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UNIVERSAL PARTNERS LIMITED - Summarised unaudited financial statements for the quarter ended 30 September 2018

Release Date: 14/11/2018 10:00
Code(s): UPL     PDF:  
 
Wrap Text
Summarised unaudited financial statements for the quarter ended 30 September 2018

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")

SUMMARISED UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTER ENDED 30 SEPTEMBER 2018
 
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 total funds at the
time an investment is made to be invested outside of the UK and Europe.

The Company's primary objective is to achieve strong capital appreciation in Pounds Sterling ("GBP") 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 and the JSE, the Company has been working closely with its investment advisor, Argo
Investment Managers ("Argo"), to identify potential investments that meet its investment criteria.

The Company has completed five investments since its listing up to the reporting date and continues to build a pipeline
of new investments.

Dentex Healthcare Group Limited ("Dentex")

Dentex continues to grow ahead of the original business case, due to the attractiveness of the Dentex co-ownership
model and the increase in appetite for Private Dental Groups in the UK. Dentex recently concluded a restructure and
obtained a senior debt facility with Lloyds Bank, based on an introduction by the Company. The proceeds of this
facility enabled Dentex to repay a bridging loan extended by the Company, with the balance of the funds being used
to fund further acquisitions of dental practices. Dentex has established a stable, efficient platform that will be used as
a base to acquire additional practices and increase its enterprise value over time. When the Company acquired the
investment in Dentex, it owned 3 dental practices – this has grown to 29 dental practices at the reporting date. This
acquisitive growth is set to continue, with a pipeline of more than 30 dental practices that they are looking to acquire
during the Company's financial year.

YASA Limited ("YASA")

The electrification of the automotive sector continues to accelerate and is taking place at a faster pace than expected
when the Company invested in YASA, which continues to trade ahead of plan. Large client projects planned for
introduction in 2019 are on track and will be positive for sales of electric motors. The newly developed controller is
making good progress, and discussions are ongoing with potential customers of integrated motor/controllers. The
successful conclusion of new contracts will enhance value in YASA over time.
                                                            
SC Lowy Partners ("SC Lowy")

SC Lowy continues to trade well, particularly given its new ability to source distressed debt in Italy via its Italian bank
subsidiary, Credito di Romagna. SC Lowy is currently the largest trader of Indian Non Performing Loans ("NPL"), at
a time when the Indian authorities are looking to the local banking sector to resolve its large exposure to NPL's. SC
Lowy is performing in line with expectations and will create value and opportunities from its newly acquired banking
businesses.

Propelair

Propelair is making progress in terms of sales of its water efficient, enhanced hygiene toilets, in the UK and in South
Africa. The company's products are finding favour with large corporates who wish to improve their environmental
credentials via a reduction in their water usage and carbon footprints. A number of trials are underway, which should
lead to a substantial increase in sales.

JSA Services Limited ("JSA")

JSA continues to trade in line with expectations. Consistent with JSA's acquisition strategy, JSA finalised its first
acquisition since the Company invested, by acquiring a smaller Personal Service Company and Umbrella Employment
business based in London. In addition JSA has concluded a Heads of Terms Agreement with another target company
that it expects to acquire in the coming months. The Company has advanced a bridging loan of up to GBP 4.025 million
to JSA to facilitate completion of these acquisitions. JSA is in the process of negotiating and concluding an enhanced
debt facility from a UK-based debt fund and the proceeds of this facility will be used to repay the bridging loan and to
conclude further acquisitions. We expect these acquisitions to contribute substantially to value enhancement in future.

On 9 August 2018, the Company, through its wholly owned subsidiary UP Contracting Investments, sold 400,000
shares in its investment in JSA Newco Limited for GBP 400,000 to a co-investment partner who made the initial
introduction to JSA, on the same terms as the Company invested into JSA. The co-investment partner has authorised
the Company to exercise control over its shares. The sale of the shares was in accordance with the Investment
Agreement and the Company's holding in JSA was reduced from 45% to 43.2%.

FINANCIAL REVIEW

For the quarter under review, revenue included interest earned from investing excess cash in interest bearing fixed
deposits for periods of up to six months. Interest earned on deposit amounted to GBP 28,647 for the quarter. The
deposited 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.

In February 2018, the Company advanced a short-term loan of GBP 5 million to Dentex while it was negotiating a
senior debt facility with Lloyds Banking Group. Dentex utilised the proceeds of the Company's loan to acquire dental
practices, in line with its growth strategy. The loan was repaid in full during the quarter and interest of GBP 102,319
from the beginning of the quarter until the repayment date was earned.

The Company's investment in SC Lowy is denominated in US Dollars ("USD"). During the quarter, the revaluation
of the investment from USD to GBP resulted in a net gain in foreign currency of GBP 106,052.

Management fees for the quarter were GBP 312,095, incurred in terms of the investment management agreement
between the Company and Argo. During the quarter, general and administrative expenses amounting to GBP 73,935
and transaction costs of GBP 2,000 were incurred.

NET ASSET VALUE ("NAV")

The NAV per share as at 30 September 2018 was GBP 1.030 (30 June 2018: GBP 1.032).
                                                            
PROFIT OR LOSS PER SHARE

The loss per share of 0.19 pence for the quarter ended 30 September 2018 and 0.22 pence for the quarter ended
30 September 2017 are based on the Company's loss before tax of GBP 139,465 and GBP 159,585 for the quarter
ended 30 September 2018 and the quarter ended 30 September 2017 respectively, based on 72,350,131 weighted
average number of shares in issue.

For the year ended 30 June 2018, the earnings per share of 4.78 pence was based on a profit before tax of
GBP 3,457,404 and a weighted average number of shares in issue of 72,350,131.

DIVIDEND

In line with the Company's investment strategy to achieve long-term growth in NAV, dividends will not be declared
on a regular basis. Accordingly, no dividend has been declared for the quarter under review.

BASIS OF PREPARATION

The summarised unaudited financial statements for the quarter ended 30 September 2018 ("summarised 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 summarised unaudited
financial statements are in terms of IFRS and consistent with those applied in the preparation of the audited financial
statements for the year ended 30 June 2018.

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

AUDITORS

These summarised audited financial statements were approved by the board of directors of Universal Partners
("Board") on 13 November 2018. These summarised unaudited financial statements have not been reviewed or
reported on by the Company's external auditors, Grant Thornton.

By order of the Board

14 November 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 summarised 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 SEM Listing Rule 12.19, Section 88 of the Mauritian Securities Act 2005
and the JSE Listings Requirements.

The directors of Universal Partners accept full responsibility for the preparation of these summarised audited financial
statements and for ensuring that the financial information has been correctly extracted from the underlying unaudited
financial statements.

                                                           
SUMMARISED UNAUDITED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2018

                                                         As at 30    As at 30 June
                                                   September 2018             2018
                                                      (Unaudited)        (Audited)
                                                              GBP              GBP
Assets
Non-current assets
Investments at fair value through profit or loss       54,363,776       54,657,723

Current assets
Receivables and prepayments                               161,943          160,000
Short-term financial asset                                      -        5,158,274
Cash and cash equivalents                              20,860,322       15,534,242
                                                       21,022,265       20,852,516

Total assets                                           75,386,041       75,510,239

Equity and Liabilities
Equity
Stated capital                                         71,847,164       71,847,164
Retained earnings                                       2,651,940        2,791,405
                                                       74,499,104       74,638,569
Current liabilities
Payables and accruals                                     886,937          871,670

Total equity and liabilities                           75,386,041       75,510,239

NAV per share                                               1.030            1.032

                                                   
SUMMARISED UNAUDITED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE QUARTER ENDED 30 SEPTEMBER 2018

                                                                         Quarter ended       Quarter ended       Year ended
                                                                          30 September        30 September          30 June
                                                                                  2018                2017             2018
                                                                           (Unaudited)         (Unaudited)        (Audited)
                                                                                   GBP                 GBP              GBP
Income
Interest income                                                                130,966             114,536          521,374
Other income                                                                    11,547              29,083          113,064
Total income                                                                   142,513             143,619          634,438

Expenditure
Management fees                                                              (312,095)           (173,302)        (942,721)
Transaction costs                                                              (2,000)            (41,500)        (430,965)
General and administrative expenses                                           (73,935)            (88,402)      (1,168,277)
Total expenditure                                                            (388,030)           (303,204)      (2,541,963)

Operating loss                                                               (245,517)           (159,585)      (1,907,525)
Fair value gain on remeasurement of financial assets at fair value
through profit or loss                                                                                   -        5,227,875
Net foreign exchange gains                                                     106,052                   -          137,054
(Loss) / profit before tax                                                   (139,465)           (159,585)        3,457,404
Tax expense                                                                          -                   -                -
(Loss) / profit for the quarter / year                                       (139,465)           (159,585)        3,457,404

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 quarter / year, net of tax                        -                   -                -

Total comprehensive income for the quarter / year                            (139,465)           (159,585)        3,457,404

                                                                                 Pence               Pence            Pence
Basic and headline (loss) / profit per share (pence)*                            (0.19)             (0.22)             4.78


* The loss per share for the quarters ended 30 September 2018 and 30 September 2017 and the profit per share for the year
ended 30 June 2018 are based on losses before tax of GBP 139,465 and GBP 159,585 and profit of GBP 3,457,404 for the
Company respectively and the 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/earnings per share.

                                                                      
SUMMARISED UNAUDITED STATEMENT OF CHANGES IN EQUITY FOR THE QUARTER ENDED 30 SEPTEMBER 2018

                                                           Profit / (loss) for
                                           Stated Capital             the year          Total
                                                      GBP                  GBP            GBP
Balance at 1 July 2017                         71,847,164            (803,607)     71,043,557

Loss for the quarter                                    -            (159,585)      (159,585)
Other comprehensive income for the quarter              -                    -              -
Transactions with shareholder                           -            (159,585)      (159,585)

Balance at 30 September 2017                   71,847,164            (963,192)     70,883,972

Balance at 1 July 2018                         71,847,164            2,791,405     74,638,569

Loss for the quarter                                    -            (139,465)      (139,465)
Other comprehensive income for the quarter              -                    -              -
Transactions with shareholder                           -            (139,465)      (139,465)

Balance at 30 September 2018                   71,847,164            2,651,940     74,499,104


                                               
SUMMARISED UNAUDITED STATEMENT OF CASH FLOWS FOR THE QUARTER ENDED 30 SEPTEMBER 2018

                                                                       Quarter ended   Quarter ended       Year ended
                                                                        30 September    30 September          30 June
                                                                                2018            2017             2018                                                                         
                                                                         (Unaudited)     (Unaudited)        (Audited)
                                                                                 GBP             GBP              GBP
Operating activities
(Loss) / profit for the quarter / year                                     (139,465)       (159,585)        3,457,404
Adjustments for:
Fair value gain on remeasurement of investments at fair value through
                                                                                   -               -      (5,227,875)
profit or loss
Interest income accrued                                                    (130,966)       (114,536)        (521,374)
Net foreign exchange (gains) / losses                                      (105,453)              35        (137,054)

Net changes in working capital:
Changes in receivables and prepayments                                       (1,943)          10,366           27,454
Changes in payables and accruals                                              15,267           2,436          807,421
Net cash flows utilised in operating activities                            (362,560)       (261,284)      (1,594,024)

Investing activities
Acquisition of investments                                                         -    (13,315,550)     (45,137,652)
Proceeds on disposal of investments                                          400,000               -                -
Loans received / (advanced) to subsidiaries                                5,000,000               -      (5,080,000)
Interest received                                                            289,239         114,536          209,812
Net cash flows received from / (used in) investing activities              5,689,239    (13,201,014)     (50,007,840)

Net change in cash and cash equivalents                                    5,326,679    (13,462,298)     (51,601,864)

Cash and cash equivalents at the beginning of the quarter / year          15,534,242      67,137,560       67,137,560
Effect of exchange rate changes on cash and cash equivalents                   (599)            (35)          (1,454)
Cash and cash equivalents at the end of the quarter / year                20,860,322      53,675,227       15,534,242




                                                                   

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