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.


-- 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.


   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) Dow Jones Newswires

February 07, 2022 01:59 ET (06:59 GMT)

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