CapMan Plc Financial Statements Bulletin 1 February 2018 at 8.30 a.m. EET
CapMan Plc’s Financial Statements Bulletin 1.1.-31.12.2017
Performance and main events for the financial year 1 January – 31 December 2017:
-
Group turnover was MEUR 34.8 (MEUR 26.7 1 January -31 December 2016).
-
Operating profit was MEUR 19.5 (MEUR 18.7). Comparable adjusted operating profit was MEUR 23.9 (MEUR 14.5).
-
Profit for the period was MEUR 15.5 (MEUR 15.3). Comparable adjusted profit was MEUR 19.5 (MEUR 10.9).
-
Diluted earnings per share for the period were 10.2 cents (16.1 cents). Comparable adjusted diluted earnings per share were 13.0 cents (11.2 cents).
-
Mari Simula was appointed Head of Fund Investor Relations and a member of the Management Group starting from 5 December 2017.
-
Scala Fund Advisory was incorporated as CapMan’s subsidiary in December.
-
CapMan established CapMan Nordic Property Income Fund and Growth Equity fund in December.
-
CapMan’s Board of Directors proposes a dividend of 11 cents per share to be paid in 2017.
This stock exchange release is a summary of CapMan Plc’s Interim Report 1 January – 31 December 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
| 1-12/17 | 1-12/16 | |
| Turnover, MEUR | 34.8 | 26.7 |
| Operating profit, MEUR | 19.5 | 18.7 |
| Comparable adjusted operating profit, MEUR | 23.9 | 14.5 |
| Profit for the period, MEUR | 15.5 | 15.3 |
| Comparable adjusted profit for the period, MEUR | 19.5 | 10.9 |
| Diluted earnings / share, cents | 10.2 | 16.1 |
| Comparable adjusted diluted earnings / share, cents | 13.0 | 11.2 |
| 31.12.2017 | 31.12.2016 | |
| Return on equity, % p.a. | 11.5 | 14.7 |
| Return on investment, % p.a. | 10.1 | 10.9 |
| Equity ratio, % | 60.0 | 56.6 |
| Net gearing, % | 19.4 | 14.5 |
Joakim Frimodig, CEO:
“CapMan had an excellent year in 2017. We increased our comparable operating profit to MEUR 24 and our comparable earnings per share by 16 per cent to 13.0 cents. Our share price increased by approximately 40 per cent during the year and, taking dividends into account, our shareholders’ total return exceeded 49 per cent in 2017. By these metrics, we were among the best-performing companies on the Helsinki stock exchange.
During the year, we completed the strategically significant Norvestia acquisition and the related integration processes. The acquisition increased and strengthened our balance sheet and complemented our business portfolio by bringing in the Growth Equity investment area. Early in the year, CapMan moved into the Mid Cap segment on the Helsinki Stock Exchange and the number of shareholders rose above 16,000, up 37 per cent from the previous year.
CapMan achieved renewal and a return to growth path in 2017. We invested in growth particularly in the Management Company and Services business by launching new investment areas, funds and investment products. One of our sources of pride in this area is our new Growth Equity fund, which we established towards the end of the year. We also have several projects underway in our other new investment area, CapMan Infra, and we are planning to establish a CapMan Infra fund in 2018. In the CapMan Real Estate business, we made several successful investments and exits during the year, and we also launched the new CapMan Nordic Real Estate II and CapMan Nordic Property Income funds. Having our mandate from BVK increased to €500 million is another example of positive achievement during the year.
In 2017, our efforts to create added value took concrete form in our other business areas as well: CapMan Growth Equity sold its share in Idean Enterprise Oy, which had a significant impact on our overall result for the year. In the autumn, CapMan Buyout made a successful exit from the private dentistry chain Oral Hammaslääkärit and invested in KotiSun Group. In CapMan Credit we made several investments during the year and despite of challenging market environment in Russia, we succeeded to develop our target companies in 2017.
Our service business achieved strong growth. The contract volumes of our procurement network CaPS grew by 24 per cent to reach € 149 million in 2017. In the latter part of the year, we incorporated Scala Fund Advisory. The arrangement makes it possible for Scala to focus on its core business and clarifies the market position of this service business.
Our goal is to grow CapMan a leading Nordic private asset manager with active approach to value-creation in its target companies and with increasingly flexible and diverse investment products and services to an expanding investor base. We aim to continue to invest in growth in 2018 in our current investment and service areas as well as new segments. To boost our growth, we will launch new investment products in the coming years, which will improve the profitability of our Management Company and Services business. The first steps to achieve our goal were already taken in 2017, and we expect them to take concrete form in 2018.
I would like to take this opportunity to extend my warmest thanks to our shareholders, equity investors and all CapMan employees for a successful 2017. During the year, we saw CapMan evolve into a modern and development-oriented private equity company, and we are now in a good position to continue to grow and develop CapMan further.”
Financial objectives and outlook estimate for 2018
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 fluctuation on annual basis considering the nature of the business. CapMan expects fees from services to continue to grow and have an impact on results from the Management Company and Services business in 2018. Our objective is to improve the profitability of Management Company and Services business before carried interest income and any possible items affecting comparability.
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 annual fluctuations affecting the business. For these and other above-mentioned reasons, CapMan does not provide numeric estimates for 2018.
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 | 1-12/17 | 1-12/16 |
| Operating profit | 19.5 | 18.7 |
| Items affecting comparability | ||
| Items related to the acquisition of Norvestia, of which: | 1.8 | -7.1 |
| transaction costs | 0.6 | 2.8 |
| integration related costs | 1.2 | |
| gain from a bargain purchase | -13.9 | |
| loss from the remeasurement of previous ownership at fair value | 4.0 | |
| Reassessment of potential repayment risk to the funds | 0.1 | 2.3 |
| Write-down of a value-added tax receivable | 1.0 | |
| Insurance compensations | -0.3 | |
| Reorganization costs | 1.0 | |
| Impairment of goodwill | 1.5 | |
| Items affecting comparability, total | 4.4 | -4.2 |
| Adjusted operating profit | 23.9 | 14.5 |
| Profit for the period | 15.5 | 15.3 |
| Items affecting comparability | ||
| Items related to the acquisition of Norvestia | 1.7 | -7.2 |
| Reassessment of potential repayment risk to the funds | 0.1 | 1.8 |
| Reorganization costs | 0.8 | |
| Impairment of goodwill | 1.5 | |
| Write-down of a value-added tax receivable | 1.3 | |
| Insurance compensations | -0.2 | |
| Items affecting comparability, total | 4.0 | -4.4 |
| Adjusted profit for the period | 19.5 | 10.9 |
| Earnings per share, cents | 10.4 | 16.2 |
| Items affecting comparability, cents | 2.8 | -5.0 |
| Adjusted earnings per share, cents | 13.1 | 11.2 |
| Earnings per share, diluted, cents | 10.2 | 16.1 |
| Items affecting comparability, cents | 2.7 | -4.9 |
| Adjusted earnings per share, diluted, cents | 13.0 | 11.2 |
Press, analyst and investor conference today at 10.00 a.m. EET
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. EET 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, 1 February 2018
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 1 January – 31 December Financial Statements Bulletin 2017
CapMan www.capman.com
CapMan is a leading Nordic private asset expert with an active approach to value-creation in its target companies and assets. We offer a wide selection of investment products and services. As one of the Nordic private equity pioneers we have developed hundreds of companies and real estate and created substantial value in these businesses and assets over the last 28 years. CapMan has today 118 private equity professionals and manages approximately €2.8 billion in assets under management. We mainly manage the assets of our customers, the investors, but also make investments from our own balance sheet. Our objective is to provide attractive returns and innovative solutions to investors. Our current investment strategies cover Real Estate, Buyout, Russia, Credit, Growth Equity and Infrastructure. We also have a growing service business that currently includes procurement services (CaPS), fundraising advisory (Scala Fund Advisory), and fund management services.
