TIDMESO TIDMEO.P TIDMEC.P TIDMEL.P
RNS Number : 8090A
EPE Special Opportunities Limited
07 February 2022
EPE Special Opportunities Limited
("ESO" or the "Company")
Trading Statement
The Board of EPE Special Opportunities is pleased to provide an
update on the Company's performance for the year ended 31 January
2022.
Summary
-- The Company's performance in the year ended 31 January 2022
was led by robust trading within the portfolio, despite the
continuing impact of the COVID-19 pandemic. The Company completed
two new investments in the period, EPIC Acquisition Corp announced
in December 2021 and The Rayware Group in July 2021. The Board and
Investment Advisor are carefully monitoring the UK economic
outlook. The Board expects continued headwinds from inflation and
ongoing global supply chain disruption. The Board also notes
evidence of increased political risk and the residual risk posed by
COVID-19.
-- The unaudited estimate of the Net Asset Value ("NAV") per
share of the Company as at 31 January 2022 was 455.66 pence per
share, representing an increase of 4.1 per cent. on the NAV per
share of 437.63 pence as at 31 January 2021. The unaudited estimate
has been prepared using the Company's historic valuation
methodology and accounting principles.
-- The share price of the Company as at 31 January 2022 was
309.00 pence, representing an increase of 14.0 per cent. on the
share price of 271.00 pence as at 31 January 2021.
-- In January 2022, Luceco released a trading update for the
year ended 31 December 2021, announcing strong revenue growth, 36.0
per cent. ahead of a 2019 pre-COVID-19 comparator, operating profit
of GBP39.0 million and net debt to EBITDA of 0.7x. The business
outperformed the market due to new business wins, superior channel
access and superior product availability despite global supply
chain disruption. In October 2021, Luceco plc announced the
acquisition of DW Windsor Group for GBP16.9 million on a cash and
debt-free basis. Luceco plc delivered share price growth, achieving
a 15.4 per cent. increase in the year ended 31 January 2022. In
June 2021, ESO sold 4.5 million shares in Luceco plc, returning
GBP15.0 million in cash, whilst retaining a 22.1 per cent. holding
in the business.
-- The Rayware Group ("Rayware") has performed well in the
period since acquisition in July 2021, achieving sales ahead of
forecast and the prior year, and maintaining strong profitability
despite headwinds from increased input and freight costs. The
business has made a number of additions to the management team,
appointing a new CFO, as well as a US Sales VP to support the
strategic focus on the US market. Looking ahead, Rayware is well
positioned for growth via international expansion and development
of its digital offering.
-- Whittard of Chelsea ("Whittard") continued to face a
difficult trading environment as a result of ongoing COVID-19
disruption throughout 2021. Whittard's retail stores remained
closed until April 2021 in line with government restrictions, while
fourth quarter trading was impacted by the resurgent Omicron
variant. The business benefitted from further government support
extended in the period as well as the agreement of bilateral deals
with the majority of the business' landlords. Whittard's e-commerce
platform continued to trade at an elevated level in the period,
partially mitigating the disruption to the retail channel. Whittard
has made encouraging progress in its international channels,
securing a new franchise partner in South Korea, as well as new
marketplace partners in the US and the EU.
-- David Phillips achieved sales growth in the period, supported
by delivery of strong project pipelines. However, profitability has
been adversely affected by exceptional global supply chain
pressures and raw material price increases. Whilst the narrowing of
profitability represents a set-back, the sales growth achieved in
the year is validation of the market opportunity for the business
and provides the scale to achieve meaningful profitability once
margin pressure subsides.
-- Pharmacy2U continued to build on the increased scale achieved
following the shift to online pharmacy in the COVID-19 period,
delivering further sales growth and improving profitability. In
addition, the business has supplemented its core divisions with a
new Services division, operating vaccination centres and associated
services.
-- In December 2021, the Company announced a EUR10 million
investment in EPIC Acquisition Corp ("EAC"), a special purpose
acquisition company. EAC was admitted to Euronext Amsterdam on 6
December 2021, raising EUR150 million. EAC intends to leverage the
experience of the Investment Advisor, TTB Partners and their
respective affiliates to identify, acquire and develop a consumer
company operating in the EEA or UK which has the potential for
significant growth in Asian markets. EAC has appointed a highly
experienced group of non-executive directors, who are leaders in
global consumer businesses and will be able to provide further
access and guidance on potential targets for EAC. EAC is targeting
companies with an enterprise value of between EUR500 million and
EUR1 billion.
-- The Company had liquidity of GBP27.6 million as at 31 January
2022. In December 2021, the Company raised GBP20.0 million gross
proceeds from a placement of zero dividend preference shares
("ZDP") to provide additional capital for the Company's strong
pipeline of potential investments. The ZDP is repayable in December
2026. The Company has GBP4.0 million of unsecured loan notes
repayable in July 2022 and no other third-party debt
outstanding.
-- In December 2021, the Company completed buybacks in the
market totalling 628,884 ordinary shares (or 1.8 per cent. of the
Company's issued ordinary share capital).
-- As at 31 January 2022, the Company's unquoted portfolio was
valued at a weighted average EBITDA to enterprise value multiple of
5.2x (excluding Pharmacy2U, which is valued on a sales multiple)
and the portfolio had a low level of third party leverage with net
debt at 0.8x EBITDA in aggregate.
Mr Clive Spears, Chairman, commented: "The performance of the
Company in the year ended 31 January 2022 was robust, despite the
challenging macroeconomic environment. The Company has made
pleasing progress in the development of the existing portfolio, the
successful completion of two new investments, and the raising of
additional capital to fund the future investment pipeline. The
Board would like to extend its thanks to the Investment Advisor for
their efforts in a challenging, but interesting year. The Board
will monitor the development of the portfolio over the coming
period and looks forward to updating shareholders at the half
year."
The person responsible for releasing this information on behalf
of the Company is Amanda Robinson of Langham Hall Fund Management
(Jersey) Limited.
Enquiries:
EPIC Investment Partners LLP +44 (0) 207 269 8865
Alex Leslie
Langham Hall Fund Management (Jersey) Limited +44 (0) 15 3488 5200
Amanda Robinson
Cardew Group Limited +44 (0) 207 930 0777
Richard Spiegelberg
Numis Securities Limited +44 (0) 207 260 1000
Nominated Advisor: Stuart Skinner
Corporate Broker: Charles Farquhar
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END
TSTDZGGZGKRGZZZ
(END) Dow Jones Newswires
February 07, 2022 01:59 ET (06:59 GMT)
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