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Summarised unaudited financial statements for the quarter ended 30 September 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 UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTER ENDED 30 SEPTEMBER 2023
Quarter ended Quarter ended Year ended
30 September 2023 30 September 2022 30 June 2023
Net asset value per share ("NAV")* GBP 1.296 1.452 1.296
Profit / (loss) for the quarter / year GBP 29 707 1 046 280 (3 062 172)
Earnings / (loss) per share pence 0.04 1.44 (4.21)
Headline earnings / (loss) per share pence 0.04 1.44 (4.21)
* The NAV per share as at 30 June 2023 was £1.296, post payment of the dividend of £0.10 per share in June 2023
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 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 two exits. In the year ended 30 June 2023, UPL
partially exited its second investment following the sale of its shares in Dentex Healthcare Group Limited ("Dentex") to Portman
Dental Care ("Portman"").
An update on investments held at the reporting date is presented below.
Portman Dental Care ("Portman")
www.portmandentalcare.com
Portman is one of the largest dental care platforms in Europe, with operations in the UK, Ireland, the Nordics, Benelux and France.
UPL became a minority shareholder in Portman following the merger with Dentex in 2023.
The integration is progressing well, with the senior leadership of both businesses working together to extract the best of both
operating models to build a transformative dental business that benefits from the significant scale of the combined group. Whilst
the operating environment is challenging, the existing estate of practices has increased profitability on a like-for-like basis over the
past year, with management actively controlling costs and focusing on dentist recruitment and retention.
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 this growth. 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. UPL elected to follow its proportional rights, subscribing
for £1,423,128 worth of Portman PIK Notes.
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.
During its financial year to 30 September 2023, WW delivered another solid financial performance, albeit somewhat below their
original budget given the tougher macro-economic conditions that prevailed in the UK. Despite the environment, WW elected to
invest in the business during the year, making several senior hires in Sales & Marketing and strengthening the IT/operating platform.
The benefits of these investments should become apparent in the new financial year and beyond.
The outlook for the new financial year remains challenging for the UK operations, although the international division remains
buoyant. Overall, WW expects respectable growth in its net fee income and EBITDA, before factoring in the benefits of any further
acquisitions.
WW has secured a new debt facility that has refinanced the existing debt and provides WW with an additional £26 million of
committed funding that will be used to make further acquisitions.
SC Lowy Partners ("SC Lowy")
www.sclowy.com
SC Lowy is a leading investment management group focused on credit investing and lending in Asia, Europe and the Middle East.
During the 9 months ended 30 September 2023, SC Lowy's credit funds delivered good performances. The flagship Primary
Investments ("PI") fund was up 4.2% YTD, with seven of the last nine months reflecting a positive performance. The two Strategic
Investment ("SI") funds performed even better, delivering IRRs above 15% since their inception dates. Management is focused on
raising additional funds for the PI fund and successor SI funds.
Solution Bank in Italy showed good profitability during the September quarter, benefitting from a high net interest margin and
growth in its loan portfolio. With the turnaround now well established, the business is on track to deliver its best ever results for
the year to December.
Cheoun Savings Bank in South Korea experienced a subdued but profitable quarter to September. Given the current turmoil in the
South Korean savings bank sector, Cheoun has intentionally constrained its lending book and boosted its capital reserves to position
itself to take advantage of any turnaround in the sector.
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.
As reported previously, it has been a challenging period for the business, with a significant slowdown in client hiring activity and
changes to the senior leadership team. 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.
Xcede continues 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. UPL is working with the new management team and the debt provider to ensure that the necessary
financial resources are available to fund the growth in the contractor book.
Propelair
www.propelair.com
Propelair has reinvented the toilet to deliver, through its unique IP and design, one of the most water efficient, economical and
hygienic systems available. The Propelair toilet utilises 1.5 litres of water per flush versus a traditional toilet that uses around 9
litres of water per flush. In addition, through its vacuum system it significantly reduces pathogen distribution and improves health and
hygiene.
As previously reported constructive progress has been made in this year, particularly in relation to the sale of units in the Middle
East and South Africa, where they have traded ahead of budget. However, the Company is still significantly behind its original
business plan and, accordingly, we continue to value this investment at a nominal £1.00.
FINANCIAL REVIEW
For the quarter under review, interest income was £248,100 comprising of interest from cash balances, loan notes and Portman PIK
notes. Other income includes an amount of £10,800, earned by the Company as a raising fee for advancing an additional loan to
Xcede during the quarter.
The Company recognised a fair value gain of £393,606 on the remeasurement of investments at fair value through profit or loss and
an impairment loss of £184,377. 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. UPL's rollover investment
in Portman comprises a combination of loan notes and ordinary equity. UPL has decided to maintain the value of the combined
rollover investment during the quarter under review. Given that interest has accrued on the loan notes, a commensurate reduction
of the fair value of the ordinary equity is required.
Management fees accrued during the quarter amounted to £463,077 incurred in terms of the investment management agreement
between the Company and Argo. General and administrative expenses amounting to £156,690 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 quarter 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 £250,758.
The Company incurred interest of £15,459 during the quarter on the RMB term loan facility. A new committed loan facility of £10
million was secured during the quarter. The facility remains undrawn at the end of the quarter.
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
14 November 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/Q124Result.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.
In line with the Company's investment strategy to achieve long-term growth in NAV, dividends are not declared on a regular basis.
Accordingly, no dividend has been declared for the quarter under review.
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 November 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 Ltd
Tel: +27 11 722 3050 Tel: +230 402 0890 Tel: +230 403 0800
Date: 14-11-2023 08:00:00
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