PE CAPITAL PARTNERS LTD (“ETHOS CAPITAL” OR “THE COMPANY” OR “THE GROUP”)
INCORPORATED IN THE REPUBLIC OF MAURITIUS
REGISTRATION NUMBER: C138883 C1/GBL
SHARE CODE: EPE
Unaudited interim results for the six months ended 31 December 2019
Ethos Capital is an investment company, registered and incorporated in Mauritius as a public company. It is listed on the Johannesburg Stock Exchange (“JSE”) and offers shareholders long-term capital appreciation by making commitments and investments into Funds or Co-Investments that are managed by Ethos Private Equity (Pty) Limited (“Ethos”), providing the Company with largely indirect exposure to a diversified portfolio of unlisted private equity type investments (“Portfolio Companies”). The Group refers to the consolidated results of the Company and its deemed controlled entity.
The Group’s performance is largely measured by the growth in the net asset value (“NAV”) and NAV per share (“NAVPS”).
Ethos acts as Ethos Capital’s Investment Advisor. In addition, Ethos is the Manager of the Funds that Ethos Capital invests in. Ethos is an investment firm that manages investments in private equity and mezzanine transactions in South Africa and other sub-Saharan African countries. Ethos has a 35-year history and an unparalleled record of successful, sustainable investing across economic and political cycles that has delivered 96 realised investments at a 36% gross IRR and a 2.7x multiple of cost.
The economic outlook in South Africa faces significant structural and growth impediments. Consumer sentiment and business confidence remain depressed and GDP growth rates continue to underperform market expectations. During the reporting period, industrial output was subdued with many corporates choosing to delay investment and expansion pending further clarity of key sectoral policies. Unexpected load shedding also negatively impacted both consumer and business confidence which was felt across almost all of Ethos’ South African based Portfolio Companies. Unfortunately, this is likely to continue over the medium term. However, strong economic growth across many other sub-Saharan African countries has continued which positively impacted those assets which had exposure to such countries.
The Group modestly increased its total assets and NAVPS at 31 December 2019 to R2.0 billion and R11.48 respectively (30 June 2019: R11.34). During the period, the Company invested R0.2 billion, largely into four acquisitions within the existing portfolio and thereby increasing its invested capital to R1.7 billion, 85.5% of total assets. The investments provide exposure to 19 Portfolio Companies operating in sub-Saharan Africa (+40% by value outside of South Africa) that are currently valued at an EBITDA multiple of 6.7x (30 June 2019: 6.9x)
Post the period-end, in February 2020, the Company successfully completed a R750 million fully underwritten Rights Offer at R7.50 per share to fund its participation in the Brait SE (“Brait”) Rights Offer. In March 2020, Ethos took over as the investment advisor to the Brait Board. The above increased both the Group’s total assets and invested capital to R2.7 billion, expanding the investments further to 24 Portfolio Companies with a wide geographical spread.
Given the uncertain economic outlook, the Board believes that remaining focused on Ethos’ strategy of theme/tailwind led investing and leveraging the sector, value add and domain expertise it has, while exercising price discipline, will result in strong investment returns in excess of the Company’s cost of equity.
31 Dec 2019
30 June 2019
31 Dec 2019
30 June 2019
Unlisted investments at fair value
|Trade and other receivables|
Money market investments at fair value
Cash and cash equivalents
|EQUITY AND LIABILITIES|
Total Ordinary shareholders’ equity
|Non-current liabilities |
TOTAL EQUITY AND LIABILITIES
|NET ASSET VALUE |
Basic Net Asset Value per share (Rand)
Attributable shares in issue (‘000)
|INVESTMENT PORTFOLIO – AT 31 DECEMBER 2019|
% of total assets
Ethos Mid Market Fund I
Ethos Fund VII
Ethos Ai Fund I
Ethos Healthcare Platform
Ethos Fund VI
Ethos Mezzanine Partners 3
Primedia Group (Pty) Ltd
Channel Vas Investments Ltd BVI
Kevro Holdings (Pty) Ltd
TOP 10 UNDERLYING PORTFOLIO COMPANIES – AT 31 DECEMBER 2019
|Name||Business description||Year*||% of Total assets|
|FinTech service provider |
Corporate clothing and gifting
Specialised analytical and testing services
TMT accessory distribution
Automotive parts retailer & wholesaler
|Other (9 Portfolio Companies) |
Total underlying investments
This short-form announcement is the responsibility of the Directors of Ethos Capital and is only a summary of the information in the full announcement and does not contain full or complete details. The announcement is itself not audited and extracted from unaudited results. Any investment decision should be based on the full announcement which is available from today here:
and is published on the Company’s website :
Copies of the full announcement may also be requested from the Company Secretary (represented by Mr Ravi Cunnoosamy) at no charge at +230 (0) 403 6000, during office hours, or at firstname.lastname@example.org.
Ethos Capital will host a webcast presentation at 10h00 am on Thursday 12 March 2020 covering the results relating to the six months ended 31 December 2019, and outlook. A copy of the presentation is available for download on the Company’s website here
Participants should please register for the webcast in advance by navigating to this website:
1 Merchant Place Cnr Fredman Drive & Rivonia Road Sandton Johannesburg, 2196
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
The financial information on which this announcement is based, has not been audited, reviewed and reported on by the Company's external auditors.