EPE Special Opportunities (ESO) announced the company’s annual report for the year ended 31 January 2023. NAV fell 28% for the period, while shares dropped 45% reflecting the challenges that exist when investing in distressed, growth or buyout opportunities during periods of market turmoil. The discount widened to almost 50%.
It’s difficult to draw too many positives from the headline numbers, however several of the company’s portfolio companies performed well. Luceco plc saw record cash generation for the year while Whittard of Chelsea saw strong growth across its international markets boosted by improving tourist activities. ESO also announced a £2.0 million investment in Denzel’s, a fast-growing, healthy, and sustainable premium dog snacks brand.
Clive Spears, chairman, commented on the results:
”The performance of the Company’s portfolio in the year ended 31 January 2023 has been affected by adverse macro-economic conditions and a recessionary environment. The board and investment advisor expect these headwinds to continue through the immediate period but look forward to the normalisation of trading conditions over the medium term. Notwithstanding these headwinds, the company was pleased to announce the completion of a new investment in Denzel’s Limited in October 2022. Looking ahead, the board and investment Advisor will continue to adopt a careful approach, monitoring economic conditions, maintaining a prudent level of liquidity at the company and positioning the portfolio to navigate the complicated operating environment. As a result of the uncertainty on market outlook, the board expects a challenging environment to complete further acquisitions or disposals within the portfolio in the near term.”
EPE: Few positives in 2022 for EPE Special Opportunities