AMANDA CAPITAL PLC STOCK EXCHANGE RELEASE
15 FEB 2007 at 12:15
AMANDA CAPITAL PLC FINANCIAL STATEMENTS BULLETIN 1 JAN 31 DEC 2006
- The Groups net sales were EUR 9.4 million (EUR 9.5 million 1
January to 31 December 2005). The net investment income included in
net sales amounted to EUR 7.6 million and management fees from private
equity fund management to EUR 1.8 million.
- Consolidated earnings after taxes increased to EUR 6.0 million
(EUR 5.5 million).
- Earnings per share calculated on the average number of shares
during the period was EUR 0.28 and on the number of shares at year-end
EUR 0.26 (EUR 0.26).
- Dividend proposal: basic dividend EUR 0.20 per share and
additional dividend EUR 0.10 per share.
- The equity to assets ratio was 95.5% (93.9%).
- Equity per share at the end of the financial period was EUR 2.48
(EUR 2.41).
- The return on private equity investments was 23.2% of invested
capital.
- The aggregate return on Amandas private equity investments since
the beginning of investment operations is 28% p.a. (IRR).
FINANCIAL DEVELOPMENT
Net sales from the management and consultation of private equity
investments increased to almost 20 per cent of Amandas total net
sales in 2006. Amandas investment portfolio, consisting of 25
different private equity funds, carried out several exits during 2006.
In particular, buyout funds founded in 1997-2000 divested their
investments. Amanda made five new private equity fund investments
during the financial period.
Amandas consolidated net sales for the period 1 January to 31
December 2006 amounted to EUR 9.4 million (EUR 9.5 million 1 January
to 31 December 2005). Fees from the management and consultation of
private equity funds accounted for EUR 1.8 million of the amount. In
the comparison period, net sales from the corresponding operations
amounted to EUR 64 thousand as the acquisition of Amanda Advisors Ltd
was only realised in December 2005, and its net sales were
consolidated since the date of acquisition. Net investment income
amounted to EUR 7.6 million (EUR 9.4 million). Consolidated earnings
increased to EUR 6.0 million (EUR 5.5 million). The decline in net
investment income during the period under review was due to a decrease
in the number of target companies divested by the private equity
funds. Exits from target companies continued to yield good return
percentages.
Amanda Capitals consolidated balance sheet total was EUR 59.0 million
(EUR 54.8 million), and shareholders equity amounted to EUR 56.4
million (EUR 51.3 million). According to Amanda Capitals investment
policy, almost the entire balance sheet consists of shareholders
equity. This means that the equity to assets ratio is high at 95.5%
(93.89%). Approximately 59% (58%) of the balance sheet total is
invested in private equity funds and 38% (36%) in liquid assets.
Consolidation goodwill amounted to 3% (6%) of the balance sheet total.
MANAGEMENT AND CONSULTATION OF PRIVATE EQUITY INVESTMENTS
The management and consultation of private equity investments
generated EUR 1.8 million in net sales during the financial period.
In May 2006, Amanda established a limited partnership fund, Amanda III
Eastern Private Equity L.P., which makes investments in Russian and
Eastern European unquoted companies through local private equity
funds. By the end of the financial period, the fund had EUR 78.8
million in investment commitments. The fund is going to continue fund
raising and its final closing is going to take place by 22 May 2007.
On 31 December 2006, Amanda had more than EUR 750 million of assets
under management (original investment commitments more than EUR 1.1
billion) and has made investments in more than 90 private equity funds
in Europe, the United States, Asia and Russia. The acquisition of the
Proventure in February 2007 increased assets under management by more
than EUR 170 million.
PRIVATE EQUITY FUNDS
Amanda made five new private equity fund investments during the
financial period.
In the second quarter, Amanda Capital sold its USD 12 million
investment commitment in the Russia Partners II private equity fund to
the newly established Amanda III Eastern Private Equity L.P. fund.
Amanda made a EUR 10 million investment commitment in the Amanda III
private equity fund.
In the second quarter, Amanda made a EUR 5 million investment
commitment to the Triton Fund II private equity fund. Triton makes
investments in unquoted medium-sized European companies.
In the third quarter, Amanda made a EUR 4 million investment
commitment in the Permira IV private equity fund. Permira is a leading
international private equity investor and has made over 280 private
equity investments since 1985.
In the third quarter, Amanda also made a GBP 3 million investment
commitment in the Gresham Fund IV L.P. private equity fund based in
England. Gresham targets buyouts of unquoted small and medium-sized
British companies.
In the fourth quarter, Amanda made a EUR 5 million investment
commitment in the EQT V private equity fund. The EQT V private equity
fund invests in medium-sized companies in growing industries in
Northern Europe.
At the end of the period under review Amanda Capital had investments
in the private equity funds listed below.
Name of fund, Year of establishment, Number of investments made, WWW
Amanda III Eastern Private Equity L.P., 2006, 4, www.amandacapital.fi
Atlas Venture VI L.P., 2001, 61, www.atlasventure.com
Benchmark Europe I L.P., 2000, 35, www.benchmark.com
Charterhouse Capital Partners VII L.P., 2002, 10,
www.charterhouse.co.uk
EQT Finland, 1999, 2, www.eqt.fi
EQT II, 1998, 10, www.eqt.se
EQT IV, 2004, 4, www.eqt.se
EQT V, 2006, 0, www.eqt.se
Fenno Rahasto Ky, 1997, 10, www.fennomanagement.fi
Finnventure Rahasto V Ky, 1999, 36, www.capman.fi
Gresham Fund III L.P., 2004, 11, www.greshampe.com
Gresham Fund IV L.P., 2006, 0, www.greshampe.com
Industri Kapital 1997, 1997, 13, www.industrikapital.com
Industri Kapital 2000, 1999, 19, www.industrikapital.com
Innovacom 4, 2000, 48, www.innovacom.com
MB Equity Fund II Ky, 1997, 8, www.mbrahastot.fi
Merlin Biosciences Fund L.P., 2000, 23, www.merlin-biosciences.com
Montagu III L.P., 2005, 2, www.montaguequity.com
Nexit Infocom 2000, 1999, 18, www.nexitventures.com
PAI Europe IV L.P., 2005, 5, www.paimanagement.com
Permira Europe II, 2000, 20, www.permira.com
Permira Europe III, 2003, 11, www.permira.com
Permira Europe IV, 2006, 0, www.permira.com
Sponsor Fund I Ky, 1997, 8, www.sponsor.fi
Triton Fund II L.P., 2006, 1
These private equity funds have invested in more than 300 companies.
Amanda Capitals degree of investment (book value of
investments/equity) was 59.0% (62.0%). The private equity funds called
in capital of approximately EUR 14.7 million during the financial
period and returned approximately EUR 11.3 million to the company as
capital returns and EUR 7.5 million as distribution of profits.
NEW INVESTMENTS MADE BY THE PRIVATE EQUITY FUNDS
The private equity funds made several new investments during the
financial period. Examples of the investments:
Permira II and Permira III are involved in an investment consortium
that has submitted an offer to acquire TDC A/S, a Danish telecom
operator. Furthermore, Permira III has acquired Aearo Technologies
Inc. The company is among the worlds leading manufacturers of
personal safety products.
EQT IV has acquired a company called Kabel Baden-Württemberg GmbH &
Co. The company is a cable operator in television, broadband and
telephony operations. Kabel Baden-Württemberg has over 2.3 million
customers.
Montagu III has acquired a company called British Car Auctions from
private investors. The company is the leading European resale channel
for vehicles. It is well known for arranging electronic auctions of
vehicles, among other things.
EQT IV has acquired Gambro AB, a global company in the pharmaceuticals
and health sector. Gambro employs more than 11,000 people in more than
40 countries and posted net sales of EUR 1.6 billion in 2005.
Permira Europe III has acquired Telepizza S.A. from the Madrid Stock
Exchange jointly with active management. Telepizza S.A. is the leading
supplier of home-delivered pizza in Spain. Its net sales in 2005
amounted to a total of EUR 312 million. Permira Europe III has also
acquired ALL3MEDIA Limited. ALL3MEDIA Limited operates as an
independent TV production company in England and employs more than
1,000 people. Its net sales in 2005 exceeded EUR 300 million.
COMPANIES DIVESTED BY THE PRIVATE EQUITY FUNDS
Several exits were seen in private equity funds during 2006. Some
examples are:
MB Funds sold A-Katsastus to Bridgepoint, a European private equity
investor.
The Finnventure V exited from Mehiläinen Oyj. The fund sold its
holding to H-Careholding AB, which owns the Swedish health-care
company Carema. Finnventure V had made its original investment in
Mehiläinen in 2000.
Nexit Ventures sold its target company Hybrid Graphics to Nvidia Inc.
Hybrid Graphics is a provider of 3D mobile graphics solutions.
Charterhouse VII sold its holding in the childrens product
manufacturer Avent to Royal Philips.
Permira Europe II divested its holding in the Travellodge low-price
hotel chain. Travellodge was sold to the Dubai International Capital
private equity investment company. Travellodge was the first company
to launch a so-called low-price hotel chain in Great Britain in 1985.
Funds managed by CapMan (Amanda is an investor in CapMans Fenno
private equity fund) made an exit from Tiimari Plc. The funds sold
Tiimari Plc to Oyj Leo Longlife Plc.
Sponsor Capital sold the entire stock of Saunatec Group Ltd to the
Dutch company ABN AMRO Capital. Saunatec Group is the worlds leading
manufacturer of sauna and steam bath products.
SHAREHOLDERS AND SHARE CAPITAL
A total of 1,508,100 new shares were subscribed for in Amandas share
issue directed to personnel. The increase in share capital was
registered in the Trade Register on 22 September 2006. Following the
registration, Amanda Capital Plcs share capital is EUR 11,383,873,
divided into 22,767,746 shares. Amanda Capital Plc had 3,703
shareholders on 31 December 2006.
On 22 August 2006 Amanda Capital Plcs Board of Directors decided to
acquire the companys own shares by virtue of an authorisation granted
by the Annual General Meeting. The acquired shares will be used in
accordance with the authorisation for the purposes of financing the
acquisition of business assets, developing the structure of the
companys equity, improving the liquidity of the shares, transferring
them to another party or annulling them, or in any other case where
the Board of Directors considers that this would be a beneficial way
to use liquid assets. The authorisation also covers the transfer of
shares acquired by the company and their use for the purposes
specified above, the manner and price subject to separate decision by
the Board of Directors. The shares will be acquired in public trading
on the Helsinki Stock Exchange at the prevailing market price. The
Board of Directors decision allows the acquisition of a maximum of
2,000,000 shares. The authorisation to acquire shares granted to the
Board of Directors by the General Meeting of Shareholders is valid
until 14 March 2007. The company held no shares of its own at the end
of the review period.
PERSONNEL
The Group had 10 employees at the end of the financial period. The
average number of personnel during the period was 10. Total salaries
paid during the financial period amounted to EUR 839 thousand (EUR 145
thousand). The personnel expenses include EUR 128 thousand of share
premium accruals associated with the personnel issue; this has no cash
flow effect. The data for the comparison year includes personnel
expenses only since the consolidation of Amanda Advisors Ltd, that is
9 December 2005.
DIVIDEND POLICY AND PROPOSAL FOR THE DISTRIBUTION OF PROFITS
Resulting from Amanda Capitals expansion from investment operations
to the management and consultation of private equity investments, the
Board of Directors has adopted a new dividend policy. The objective is
that the dividends will amount to a minimum of 50% of Amanda Capitals
result for the year. The Board of Directors proposes to the Annual
General Meeting a basic dividend of EUR 0,20 per share and an
additional dividend of EUR 0,10 per share. The proposal of the
additional dividend is based on Amandas strong cash situation
resulting from excellent exits from private equity investments.
DISPUTES
On 30 June 2005 Helsinki District Court dismissed the lawsuits filed
against Amanda Capital Plc by Interglobia Ltd.s bankruptcy estate and
Interavanti Oyj. On 19 September 2005 Interavanti Oyj and
Interglobias bankruptcy estate filed an appeal against Helsinki
District Courts decision with the Court of Appeal.
Amanda Capitals management, Board of Directors and legal counsellors
regard the lawsuits as unfounded. The legal procedures as such do not
have an impact on Amanda Capital Plcs regular business operations.
DEVELOPMENTS AFTER THE REVIEW PERIOD
On 9 February 2007, Amanda acquired the entire stock of the Proventure
for EUR 10.0 million. The net asset value of the acquired companies
was EUR 7.1 million on 31 December 2006. The purchase price was
settled entirely in cash.
Proventure is a private equity investment management company
previously held by private shareholders. Companies within the acquired
group are founding general partners in the private equity funds-of-
funds First European Fund Investments L.P and European Fund
Investments II L.P, which have several Finnish and foreign
institutional investors.
The acquisition will increase the net sales of Amandas private equity
investment management and consultation by approximately EUR 1.7
million this year.
After the end of the financial period, some exits have taken place in
Amandas investments, resulting in an aggregate cash flow of more than
EUR 1 million for Amanda. These include, among others:
The Permira Europe II private equity fund has divested its holding in
Rodenstock GmbH. The company is the leading manufacturer of lenses and
frames in Germany. It has production facilities in 10 countries and
sales offices in more than 80 countries. The Permira Europe II private
equity fund has also divested its remaining holding in Premiere AG.
The company was listed on the Frankfurt stock exchange in March 2005.
The Permira Europe III private equity fund has sold its holding in
Grand Navi Veloci S.p.A to other private equity investors. The company
operates cruise vessels in the Mediterranean and maintains ferry
traffic from Italy to Sardinia and Sicily, among other routes. The PAI
Europe IV private equity fund has rearranged funding for its target
company Chr.Hansen, which will result in capital being returned to
Amanda. The EQT II private equity fund has sold HemoCue to Quest
Diagnostics. HemoCue is a leading developer, manufacturer and marketer
of medical diagnostics equipment for point-of-care testing. HemoCues
annual net sales amount to approximately EUR 90 million.
DEVELOPMENTS IN THE PRIVATE EQUITY MARKET
The private equity market has been growing strongly in Europe and
around the world, particularly during the last two years. The amount
of new investment commitments in private equity funds in Europe in
2005 was a record-breaking high of EUR 72 billion, and the 2006 figure
is expected to be even higher. Private equity funds have been fairly
successful in finding investment targets for their increased assets,
and the exit market has made exits possible. The large amount of funds
that has flown into the industry and the good liquidity of the debt
markets have increased the average purchase price of companies
divestments. The rising interest rate development may cause problems
for certain target companies of private equity funds where the share
of debt financing is high. A majority of the private equity market,
however, use debt financing moderately, making reasonably priced
investments that still produce typical private equity returns. No
substantial changes are expected in the exit market in 2007 compared
to the previous year. The large amount of funds available on the
private equity market will probably mean that secondary deals will
remain high. The other exit options, like selling the target companies
to other companies and stock exchange listings, are also still
possible exit methods.
COMPANY OUTLOOK
During a period of slightly more than a year, Amanda has expanded its
business from investment operations to the management and consultation
of private equity investments through two acquisitions and a newly
established fund. The management of private equity investments is
characterised by long-term management contracts that produce a stable
cash flow and improve the predictability of Amandas net sales and
earnings. The expansion of business operations will reduce the
sensitivity of Amandas earnings to fluctuations in investment income.
The companys objective is to continue expanding its management
business both organically by establishing new funds and by potential
acquisitions. The net sales of the business segment are expected to
exceed EUR 3.5 million in 2007.
Amanda has continued its disciplined investment operations and made
very selective investments despite the wide variety of options
available. Amanda has mostly concentrated its investments in private
equity funds targeting more mature companies. The strategy has
resulted in excellent returns, and the long-term returns on
investments are expected to remain good for the foreseeable future.
AMANDA CAPITAL PLC
Board of Directors
For more information: CEO Petteri Änkilä, tel. +358 10 236 5036
Distribution: Helsinki Stock Exchange, www.amandacapital.fi
Amanda Capital Group is a private equity investment company. Its
parent company is the only publicly listed private equity fund-of-
funds in Scandinavia. The company has investments in 25 different
private equity funds and thereby in over 300 unquoted companies,
mainly located in Europe. Amanda is one of Finlands largest private
equity fund investment management companies. In addition to its own
investments, it manages several private equity fund portfolios under
consultancy agreements. Amanda is also a founding general partner in
the private equity funds Mandatum Equity Fund I and II L.P., as well
as Amanda III Eastern Private Equity L.P., which have several
institutional investors. Amanda Group currently has more than EUR 900
million of assets under management (original investment commitments
more than EUR 1.3 billion) and has made investments in more than 100
private equity funds in Europe, the United States, Asia and Russia.
APPENDIX FINANCIAL STATEMENT TABLES
CONSOLIDATED INCOME STATEMENT 1-12/06, EUR 1 000
112/06 1-12/05 Q4/06 Q4/05
NET SALES
Net investment income 7 557 9 413 630 2 812
Management fees 1 812 64 661 64
Total 9 369 9 477 1 291 1 291
Depreciation and amortisation -246 -1 -62 0
Other operating expenses -1 576 -2 191 -501 -720
OPERATING PROFIT 7 547 7 286 729 2 208
Financial income and expenses 536 180 196 109
PROFIT BEFORE APPROPRIATIONS
AND TAXES 8 083 7 466 925 2 317
Appropriations and
taxes corresponding to
the periods profit -2 074 -1 937 -237 -599
PROFIT 6 009 5 529 688 1 719
CONSOLIDATED BALANCE SHEET, EUR 1 000
31.12.2006 31.12.2005
ASSETS
LONG-TERM ASSETS
Intangible and tangible
assets 3 054 3 299
Investments available for sale
Private equity investments 33 268 31 814
CURRENT ASSETS
Accrued income and advance payments 334 15
Investments available for sale
Financial securities 19 397 15 257
Cash 2 985 4 395
TOTAL ASSETS 59 038 54 780
SHAREHOLDERS EQUITY AND LIABILITIES
SHAREHOLDERS EQUITY 56 395 51 312
LIABILITIES
Non-current liabilities 0 273
Current liabilities 2 643 3 195
TOTAL LIABILITIES 2 643 3 468
TOTAL SHAREHOLDERS
EQUITY AND LIABILITIES 59 038 54 780
CONSOLIDATED CASH FLOW STATEMENT, EUR 1 000
1-12/06 1-12/05 Q4/06 Q4/05
OPERATIONS
Operating income 7 547 7 286 727 2 209
Depreciation and write-downs 245 1 75 1
Investments available for sale
Long-term, increase (-)
decrease (+) -1 454 543 -1 002 -258
Short-term, increase (-)
decrease (+) -4 140 -4 829 -1 234 1 915
Change in fair value reserve -1 665 765 671 1 545
Change in tax
liability/receivable -581 1 778 308 714
Investments available for sale,
total change -7 840 -1 743 -1 254 3 916
Change in working capital
Business receivables, increase (-)
decrease (+) -319 1 063 -63 973
Interest-free debt, increase (+)
decrease (-) 29 581 -597 79
Interest bearing debts,
increase (+)decrease (-) -273 0 -166 0
Total change in working capital -563 1 644 -826 1 052
Dividends paid -3 189 -2 126 0 0
Personnel issue paid over par 128 0 128 0
Cash flow from operations before
financial items and taxes -3 672 5 062 -1 149 7 718
Financial income and expenses 536 181 196 110
Deferred taxes -2 074 -2 181 -236 -843
CASH FLOW FROM OPERATIONS -5 210 3 062 -1 189 6 445
CASH FLOW FROM INVESTMENTS
Acquisition of subsidiary 0 -3 407 0 -3 407
FINANCING
Payment from share issue 3 800 0 -64 0
Increase/decrease in
liquid assets -1 410 -345 -1 253 3 037
Liquid assets at the beginning
of the period 4 395 4 740 4 238 1 358
Liquid assets at the end
of the period 2 985 4 395 2 985 4 395
Liquid assets contain cash and bank deposits.
CHANGE IN CONSOLIDATED SHAREHOLDERS EQUITY
Other Fair
Share re- value Retained
EUR 1 000 capital serves reserve earnings Profit Total
Shareholders equity
1 Jan. 2006 10 630 26 635 698 13 349 51 312
Changes in Investments
Available for Sale -1 666 -1 666
Personnel share issue 754 3 046 128 3 928
Profit for the period 6 009 6 009
Payment of dividends -3 189 -3 189
Shareholders equity
31 Dec. 2006 11 384 29 681 -968 10 288 6 009 56 394
Other Fair
Share re- value Retained
EUR 1 000 capital serves reserve earnings Profit Total
Shareholders equity
1 Jan. 2005 10 630 26 635 -67 9 940 47 138
Changes/corrections 6 6
Changes in Investments
Available for Sale 765 765
Profit for the period 5 529 5 529
Payment of dividends -2 126 -2 126
Shareholders equity
31 Dec. 2005 10 630 26 635 698 7 820 5 529 51 312
CONSOLIDATED KEY RATIOS
1-12/06 112/05
Earnings per share, EUR 0.26 0.26
Earnings per average number of shares, EUR 0.28 0.26
Equity per share, EUR 2.48 2.41
Equity per average number of shares, EUR 2.59 2.41
Return on investment, ROI % p.a. 15.0 15.1
Return on equity, ROE % p.a. 11.2 11.2
Equity to assets ratio, % 95.5 93.9
Stock price at end of period, EUR 3.43 2.43
Investments, EUR 1 000 0 3 792
Number of personnel at the
end of the period 10 8
Private equity investments to
equity ratio, % 59.0 62.0
Investment commitments to
equity ratio, % 121.4 107.0
CHANGE IN BOOK VALUE OF PRIVATE EQUITY FUNDS, EUR 1 000
1-12/06
Book value of private equity funds 1 Jan 2006 31 814
Drawdowns to private equity funds 14 728
Return of capital -11 281
Net changes in the book values of
private equity funds -1 993
Book value of
private equity funds 31 December 2006 33 268
REMAINING COMMITMENTS
Amanda Capital Plcs remaining commitments in private equity funds on
31 December 2006 stood at EUR 35.2 million (EUR 22.9 million on 31
December 2005). Other liabilities at the end of the reporting period
was EUR 0.5 million (EUR 0.1 million).