15

17 Operating review

18 SVG Advisers Third-party funds under management and commitments of 1.7 billion four private equity fund of funds three quoted funds On track to make modest profit in 2005 Reputation for innovation and performance in all of its products Launch of Strategic Equity Capital plc million UK investment trust managed by the public equity team Third fund of funds launched in conjunction with Schroders expected to have a first close by the year-end December 2004 valuation of business of 22.2p* * after applying standard discounts 17

19 Operating results Six months to June months to December SVGA third-party external investment management SVGA external fees earned 4,899 8,550 SVGA investment management costs (3,912) (7,138) Net contribution 987 1, Management of SVG Capital plc Interest and other revenues 1,656 1,501 Direct legal, secretarial etc. costs (822) (1,530) Direct management time costs* (1,272) (2,171) Net costs (438) (2,200) Revenue results before interest and tax Investment income funds Operating profit before tax ,226 12,775 (788) 1, * time spent by SVG Advisers staff on management of SVG Capital 18

20 Appendices

21 Adjusted net assets (IPEVC) - pence per share Adjusted NAV (movements in cash and quoted portfolio, applying same discounts) 579.7p 586.5p 124.8p 159.4p 302.2p 247.5p Quoted Unquoted Cash Net convertible 129.9p 156.8p 22.8p 22.8p Published NAV at 30 June 2005 Adjusted NAV at 2 September

22 Permira and Schroder Ventures - performance % 25 Aggregated Net IRRs (all funds) since inception (1983) Dec 00 Jun 01 Dec 01 Jun 02 Dec 02 Jun 03 Dec 03 Jun 04 Dec 04 Jun 05 Permira & Schroder Ventures Weighted stock market 21

23 Share price performance Sterling pence per share Share price NAV - IFRS 709p 630.0p* * Including 22.2p for SVG Advisers 100 Jun-96 Jun-97 Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 22

24 Fund commitments (30 June 2005) Amount Amount SVG Capital called uncalled uncalled (local currency) (local currency) commitment* Permira Europe II 565.0m 85.2m 57.5m Permira Europe III 174.2m 333.8m 225.4m The Japan Venture Fund III 2,962.6m 142.4m 0.8m The Japan Fund IV 2,361.3m 8,352.3m 42.1m SV Investments Fund I US$52.6m US$10.6m 5.9m SV Life Sciences Fund II US$40.3m US$6.4m 3.5m SV Life Sciences Fund III US$31.5m US$43.4m 24.3m Strategic Recovery Fund 6.9m 0.5m 0.5m P m 21.0m 14.2m SVG Diamond m 34.3m Total 408.5m * Based on exchange rates at 30 June

25 Ageing of portfolio (30 June 2005) million 200 Written-down Cost Earnings / third-party Quoted 150 million & prior

26 Disclaimer This presentation is directed only at persons who (i) are persons falling with Article 49(2)(a) to (d) ( high net worth companies, unincorporated associations etc. ) of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (as amended) or (ii) have professional experience in matters relating to investments (all such persons together being referred to as relevant persons ). This presentation must not be acted on or relied on by persons who are not relevant persons. This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and businesses of the Company. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. Nothing in this presentation should be construed as a profit forecast. 25