Wrap Text
Unaudited interim results for the six months ended 31 December 2019
EPE CAPITAL PARTNERS LTD ("ETHOS CAPITAL" OR "THE COMPANY" OR "THE GROUP")
INCORPORATED IN THE REPUBLIC OF MAURITIUS
REGISTRATION NUMBER: C138883 C1/GBL
ISIN: MU0522S00005
SHARE CODE: EPE
Unaudited interim results for the six months ended 31 December 2019
INTRODUCTION
Ethos Capital is an investment company, registered and incorporated in Mauritius as a public company. It is listed on the Johannesburg Stock
Exchange ("JSE") and offers shareholders long-term capital appreciation by making commitments and investments into Funds or Co-Investments that are managed
by Ethos Private Equity (Pty) Limited ("Ethos"), providing the Company with largely indirect exposure to a diversified portfolio of unlisted private equity
type investments ("Portfolio Companies"). The Group refers to the consolidated results of the Company and its deemed controlled entity.
The Group's performance is largely measured by the growth in the net asset value ("NAV") and NAV per share ("NAVPS").
THE ADVISOR: ETHOS
Ethos acts as Ethos Capital's Investment Advisor. In addition, Ethos is the Manager of the Funds that Ethos Capital invests in. Ethos is an investment firm
that manages investments in private equity and mezzanine transactions in South Africa and other sub-Saharan African countries. Ethos has a 35-year history
and an unparalleled record of successful, sustainable investing across economic and political cycles that has delivered 96 realised investments at a 36%
gross IRR and a 2.7x multiple of cost.
RESULTS ANNOUNCEMENT
Key highlights
R0.2 billion invested during the period, including 4 acquisitions within the existing Portfolio Companies.
Total assets increased to R2.0 billion and the NAVPS to R11.48 at 31 December 2019.
At 31 December 2019, invested capital increased to R1.7 billion or 85.5% of total assets, with exposure to 19 Portfolio Companies.
Post the period-end, invested capital and total assets have both increased to R2.7 billion, and the Portfolio Companies to 24.
Overview
The economic outlook in South Africa faces significant structural and growth impediments. Consumer sentiment and business confidence remain depressed and
GDP growth rates continue to underperform market expectations. During the reporting period, industrial output was subdued with many corporates choosing to
delay investment and expansion pending further clarity of key sectoral policies. Unexpected load shedding also negatively impacted both consumer and
business confidence which was felt across almost all of Ethos' South African based Portfolio Companies. Unfortunately, this is likely to continue over the
medium term. However, strong economic growth across many other sub-Saharan African countries has continued which positively impacted those assets which had
exposure to such countries.
The Group modestly increased its total assets and NAVPS at 31 December 2019 to R2.0 billion and R11.48 respectively (30 June 2019: R11.34).
During the period, the Company invested R0.2 billion, largely into four acquisitions within the existing portfolio and thereby increasing its invested
capital to R1.7 billion, 85.5% of total assets. The investments provide exposure to 19 Portfolio Companies operating in sub-Saharan Africa (+40% by value
outside of South Africa) that are currently valued at an EBITDA multiple of 6.7x (30 June 2019: 6.9x)
Post the period-end, in February 2020, the Company successfully completed a R750 million fully underwritten Rights Offer at R7.50 per share to fund its
participation in the Brait SE ("Brait") Rights Offer. In March 2020, Ethos took over as the investment advisor to the Brait Board. The above increased
both the Group's total assets and invested capital to R2.7 billion, expanding the investments further to 24 Portfolio Companies with a wide geographical
spread.
Given the uncertain economic outlook, the Board believes that remaining focused on Ethos' strategy of theme/tailwind led investing and leveraging the
sector, value add and domain expertise it has, while exercising price discipline, will result in strong investment returns in excess of the Company's cost
of equity.
FINANCIAL POSITION AND INVESTMENT PORTFOLIO
EXTRACT OF STATEMENT OF FINANCIAL POSITION
Group Company
31 Dec 2019 30 June 2019 31 Dec 2019 30 June 2019
R'million R'million R'million R'million
ASSETS
Non-current assets
Unlisted investments at fair value 1,680.0 1,427.3 1,680.0 1,427.3
Current assets 284.5 501.3 284.0 500.8
Trade and other receivables 0.4 16.7 0.4 16.7
Money market investments at fair value 278.3 481.0 278.3 481.0
Cash and cash equivalents 5.8 3.6 5.3 3.1
TOTAL ASSETS 1,964.5 1,928.6 1,964.0 1,928.1
EQUITY AND LIABILITIES
Total Ordinary shareholders' equity 1,808.0 1,785.5 1,945.9 1,920.5
Non-current liabilities 138.4 135.5 - -
Current liabilities 18.1 7.6 18.1 7.6
Total Liabilities 156.5 143.1 18.1 7.6
TOTAL EQUITY AND LIABILITIES 1,964.5 1,928.6 1,964.0 1,928.1
NET ASSET VALUE 1,808.0 1,785.5 1,945.9 1,920.5
Basic Net Asset Value per share (Rand) 11.48 11.34 11.38 11.23
Attributable shares in issue ('000) 157,500 157,500 171,000 171,000
INVESTMENT PORTFOLIO - AT 31 DECEMBER 2019
Commitment Valuation
Name R'million R'million % of total assets
Primary/Secondary Investments
Ethos Mid Market Fund I 950.0 520.9 26.5
Ethos Fund VII 1,250.0 418.0 21.3
Ethos Ai Fund I 150.0 119.2 6.1
Ethos Healthcare Platform 87.0 108.4 5.5
Ethos Fund VI 140.0 91.3 4.6
Ethos Mezzanine Partners 3 250.0 40.4 2.1
Co-Investments
Primedia Group (Pty) Ltd 171.0 175.3 8.9
Channel Vas Investments Ltd BVI 100.0 105.6 5.4
Kevro Holdings (Pty) Ltd 100.0 100.9 5.1
3,198.0 1,680.0 85.5
TOP 10 UNDERLYING PORTFOLIO COMPANIES - AT 31 DECEMBER 2019
Name Business description Year* % of Total assets
Channel Vas FinTech service provider 2018 23.4
Kevro Corporate clothing and gifting 2017 9.7
Echotel Corporate ISP 2018 8.7
Primedia Media 2017 8.0
Vertice MedTech 2018 7.5
Synerlytic Specialised analytical and testing services 2019 6.2
Gammatek TMT accessory distribution 2018 4.8
Twinsaver Manufacturing (FMCG) 2015 3.4
Autozone Automotive parts retailer & wholesaler 2014 2.4
TymeBank Banking 2019 2.3
76.4
Other (9 Portfolio Companies) 9.1
Total underlying investments 85.5
* Initial acquisition date by Ethos Fund
RESPONSIBILITY STATEMENT
This short-form announcement is the responsibility of the Directors of Ethos Capital and is only a summary of the information in the full announcement and
does not contain full or complete details. The announcement is itself not audited and extracted from unaudited results. Any investment decision should be
based on the full announcement which is available from today at:
https://senspdf.jse.co.za/documents/2020/JSE/ISSE/EPEE/EPECAP1219.pdf
and is published on the Company's website at:
https://ethoscapital.mu/investors/reports-results/
Copies of the full announcement may also be requested from the Company Secretary (represented by Mr Ravi Cunnoosamy) at no charge at +230 (0) 403 6000,
during office hours, or at ethoscapital@ocorian.com.
PRESENTATION
Ethos Capital will host a webcast presentation at 10h00 am on Thursday 12 March 2020 covering the results relating to the six months ended 31 December 2019,
and outlook. A copy of the presentation is available for download on the Company's website at http://www.ethoscapital.mu/investors1/reports-results
Participants should please register for the webcast in advance by navigating to this website:
https://www.diamondpass.net/6486164
CORPORATE INFORMATION
Directors
Yvonne Stillhart (Chairperson)
Derek Prout-Jones
Kevin Allagapen
Michael Pfaff
Yuvraj Juwaheer
Senior Advisors (Officers)
Jean-Pierre van Onselen (CFO)
Peter Hayward-Butt (CEO)
Investment Advisor
Ethos Private Equity (Pty) Limited
35 Fricker Road
Illovo
Johannesburg, 2196
Company Secretary and Registered Office
Ocorian
6th Floor, Tower A,
1 Cybercity
Ebene
Mauritius
Auditors
Deloitte & Touche
Level 7, Standard Chartered Tower
19 Cybercity
Ebene
Mauritius
Deloitte & Touche
20 Woodlands Drive
Woodmead
Sandton
Johannesburg, 2196
Listing
JSE Limited
Abbreviated name: ETHOSCAP
JSE code: EPE
Sector: Financials - Speciality Finance
Transfer Secretary
Computershare Investor Services Proprietary Limited
70 Marshall Street
Johannesburg, 2001
Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
1 Merchant Place
Cnr Fredman Drive & Rivonia RoadSandton, 2196
Disclaimer
The financial information on which this announcement is based, has not been audited, reviewed and reported on by the Company's external auditors.
Ebene, Mauritius (with simultaneous circulation in Johannesburg)
12 March 2020
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 12-03-2020 07:30:00
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