ACP Capital Limited ("ACP Capital" or the "Company"; AIM: APL.L)
Preliminary interim results for the period ending 30 June 2006 ("Period")
ACP Capital exceeds full year trading expectations at the Period
25 September 2006
ACP Capital, a Jersey-incorporated niche investment and fund manager whose shares were admitted to trading on AIM in January 2006, announces its interim results for the six months ended 30 June 2006.
Financial Highlights
- The Company generated total income of £13.6 million and a net profit of £10.9 million with
diluted earnings per ordinary share of 16.6 pence for the period from 6 January 2006 to 30
June 2006.
- ACP Capital has exceeded its full year 2006 targets set at the time of its IPO in December
2005 in the period ending June 2006, and as a result expects to meet or surpass its initially
expected dividend target of 2 pence per share forecasted in the Admission Document. The
Company also continues to deliver on its strategic objectives for 2006 as a whole.
- In May 2006, ACP Capital acquired an approximate 12% shareholding in Kamps Food
Retail Investments S.A. (“KFRI”) in parallel to providing a €20 million mezzanine bridge
facility and a €9 million corporate loan. KFRI is an acquisition vehicle targeting the
continental European small/mid-cap food retail industry. The combined funding reflects
ACP Capital’s integrated finance capabilities, a key part of its strategy for the European
small to mid-cap sector.
Human Resources
- The Company has identified and hired 6 individuals, amongst others Eric Youngblood as
Chief Financial Officer and Nikolaj Larsen as Head of Strategic Investments.
- On 4 September 2006, Jeff Bennett joined ACP Capital as Chief Investment Officer for ACP Mezzanine Limited. Jeff was previously a Managing Director in the Leverage Finance
Group at Morgan Stanley, where he worked from September 1999 until June 2006. Jeff will
be responsible for (a) ACP Mezzanine and (b) the development of ACP Capital’s
loan/senior lending business, which together with ACP Mezzanine will enable ACP Capital, alongside its strategic equity investment objectives, to be a leading integrated finance provider as stated above for the small to mid-cap sector.
- ACP Capital has identified and initiated discussions with further individuals with whom the Company would like to advance and finalise negotiations in the period ending December 2006. Such individuals include senior candidates with responsibility for infrastructure, real estate, and credit analysis/portfolio management.
ACP Mezzanine
- On 26 July 2006, the Company successfully listed ACP Mezzanine Limited (“ACP
Mezzanine”), its first managed vehicle, which raised €100 million through an admission to
AIM, together with the closing of a long-term facility of €125 million from the Royal Bank of
Scotland. ACP Mezzanine will focus on mezzanine lending in continental Europe in the
small to mid-cap sector, alongside ACP Capital which will, if required, arrange/provide
senior debt funding and equity funding, as part of its stated integrated finance objectives.
- ACP Capital originated and warehoused €45 million of mezzanine assets to seed ACP
Mezzanine.
- ACP Capital, as Investment Manager of ACP Mezzanine, will receive a management fee and a performance fee in line with its initial projections.
IFR Capital (“IFRC”)
- It is announced that IFRC is seeking an Admission to trading on AIM and proposes to raise
up to €250 million by way of a placing.
- IFRC will be an acquisition platform focused on consolidating the German and continental
European food retail business and, in particular, retail food outlets and food production with
the intention of creating significant synergies across different companies in this sector, while applying a private equity approach during the anticipated first three years of rapid growth.
- Post IPO, it is intended that ACP Capital will act as IFRC’s investment manager and
financial adviser whilst Heiner Kamps will act as its CEO providing operational
management expertise.
- The proceeds are intended to be used for acquisitions. Advanced discussions are ongoing in relation to possible offers to acquire Kamps Food Retail Investments S.A. which is the owner of Nordsee GmbH, the largest fish restaurant chain in Europe with a turnover of approximately €345 million, and parallel acquisitions in the retail sector where due diligence is expected to be completed around the time of the IPO. ACP Capital is again acting as financial adviser in this transaction.
Further Managed Vehicles
- ACP Capital is in the process of evaluating the launch of further Managed Vehicles. These
include Vehicles in the continental European real estate/sale-leaseback and infrastructure
sectors, as well as a Strategic Equity Vehicle, which for example would be the Vehicle that
holds equity positions in companies such as IFRC, where the Company, as a result of its
integrated finance capabilities, has access to excellent strategic investment opportunities.
Such a vehicle is also intended to provide first loss equity positions in funding programmes
in CLO/CDO structures.
- Given this rapid expansion, ACP Capital is currently evaluating possible equity or equity- linked capital raising alternatives alongside additional investment grade debt funding lines to be put in place in the near term.
Derek Vago, Chief Executive Officer said:
“ACP Capital has made strong progress in the 6-month period since the admission in January 2006 to 30 June 2006 and is well on track to meet its first 12 month objectives.
During the period, ACP Capital has put in place a leading professional team and
originated/warehoused mezzanine assets totalling €45 million in value, transferred to ACP
Mezzanine at listing in July 2006. Furthermore, it completed its first strategic investment, in
conjunction with its integrated finance objectives, of a 12% interest in KFRI alongside a €20
million mezzanine bridge and €9 million corporate loan facilities.
Our earnings of £10,919,205 or 16.6 pence per share, for the interim period ending 30 June 2006 demonstrate the success of our strategy.
We continue our focus on developing and positioning the Company to become a combined merchant bank and asset manager for the small to mid-cap sector across both the asset-backed and non asset-backed sectors, and both in the United Kingdom and continental Europe, focusing especially on Germany and Italy in the short term.
This therefore includes (a) completing acquisitions by year-end in either/or both the infrastructure and real estate sectors with a view to launching such managed Vehicles in 2007-2008, alongside the Strategic Equity Vehicle (we are therefore well on track in our goal of putting in place two Managed Vehicles per year commencing in Year 2 of operations) and, (b) discussions with a series of existing origination platforms/companies in both the United Kingdom and Europe with a view to either a joint venture or possible investment in such platforms which we believe will augment our origination capabilities across the continent.”
For further information please contact:
Investor Relations:
Rob Bain - +44 (0) 20 7822 0200
ACP Capital:
Derek Vago - +44 (0) 20 7082 3922
About the Company:
ACP Capital is a Jersey-incorporated niche investment and fund manager whose shares were
admitted to trading on AIM in January 2006. The Company’s strategy is to operate as a
combined hybrid merchant bank and asset manager through an integrated finance approach
whereby ACP Capital will provide funding across the capital structure (senior debt, mezzanine
debt and equity), thus procuring a flow of assets for its various managed Vehicles, in which it has
raised 3rd party capital.
In order to augment origination, the Company may form joint ventures with or even invest in companies who are active in the markets that ACP Capital specialises in. These include mortgage/leasing origination platforms, specialist debt arrangers, alternative asset managers, etc.
Independent Review Report
Introduction
We have been instructed by the company to review the financial information set out in the
Chairman's statement, Consolidated Income Statement, Consolidated Balance Sheet,
Consolidated Cash Flow Statement and associated notes on pages 9-11 and we have read the
other information contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
Directors' Responsibilities
The interim report, including the financial information contained therein, is the responsibility of,
and has been approved by, the directors. The AIM Rules of the London Stock Exchange require
that the accounting policies and presentation applied to the interim figures should be consistent
with those applied in preceding annual accounts except where any changes, and the reasons for
them, are disclosed.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the
Auditing Practices Board. A review consists principally of making enquiries of group
management and applying analytical procedures to the financial information and underlying
financial data and based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes audit procedures
such as tests of controls and verification of assets, liabilities and transactions. It is substantially
less in scope than an audit performed in accordance with Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not express an audit
opinion on the financial information.
Review Conclusion
On the basis of our review we are not aware of any material modifications that should be made to
the financial information as presented for the six months ended 30 June 2006.
Kingston Smith LLP
Chartered Accountants
Devonshire House
60, Goswell Road
London
EC1M 7AD
Dated: 21 September 2006
Consolidated Income Statement (Unaudited)
For the period ended 30 June 2006
| Note | Period to 30.06.2006 Unaudited £ |
|
| Investments | ||
| Gains on investments at fair value through profit or loss | 12,077,832 | |
| Foreign exchange gains | 150,286 | |
| Net Investment Result | 12,228,118 | |
| Income | ||
| Interest | 1,023,040 | |
| Fee income | 342,615 | |
| Total Income | 13,593,773 | |
| Expenses | ||
| Administration expenses | (510,774) | |
| Return before exceptional items | 13,082,999 | |
| Provisions | (25,000) | |
| Exceptional item - Cost of share awards and options | (2,138,794) | |
| Net return for the period | 10,919,205 | |
| Earnings per share: | ||
| Basic | 3 | 17.0p |
| Diluted | 3 | 16.6p |
All items in the above statement are derived from continuing operations.
All income is attributable to the Ordinary Shareholders of the Company.
The accompanying notes form an integral part of the financial statements.
Consolidated Balance Sheet (Unaudited)
As at 30 June 2006
| Note | As at 30 June 2006 Unaudited £ |
|
| Non-current assets | 4 | |
| Property, plant and equipment | 22,804 | |
| Investments at fair value through profit or loss | 14,350,957 | |
| Loans and receivables | 6,396,793 | |
| Total non-current assets | 20,770,554 | |
| Current assets | ||
| Available for sale financial assets | 22,950,268 | |
| Trade and other receivables | 5 | 511,360 |
| Cash and cash equivalents | 23,799,977 | |
| Total current assets | 47,261,605 | |
| Total assets | 68,032,159 | |
| Current liabilities | ||
| Trade and other payables | 6 | (302,024) |
| Total liabilities | (302,024) | |
| Net Assets | 67,730,136 | |
| Equity | ||
| Issued share capital | 64,194 | |
| Share premium | 7 | 54,744,437 |
| Share-based payment reserve | 2,002,300 | |
| Retained earnings | 10,919,205 | |
| Total Equity | 67,730,136 |
Approved by the board on 14 September 2006
Signed on behalf of the Board of Directors by:
| Mr D Vago Chief Executive |
Mr E Youngblood Chief Financial Officer |
Consolidated Statement of Changes in Shareholder’s Equity (Unaudited)
For the period ended 30 June 2006
Consolidated Cash Flow Statement (Unaudited)
Notes to the Unaudited Interim Financial Statements
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