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RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2020
EPE Capital Partners Ltd 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’s performance is largely measured by the growth in the net asset value (“NAV”) and NAV per share
THE ADVISOR: ETHOS
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 36-year history
and an unparalleled record of successful, sustainable investing across economic and political cycles that has delivered 97 realised investments at a 36%
gross internal rate of return (“IRR”) and a 2.7x multiple on invested capital (“MOIC”).
- R1.8 billion carrying value of invested capital, with exposure to 22 Portfolio Companies.
- NAVPS at 31 December 2020 of R6.65, based on Brait’s share price.
- NAVPS of R8.65 based on Brait’s last reported NAVPS (as at 30 September 2020).
- Unlisted portfolio’s EBITDA valuation multiple unchanged at 7.0x; “market implied” multiple of 4.3x, based on share price.
- Last 12 months attributable revenue and EBITDA growth of top 5 unlisted investments of 15.0% and 8.6% respectively.
- Ethos Capital achieved realisations during the past 12 months from its unlisted portfolio of R159 million, including the sale of two investments
- at an average 1.6x MOIC and a 24% IRR.
- Brait realised R3 billion of disposals from its portfolio in the past 12 months.
COVID has had a significant impact on most of the Portfolio Companies. As a consequence of the initial lockdown, the Portfolio Companies implemented
significant cost-saving initiatives and improved operational efficiencies, and focused on finding opportunities to grow the businesses post the crisis. With
the improved consumer sentiment, slightly improved macroeconomic outlook, and easing of respective lockdown restrictions towards the second part of the
year, most of the Portfolio Companies benefitted from these earlier initiatives that resulted in stronger than expected recoveries across some of these
businesses. The largest five unlisted investments achieved growth in their last 12 months (“LTM”) attributable revenue and EBITDA of 15.0% and 8.6% respectively,
resulting in significant valuation uplifts.
Some others though have been adversely impacted by the further enforced lockdowns and consumer restrictions and spending, with Virgin Active and Ster
Kinekor having to contend with significant reductions in revenue that necessitated significant restructuring of the businesses to ensure they are viable and
able to thrive in a post-COVID world.
Despite a significant re-rating of the market from its COVID lows with some sectors having fully recovered, Ethos has kept the valuation multiples
effectively at the March 2020 levels until the sustainability of the recovery and investment performance is entrenched. The unlisted portfolio is valued at
an unchanged implied EV/maintainable EBITDA multiple of 7.0x.
The NAV of R1.7 billion increased slightly over the period, while the NAVPS, including Brait at its share price that increased by 12% during the period,
ended the six-month period flat at R6.65. The NAVPS, including Brait at a valuation of its last reported NAVPS, decreased from R9.12 to R8.65. Ethos Capital
benefitted from R159 million of realisations during the past 12 months, including a partial sale of Channel VAS for R75.7 million, that achieved a MOIC
of 1.6x and an IRR of 25%. Following the R1 billion invested during the six-months to 30 June 2020, the investment rate was
subdued during the current period, other than a few bolt-on acquisitions by Portfolio Companies.
The impact of COVID is likely to be felt for some time and the macroeconomic outlook for South Africa remains uncertain. The Board believes that remaining
focused on theme/tailwind-led investing, leveraging the sector and domain expertise of Ethos while exercising price discipline, should enable the Company to
generate sustainable, market-leading returns for its investors.
FINANCIAL POSITION AND INVESTMENT PORTFOLIO
EXTRACT OF STATEMENT OF FINANCIAL POSITION
|31 Dec 2020|
|30 June 2020|
|31 Dec 2020|
|30 June 2020|
Unlisted investments at fair value
|EQUITIES AND LIABILITIES|
|Total ordinary shareholders’ equity |
|TOTAL EQUITY AND LIABILITIES||1,871.5||1,905.1||1871.0||1904.6|
|NET ASSET VALUE||1,713.6||1,711.8||1,863.4||1,856.2|
|Basic Net Asset Value per share (Rand) |
Attributable shares in issue (‘000)
INVESTMENT PORTFOLIO – AT 31 DECEMBER 2020
|% of total|
|Ethos Fund VII|
Ethos Mid Market Fund I
Ethos Healthcare Platform
Ethos Ai Fund I
Ethos Fund VI
Ethos Mezzanine Partners 3
TOP 10 UNDERLYING PORTFOLIO COMPANIES – AT 31 DECEMBER 2020
|Name||Business Description||Year*||% of Total|
Virgin Active (Brait)
|FinTech Service provider|
Health club operator
Specialised analytical and testing services
TMT accessory distribution
Corporate clothing and gifting
|Other (12 Portfolio Companies)||8.5|
|Total underlying investments||96.4|
* Initial acquisition date by Ethos Fund
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 published on SENS and available for viewing at:https://senspdf.jse.co.za/documents/2021/JSE/ISSE/EPEE/EPECAP1220.pdf
and is published on the Company’s website at:https://ethoscapital.mu/investors/reports-results/
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 email@example.com.
Ethos Capital will host a webcast presentation at 11h00 am on Thursday 11 March 2021 covering the results relating to the six months ended 31 December 2020,
and outlook. A copy of the presentation is available for download on the Company’s website at https://ethoscapital.mu/investors/reports-results/
Participants can join the webcast by navigating to this website:https://themediaframe.net/ethos10038729
Yvonne Stillhart (Chairperson)
Senior Advisors (Officers)
Jean-Pierre van Onselen (CFO)
Peter Hayward-Butt (CEO)
Ethos Private Equity (Pty) Limited
35 Fricker Road
Company Secretary and Registered Office
6th Floor, Tower A,
Level 7, Standard Chartered Tower
5 Magwa Crescent
Abbreviated name: ETHOSCAP
JSE code: EPE
Sector: Financials – Equity Investment Instruments
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