2019 was a fantastic year for Oakley shareholders – a 25% return on NAV translated into a 56% return to shareholders as the discount narrowed significantly. The underlying portfolio companies generated EBITDA growth of 30% and the earnings growth helped push valuations higher. Two exits were made – WebPros was the major driver – we discussed this here. Dividends for the year totalled 4.5p.
Five new investments made in the year – Ekon (TMT), Seagull & Videotel (Education), Alessi (Consumer), Seven Miles (Consumer) and Contabo (TMT). The average entry valuation multiple (EV/EBITDA) was 9.7x, compared to the peer group average of 13.1x. Oakley is getting in at more attractive prices as it is going after smaller (mid-market) deals and is trying to source deals through its own network.
Tweak to fees
From 1 January 2020, management and performance fees are no longer payable on direct debt investments. This is good for shareholders but only at the margin as the proportion of these in the portfolio is declining.
Highlights from the manager’s report include:
- A near doubling of the valuation of Time Out (the last remaining investment from Fund I) from €34.7m to €63.3m on the back of an increase in its share price.
- Profit taking from the position in Inspired in Fund II, which freed up €33.9m for the trust.
- The sale of WebPros and a refinancing of Career Partner Group in Fund III
- And the start of investment activity in Fund IV, including the trust’s first investment in the Nordic region (Seagull)
OCI : Fantastic year for Oakley shareholders