Ethos Capital – Annual Results Media Release

EPE CAPITAL PARTNERS LTD (‘ETHOS CAPITAL’ OR ‘THE COMPANY’)

Key Highlights:

• NAV increased to R1.87 billion and NAVPS to R10.37; representing an annualised return of 7%
• Invested capital at 30 June 2017 of R334 million (18% of NAV), will increase to R746 million (40% of NAV) upon completion of transactions agreed post year-end
• Committed capital of R682 million at 30 June 2017, increased to R1.3 billion post year-end
• Growth in aggregate sales and EBITDA of underlying Portfolio Companies of 9% and 10% respectively over last 12 months
• Strong pipeline of new Funds and investment opportunities across all Funds

Key developments:

Ethos Capital was listed on the JSE in August 2016, raising R1.8 billion. As at 30 June 2017, the Company had committed R0.7 billion to Ethos Funds and invested 18% of the capital, providing access to nine underlying Portfolio Companies. As at 30 June 2017, Ethos Capital had a NAV of R1.87 billion and a NAVPS of R10.37. 

Post year-end, Ethos Capital made further commitments to Ethos Funds and Direct Investments, increasing its commitments to R1.3 billion, and with three new Portfolio Company investments completed or agreed, its invested capital base will increase to R746 million (40% of the NAV). In addition, at the September 2017 Board meeting, the Board approved a further Direct Investment of R100 million and initial commitments to Ethos Fund VII (R1.25 billion), Ethos Mezzanine Partners Fund 3 (R250 million) and Ethos Healthcare Fund I (R250 million). 

The Board’s medium-term objective is to fully invest Ethos Capital’s NAV and is assessing further commitments into new Ethos Fund investment programmes and Direct Investments; whilst managing the Company’s liquidity and commitment strategies in a disciplined way. 

The Company’s share price ended the financial year at R8.74, a discount of 15.7% to the NAVPS as at 30 June 2017. It is expected that increased investment activity and growth in the portfolio value should provide a positive catalyst to the share price; however, public market perceptions are difficult to predict.

Commenting on the results, Ethos Capital CEO, Peter Hayward-Butt added: 

“The past year has been an exciting one for Ethos Capital and the Ethos franchise more broadly. NAV uplift has been pleasing and invested capital, including post year-end commitments, is showing meaningful traction.  Likewise, the Board and I are encouraged by new Fund and investment opportunities being presented across all Ethos Funds.  By nature, private equity is a long-term investment, requiring long-term thinking and a patient strategy. Ethos Capital remains confident in its ability to generate sustainable, market-leading returns – throughout the cycle – for its investors.”