Better Capital PCC has announced its interim results for the six-months ended 30 September 2015 for both the 2009 Cell and the 2012 Cell. During the period the NAV for the 2009 Cell has increased by 0.7% to £264.2m whilst the NAV for the 2012 cell has fallen by 22.1% to £263.3m. The decline in the NAV for the 2012 cell wasn’t a complete surprise as the board had previously announced on the 6 November 2015 that they were expecting a decline in NAV, for the 2012 cell, in the region of 20%.
The company says that the NAV of the 2012 Cell fell principally due to write downs in Everest, SPOT (Spicers Office Team) and CAV Aerospace. Everest and SPOT, the company says, have both delivered disappointing trading results with sales performance well behind budgeted levels in the current year. The company reports that the issues driving poor performance have been identified by the Fund II GP and shared with the Board and that consequent action plans are in progress. The company note that both Everest and SPOT remain profitable and are not subject to liquidity issues. The company reports however that, following a short period of Fund II ownership, it became clear to the Fund II GP that the trading and operations at CAV Aerospace were significantly worse than understood at acquisition and a substantial warranty claim has been filed. The managers say that the business continues to suffer considerable losses and it will require a further cash injection in the near term.
The company says that the principal driver of NAV growth in the 2009 Cell is Gardner whose performance offset by write downs in Fairline and SPOT. In September 2015, Fund I disposed of its equity interest in Fairline to Wessex Bristol for a £2.0 million secured deferred consideration. The company says that, faced with a weak market for its boats, the Fund I GP no longer considered the business had a feasible strategy to support going forward. The deferred consideration has been recognised as a receivable in Fund I’s net assets attributable to the 2009 Cell. Fund I’s holding in SPOT has been written down, reflecting the group’s trading underperformance and adjusted for a partial repayment of Fund I’s short term loan.
There have been further personnel changes in Better Capital LLP, the Consultant to the Fund GPs. Mark Aldridge, one of the founders of Better Capital, has decided to step down as CEO. Simon Pilling (pictured) has replaced Mark as CEO and is leading the Consultant, in conjunction with his role as Head of Portfolio, which involves sitting as non-executive Chairman of Jaeger, SPOT and iNTERTAIN and sitting on the boards of m-hance and Omnico. On the Portfolio side, the team has seen the addition of Chris Horobin. Chris has experience in internet and digital retailing, having previously run QVC Japan and Sensen Taiwan as CEO of those businesses. In the near term, Chris is CEO at Jaeger and the company says he is providing input on the strategic direction of Everest.
BCAP / BC12 : Better Capital’s 2012 Cell posts 22.1% NAV decline during half-year