Mithras has reported a 6.7% uplift in its NAV and a 2.8% increase in its share price over the year ended 31 December 2015 (as the discount widened from 12.1% to 15.3%). the Board has recommended a final dividend totalling 1.0 pence per share (2014: 1.0 pence).
Cash distributions received by the Company amounted to £8.4m. In June 2015 the Company completed its fourth tender offer returning £6.1m to shareholders. The number of underlying portfolio companies decreased significantly from 64 to 53 during the year. They say they do not expect MCF to call significant further capital from the Company as any future add-on investments to existing portfolio companies are likely to be funded directly by the underlying portfolio companies.
The Board continues to believe that the current strategy of returning cash to shareholders by way of tender offers at close to NAV is the best way to maximise value for shareholders. After allowing for expected commitments to portfolio funds and other costs, the Company had a net cash position of £5.6m as at 31 December 2015. In addition, two previously announced portfolio company realisations completed at the end of February 2016 with the Company receiving a total of £2.4m from MCF giving a strong start to the year in terms of cash generation.
MCF drew down a total of £1.1m by way of capital calls or retained distribution proceeds. CVC Europe V completed its final new deal, acquiring Skybet in March 2015 and also called funds for add-on investments to Quiron, the Spanish healthcare operator, and Vedici, a French private hospital operator. Doughty Hanson V, PAI Europe V and OCM Principal Opportunities Fund IV all made add-on acquisitions to existing portfolio companies, including TMF Group, R&R Ice Cream and AdvancePierre Foods, although these acquisitions were typically funded directly by these portfolio companies.
The continuation of a generally positive environment for private equity exits meant that 2015 was another good year for distributions with MCF making gross distributions to the Company totalling £8.4m (£7.8m). These distribution proceeds comprised several full or partial exits, as well as refinancing and dividend recapitalisation proceeds. Whilst the level of distributions was ahead of 2014, there were also a number of pending exits at the year end, notably PAI Europe V’s proposed sales of Swissport and Hunkemoeller which completed in February 2016 and have ensured a positive start to the year from a cash perspective.
CVC Europe V was the most active underlying fund in terms of exits and realisation proceeds, distributing a total of £5.3m to the Company. CVC Europe V sold Pilot Travel Centers, R Cable, Skrill and Virgin Active to trade buyers, with each exit returning in excess of 2.0x cost; completed the sell down of previously listed investments in Evonik, Merlin Entertainments and Cerved; and distributed partial disposal or recapitalisation proceeds from Sunrise (post IPO), Abertis and Continental Foods respectively.
Doughty Hanson V distributed £1.8m following completion of the sale of Eurofiber at c.2.5x cost. PAI Europe V distributed £0.7m after completing its second full exit by selling its residual stake in Atos for a total return of 2.0x cost. OCM Principal Opportunities Fund IV provided a number of smaller distributions during the course of 2015 following the sale of some small non-core holdings. Disappointingly, Riverside Europe III portfolio company Tensator went into administration which resulted in a full write off for MCF.
MTH : Cash flowing back to Mithras