Wrap Text
Unaudited interim results for the six months ended 31 December 2021
EPE CAPITAL PARTNERS LTD
INCORPORATED IN THE REPUBLIC OF MAURITIUS
REGISTRATION NUMBER: C138883 C1/GBL
ISIN: MU0522S00005
SHARE CODE: EPE
("ETHOS CAPITAL" OR "THE COMPANY" OR "THE GROUP")
UNAUDITED INTERIM RESULTS FOR the SIX MONTHS ENDED 31 DECEMBER 2021
INTRODUCTION
EPE Capital Partners Ltd 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 38-year history and
a strong track record of successful, sustainable investing across economic and political cycles that has delivered 98 realised investments at a 24% gross
IRR and a 2.5x multiple of cost for limited partners in its Large Equity Funds.
RESULTS ANNOUNCEMENT
Key highlights over the six-month period
- R2.6 billion carrying value of invested capital and total assets, with exposure to 23 Portfolio Companies.
- 24% increase in 31 December 2021 NAVPS of R8.26, at Brait's share price.
- 10% increase in 31 December 2021 NAVPS of R10.08, at Brait's NAVPS.
- R310 million capital invested via the Ethos Funds, including a new Fintech investment in Crossfin and the Brait exchangeable bonds.
- Significant improvement in operating performance with 88% of the unlisted portfolio by value delivering positive EBITDA growth.
- Aggregate attributable LTM EBITDA growth of 54% across the unlisted portfolio, and 15% across the top five unlisted investments.
- Continued demonstration of exiting investments at a premium to NAV.
- Board’s focus is on value optimisation and return of capital to shareholders.
Overview
The past six months has seen a continuation of the robust recovery Ethos Capital experienced in the second half of the financial year ended June 2021.
Whilst the Omicron variant, and the social unrest in July 2021, caused significant disruption to various Portfolio Companies and impacted consumer
sentiment, in the main the impact of the latest COVID wave has been less severe than previous waves.
Almost all the Portfolio Companies achieved strong growth in the past six months with some returning to above pre-COVID levels. The benefit of the cost-
saving initiatives and improved operating leverage has manifested in stronger than expected recoveries although some remain adversely impacted by the
effects of the crisis and the lower levels of consumer spend and sentiment. The improved operating performance has resulted in a very significant increase
in the valuations of the majority of unlisted and listed assets.
The Ethos Capital NAVPS (including Brait at its NAVPS that increased by 3%) increased by c.10% from R9.19 to R10.08, largely driven by the unlisted
portfolio. The portfolio achieved a 13% return over the period, driven by broad increases in valuations across most of the portfolio, including Channel VAS,
Gammatek and TymeBank. Furthermore, the listed assets (Brait and MTN Zakhele Futhi) benefited from share price increases of 58% and 100% respectively. These
all contributed to an increase in Ethos Capital's NAVPS (including Brait at its share price) of c.24% from R6.67 to R8.26 over the six months.
Total assets increased to R2.6 billion, resulting from the portfolio increases as well as net capital invested of R310 million during the period. This
includes Ethos Capital's participation via the Ethos Funds in a new Fintech investment, Crossfin Technology Holdings (Pty) Ltd, and the Brait exchangeable
bonds rights issue.
Given the uncertain economic outlook, the Board believes that remaining focused on theme/tailwind-led investing, leveraging the sector, value add and domain
expertise of the Investment Advisor, while exercising price discipline and exploring realisation opportunities, should result in strong investment returns
in excess of the Company's cost of capital.
FINANCIAL POSITION AND INVESTMENT PORTFOLIO
EXTRACT OF STATEMENT OF FINANCIAL POSITION
Group Company
31 December 30 June 31 December 30 June
2021 2021 2021 2021
R'million R'million R'million R'million
ASSETS
Non-current assets
Unlisted investments at fair value 2,563.0 1,827.3 2,563.0 1,827.3
Current assets 11.9 57.2 11.4 56.7
TOTAL ASSETS 2,574.9 1,884.5 2,574.4 1,884.0
EQUITY AND LIABILITIES
Total Ordinary shareholders' equity 2,128.2 1,716.4 2,289.6 1,871.9
Non-current liabilities 431.9 156.0 270.0 -
Current liabilities 14.8 12.1 14.8 12.1
Total Liabilities 446.7 168.1 284.8 12.1
TOTAL EQUITY AND LIABILITIES 2,574.9 1,884.5 2,574.4 1,884.0
NET ASSET VALUE 2,128.2 1,716.4 2,289.6 1,871.9
Basic Net Asset Value per share (Rand) 8.26 6.67 8.45 6.91
Attributable shares in issue ('000) 257,500 257,500 271,000 271,000
INVESTMENT PORTFOLIO - AT 31 DECEMBER 2021
Valuation
Name R'million % of total assets
Primary/Secondary Investments
Ethos Fund VII 907.5 35.2
Ethos Mid Market Fund I 603.8 23.4
Ethos Ai Fund I 164.2 6.4
Ethos Healthcare Platform 140.8 5.5
Ethos Fund VI 62.5 2.4
Ethos Mezzanine Partners 3 10.6 0.4
Co-Investments
Brait 510.3 19.8
Channel Vas Investments Ltd BVI 76.8 3.0
Primedia / Ster Kinekor 67.0 2.6
Kevro Holdings (Pty) Ltd 19.5 0.8
2,563.0 99.5
TOP 10 UNDERLYING PORTFOLIO COMPANIES - AT 31 DECEMBER 2021
Name Business description Year* % of Total assets
Channel Vas FinTech service provider 2018 26.1
Premier (Brait) FMCG manufacturer 2020 10.9
Virgin Active (Brait) Health club operator 2020 10.4
Echo Corporate ISP 2018 7.3
Vertice MedTech 2018 7.0
Synerlytic Specialised analytical and testing services 2019 6.5
Crossfin FinTech group 2021 4.8
Gammatek TMT accessory distribution 2018 4.7
Primedia Media 2017 2.8
MTN Zakhele Futhi Telecommunications 2017 2.6
83.1
Brait EB Exchangeable bonds 2021 6.6
Other (13 Portfolio Companies) 9.8
Total underlying investments 99.5
* 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 but 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/2022/JSE/ISSE/EPEE/EPECAP1221.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 Kenny Curpen) 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 Wednesday 16 March 2022 covering the results relating to the six months ended 31 December
2021, and outlook. A copy of the presentation will be available for download on the Company's website at https://ethoscapital.mu/investors/reports-results/
Participants can obtain access via one of the following links:
Webcast -
https://services.choruscall.com/links/ethos4Y79T.html
Conference call -
https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=4168212&linkSecurityString=87a69ea80
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
5 Magwa Crescent
Waterfall City
Johannesburg, 2090
Listing
JSE Limited
Abbreviated name: ETHOSCAP
JSE code: EPE
Sector: Financials - Closed End Investments
Transfer Secretary
Computershare Investor Services Proprietary Limited
15 Biermann Avenue
Rosebank, 2196
Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
1 Merchant Place
Cnr Fredman Drive & Rivonia Road
Sandton, 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)
16 March 2022
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 16-03-2022 07:05:00
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