CapMan Group's Interim Report for 1 January - 30 June 2012
(Thomson Reuters ONE) -
CapMan Plc Stock Exchange Release - 9 August 2012 at 9.00 a.m. EET
CapMan Group's Interim Report for 1 January - 30 June 2012
Performance and main events during the review period:
- Group turnover totalled MEUR 13.2 (January-June 2011: MEUR 15.7).
- The Group's operating profit was MEUR 1.9 (MEUR 9.2).
- The Management Company business recorded an operating loss of MEUR 1.7
(MEUR 0.9), while the Fund Investment business recorded an operating
profit of MEUR 3.6 (MEUR 10.1).
- Profit before taxes was MEUR 2.4 (MEUR 12.0) and profit after taxes was
MEUR 2.0 (MEUR 8.9).
- Profit attributable to the owners of the parent company was MEUR 2.0
(MEUR 8.7). Earnings per share were 1.0 cent (8.9 cents).
- Capital under management as of 30 June 2012 totalled MEUR 3,022.2
(30 June 2011: MEUR 3,069.8).
- Long-term bank financing was completed.
Outlook for 2012 unchanged
CapMan's next major fundraising rounds will take place in 2012. The development
of the company's current year management fees will depend on the timing of exits
made from current funds and the size and timing of new funds to be established.
Our operating expenses will continue to decline as a result of the various
efficiency enhancement measures that have been taken. Due to our fundraising
efforts, management fees will not fully cover operating expenses until the new
funds currently in the process of being established reach an adequate size.
The fair value of CapMan's fund investments developed favourably during the
review period. We believe that our portfolio companies are well-positioned to
continue performing well in this respect during the rest of the year, which
would have a positive effect on the fair value development of our fund
investments.
The Group's overall result for 2012 will mainly depend on whether funds already
generating carried interest are able to conduct new exits, whether new funds
will transfer to carry, and on how the value of investments develops in funds
where CapMan is a substantial investor. Due to the difficulty of forecasting
these developments and their timing, CapMan will not issue guidance on its
result for the full year.
CEO Lennart Simonsen:
"With prevailing market uncertainty as a backdrop, we were relatively successful
in making progress with our exits, which had a positive impact on our
operations. Our CapMan RE II fund sold the Stockmann department store property
in Turku during the second quarter. Moreover, the CapMan Equity VII B fund
transferred into carry after the review period as a result of our successful
exit from the Tokmanni Group in July. Following the exit, both the CapMan Equity
VII A and CapMan Equity Sweden KB funds are significantly closer to carry as
well.
Our result for the first half of the year was unsatisfactory. The Management
Company business recorded a loss as a result of lower management fees and a lack
of carried interest income.
We continued fundraising for the Buyout X, Nordic Real Estate, and CapMan Russia
II funds. Despite the challenging fundraising market, we believe that we will
complete the first rounds of fundraising for all three funds during the course
of this year.
We are pleased with our restructured loan arrangements as we achieved greater
financial flexibility by replacing our previous bank financing facilities with a
new senior loan and a long-term revolving credit facility. CapMan is committed
to maintaining our role as a major investor also in our new funds, and this
refinancing arrangement preserves our operational leeway."
Business operations
CapMan Group is a private equity fund manager operating in the Nordic countries
and Russia. The Group also makes investments in its own funds.
Private equity investment means making direct equity investments in companies
and real estate. Investments are made through funds, which raise their capital
primarily from institutional investors such as pension funds and foundations.
Private equity investors actively develop their portfolio companies and real
estate by working closely with the management and tenants. Value creation is
based on promoting companies' sustainable growth and strengthening their
strategic position. Private equity investment is of a long-term nature -
investments are held for an average of three to five years and the entire life
cycle of a fund is typically around 10 years. Over the long term, private equity
funds have generated significantly higher levels of returns compared to other
investment classes(1), and the industry's prospects are good. By investing in
CapMan, institutional and private investors can benefit from the profit
potential of the private equity industry while diversifying their exposure.
The Group has two operating segments: a Management Company business and a Fund
Investment business.
In its Management Company business, CapMan raises capital from Nordic and
international institutions for the funds that it manages. The investment teams
invest this capital in Nordic and Russian companies and real estate. The
management company business has two sources of income. Fund investors pay a
management fee to CapMan (typically 0.5-2.5% p.a.) during the life cycle of each
fund. The management fee is based on fund size less realised exits during the
fund's investment period (typically 5 years), after which the management fee is
based on the remaining invested portfolio valued at cost. Management fees
normally cover CapMan's operating costs and generally represent a steady and
highly predictable source of income.
The second source of income of the Management Company business is carried
interest received from funds. Carried interest denotes the Management Company's
share of each fund's cash flow after paid-in capital has been distributed to
fund investors and the latter have received their annual preferential return
(so-called hurdle rate (IRR), typically 8% p.a.). The amount of carried interest
generated depends on the timing of exits and the stage at which funds are in
their life cycle, which makes advance prediction difficult.
Through its Fund Investment business CapMan makes investments from its own
balance sheet in the funds that it manages. Income in this business is generated
by increases in the fair value of investments and realised returns. Fair value
is determined by the development of portfolio companies and real estate held by
the funds in addition to general market developments. Revenue from CapMan's fund
investments can sometimes be negative.
As there may be considerable quarterly fluctuations in carried interest and the
fair value of fund investments, the Group's financial performance should be
analysed over a longer time span than the quarterly cycle.
Group turnover and result in January - June 2012
The Group's turnover declined compared to the first half of 2011 and totalled
MEUR 13.2 (January - June 2011: MEUR 15.7), as a result of lower management fees
and carried interest compared to the January - June 2011 period. In addition,
turnover during the first half of last year included MEUR 1.0 of real estate
consulting income. CapMan sold its real estate consulting business in June
2011. Operating expenses fell as expected, as a result of efficiency enhancement
initiatives, and totalled MEUR 15.4 (MEUR 17.5). Operating expenses for the
review period included an impairment loss of MEUR 0.5 resulting from CapMan's
sale of a 4% stake in Access Capital Partners Group SA. The transaction was
completed after the review period.
The Group recorded an operating profit of MEUR 1.9 (MEUR 9.2). Financial income
and expenses amounted to MEUR -0.1 (MEUR 0.4). CapMan's share of the profit of
its associated companies was MEUR 0.6 (MEUR 2.4). Profit before taxes was MEUR
2.4 (MEUR 12.0) and profit after taxes was MEUR 2.0 (MEUR 8.9).
Profit attributable to the owners of the parent company was MEUR 2.0 (MEUR
8.7). Earnings per share were 1.0 cent (8.9 cents).
A quarterly breakdown of turnover and profit, together with turnover, operating
profit/loss, and profit/loss by segment for the review period, can be found in
the Tables section of this report.
Management Company business
Turnover generated by the Management Company business during the first half
totalled MEUR 13.2 (MEUR 15.7). Management fees decreased compared to the
comparable period in 2011 as a result of exits, and totalled MEUR 12.4 (MEUR
13.9).
No carried interest income was received during the first half of 2012. This
compares to carried interest income of MEUR 0.4 during the first half of 2011.
The Management Company business recorded an operating loss of MEUR 1.7 (MEUR
0.9) and a loss of MEUR 1.8 (MEUR 0.5). The status of the funds managed by
CapMan is presented in more detail in Appendix 1.
Fund Investment business
Fair value changes related to fund investments totalled MEUR 3.8 (MEUR 10.3)
during the first half, and represented a 5.2% increase in value during January -
June 2012 (16.9% increase in value during the first half of 2011). Portfolio
companies have developed favourably during the first half of the year and
positive development is expected to continue for the remainder of the year. Fair
value changes were also influenced by developments in the market value of the
listed peers of our portfolio companies. The aggregate fair value of fund
investments as of 30 June 2012 was MEUR 75.9 (30 June 2011: MEUR 65.2).
The operating profit of the Fund Investment business was MEUR 3.6 (MEUR 10.1)
and profit for the first half was MEUR 3.7 (MEUR 9.4). CapMan's share of the
result of its Maneq associated companies impacted this figure. Changes in the
fair value of Maneq fund investments impacted the performance of Maneq
companies.
CapMan invested a total of MEUR 4.1 (MEUR 6.5) in its funds during the first
half. The majority of this was allocated to the CapMan Buyout VIII and CapMan
Russia funds. CapMan received distributions from funds totalling MEUR 1.7 (MEUR
17.0). CapMan did not make any new commitments to funds during the review
period.
The amount of remaining commitments totalled MEUR 21.7 as of 30 June 2012 (30
June 2011: MEUR 28.0). The aggregate fair value of existing investments and
remaining commitments as of the same date was MEUR 97.5 (MEUR 93.2). CapMan's
goal is to invest 1-5% of the original capital in the new funds that it manages,
depending on fund size, fund demand, and CapMan's investment capacity.
Investments in portfolio companies are valued at fair value in accordance with
International Private Equity and Venture Capital Valuation Guidelines (IPEVG),
while real estate assets are valued in accordance with the value appraisals of
external experts, as detailed in Appendix 1.
Investments at fair value and remaining investment capacity by investment area
are presented in the Tables section.
Balance sheet and financial position as of 30 June 2012
CapMan's balance sheet totalled MEUR 134.5 as of 30 June 2012 (30 June 2011:
MEUR 142.0). Non-current assets amounted to MEUR 118.0 (MEUR 106.5), of which
the carrying amount of goodwill totalled MEUR 6.2 (MEUR 6.2).
Fund investments booked at fair value totalled MEUR 75.9 (MEUR 65.2). Long-term
receivables amounted to MEUR 20.0 (MEUR 19.1), of which MEUR 18.8 (MEUR 18.4)
represented loan receivables from Maneq funds. Both CapMan Plc and CapMan
personnel are investors in Maneq funds. The expected returns from CapMan's Maneq
investments are broadly in line with the return expectations for CapMan's other
investments in its own funds, and Maneq funds pay market rate interest on loans
they receive from CapMan Plc.
Current assets amounted to MEUR 13.5 (MEUR 32.0). Liquid assets (cash in hand
and at banks, plus other financial assets at fair value through profit and loss)
amounted to MEUR 4.3 (MEUR 27.7). Liquid assets decreased mainly because CapMan
completed no significant exits during the review period. CapMan exited OneMed
and Proxima during the first half of 2011.
CapMan Plc's hybrid bond stands at MEUR 29.0. Due to dividend payments, the
interest on the bond for the financial year is deducted from equity in line with
the terms of the loan. The interest on the bond is payable semi-annually. CapMan
Plc had a bank financing package totalling MEUR 45.0 (MEUR 44.4) available as of
30 June 2012, of which MEUR 35.0 (MEUR 34.4) was utilised. Trade and other
payables totalled MEUR 13.1 (MEUR 17.3). The Group's interest-bearing net debt
amounted to MEUR 31.1 (MEUR 7.3).
The Group's cash flow from operations totalled MEUR -10.9 (MEUR -5.2). Income
from fund management fees is paid semi-annually, in January and July, and is
shown under working capital in the cash flow statement. Cash flow from
investments totalled MEUR -1.5 (MEUR 17.0) and includes fund investments and
repaid capital received by the company. Cash flow before financing totalled MEUR
-12.4 (MEUR 11.9), while cash flow from financing was MEUR -5.5 (MEUR -18.6).
Key figures as of 30 June 2012
CapMan's equity ratio as of 30 June 2012 was 61.2% (30 June 2011: 60.2%), its
return on equity 4.6% (20.2%), and its return on investment 5.3% (19.9%). The
target levels for the company's equity ratio and return on equity are at least
60% and over 20%, respectively.
Key figures
30.6.12 30.6.11 31.12.11
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Earnings per share, cents 1.0 8.9 10.1
Earnings per share, diluted, cents 1.0 8.7 10.1
Shareholders' equity / share, cents * 98.8 101.3 104.7
Share issue adjusted number of shares 84,255,467 84,255,467 84,255,467
Number of shares at the end of period 84,281,766 84,281,766 84,281,766
Number of shares outstanding 84,255,467 84,255,467 84,255,467
Company's possession of its own shares, end of
period 26,299 26,299 26,299
Return on equity, % 4.6 20.2 12.4
Return on investment,% 5.3 19.9 11.9
Equity ratio,% 61.2 60.2 61.9
Net gearing,%
37.9 8.6 14.4
*) In line with IFRS standards, the MEUR 29 hybrid bond has been included in
equity, also when calculating equity per share. The interest on the hybrid bond
(net of tax) for the review period has been included when calculating earnings
per share.
Fundraising during January - June 2012 and capital under management as of 30
June 2012
Capital under management refers to the remaining investment capacity of funds
and capital already invested at acquisition cost. Capital increases as
fundraising for new funds progresses and declines as exits are made.
On-going economic uncertainty has impacted the fundraising market, which is
expected to remain challenging during 2012. This extended period of economic
instability has prolonged fundraising efforts of many private equity funds,
resulting in a record number of funds in the market. Fund investors are
therefore increasingly selective in making investment decisions. Time spent
fundraising has also increased.
CapMan began fundraising for the Buyout X, Nordic Real Estate, and CapMan Russia
II funds during the first half of the year. We believe that we will complete the
first rounds of fundraising for all three funds during 2012.
Capital under management declined to MEUR 3,022.2 as of 30 June 2012 (30 June
2011: MEUR 3,069.8), and is attributable to the exits made after the comparable
period. Of the total capital under management, MEUR 1,587.2 (MEUR 1,635.3) was
held in funds making investments in portfolio companies and MEUR 1,435.0 (MEUR
1,434.5) in real estate funds.
Funds under management, together with their investment activities, are presented
in more detail in Appendices 1 and 2.
Authorisations held by the Board
The Annual General Meeting authorised the Board of Directors to decide on the
repurchase and/or on the acceptance as pledges of the company's B shares. The
number of B shares concerned shall not exceed 8,000,000, and the authorisation
shall remain in force until the end of the following AGM and 30 June 2013 at the
latest. The AGM also authorised the Board to decide on the issuance of shares
and other special rights entitling to shares. The number of shares to be issued
shall not exceed 15,000,000 B shares and the authorization shall remain in force
until the end of the following AGM and 30 June 2013 at the latest.
Further details on these authorisations can be found in the stock exchange
release on the decisions taken by the AGM issued on 14 March 2012.
Personnel
CapMan employed a total of 109 people as of 30 June 2012 (30.6.2011: 119), of
whom 72 (80) worked in Finland and the remainder in Sweden, Norway, Russia, and
Luxembourg. A breakdown of personnel by country is presented in the Tables
section.
Shares and share capital
There were no changes in CapMan Plc's share capital or the number of company
shares during the first half of 2012. Share capital as of 30 June 2012 totalled
EUR 771,586.98. The number of B shares was 78,531,766 and that of A shares
5,750,000 as of 30 June 2012.
B shares entitle holders to one vote per share and A shares to 10 votes per
share.
Shareholders
The number of CapMan Plc shareholders increased by 12.6% compared to the first
half of 2011 and totalled 6,049 as of 30 June 2012 (30 June 2011: 5,371). No
flagging notices were issued during the review period.
Company shares
As of 30 June 2012, CapMan Plc held a total of 26,299 CapMan Plc B shares. No
changes took place in the number of shares held by CapMan Plc during the first
half.
Stock option programmes
As of 30 June 2012, CapMan Plc had one stock option programme - Option Programme
2008 - in place as part of its incentive and commitment arrangements for
personnel. The maximum number of stock options issued under Option Programme
2008 will be 4,270,000, which will carry an entitlement to subscribe to a
maximum of 4,270,000 new B shares. The programme is divided into A and B series,
both of which cover a maximum of 2,135,000 option entitlements. The share
subscription price of the 2008A options is EUR 2.53 and of the 2008B option EUR
0.89. The subscription period for 2008A and 2008B options started on 1 May 2011
and 1 May 2012, respectively. Receivables from shares subscribed to under these
options will be entered in the company's unrestricted shareholders' equity. As
of 30 June 2012, 1,926,250 2008A stock option entitlements and 2,070,000 2008B
stock option entitlements were allocated.
Trading and market capitalisation
CapMan Plc's B shares closed at EUR 0.89 on 30 June 2012 (30 June 2011: EUR
1.35). The average price during the first half was EUR 1.05 (EUR 1.63). The
highest price paid was EUR 1.19 (EUR 1.84) and the lowest EUR 0.84 (EUR 1.23).
The number of CapMan Plc B shares traded between January and June 2012 totalled
8.5 million (10.7 million), valued at MEUR 8.9 (MEUR 17.5).
The market capitalisation of CapMan Plc B shares as of 30 June 2012 was MEUR
69.9 (30 June 2011: MEUR 105.7). The market capitalisation of all company
shares, including A shares valued at the closing price of B shares, was MEUR
75.0 (MEUR 113.8).
Other events during the review period
CapMan Plc has signed a refinancing agreement with a Finnish bank that replaces
the Group's previous bank loan facility. The new agreement provides MEUR 30 in
senior debt in addition to a MEUR 15 long-term revolving credit facility. As a
result of the agreement and the replacement of previous external loan
agreements, the average maturity of the Group's outstanding loans was extended
by four years. The agreement includes standard covenants. The interest rate
margin is in line with current market levels and other loan terms remained
unchanged.
Events after the review period
Funds managed by CapMan completed the exit from the Tokmanni Group in July. The
exit transferred the CapMan Equity VII B fund into carry. The impact of the
transaction on CapMan's current year financial result is approx. MEUR 1.2
consisting of carried interest income and return on CapMan's own fund
investments. The impact on the Group's 2012 cash flow is approx. MEUR 4.4.
CapMan sold a 4% percent stake in Access Capital Partners Group SA in July.
Following the transaction, CapMan retains a 1% stake in the company. The
transaction results in positive cash flow of approx. MEUR 2 for the Group in
2012. The MEUR 0.5 loss from the sale was accounted for in the second quarter.
Significant risks and short-term uncertainties
Prolonged financial market uncertainty may affect CapMan's operations by
delaying exits and reducing the fair value of the Group's fund investments.
Fluctuations in exchange rates could also affect the valuation of CapMan's
portfolio companies.
Continued market uncertainty will also likely deteriorate the already
challenging fundraising conditions by reducing fund investors' willingness and
ability to make new commitments to CapMan's funds. Fundraising markets are
expected to remain crowded over the short term, possibly affecting the outcome
of the on-going fundraising this year. A successful fundraising effort will
impact the total amount of capital under management, hence resulting in new
management fees.
The EU's Basel III and Solvency II regulatory initiatives limit the ability of
European banks and insurance companies to invest in private equity funds, and
could therefore impact CapMan's fundraising activity.
Business environment
Data from Preqin indicates that the majority of investors intend to increase or
maintain investment allocations in private equity funds, strengthening the
growth prospects for the private equity industry over the long term.(2) However,
a record number of funds are currently in the market and investors have become
increasingly selective in making investment decisions. Investors are still
interested in funds that focus on small and mid-cap M&A and the debt crisis in
southern Europe has resulted in increased investor awareness of opportunities in
the Nordic region.
The number of buyout transactions in Europe declined during the second quarter,
although their value increased compared to the first quarter, largely as a
result of higher large and mid-cap M&A transaction values.(3) Compared to the
rest of Europe, Nordic banks have been less affected by the economic problems in
the eurozone, which has helped maintain the availability of bank-based funding
and M&A activity in the Nordic region.
The exit market perked up markedly during the second quarter, with the value of
exits increasing by more than 60% compared to the first quarter.(4) A stronger
exit market will boost capital repayments to investors and enhance their ability
to make new commitments to private equity funds.
Despite the prolonged eurozone crisis, the European real estate market declined
only modestly during the second quarter in comparison to the first quarter,
according to data from CBRE.(5) Transaction volume decreased also in the Nordic
region during the second quarter. Prime rents remained stable or increased
marginally in the largest Nordic cities. Prime yields remained mostly unchanged
or decreased, largely because of a strong investor appetite for prime properties
and their simultaneously limited supply.(6) According to research by KTI,
international investors view offices in Helsinki CBD as well as shopping centres
and city centre retail across the country as the most attractive investment
opportunities in Finland.(7)
CapMan funds investing in portfolio companies will continue to execute their
investment strategies, and the prospects of our portfolio companies are largely
positive for 2012. In accordance with IPEVG criteria, the fair value development
of portfolio companies will also be impacted by the development of the profit
projections and market valuations of listed companies and the performance of
currencies used in our areas of operations against the euro.
CapMan funds investing in portfolio companies have some MEUR 483 available for
new and add-on investments, while real estate funds have approx. MEUR 42 in
investment capacity, primarily for developing their existing portfolios. Long-
term cooperation with Nordic banks is of particular importance for us, and has
been successful.
Regulatory environment
The European Directive on Alternative Investment Fund Managers (AIFM directive)
came into force on 21 July 2011, and member states have until 21 July 2013 to
integrate it into their national legislation. The directive stipulates an
operating license for participants, as well as other significant requirements,
including fund investor and authority reporting. Thanks to its organisation and
operating model, CapMan is in a good position to operate within the requirements
of these new regulations.
In the US, the Dodd-Franck Act requires certain non-US private equity advisors
and managers to register with or report to the Securities and Exchange
Commission (S.E.C.). In line with the requirements of the Act, CapMan reported
to the S.E.C. on Group companies that manage funds with American investors or
offer investment advice covering such funds by 30 March 2012.
CapMan actively monitors other regulatory developments affecting the industry,
including the Basel III and Solvency II initiatives, which are designed to set
capital requirements for European banks and insurance companies.
Future outlook
CapMan's next major fundraising rounds will take place in 2012. The development
of the company's current year management fees will depend on the timing of exits
made from current funds and the size and timing of new funds to be established.
Our operating expenses will continue to decline as a result of the various
efficiency enhancement measures that have been taken. Due to our fundraising
efforts, management fees will not fully cover operating expenses until the new
funds currently in the process of being established reach an adequate size.
The fair value of CapMan's fund investments developed favourably during the
review period. We believe that our portfolio companies are well-positioned to
continue performing well in this respect during the rest of the year, which
would have a positive effect on the fair value development of our fund
investments.
The Group's overall result for 2012 will mainly depend on whether funds already
generating carried interest are able to conduct new exits, whether new funds
will transfer to carry, and on how the value of investments develops in funds
where CapMan is a substantial investor. Due to the difficulty of forecasting
these developments and their timing, CapMan will not issue guidance on its
result for the full year.
The CapMan Group will publish its Interim Report for 1 January - 30 September
2012 on Thursday, 1 November 2012.
Helsinki, 9 August 2012
CAPMAN PLC
Board of Directors
Further information:
Lennart Simonsen, CEO, tel. +358 207 207 567 or +358 400 439 684
Niko Haavisto, CFO, tel. +358 207 207 583 or +358 50 465 4125
Distribution:
NASDAQ OMX Helsinki
Principal media
www.capman.com
Sources:
1) Bain & Company, Global Private Equity Report
2) The Preqin Private Equity Quarterly, Q2 2012 July 2012
3) Arle Capital Partners Q2 2012 unquote" Private Equity Barometer
4) The Preqin Private Equity Quarterly, Q2 2012 July 2012
5) CBRE MarketView Q2 2012, European Investment Quarterly
6) CBRE MarketView Q2 2012, EMEA Rents and Yields
7) KTI Finnish Property Barometer, Investor sentiment survey, Spring 2012
Appendices (after the Tables section):
Appendix 1: CapMan Group's funds under management as of 30 June 2012, MEUR
Appendix 2: Operations of CapMan's funds under management, 1 January - 30 June
2012
Accounting principles
The Interim Report has been prepared in accordance with the International
Financial Standards (IFRS) and is in conformity with the accounting policies
published in the 2011 financial statements. The revised and amended standards
entering into force on 1 January 2012 had no impact on this interim report. The
information presented in the Interim Report is un-audited.
GROUP STATEMENT OF COMPREHENSIVE INCOME (IFRS)
? ('000) 4-6/12 4-6/11 1-6/12 1-6/11 1-12/11
-------------------------------------------------------------------------------
Turnover 6,525 7,564 13,201 15,749 32,440
Other operating income 232 601 232 601 670
Personnel expenses -4,295 -6,096 -8,627 -11,372 -22,349
Depreciation and amortisation -190 -214 -385 -430 -811
Other operating expenses -3,440 -2,842 -6,362 -5,663 -11,704
Fair value gains / losses of investments 339 6,222 3,826 10,321 12,849
Operating profit/loss -829 5,235 1,885 9,206 11,095
Financial income and expenses -270 53 -52 408 559
Share of associated companies' result -81 1,951 608 2,406 2,055
Profit/loss before taxes -1,180 7,239 2,441 12,020 13,709
Income taxes 44 -2,000 -463 -3,125 -2,622
Profit/loss for the period -1,136 5,239 1,978 8,895 11,087
Other comprehensive income:
Translation differences 0 -17 5 -14 -31
Total comprehensive income -1,136 5,222 1,983 8,881 11,056
Profit attributable to:
Equity holders of the company -1,136 5,120 1,978 8,707 10,899
Non-controlling interests 0 119 0 188 188
Total comprehensive income attributable to:
Equity holders of the company -1,136 5,103 1,983 8,693 10,868
Non-controlling interests 0 119 0 188 188
Earnings per share for profit attributable
to the equity holders of the Company:
Earnings per share, cents -2.0 5.4 1.0 8.9 10.1
Diluted, cents -2.0 5.2 1.0 8.7 10.1
Accrued interest payable on the hybrid bond has been taken into consideration
for the review period when calculating earnings per share.
GROUP BALANCE SHEET (IFRS)
? ('000) 30.6.12 30.6.11 31.12.11
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ASSETS
Non-current assets
Tangible assets 389 506 438
Goodwill 6,204 6,190 6,204
Other intangible assets 1,774 2,114 1,881
Investments in associated companies 9,133 8,720 8,347
Investments at fair value through profit and loss
Investments in funds 75,893 65,212 70,167
Other financial assets 116 597 597
Receivables 19,977 19,120 19,601
Deferred income tax assets 4,497 4,003 4,025
117,983 106,462 111,260
Current assets
Trade and other receivables 9,161 4,336 5,467
Other financial assets at fair value
through profit and loss 373 378 378
Cash and bank 3,972 27,319 21,887
13,506 32,033 27,732
Non-current assets held for sale 3,000 3,501 3,501
Total assets 134,489 141,996 142,493
? ('000) 30.6.12 30.6.11 31.12.11
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EQUITY AND LIABILITIES
Capital attributable the Company's
equity holders
Share capital 772 772 772
Share premium account 38,968 38,968 38,968
Other reserves 38,814 38,679 38,679
Translation difference 43 55 38
Retained earnings 3,673 6,881 9,784
Total equity 82,270 85,355 88,241
Non-current liabilities
Deferred income tax liabilities 2,421 3,114 2,569
Interest-bearing loans and borrowings 26,492 31,885 28,753
Other liabilities 1,185 1,260 1,131
30,098 36,259 32,453
Current liabilities
Trade and other payables 13,121 17,257 15,269
Interest-bearing loans and borrowings 9,000 3,125 6,250
Current income tax liabilities 0 0 280
22,121 20,382 21,799
Total liabilities 52,219 56,641 54,252
Total equity and liabilities 134,489 141,996 142,493
GROUP STATEMENT OF CHANGES IN EQUITY
Attributable to the equity holders of the Company
Trans- Non-
Share lation controll-
Share premium Other differ- Retained ing Total
EUR ('000) capital account reserves ences earnings Total interests equity
--------------------------------------------------------------------------------
Equity on
1 Jan 2011 772 38,968 38,679 69 12,241 90,729 273 91,002
Options 222 222 222
Dividends -10,114 -10,114 -222 -10,336
Hybrid bond,
interest
(net of tax) -2,414 -2,414 -2,414
Comprehen-
sive
profit -14 8,707 8,693 188 8,881
Acquisition
of non-
controlling
interests -1,761 -1,761 -239 2,000
Equity on
30 June 2011 772 38,968 38,679 55 6,881 85,355 0 85,355
Equity on
1 Jan 2012 772 38,968 38,679 38 9,784 88,241 0 88,241
Options 135 272 407 407
Dividends -5,898 -5,898 -5,898
Hybrid bond,
interest
(net of tax) -2,463 -2,463 -2,463
Comprehen-
sive
profit 5 1,978 1,983 1,983
Equity on
30 June 2012 772 38,968 38,814 43 3,673 82,270 0 82,270
STATEMENT OF CASH FLOW (IFRS)
? ('000) 1-6/12 1-6/11 1-12/11
------------------------------------------------------------------
Cash flow from operations
Profit for the financial year 1,978 8,895 11,087
Adjustments -2,415 -8,210 -10,350
Cash flow before change in working capital -437 685 737
Change in working capital -7,597 -3,206 -1,142
Financing items and taxes -2,844 -2,668 -7,788
Cash flow from operations -10,878 -5,189 -8,193
Cash flow from investments -1,495 17,045 14,607
Cash flow before financing -12,373 11,856 6,414
Dividends paid -5,898 -10,336 -10,336
Other net cash flow 356 -8,250 -8,240
Financial cash flow -5,542 -18,586 -18,576
Change in cash funds -17,915 -6,730 -12,162
Cash funds at start of the period 21,887 34,049 34,049
Cash funds at end of the period 3,972 27,319 21,887
Segment
information
The Group reports two segments: Management company business and Fund
investments
Fund Investment
4-6/2012 Management Company business business Total
CapMan Private CapMan Real
? ('000) Equity Estate Total
--------------------------------------------------------------------------------
Turnover 4,841 1,684 6,525 0 6,525
Operating
profit/loss -693 -372 -1,065 236 -829
Profit/loss for
the financial year -869 -372 -1,241 105 -1,136
Fund Investment
4-6/2011 Management Company business business Total
CapMan Private CapMan Real
? ('000) Equity Estate Total
--------------------------------------------------------------------------------
Turnover 5,313 2,251 7,564 0 7,564
Operating
profit/loss -508 -362 -870 6,105 5,235
Profit/loss for
the financial year -338 -362 -700 5,939 5,239
Fund Investment
1-6/2012 Management Company business business Total
CapMan Private CapMan Real
? ('000) Equity Estate Total
--------------------------------------------------------------------------------
Turnover 9,791 3,410 13,201 0 13,201
Operating
profit/loss -1,113 -600 -1,713 3,598 1,885
Profit/loss for
the financial year -1,165 -600 -1,765 3,743 1,978
Assets 8,004 2,122 10,126 107,857 117,983
Total assets
includes:
Investments in
associated
companies 0 0 0 9,133 9,133
Non-current assets
held for sale 3,000 0 3,000 0 3,000
Fund Investment
1-6/2011 Management Company business business Total
CapMan Private CapMan Real
? ('000) Equity Estate Total
--------------------------------------------------------------------------------
Turnover 11,291 4,458 15,749 0 15,749
Operating
profit/loss -197 -700 -897 10,103 9,206
Profit/loss for
the financial year 232 -700 -468 9,363 8,895
Assets 8,635 772 9,407 97,055 106,462
Total assets
includes:
Investments in
associated
companies 0 0 0 8,720 8,720
Non-current assets
held for sale 3,501 0 3,501 0 3,501
Fund Investment
1-12/2011 Management Company business business Total
CapMan Private CapMan Real
? ('000) Equity Estate Total
--------------------------------------------------------------------------------
Turnover 24,633 7,807 32,440 0 32,440
Operating
profit/loss -45 -1,024 -1,069 12,164 11,095
Profit/loss for
the financial year -651 -1,024 -1,675 12,762 11,087
Assets 8,362 627 8,989 102,271 111,260
Total assets
includes:
Investments in
associated
companies 0 0 0 8,347 8,347
Non-current assets
held for sale 3,501 0 3,501 0 3,501
Income taxes
The Group's income taxes in the Income Statements are calculated on the basis of
current taxes on taxable income and deferred taxes. Deferred taxes are
calculated on the basis of all temporary differences between book value and
fiscal value.
Dividend
A dividend of ?0.07 per share, total ?5.9 million, was paid for the year 2011.
The dividend was paid to the shareholders on 26 March 2012 (A dividend of ?0.12
per share, total ?10.1 million, was paid for the year 2010.).
Non-current assets
? ('000) 30.6.12 30.6.11 31.12.11
---------------------------------------------------------------
Investments in funds at fair value through
profit and loss at Jan 1 70,167 66,504 66,504
Additions 4,068 6,451 11,847
Distributions -1,715 -16,984 -19,530
Fair value gains/losses on investments 3,373 9,241 11,346
Investments in funds at fair value through
profit and loss at end of the period 75,893 65,212 70,167
Investments in funds at fair value through
profit and loss at the end of period 30.6.12 30.6.11 31.12.11
Buyout 41,010 33,104 37,458
Mezzanine 3,817 4,607 3,835
Russia 3,697 1,981 2,836
Public Market 3,774 3,812 3,631
Real Estate 6,246 5,831 6,038
Other 12,870 11,106 11,961
Access 4,479 4,771 4,408
In total 75,893 65,212 70,167
Transactions with related parties (associated companies)
? ('000) 30.6.12 30.6.11 31.12.11
--------------------------------------------------------------------------
Receivables - non-current at end of review period 18,797 18,232 18,682
Receivables - current at end of review period 783 352 890
Non-current liabilities
? ('000) 30.6.12 30.6.11 31.12.11
--------------------------------------------------------------------------
Interest bearing loans at end of review period 26,492 31,885 28,753
Seasonal nature of CapMan's business
Carried interest income is accrued on an irregular schedule depending on the
timing of exits. One exit may have an appreciable impact on the Group's result
for the full financial year
Personnel
By country 30.6.12 30.6.11 31.12.11
-----------------------------------
Finland 72 80 79
Sweden 14 18 18
Norway 8 6 8
Russia 14 14 14
Luxembourg 1 1 1
In total 109 119 120
Commitments
? ('000) 30.6.12 30.6.11 31.12.11
--------------------------------------------------------------------
Leasing agreements 7,808 8,132 7,534
Securities and other contingent liabilities 66,490 66,667 67,143
Remaining commitments to funds 21,651 28,026 24,425
Remaining commitments by investment area
Buyout 8,438 12,522 10,008
Mezzanine 4,552 4,313 4,826
Russia 1,282 2,788 2,113
Public Market 1,091 571 299
Real Estate 903 1,097 942
Other 3,472 4,780 4,328
Access 1,913 1,955 1,909
In total 21,651 28,026 24,425
Turnover and profit quarterly
2012
MEUR 1-3/12 4-6/12 1-6/12
---------------------------------------------------------
Turnover 6.7 6.5 13.2
Management fees 6.2 6.2 12.4
Carried interest 0.0 0.0 0.0
Other income 0.5 0.3 0.8
Other operating income 0.0 0.2 0.2
Operating expenses -7.5 -7.9 -15.4
Fair value gains of investments 3.5 0.3 3.8
Operating profit/loss 2.7 -0.8 1.9
Financial income and expenses 0.2 -0.3 -0.1
Share of associated companies'
result 0.7 -0.1 0.6
Profit before taxes 3.6 -1.2 2.4
Profit for the period 3.1 -1.1 2.0
2011
MEUR 1-3/11 4-6/11 1-6/11 7-9/11 10-12/11 1-12/11
--------------------------------------------------------------------------------
Turnover 8.2 7.6 15.7 9.8 6.8 32.4
Management fees 7.1 6.8 13.9 6.8 6.4 27.1
Carried interest 0.4 0.0 0.4 2.6 0.1 3.1
Real Estate consulting 0.5 0.5 1.0 0.0 0.0 1.0
Other income 0.2 0.3 0.5 0.4 0.3 1.2
Other operating income 0.0 0.6 0.6 0.0 0.0 0.6
Operating expenses -8.3 -9.2 -17.5 -7.9 -9.5 -34.9
Fair value gains / losses of
investments 4.1 6.2 10.3 -0.1 2.6 12.8
Operating profit 4.0 5.2 9.2 1.8 0.1 11.1
Financial income and expenses 0.4 0.0 0.4 -0.2 0.4 0.6
Share of associated companies'
result 0.5 1.9 2.4 0.4 -0.7 2.1
Profit after financial items 4.8 7.2 12.0 2.0 -0.3 13.7
Profit for the period 3.7 5.2 8.9 1.6 0.6 11.1
APPENDIX 1: THE CAPMAN GROUP'S FUNDS UNDER MANAGEMENT AS OF 30 JUNE 2012, MEUR
The tables below show the status of the funds managed by CapMan as of 30 June
2012. CapMan groups its funds into four categories in terms of their life cycle
as follows: 1) Funds generating carried interest; 2) Funds in exit and value
creation phase; 3) Funds in active investment phase; and 4) Funds with no
carried interest potential for CapMan.
Exits made by funds generating carried interest provide CapMan with immediate
carry income, while those in the exit and value creation phase can be expected
to start generating carried interest within the next 1-5 years. The carry
potential of funds in active investment phase is likely to be realised over the
next 5-10 years. The last category comprises funds that do not offer any carried
interest potential for CapMan, either because CapMan's share of carry in the
funds concerned is small or because the funds are not expected to transfer to
carry.
When analysing the projected timetable within which a fund could transfer to
carry, the cumulate cash flow that investors have already received should be
compared to the fund's paid-in capital. In order for a fund to enter carry, it
must first return its paid-in capital and pay an annual preferential return to
investors. In the case of funds in the exit or value creation phase, the table
shows the cash flow that must be returned to investors to enable a fund to
transfer to carry. The carry potential of each fund can be evaluated by
comparing this figure to the fair value of the fund's portfolio. A portfolio's
fair value, including its possible net cash flows, provides an indication of the
distributable capital available as of the end of the reporting period. Any
uncalled capital in a fund (relevant especially for funds in the active
investment phase) should be taken into account when evaluating the cash flow
that will be needed to enable a fund to transfer to carry.
The percentage shown in the last column indicates the share of each fund's cash
flow due to CapMan as and when the fund transfers to carry. Following a previous
distribution of carried interest, any new paid-in capital, together with the
annual preferential return payable on it, must be returned to investors before
any further distribution of carried interest can take place.
Definitions of the column headings are shown below the table.
FUNDS INVESTING IN PORTFOLIO COMPANIES
Size Paid- Fund's Net Distributed Amount CapMan's
in current cash cash flow of cash share of
ca- portfolio assets flow cash
pital----------------- -------------- needed flow if
At At To To to fund
cost fair invest- mgmt transfer gene-
value ors com- the fund rates
pany to carry carried
as of interest
30.6.
2012
Funds
gene-
rating
carried
interest
Fenno
Program
1), FM II
B, FV V,
FM IIIB
--------------------------------------------------------------------------------
Total 258.0 252.3 18.0 11.7 1.2 407.0 17.4 10-20%
Funds in
exit and
value
creation
phase
FM III A 101.4 100.6 21.8 21.6 3.2 121.7 8.9 20%
CME VII A
6) 156.7 156.7 62.7 70.5 7.3 150.2 65.2 15%
CME VII B
6) 56.5 56.5 20.3 30.3 3.6 69.4 9.1 13%
CME Sweden
6) 67.0 67.0 26.9 30.2 3.0 63.8 29.2 15%
CMB VIII
2) 6) 440.0 389.3 257.2 295.5 6.5 154.1 372.7 12%
CMLS IV 54.1 50.0 30.6 39.3 2.1 12.1 52.6 10%
CMT
2007 2) 99.6 69.3 39.2 57.8 0.1 9.1 81.6 10%
CMPM 138.0 130.2 101.8 104.1 0.1 56.5 93.8 10%
--------------------------------------------------------------------------------
Total 1,113.3 1,019.6 560.5 649.3 25.9 636.9
Funds in
active
invest-
ment
phase
CMR 118.1 90.9 60.8 73.9 4.4 0.0 3.4%
CMB IX 294.6 220.1 185.1 212.6 0.5 13.4 10%
CMM V 95.0 25.9 24.3 27.5 0.3 1.2 10%
--------------------------------------------------------------------------------
Total 507.7 336.9 270.2 314.0 5.2 14.6
Fund with
no carried
interest
potential
for CapMan
FV IV, FV
VET,
SWE LS 3),
SWE Tech
2) 3)
, CME VII
C,
FM II A,
C, D 2),
FM III C,
CMM IV 4)
--------------------------------------------------------------------------------
Total 581.7 556.6 181.7 157.1 6.2 383.0
Private
equity
funds
total 2,460.7 2,165.4 1,030.4 1,132.1 38.5 1,441.5 17.4
--------------------------------------------------------------------------------
REAL ESTATE FUNDS
Invest- Paid- Fund's Net Distributed Amount CapMan's
ment in ca- current cash cash flow of cash share of
ca- pital portfolio assets flow cash
pacity ----------------- --------------- needed flow if
At At fair To in- To to fund
cost value vestors mgmt- transfer gene-
com- the fund rates
pany to carry carried
as of interest
30.6.
2012
Funds in
exit and
value
creation
phase
CMRE I 5)
Equity
and
bonds 200.0 188.5 60.2 44.8 207.3 27.4 67.2 26%
Debt-
finan-
cing 300.0 276.6 70.5 70.5
--------------------------------------------------------------------------------
Total 500.0 465.1 130.7 115.3 0.9 207.3 27.4
CMRE II
Equity
and
bonds 150.0 116.3 99.7 113.2 20.6 138.6 12%
Debt-
finan-
cing 450.0 280.2 224.3 224.3
--------------------------------------------------------------------------------
Total 600.0 396.5 324.0 337.5 3.6 20.6
CMHRE
Equity
and
bonds 332.5 313.1 363.2 301.4 29,9 393,2 12%
Debt-
finan-
cing 617.5 542.6 512.1 512.1
--------------------------------------------------------------------------------
Total 950.0 855.7 875.3 813.5 2.3 29.9
Total 2,050.0 1,717.3 1,330.0 1,266.3 6.8 257.8 27.4
Funds in
active-
invest-
ment
phase
PSH Fund
Equity
and
bonds 5.0 3.5 3.5 6.2 0.7 10%
Debt-
finan-
cing 8.0 8.0 7.8 7.8
--------------------------------------------------------------------------------
Total 13.0 11.5 11.3 14.0 0.2 0.7
Total 13.0 11.5 11.3 14.0 0.2 0.7
Real
Estate
funds
total 2,063.0 1,728.8 1,341.3 1,280.3 7.0 258.5 27.4
--------------------------------------------------------------------------------
Abbreviations used to refer to funds:
CMB = CapMan Buyout CMRE = CapMan Real Estate
CME = CapMan Equity CMT 2007 = CapMan Technology 2007
CMLS = CapMan Life Science FM = Finnmezzanine Fund
CMM = CapMan Mezzanine FV = Finnventure Fund
CMHRE = CapMan Hotels RE PSH Fund = Project Specific Hotel Fund
CMPM = CapMan Public Market Fund SWE LS = Swedestart Life Science
CMR = CapMan Russia Fund SWE Tech = Swedestart Tech
Explanation of the terminology used in the fund tables
Size/Original investment capacity:
Total capital committed to a fund by investors, i.e. the original size of a
fund. For real estate funds, investment capacity also includes the share of debt
financing used by a fund.
Paid-in capital:
Total capital paid into a fund by investors as of the end of the review period.
Fund's current portfolio at fair value:
Fund investments in portfolio companies are valued at fair value in accordance
with the International Private Equity and Venture Capital Valuation Guidelines
(IPEVG, www.privateequityvaluation.com), and investments in real estate assets
are valued in accordance with the appraisals of external experts.
Fair value is the amount for which an asset could be exchanged between
knowledgeable, willing parties in an arm's length transaction. Due to the nature
of private equity investment activities, fund portfolios contain investments
with a fair value that exceeds their acquisition cost, as well as investments
with a fair value less than the acquisition cost.
Net cash assets:
When calculating the investors' share, a fund's net cash assets must be taken
into account in addition to the portfolio at fair value. The proportion of debt
financing in real estate funds is presented separately in the table.
Amount of cash flow needed to transfer the fund to carry:
This cash flow refers to the profit distributed by funds and the capital they
pay back to investors. The figure indicates the size of the cash flow that
Unternehmensinformation / Kurzprofil:
Datum: 09.08.2012 - 08:02 Uhr
Sprache: Deutsch
News-ID 173121
Anzahl Zeichen: 65626
contact information:
Town:
Helsinki
Kategorie:
Business News
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"CapMan Group's Interim Report for 1 January - 30 June 2012"
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