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Summarised audited financial statements for the year ended 30 June 2023
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 "UPL" or "the Company")
SUMMARISED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
Year ended Year ended
30 June 2023 30 June 2022
Net asset value per share ("NAV")* GBP 1.296 1.438
(Loss) / profit for the year GBP (3 062 172) 13 977 271
(Loss) / earnings per share pence (4.21) 19.25
Headline (loss) / earnings per share pence (4.21) 19.25
* The NAV per share as at 30 June 2023 was £1.296, after accounting for the dividend of 10 pence per share that was
paid in June 2023 (30 June 2022: £1.438).
Universal Partners Limited 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
focus on the United Kingdom ("UK"). The Company's investment mandate also allows up to 20% of total funds at the
time an investment is made to be invested outside the UK and Europe.
BUSINESS REVIEW
Since its listing on the SEM and the JSE, the Company has worked closely with its investment advisor, Argo Investment
Managers ("Argo"), to identify potential investments that meet its investment criteria.
The Company has made six investments since listing and successfully concluded the first exit in the prior financial year.
In the year ended 30 June 2023, UPL successfully exited its second investment following the sale of its shares in Dentex
Healthcare Group Limited ("Dentex") to Portman Dental Care ("Portman").
On 23 August 2022, Dentex shareholders entered into definitive transaction agreements with Portman, resulting in a
merger of Dentex with Portman (the "Transaction"). The Transaction resulted in the disposal of the Company's entire
shareholding in Dentex. The Transaction was completed on 13 April 2023, and UPL received proceeds of £65.5 million
paid as follows:
- £30.3 million cash; and
- £35.2 million worth of shareholder loan notes and ordinary shares in Portman.
The cash proceeds were utilised to repay a portion of the outstanding borrowings from Rand Merchant Bank (Mauritius)
Limited ("RMB"), and a cash dividend of 10 pence per share was declared and paid to UPL shareholders on 6 June
2023.
An update on investments held at the reporting date is presented below.
Portman Dental Care ("Portman")
www.portmandentalcare.com
As referenced above, Portman and Dentex completed the merger during April following clearance from the Competition
and Markets Authority (CMA) in the UK. UPL is now a minority shareholder in one of the largest dental care platforms
in Europe. In combination, the group operates over 350 practices in the UK, with more than 2,000 clinicians and more
than 4,000 employees. The group provides dental care to over 1.5 million patients per year. Whilst Dentex has
exclusively focused on the UK, Portman currently has operations in 5 European countries and plans to expand further
across the continent.
Both Portman and Dentex are high-performing businesses that have significantly changed the private dental landscape
in the UK. The management teams of both companies have developed an integration plan to combine the best of both
companies and create a dental entity that is transformative both for the profession and for patients.
Integrating the operations, leadership team and cultures of two large organisations is a significant exercise, and the
business has engaged third-party consultants to assist with developing a target operating model for the combined
company, including a review of all systems and processes. The integration of the two businesses is now in progress.
The combined business continues to acquire high-quality dental practices in the UK and Europe. Portman negotiated an
increase in its debt facilities to fund further mergers & acquisitions. In order to secure the increase in debt facilities,
shareholders were required to invest additional equity in the business. Portman raised capital from shareholders in
August 2023 (after the current reporting period) by issuing front-ranking PIK Notes and Preference Share instruments.
UPL elected to follow its proportional rights, subscribing for £1.4m worth of PIK Notes.
Prior to the disposal of Dentex to Portman, the valuation of Dentex in UPL's accounts was £59.6m. As reported
previously, the Portman merger valuation implied a valuation of £65.5m (a 10% uplift to UPL's carrying value), with
UPL receiving £30.3m in cash and the balance of the proceeds (£35.2m) reinvested into Portman equity (shareholder
loan notes and Ordinary Equity) ("Rollover Equity"). The UPL directors have chosen not to write up the valuation in
the accounts and have reflected the cost of the Rollover Equity in Portman at a level that equates to combined proceeds
of £59.6m (£30.3m cash, £29.3m Rollover Equity), being the carrying cost of Dentex before the sale. The directors are
of the view that it will be prudent to reassess the valuation of Portman following the successful integration of the two
businesses.
Workwell (Formerly JSA Services Limited) ("WW")
www.workwellsolutions.com
WW is one of the fastest-growing contractor accountancy and payroll solutions companies in the UK. Their services are
designed to meet the unique needs of contractors and freelancers, from one-person businesses to large employment
agencies. They also create bespoke solutions for temporary labour supply chains, helping their clients navigate the
complexities of contractor payroll and compliance in the UK and internationally.
As communicated previously, UPL subscribed for £5m of Convertible Loan Notes ("CLN") issued by WW in December
2022. In January 2023, WW issued a further £4m of CLNs to certain UPL co-investors, with the funds raised being used
to finance two bolt-on acquisitions. On 29 June, all holders of the CLNs converted these instruments into ordinary
equity in WW. The conversion price represents a 13% premium to the previous carrying value of UPL's investment in
WW, being the valuation at which we acquired equity in November 2021. The value of UPL's investment in WW has
been updated to reflect the valuation of the CLN conversion, resulting in a £4.7m increase in the carrying value.
During August 2023, WW signed a commitment letter with a new lender for a new debt facility to refinance existing
debt, settle fees and costs associated with the refinance and support future acquisitions through the provision of a £26m
committed acquisition facility. This is an important milestone for the business, as the facility provides significant
capacity for further acquisitions.
While still delivering year-on-year growth in revenue and profits, WW is trading behind budget for the year ending 30
September 2023 due to the very challenging macro-economic environment in the UK and Europe. Despite difficult
trading conditions, the business has made significant investments in people as well as its operating / IT platform during
the year. These investments will drive organic growth in future years and further enhance the resilience and scalability
of the business.
SC Lowy Partners ("SC Lowy")
www.sclowy.com
SC Lowy is a leading investment management group focused on credit investing & lending in Asia, Europe and the
Middle East.
The half year to 30 June 2023 saw a positive return of 4% from the Primary Investments ("PI") fund, putting the fund's
performance YTD ahead of its benchmark. The performance of the two Strategic Investment funds continues to be very
satisfactory. Rising interest rates create opportunities for specialist operators such as SC Lowy in the private debt, so
market conditions remain supportive.
While current levels of global uncertainty make fundraising challenging, management remain very focused on this area
and expect positive developments in the second half of the year. Solution Bank in Italy and Cheoun Savings Bank in
South Korea have performed in line with expectations during the half year. Overall, SC Lowy experienced a solid six
months with an increase in profits compared to the prior year.
Xcede Group (Formerly Techstream Group) ("Xcede")
www.xcede.com
Xcede is a global recruitment specialist operating across the UK, Europe, North America, Africa and Asia. It operates
under two brands: Xcede and EarthStream. Xcede recruits talent in data, software, cloud infrastructure and cyber security
markets. EarthStream is a global sustainable energy recruitment specialist.
The last 12 months have been challenging for the business, with a significant slowdown in client hiring activity. This
has resulted in a reduction in permanent net fee income, particularly within the Xcede brand, with technology and data
clients reducing headcount and preferring flexible labour. EarthStream has demonstrated more resilience due to
continued investment in renewable energy globally. Across both markets, the company has continued to deliver steady
growth in contractor net fee income. The contractor side of the business is attractive as the revenue is more predictable
and provides forward visibility of earnings. However, it is more demanding from a working capital perspective, given
clients' payment terms.
The Xcede board has implemented several significant leadership changes during the past year. Due to unforeseen,
challenging personal circumstances, the CEO was replaced in December 2022 with a suitable internal candidate. The
senior leadership team has been further streamlined and strengthened by the addition of a new CFO, who has 20 years
of experience in the recruitment sector. In September 2022, a non-executive director of the business with considerable
staffing industry experience, stepped into the role of executive chairman to help the new leadership team navigate the
challenging operating environment.
The new leadership team has had a positive impact on the business within a short time frame, delivering significant
improvements to client engagement, profit margins and working capital management.
UPL subscribed for a further £4.35m worth of front-ranking loan notes during the last financial year to support the
working capital of the business and amortise term debt held by the company.
As a result of the challenging operating environment, the directors have decided to impair UPL's equity investment in
Xcede. The carrying value of UPL's equity investment in Xcede is £5.1m and has been fully provided for. No adjustment
has been made to the front-ranking loan notes with a carrying value of £7.6m (principal plus accrued interest).
Propelair
www.propelair.com
Propelair has reinvented the toilet to deliver one of the most water efficient, economical and hygienic systems available
through its unique IP and design. The Propelair toilet utilises 1.5 litres of water per flush versus a traditional toilet that
uses around 9 litres per flush. In addition, through its vacuum system, it significantly reduces pathogen distribution and
improves health and hygiene.
Even though constructive progress has been made, particularly in relation to the sale of units in the Middle East and
South Africa the company is trading significantly behind its business plan. In addition, cash flow continues to be
extremely tight and the company is seeking to raise additional capital to fund its operations. UPL has elected not to
participate in this capital raise and continues to value this investment at a nominal £1.
FINANCIAL REVIEW
For the year under review, interest income of £1,334,633 mainly comprised of interest earned from the loan advanced
to Xcede. Other income includes an amount of £87,000, earned by the Company as a raising fee for advancing additional
loans to Xcede during the year.
Dividend income of £680,586 relates to an accrual raised on the preferred shares held in Xcede.
The Company recognised a fair value loss of £792,690 on the remeasurement of investments at fair value through profit
or loss and an impairment loss of £836,745. These amounts comprise the adjustments to the valuations in the Company's
underlying investments, as well as the foreign currency translation of SC Lowy, which is denominated in US Dollars.
Management fees accrued during the year amounted to £2,227,568 incurred in terms of the investment management
agreement between the Company and Argo. General and administrative expenses amounting to £521,449 were incurred.
The accrual for performance fees is calculated on the revaluation of the Company's investments. These fees, which are
recalculated quarterly, only become payable to Argo if the Company realises the expected profit on disposal of the
investments. No performance fees are payable to Argo until a successful exit of an investment has been achieved. During
the year under review, there was a net reversal of the accrual for performance fees previously recognised, which had a
positive impact on the income statement of £424,847.
The Company incurred interest of £1,096,744 during the year on the RMB term loan facility. In the period after year-
end, the existing RMB term loan facility was settled in full using cash on hand and a new committed loan facility of
£10m, which is undrawn at this stage, was secured.
Short-form announcement
This short-form announcement is the responsibility of the directors and is only a summary of the information in the full
announcement and accordingly does not contain full or complete details. The full announcement was published on SENS
on 13 September 2023, and can be found on the Company's website www.universalpartners.mu and can be accessed
using the following JSE link https://senspdf.jse.co.za/documents/2023/jse/isse/UPLE/FY23Result.pdf.
Any investment decisions by shareholders and/or investors should be based on the full announcement released on SENS
and published on the Company's website.
Copies of this report are available to the public, free of charge, at the registered office of the Company, c/o
Intercontinental Trust Limited, Level 3 Alexander House, 35 Cybercity, Ebene 72201, Mauritius.
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. The Board of Universal Partners accepts full responsibility for the
accuracy of the information in this communique.
A dividend of 10 pence per share was declared by the Board and paid to shareholders on 6 June 2023.
In line with the Company's investment strategy to achieve long-term growth in NAV, dividends are not declared on a
regular basis.
The Board of Universal Partners accepts full responsibility for the accuracy of the information contained in this
announcement.
By order of the Board
Mauritius – 13 September 2023
Company Secretary
Intercontinental Trust Limited
For further information please contact:
SEM authorised representative
JSE sponsor and sponsor Company Secretary
Java Capital Perigeum Capital Intercontinental Trust
Tel: +27 11 722 3050 Tel: +230 402 0890 Tel: +230 403 0800
Date: 13-09-2023 08:00:00
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