UNIVERSAL PARTNERS LIMITED - Abridged unaudited financial statements for the quarter and six months ended 31 December 2017

Release Date: 07/02/2018 09:30
Code(s): UPL
 
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Abridged unaudited financial statements for the quarter and six months ended 31 December 2017

UNIVERSAL PARTNERS LIMITED
(Incorporated in the Republic of Mauritius)
(Registration number: 138035 C1/GBL)
SEM share code: UPL.N0000
JSE share code: UPL
ISIN: MU0526N00007
(“Universal Partners” or “the Company”)

ABRIDGED UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTER AND SIX MONTHS ENDED 31 DECEMBER 2017


Universal Partners has a primary listing on the Official Market of the Stock Exchange of Mauritius Ltd
(“SEM”) and a secondary listing on the Alternative Exchange of the JSE Limited (“JSE”).

PRINCIPAL ACTIVITY

The principal activity of the Company is to hold investments in high quality, growth businesses across
Europe, with a particular focus on the United Kingdom (“UK”). The Company’s mandate also allows up
to 20% of funds to be invested outside of the UK and Europe.

The Company’s primary objective is to achieve strong capital appreciation in Pounds Sterling over the
medium to long-term by investing in businesses that meet the investment criteria set out in the Company’s
investment policy.

BUSINESS REVIEW

Since its listing on the SEM on 8 August 2016 and the JSE on 11 August 2016, the Company has been
working closely with its investment advisor, ARGO Investment Managers (“ARGO”), to identify potential
investments that meet its investment criteria. ARGO has assessed over 60 potential investments to date,
and has in turn proposed a small number that meet the investment criteria to the Investment Committee of
the Company.

The Company has concluded four investments since its listing up to the reporting date.

Dentex Healthcare Group Limited (“Dentex”)
www.dentexhealth.co.uk

On 28 April 2017, the Company entered into an agreement to invest in Dentex for a total consideration of
GBP 15 million.

GBP 4 million was invested upfront to subscribe for a 36% ordinary shareholding in Dentex. The Company
subscribed for GBP 11 million worth of convertible Loan Notes (“Loan Notes”) which Dentex can draw
down during an 18 month availability period, commencing on 28 April 2017. The Company will have the
right to convert the Loan Notes into ordinary shares of Dentex which will enable it to increase its
shareholding in the ordinary equity of Dentex.

During the period, Dentex continued to investigate, make offers on and acquire dental practices, with a
total of 19 acquisitions completed at 31 December 2017 and a large pipeline of practice acquisitions at
various stages of completion. Dentex continues to trade in line with expectations set at the time of the
Company’s investment, and was awarded the ‘Highly Commended Award for Innovation of the Year’ at
the Dental Industry Awards, as well as being shortlisted for ‘Product Launch of the Year’. The Company
has assisted Dentex in engaging with banks in the UK in order to implement an appropriate debt structure
to support future acquisitions. The banks have appetite and this new facility should be finalised in the next
few months.
                                                     
 
Propelair
www.propelair.com

On 13 July 2017, the Company co-invested with Investec Investments UK Limited and invested
GBP 1 million for a 13% shareholding in Propelair, a leader in positive pressure flushing toilets. Based on
the investment thesis and expected growth, the business is likely to require additional expansion capital in
future, providing Universal Partners with an opportunity to increase the quantum of funds invested in the
business, and to boost its shareholding to around the 25% level. Universal Partners has a seat on the
Propelair board of directors, and is actively engaged in growing the business.

Over the period, Propelair appointed a new CEO with deep experience in growing similar businesses, in
addition to appointing further experienced individuals to support growth. Propelair was appointed by
MOTO group, the largest operator of motorway service stations, to install over 1,000 units across its UK
estate, with installation to commence in Q1 of 2018. Propelair’s customers also include McDonalds,
Barclays, and Thames Water.

Given the potential for Propelair’s technology to deliver substantial water savings (of around 80%), whilst
improving hygiene and reducing maintenance costs, the Company facilitated introductions in South Africa
where Propelair could present its solutions to the largest property owners in Cape Town during November
2017. A number of water measuring trials have commenced in Cape Town, to be followed up with trial
installations during Q1 of 2018, across a selected number of office buildings and shopping centres, in order
to demonstrate that the Propelair technology can provide meaningful solutions to water stressed regions in
South Africa.

YASA Limited (“YASA”)
www.yasa.com

On 18 August 2017, the Company concluded an agreement to subscribe for shares and invest an amount of
GBP 9.3 million in YASA, a manufacturer of highly differentiated electrical axial flux motors, generators
and controllers. The Company subscribed for shares together with existing YASA shareholders, and
became the holder of 21.7% of the equity shares in YASA.

The Company had a further option to purchase additional shares from various employees and shareholders
of YASA and subsequently, on 11 December 2017 and 15 January 2018, Universal Partners acquired
further shares in YASA at the original valuation for the amounts of GBP 0.7 million and GBP 1.3 million
respectively. This is expected to increase the Company’s shareholding in YASA to 26.25%, pre any dilution
from Employee Share Option Schemes.

YASA has signed long term develop and supply agreements with customers in the premium automotive
sector which are subject to strict confidentiality terms. It is anticipated that YASA’s products will be used
in future hybrid and electric vehicles released by these customers. Subject to customer approval, further
information will be provided on the launch of the vehicles. YASA is also engaged in a number of other
advanced engineering projects in the automotive, aviation and industrial sectors. In the period under review,
YASA continues to develop its own controller, with initial engineering evaluation samples anticipated to
be available to customers later in 2018. YASA officially opened its new factory in Yarnton, Oxfordshire
in the UK on 1 February 2018.

SC Lowy Partners (“SC Lowy”)
www.sclowy.com

On 22 December 2017, the Company invested in SC Lowy, an international banking and finance group
specialised in fixed income which is headquartered in Hong Kong. The Company participated in a
consortium alongside Investec Bank and other strategic family offices, which consortium acquired 20% of
the shares in SC Lowy. The founders, Michel Löwy and Soo Cheon Lee, retain majority ownership of the
business.

                                                      
SC Lowy facilitates primary issuance, secondary trading and investments, with a primary focus on
corporate bonds, loans, trade claims and special situations. SC Lowy’s in-house analysts cover the energy,
infrastructure, manufacturing, telecommunications, media, metals, mining, financials, shipping and real
estate sectors for companies based in Australia, Asia, the Middle East and Europe. SC Lowy has over 100
employees located across the world’s major financial centres and has built a global client network of over
800 international and regional banks, asset managers, hedge funds, private equity and pension funds, family
offices and corporations. SC Lowy also controls a bank in South Korea. The bank is performing well and
is in line with expectations.

In the period to 31 December 2017, SC Lowy performed in line per its budget and the Company’s due
diligence expectations, supported by a high level of trades facilitated for clients in a number of stressed and
distressed situations.

Other

ARGO has identified a pipeline of additional potential investment opportunities which are at various stages
of maturity. These opportunities are going through a rigorous and thorough due diligence prior to being
presented to the Company’s Investment Committee. Announcements regarding any successfully concluded
transactions will be forthcoming as they are completed.

For the period under review, revenue included interest earned from investing excess cash in interest bearing
fixed deposits for periods of up to six months. The interest earned from these deposits amounted to
GBP 57,950 for the period. The invested funds will remain in short-term fixed deposits, money market and
NCD instruments until such time as they are required for investments in accordance with the Company’s
investment policy. Additional interest earned from the Dentex Loan Notes, which were fully drawn down
as at the reporting date, amounted to GBP 128,664 for the period, resulting in a total interest earned of
GBP 186,614 for the period under review.

Management fees for the quarter ended 31 December 2017 amounted to GBP 228,199, incurred in terms
of the investment management agreement between the Company and ARGO. General and administrative
expenses amounting to GBP 88,727 and transaction costs of GBP 89,496 relating to the acquisition of
investments were incurred for the quarter ended 31 December 2017.

On a comparative basis, management fees for the quarter and six months ended 31 December 2017 were
higher than the management fees for the quarter and six months ended 31 December 2016 due to the number
of acquisitions and higher investment values between the two comparative periods.

NET ASSET VALUE (“NAV”)

The NAV per share as at 31 December 2017 was GBP 0.979 (30 June 2017: GBP 0.984).

LOSS PER SHARE

The loss per share of GBP 0.0029 for the quarter ended 31 December 2017 and GBP 0.0024 for the quarter
ended 31 December 2016 are based on the Company’s loss before tax of GBP 210,827 and GBP 176,955
for the quarter ended 31 December 2017 and the quarter ended 31 December 2016 respectively, and
72,350,131 weighted average number of shares in issue.

For the six months ended 31 December 2017, the loss per share of GBP of 0.0051 was based on a loss
before tax of GBP 370,411 and a weighted average number of shares in issue of 72,350,131. For the
corresponding six months in the prior year, the loss per share of GBP 0.0041 was based on a loss before
tax of GBP 298,424 and a weighted average number of shares in issue of 72,350,131.

DIVIDEND

No dividend has been declared for the period under review.
                                                       
BASIS OF PREPARATION

The abridged unaudited financial statements for the quarter and six months ended 31 December 2017
(“abridged unaudited financial statements”) have been prepared using accounting policies consistent
with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting
Standards Board (“IASB”) and in accordance with International Accounting Standard (IAS) 34 – Interim
Financial Reporting, the Listing Rules of the SEM, the Mauritian Securities Act 2005 and the JSE Listings
Requirements.

The accounting policies and methods of computation adopted in the preparation of these abridged unaudited
financial statements are in terms of IFRS and consistent with those applied in the preparation of the audited
financial statements for the period ended 30 June 2017.

The directors are not aware of any circumstances or matters arising subsequent to the period that require
any additional disclosure or adjustment to the financial statements.

AUDITORS

These abridged unaudited financial statements were approved by the Board on 6 February 2018. These
abridged unaudited financial statements have not been reviewed or reported on by the Company’s external
auditors, Grant Thornton.

By order of the Board

7 February 2018

Intercontinental Trust Limited
Company secretary


For further information please contact:

South African corporate advisor and JSE sponsor
Java Capital                                                               +27 11 722 3050

SEM authorised representative and sponsor
Perigeum Capital Ltd                                                       +230 402 0890

Company Secretary
Intercontinental Trust Limited                                             +230 403 0800

NOTES

Copies of these abridged unaudited financial statements as well as copies of the statement of direct or
indirect interest of the Senior Officers of the Company pursuant to Rule 8(2)(m) of the Securities
(Disclosure of Obligations of Reporting Issuers) Rules 2007 are available to the public upon request to the
Company Secretary at the Registered Office of the Company at c/o Intercontinental Trust Limited, Level
3 Alexander House, 35 Cybercity, Ebene 72201, Mauritius.

This announcement is issued pursuant to the JSE Listings Requirements, SEM Listing Rule 12.19 and
Section 88 of the Mauritian Securities Act 2005. The Board of Directors of Universal Partners accepts full
responsibility for the accuracy of the information in this announcement.


                                                     
ABRIDGED UNAUDITED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017

                                                         As at 31 December
                                                                              As at 30 June 2017
                                                                      2017
                                                                (Unaudited)           (Audited)
                                                                      GBP                 GBP
Assets
Non-current assets
Investments at fair value through profit and loss               37,380,700            4,000,100

Current assets
Receivables and prepayments                                        121,986              107,454
Cash and cash equivalents                                       33,352,117           67,137,560
                                                                33,474,103           67,245,014

Total assets                                                    70,854,803           71,245,114

Equity and Liabilities
Equity
Stated capital                                                  71,847,164           71,847,164
Loss for the period                                             (1,036,410)            (665,999)
                                                                70,810,754           71,181,165
Current liabilities
Payables and accruals                                              44,049                63,949

Total equity and liabilities                                    70,854,803           71,245,114



                                                   
ABRIDGED UNAUDITED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE QUARTER AND SIX
MONTHS ENDED 31 DECEMBER 2017

                                                                                Quarter ended                             Six months ended

                                                                                            31 December
                                                                   31 December 2017                          31 December 2017        31 December 2016
                                                                                                   2016
                                                                        (Unaudited)          (Unaudited)            (Unaudited)           (Unaudited)
                                                                              GBP                  GBP                    GBP                   GBP
Revenue
Interest income                                                            186,614              105,654                  301,150             154,638
Other income                                                                 8,981                  -                     38,064                 -
Total revenue                                                              195,595              105,654                  339,214             154,638

Expenditure
Management fees                                                           (228,199)             (161,641)                (401,500)           (244,834)
Set up costs                                                                   -                     -                        -                (5,749)
General and administrative expenses                                       (178,223)             (120,968)                (308,125)           (198,762)
Operating loss                                                            (210,827)             (176,955)                (370,411)           (294,707)

Loss from financial assets at fair value through profit and loss                 -                   -                        -                (3,717)

Loss before tax                                                           (210,827)             (176,955)                (370,411)           (298,424)
Tax expense                                                                    -                     -                        -                   -
Loss for the period                                                       (210,827)             (176,955)                (370,411)           (298,424)

Other comprehensive income
Items that will not be reclassified subsequently to profit and
                                                                                 -                   -                        -                   -
loss
Items that will be reclassified subsequently to profit and loss                  -                   -                        -                   -

Other comprehensive income for the period, net of tax                            -                   -                        -                   -

Total comprehensive income for the period                                 (210,827)             (176,955)                (370,411)           (298,424)

Basic and headline loss per share (pence)*                                       0.29               0.24                     0.51                0.41

* The loss per share for the quarter ended 31 December 2017 and six months ended 31 December 2017 are based on loss before tax of GBP 210,827 and
GBP 370,411 for the Company respectively and the weighted average number of shares in issue of 72,350,131 (31 December 2016: Based on loss before
tax of GBP 298,424 and the weighted average number of shares in issue of 72,350,131).

There were no dilutive shares in issue. There were no reconciling items between the basic and headline loss per share.


                                                                          
ABRIDGED UNAUDITED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED
31 DECEMBER 2017


                                            Stated Capital    Loss for the period   Total

                                                GBP                  GBP            GBP

Issue of shares                                 72,350,131                   -      72,350,131
Share issue costs                                 (502,967)                  -        (502,967)

Transactions with shareholder                   71,847,164                   -      71,847,164

Loss for the period                                    -                (665,999)     (665,999)
Other comprehensive income for the period              -                     -             -

Total comprehensive income for the period              -                (665,999)     (665,999)

At 30 June 2017                                 71,847,164              (665,999)   71,181,165

At 1 July 2017                                  71,847,164              (665,999)   71,181,165

Loss for the period                                    -                (370,411)     (370,411)
Other comprehensive income for the period              -                     -             -

Total comprehensive income for the period              -                (370,411)     (370,411)

At 31 December 2017                             71,847,164            (1,036,410)   70,810,754



 
ABRIDGED UNAUDITED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 31 DECEMBER 2017

                                                                                       Six months ended
                                                                   Six months ended         31 December    Year ended 30
                                                                   31 December 2017                2016       June 2017
                                                                         (Unaudited)         (Unaudited)       (Audited)
                                                                               GBP                 GBP              GBP
Operating activities
Loss before tax                                                            (370,411)           (298,424)       (665,999)
Adjustments for:
Loss from financial assets at fair value through profit and loss                -                 3,716           3,716
Net foreign exchange loss                                                       343              46,858          47,599

Changes in working capital:
Decrease / (Increase) in receivables and prepayments                         25,468                 -           (27,454)
(Decrease) / Increase in payables and accruals                              (19,900)             44,742          63,849

Net cash flows generated from operating activities                         (364,500)           (203,108)       (578,289)

Investing activities
Acquisition of investments                                              (33,380,600)           (200,000)     (4,202,000)
Proceeds on disposal of investments                                             -               196,284         198,284
Loans advanced to subsidiaries                                              (40,000)                -           (80,000)

Net cash flows used in investing activities                             (33,420,600)             (3,716)     (4,083,716)

Financing activities
Proceeds from issue of shares                                                   -            72,350,131      72,350,131
Share issue costs                                                               -              (502,967)       (502,967)

Net cash flows generated from financing activities                              -            71,847,164      71,847,164

Net change in cash and cash equivalents                                 (33,785,100)         71,640,340      67,185,159

Cash and cash equivalents at the beginning of the period                 67,137,560                 -               -
Exchange rate differences                                                      (343)            (46,858)        (47,599)
Cash and cash equivalents at the end of the period                       33,352,117          71,593,482      67,137,560



 

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