Luceco recovery fires up EPE Special Opps – over the year ended 31 January 2020, EPE Special Opportunities saw a 54.6% increase in its NAV per share. This was driven by strong performance from two of its investments – Luceco and Whittard. The share price rose by 33.9% over this period.
The statement says:
- Whittard grew pleasingly throughout the historic period. The business’s UK retail estate continued to perform strongly, achieving 9.1 per cent. like-for-like sales growth, whilst further afield three new stores were opened in Taiwan. Growth in Whittard’s e-commerce channel was maintained both domestically and in China. In the interest of employee safety and in line with government advice, Whittard temporarily closed its 49 retail stores on 21 March 2020. The business continues to review its fixed and variable costs and will benefit from the announced government schemes regarding furloughing, business rates and other taxation.
- Luceco has reported stronger trading performance and increased profitability following the successful implementation of operational improvements and sustained gross margin gains during 2019. Luceco traded on budget for first quarter of 2020, has modest financial debt of 1.1x net debt to EBITDA and significant available liquidity with GBP24 million undrawn against committed banking facilities (as at 31 December 2019). It was the best performing stock in the All Share Index over 2019.
- Trading at David Phillips improved steadily over the course of 2019, with the business successfully capitalising on new opportunities to improve sales and profitability. David Phillips traded well in the first quarter of 2020 and has a strong order book for the remainder of the year. The business continues to review its fixed and variable costs and will benefit from the announced government schemes regarding furloughing, business rates and other taxation.
- Pharmacy2U maintained its high growth trajectory throughout the period, underpinned by significant improvements in key customer acquisition, retention and profitability metrics.
- As at 31 January 2020, the portfolio was valued at a weighted average EBITDA to enterprise value multiple of 8.1x (excluding Pharmacy2U, which is valued on a sales multiple) and had a low level of third party leverage (0.7x last 12 month EBITDA to net third party debt).
- The company has liquidity of GBP26.4 million and operates with modest committed outgoings. The company has GBP3.9 million of outstanding unsecured loan notes repayable on 25 July 2022 and no other third party debt outstanding.