CapMan Plc Half-Year Financial Report 10 August 2017 at 8.30 a.m. EEST
CapMan Plc’s Half-Year Financial Report 2017
Performance and main events for the review period 1 January – 30 June 2017:
· Group turnover was MEUR 16.6 (MEUR 15.4 1 Jan -30 June 2016).
· Operating profit was MEUR 17.8 (MEUR 7.2). Comparable adjusted operating profit was MEUR 18.3 (MEUR 8.1).
· Profit before taxes was MEUR 16.1 (MEUR 5.5).
· Profit for the period was MEUR 14.8 (MEUR 5.2). Comparable adjusted profit was MEUR 15.3 (MEUR 6.3).
· Diluted earnings per share for the period were 9.8 cents (5.4 cents). Comparable adjusted diluted earnings per share were 10.1 cents (6.8 cents).
· Pia Kåll was appointed as CapMan Buyout’s managing partner and a member of Management Group.
This stock exchange release is a summary of CapMan Plc’s Half-Year Financial Report 2017. The complete report is available in pdf-format as an attachment to this release and on the company’s website at https://www.capman.com/newsroom/financial-reports/.
Key figures
| 1-6/17 | 1-6/16 | |
| Turnover, MEUR | 16.6 | 15.4 |
| Operating profit, MEUR | 17.8 | 7.2 |
| Comparable adjusted operating profit, MEUR | 18.3 | 8.1 |
| Profit for the period, MEUR | 14.8 | 5.2 |
| Comparable adjusted profit for the period, MEUR | 15.3 | 6.3 |
| Diluted earnings / share, cents | 9.8 | 5.4 |
| Comparable adjusted diluted earnings / share, cents | 10.1 | 6.8 |
| 30.6.2017 | 30.6.2016 | |
| Return on equity, % p.a. | 22.1 | 15.9 |
| Return on investment, % p.a. | 17.8 | 10.8 |
| Equity ratio, % | 55.4 | 44.0 |
| Net gearing, % | 25.0 | 73.9 |
Joakim Frimodig, Interim CEO:
“Our results for the first half of 2017 were strong and we saw a continuation of positive development in our business areas. Especially our Investment business had a positive impact on our results; we saw a successful exit from Idean in the first quarter and an increase in the fair values of CapMan’s own fund investments and trading portfolio.
Other business areas also developed favourably. The ongoing development work in our Buyout portfolio companies is now reflected as positive value increases. We are also actively looking for new exit opportunities in the prevailing favourable capital market environment. Our various real estate transactions during the first half reflect the positive activity in the real estate market. In June, we made two new real estate investments in the Nordics of which the mixed-used commercial property St.Olavs Gate was our first property investment in Norway.
An important factor in CapMan’s growth strategy is our Services business, which had an excellent performance in the first half of 2017. The contractual procurement volumes of CapMan Procurement Services CaPS grew by 25 per cent to 55 million. Furthermore, Scala Fund Advisory, which offers specialised private equity fund raising and advisory services, completed several mandates during the review period; a fund raising for one of the largest US private markets asset management firm Hamilton Lane mandate, among others. In addition to this, the demand both in the Nordics and internationally for Scala’s services has been strong and several mandates will be executed during 2017.
One of the key themes in 2017 is growing the revenues of our Management Company and Services business. For this part, our growth iniatives are starting to materialize. The fund raising of CapMan Nordic Real Estate II fund will be completed during the third quarter 2017 and we are also planning to launch other new Real Estate investment products. We are planning to establish a Growth Equity fund and we have strengthened the Growth Equity team with a new recruitment, as announced earlier today.
The activity of CapMan Infra, focusing on Nordic mid-cap infrastructure assets, has gotten off to a good start and we have already gathered a number of deal opportunities, which we will develop further in 2017.
Looking to the future, I see that we are in a good position for profitable growth due to our diverse business portfolio, which is developing favourably. We will continue the systematic development work of our business areas and launch new investment products. We are developing CapMan forward a leading private equity investment and asset management company in the Nordics. I would like extend a warm thank you for our investors, shareholders and CapMan’s personnel for the successful first half. We have a good basis to continue the strong development during the year 2017.”
CapMan maintains its outlook estimate for 2017
CapMan renewed its financial objectives at the end of 2016. The growth objective for Management Company and Services business is more than 10 per cent p.a. on average. The objective for return on equity is more than 20 per cent p.a. on average. The objective for net gearing, that is ratio of net interest bearing debt to equity, is a maximum of 40 per cent on average. CapMan’s objective is to pay at least 75 per cent of earnings per share as dividend.
CapMan expects to achieve these financial objectives gradually and key figures are expected to show seasonality. CapMan expects fees from services to have a larger impact on results from the Management Company and Services business in 2017. The Management Company and Services business is profitable before carried interest income and any possible items affecting comparability. The integration of Norvestia and other growth initiatives will generate expenses in 2017.
The return on CapMan’s investments have a substantial impact on CapMan’s overall result. The development of industries and local economies, inflation development, valuation multiples of peer companies, exchange rates and various other factors outside of CapMan’s control influence fair value development of CapMan’s overall investments in addition to company and real estate specific development.
CapMan’s objective is to improve results longer term, taking into account the seasonality affecting services and the Investment business. For these and other above mentioned reasons, CapMan does not provide numeric estimates for 2017.
Items affecting comparability and alternative performance measures
CapMan uses alternative performance measures to denote the financial performance of its business and to improve the comparability between different periods. Alternative performance measures do not replace performance measures in accordance with the IFRS and are reported in addition to such measures. Alternative performance measures, as such are presented, are derived from performance measures as reported in accordance with the IFRS by adding or deducting the items affecting comparability and they will be nominated as adjusted.
Items affecting comparability are, among others, material items related to mergers and acquisitions or major development projects, material gains or losses related to the acquisition or disposals of business units, material gains or losses related to the acquisition or disposal of intangible assets, material expenses related to decisions by authorities and material gains or losses related to reassessment of potential repayment risk to the funds.
| MEUR | 1-6/17 | 1-6/16 |
| Operating profit | 17,8 | 7,2 |
| Items affecting comparability | ||
| Items related to the acquisition of Norvestia, of which: | 0,5 | 0,2 |
| transaction costs | 0,1 | 0,2 |
| integration related costs | 0,4 | |
| Write-down of a value-added tax receivable | 1,0 | |
| Insurance compensations | -0,3 | |
| Items affecting comparability, total | 0,5 | 0,9 |
| Adjusted operating profit | 18,3 | 8,1 |
| Profit for the period | 14,8 | 5,1 |
| Items affecting comparability | ||
| Items related to the acquisition of Norvestia | 0,4 | 0,2 |
| Write-down of a value-added tax receivable | 1,3 | |
| Insurance compensations | -0,2 | |
| Items affecting comparability, total | 0,4 | 1,2 |
| Adjusted profit for the period | 15,3 | 6,3 |
| Earnings per share, cents | 9,9 | 5,4 |
| Items affecting comparability, cents | 0,3 | 1,4 |
| Adjusted earnings per share, cents | 10,2 | 6,8 |
| Earnings per share, diluted, cents | 9,8 | 5,4 |
| Items affecting comparability, cents | 0,3 | 1,4 |
| Adjusted earnings per share, diluted, cents | 10,1 | 6,8 |
Press, analyst and investor conference today at 10.00 a.m. EEST
CapMan’s management will present the result for the review period to press, analysts and investors and review the market situation in a press conference to be held at 10.00 a.m. EEST at CapMan’s head office in Helsinki, address Ludviginkatu 6, 00130 Helsinki. The press and analyst conference will be held in Finnish. To join the conference, please register with katariina.kataja@capman.com. Welcome!
Helsinki, 10 August 2017
CAPMAN PLC
Board of Directors
Further information:
Niko Haavisto, CFO, tel. +358 50 465 4125
Distribution:
NASDAQ Helsinki Ltd
Principal media
www.capman.com
Appendix: CapMan Plc’s Half-Year Report 2017
CapMan www.capman.com
CapMan is a leading Nordic investment and specialised asset management company. As one of the Nordic private equity pioneers we have actively developed hundreds of companies and real estate and thereby created substantial value in these businesses and assets over the last 25 years. CapMan has today 110 private equity professionals and manages 2.3 billion in assets. We mainly manage the assets of our customers, the investors, but also make direct investments from our own balance sheet in areas without an active fund. Our objective is to provide attractive returns and innovative solutions to investors and value adding services to professional investment partnerships, growth-oriented companies and tenants. Our current investment strategies cover Buyout, Growth Equity, Real Estate, Russia, Credit, Infrastructure and Tactical Opportunities. We also have a growing service business that currently includes fundraising advisory, procurement activities and fund management.
