Dunedin Enterprise shareholders made 74% in 2017 – [shame it is winding up!]
Dunedin Enterprise made an NAV return of 23.9% over 2017. Shareholders did even better, with a total return to shareholders of 74.8%. This was boosted by a return of capital to shareholders of 100p per share and the payment of dividends of 31p. The net asset value decreased from 503.3p to 489.2p during the year after taking account of the return of capital and dividends and, following a second return of capital in February, the net asset value fell by a further 50p to 439.2p. This means that a total of 181p has been distributed to shareholders since the beginning of 2017. The discount has reduced from 39.2% at the end of 2016 to 13.5%.
There were five significant realisations during the year to 31 December 2017.
- Steeper, a world leading manufacturer and supplier of prosthetic limbs, was sold in February 2017 for GBP10.1m. The overall return was 1.9x, representing an IRR of 7%. Steeper was valued at the realised proceeds at 31 December 2016.
- In August 2017 there was a successful realisation of Blackrock, the provider of independent expert witnesses to dispute and litigation resolution in the construction sector. Total proceeds from the sale amounted to GBP12.9m, representing an uplift of GBP2.9m (29%) over the valuation of GBP10.0m at 31 December 2016. The investment delivered a return of 2.8x and an IRR of 60%.
- Alpha, the leading global asset and wealth management consulting firm, was realised in its entirety on the listing of the company on the AIM market. The investment was originally made only in February 2016. Total proceeds from the October 2017 sale amounted to GBP16.7m, representing an uplift of GBP9.6m (135%) on the valuation of GBP7.1m at 31 December 2016, a 2.1x return and an IRR of 55%.
- Kee Safety, the market leading provider of collective fall protection and safety systems, was also sold in October 2017. Total proceeds from the sale amounted to GBP15.9m, representing an uplift of GBP6.1m (62%) on the valuation of GBP9.8m at 31 December 2016, a 3.0x return and an IRR of 35%.
- In December 2017 the investment in Innova/5, one of the two remaining European funds, was realised. Innova/5 invests in mid-market buyouts in Central Eastern Europe. The sale of the interest in the fund was achieved at net asset value, realising proceeds of GBP10.2m, which represents an IRR of 7%.
Portfolio
A new investment of GBP6.0m was made in Forensic Risk Alliance (“FRA”), an international consultancy business which provides forensic accounting, data analytics and e-discovery expertise to help businesses manage risk in an increasingly regulated global environment. The trading performance of the remaining portfolio has been strong during the year. Unrealised valuation increases of GBP12.9m were partially offset by decreases of GBP5.8m. Valuation uplifts were achieved by Pyroguard, FRA, Red and Kingsbridge. Each of these businesses is trading well as a result of strong organic growth. The most significant valuation reduction in the year to 31 December 2017 was the decline of GBP1.2m of the holding in CitySprint.
DNE : Dunedin Enterprise shareholders made 74% in 2017