EPE Special Opportunities has announced interim results for the six months ended 31 July 2016. The NAV at 31 July 2016 was 187.89 pence per share, an increase of 17.4% on the NAV per share of 160.00 pence as at 31 January 2016. The share price at 31 July 2016 was 148.50 pence, representing an increase of 19.3% on the share price of 124.50 pence as at 31 January 2016.
Within the portfolio, on 4 July 2016, they announced the completion of a merger of Pharmacy2U and ChemD Holdings, which trades as ChemistDirect.co.uk. In conjunction with the merger, the Business Growth Fund has invested GBP10.0 million to support the new business’ ambitious growth plans. The enterprise value of the new business equates to GBP43.3 million and the merger creates a clear leader in the UK online pharmacy sector, with 1.5 million customers and unrivalled experience in digital pharmacy services. The Chief Executive of the new business is ChemistDirect.co.uk Chief Executive Mark Livingstone, who brings a strong track record in innovative internet-based businesses including LOVEFiLM and Graze.com.
Luceco (formerly Nexus Industries) has continued its strong growth trajectory and outperformed budget, driven by increased sales across all channels and successful product introductions, including wiring accessories such as USB sockets, a redeveloped range of circuit protection and the continued expansion of the business’s LED lighting range. In June 2016, work was completed on the second expansion of the business’ Chinese manufacturing facility.
Whittard of Chelsea had a weak first half of 2016 with disappointing high street and web sales. However this weakness is in part due to adverse trading conditions across the retail sector and the company has invested in programs to target long term, sustainable returns, such as the launch of their new tea range in September 2015.
Process Components had a weak year to 30 June 2016, finishing behind budget, in part due to order phasing. The business continues to invest in sales infrastructure and product development at the business’ UK and US facilities;
They say the portfolio remains conservatively valued with a weighted average Enterprise Value equating to an EBITDA multiple of 6.1x for mature assets and equating to a Sales multiple of 0.5x for assets investing for sales growth. Further, 27.0% of the portfolio’s GAV comprised of yielding loans. The underlying portfolio is relatively unleveraged with 1.5x third party net debt to EBITDA. They had a cash balance of GBP4.2 million as at 31 July 2016, providing 6.2x per annum coverage on outstanding loan interest. Overall liquidity was GBP6.0 million.
EPE Special Opportunities is actively pursuing new investment opportunities where the Board is confident a good return for investors can be achieved. All new investments will be made via ESO Investments 2 LP, in which the Company is the sole investor.
ESO : EPE Special Opportunities NAV climbs 17% in first half