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Pyroguard sale boosts Dunedin Enterprise return in 2018

DNE : Dunedin Enterprise sells Pyroguard, plans cash return

Pyroguard sale boosts Dunedin Enterprise return in 2018 – the UK-focused private equity investment trust Dunedin Enterprise (DNE) made an NAV return of 6.4% in the year to 31 December 2018, largely on the back of valuation uplifts and realisations. Shareholders fared better with a total return of 9.4%. This was boosted by a return of capital to shareholders of 100p per share and the payment of a 5.5p dividend.

Pyroguard leads realisations

  • Realisations totalled £12.3mn in 2018 with Pyroguard, the specialist fire resistant glass manufacturer, generating £9.3mn as the main exit. The original cost of the investment was £3.8m and over the life of the investment a total of £22.5m was received by DNE representing a 5.9x return and an IRR of 35%.
  • Elsewhere, two realisations were received from the European private equity fund, Realza: a £1.0m repayment of loan stock was received from Dolz, the automotive pump manufacturer; in January 2019 Litalsa, a provider of services for metal can and closure manufacturers, was realised generating proceeds of £3.9m, representing a return of 2.9x original cost and an IRR of 26%.  At 31 December 2018 Litalsa has been valued at the realised proceeds received in January 2019.

Portfolio

  • Two new investments were made in the year by the trust. In June 2018, £6.4m was invested in GPS, the global payments processor which supports a number of digital banks, challenger banks, fintechs and financial institutions. In November 2018 £3.0m was invested in Incremental, a Glasgow-headquartered, market-leading IT services business.
  • Overall the trading performance of the portfolio was positive in 2018. Unrealised valuation increases of £9.1m were partially offset by decreases of £4.3m. The most significant valuation reduction in the year to 31 December 2018 was the decline of £1.9m in the value of the holding in Formaplex.

Dunedin Enterprise in wind down mode

In May 2016, shareholders gave their approval for the Company to be placed into wind-down and it was concluded that the best way to maximise value for shareholders would be to implement a plan that allows the Company’s investments to be realised in an orderly manner over a period of time and cash to be returned to shareholders progressively. The majority of the Company’s assets, or some 80%, are managed by Dunedin LLP by way of limited partnership interests in Dunedin’s funds. One of these funds is still actively investing and so the company is obliged to follow its commitment by funding future capital calls made by that fund. The other 20% of the Company’s assets are invested in private equity funds managed by external parties.

DNE: Pyroguard sale boosts Dunedin Enterprise return in 2018

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