TIDMAPAX
RNS Number : 4818L
Apax Global Alpha Limited
06 September 2023
(LSE: APAX)
Apax Global Alpha Limited
Interim results for the period ended 30 June 2023
Apax Global Alpha (LON:APAX), the closed-ended investment
company providing access to the Apax Private Equity Funds, today
announced its interim results for the period ended 30 June
2023.
Key highlights
-- AGA achieved a Total NAV Return(1) of 2.4% (3.6% constant currency)
in the six months ended 30 June 2023. Adjusted NAV(2) was largely
unchanged at EUR1.3bn (31 Dec 2022: EUR1.3bn) or EUR2.64/GBP2.27
per share.
-- The main drivers of Total NAV Return were value creation across
the Private Equity portfolio as well as strong returns from
the Debt portfolio.
-- In Private Equity, continued momentum saw portfolio companies
achieve average LTM EBITDA growth of 14.1%(3) despite some slowdown
in earnings growth in Q2 2023.
-- AGA received EUR35m in distributions from the Apax Funds, primarily
from three full exits achieved at an average uplift of 24%(4)
. This brings total distributions received from the Apax Funds
in the last 5 years to EUR998m compared to calls of EUR651m
in the same period.
-- AGA deployed EUR11.4m(5) across three new investments in the
first six months of 2023, including the first standalone investment
in the Apax Global Impact Fund to which AGA has committed $60m.
The pipeline for new investments remains healthy with Apax XI,
the latest global buyout fund, signing its first two investments
in May and July.
-- The Debt portfolio, which primarily consists of first and second
lien loans to complement the Private Equity portfolio, achieved
a Total Return (1) of 5.3% in the first six months of 2023.
The portfolio had a yield to maturity of 13.3% and, with 99%
of investments being floating rate loans, the income yield was
11.4% at 30 June 2023.
-- Dividend of 5.70p per share declared for the half year 2023,
in line with AGA's stated dividend policy of distributing 5%
of NAV per annum.
Tim Breedon, Chairman of AGA, said:
"Against an uncertain market backdrop, AGA's performance
remained resilient driven primarily by value creation in the
Private Equity portfolio and strong returns from the Company's debt
investments. Over the last five years AGA has delivered a total
annualised return of c.12% and returned nearly EUR300m in dividends
to shareholders. This is testament to the strength of AGA's
portfolio and the Apax Funds' 'all-weather' investment
strategy."
Financial highlights
-- AGA was 93% invested as at 30 June 2023. The Company's unfunded
commitments to the Apax Funds (together with recallable distributions)
reduced by EUR20m in the six months period to EUR985m at
30 June 2023 (31 Dec 22: EUR1.0bn).
-- At 30 June 2023, AGA's invested portfolio was split 71% in
Private Equity and 28% in Debt investments, with the remaining
1% invested across three Equity positions.
-- On 5 September 2023, AGA entered into a new multi-currency
revolving credit facility of EUR250m with SMBC Bank International
plc and JPMorgan Chase, N.A., London Branch, replacing the
facility with Credit Suisse AG, London Branch. The new facility
has an initial term of 2.5 years, and the margin will be
300-335bps (over SOFR or EURIBOR) p.a.
H1 2023 H1 2023 FY 2022 FY 2022 (GBP)
(EUR) (GBP) (EUR)
Adjusted NAV (2) 1,299m 1,116m 1,299m 1,150m
-------- -------- -------- --------------
Adjusted NAV (2)
per share 2.64 2.27 2.65 2.34
-------- -------- -------- --------------
NAV (2) per share 2.65 2.28 2.65 2.34
-------- -------- -------- --------------
% H1 2023 H1 2023
of constant currency
NAV
Total NAV Return(1) 2.4% 3.6%
----- -------- -------------------
Total Return(1) - Private
Equity 66% 1.9% 3.2%
----- -------- -------------------
Total Return(1) - Debt Investments 26% 5.3% 6.9%
----- -------- -------------------
Total Return(1) - Derived
Equity 1% 2.9% 3.8%
----- -------- -------------------
Cash & Others 7%
----- -------- -------------------
Portfolio highlights
-- AGA offers access to a portfolio of hidden gems, mostly private
companies that shareholders can't buy elsewhere. These companies
operate globally across the core Apax sectors of Tech & Digital,
Services, Healthcare, and Internet/Consumer.
-- At 30 June 2023, the invested portfolio consisted of 39% invested
in Tech & Digital, 28% in Services, 17% in Healthcare, and 16%
in Internet/Consumer.
-- In Private Equity, earnings growth was a key driver of performance
with average LTM EBITDA growth to 30 June 2023 of 14.1%(3) across
portfolio companies. Valuation multiples reduced to 16.3x(3)
compared to 17.2x at 31 December 2022, reflecting multiple compression
from Paycor and Thoughtworks, two publicly listed holdings that
were IPO'd in 2021, as well as a change to the comparables set
of certain companies as a result of the impact of M&A.
-- Leverage across the Apax Funds' portfolio reduced slightly to
4.4x(3) at 30 June 2023 (31 December 2022: 4.8%). The Funds'
portfolio is well-positioned to weather the current interest
rate environment and 83%(6) of portfolio companies have debt
maturities extending beyond 2027 and about three quarters of
debt outstanding at a fixed rate.
-- AGA's Debt portfolio continued to perform strongly and delivered
a Total Return(1) of 5.3% in H1 2023. This portfolio has achieved
a 46.8% cumulative constant currency Total Return over the past
five years, outperforming the S&P/LSTA leveraged loan index(7)
which delivered 22.4% for the same five-year period.
-- The Derived Debt portfolio absorbs cash not invested in Private
Equity, enhances the robustness of AGA's balance sheet, provides
a steady flow of income to support dividends, and additional
returns.
-- Derived Equity now makes up a very small part of the portfolio
and at 30 of June 2023, the portfolio held three positions valued
at EUR13.8m. This portfolio delivered a Total Return (1) of 2.9%
in H1 2023.
For further information regarding the announcement of AGA's
Interim 2023 Results, including the Company's results presentation
and details for today's analyst and investor webcast at 9.30am (UK
time), please visit www.apaxglobalalpha.com .
Contact details
Katarina Sallerfors, Investor Relations - AGA
Telephone: +44 207 666 6526
Email: Katarina.sallerfors@apax.com
APPIX
Movements in NAV
Adjusted NAV movements Private Derived Treasury Facility H1 2023
(EURm) Equity Investments Cash Shares drawn Other(8) Total
-------- ---------------- ----- --------- --------- --------- --------
Adjusted NAV at
31.12.22 871.0 364.2 68.0 - - (3.8) 1,299.4
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+ Investments 6.9 5.9 (16.8) - - 4.0 -
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
- Distributions/
divestments (35.0) (19.1) 54.4 - - (0.3) -
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+ Interest and dividend
income - - 14.8 - - 4.1 18.9
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+/- Gains/(losses) 26.5 10.1 - - - - 36.6
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+/- FX gains/(losses)(9) (10.5) (5.6) 0.3 - - - (15.8)
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+/- Costs and other
movements - - (1.8) - - (3.0) (4.8)
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
- Dividends paid - - (32.5) - - - (32.5)
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+/- Performance fee
reserve(10) - (3.1) - - - - (3.1)
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+/- Shares purchased - - - - - - -
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+/- Revolving credit - - - - - - -
facility
drawn/repaid
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
Adjusted NAV at
30.06.23 858.9 352.4 86.4 - - 1.0 1,298.7
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
Private Equity - operational metrics
Private Equity - operational metrics 30 June 23 31 December 22
-------------
Portfolio year-over-year LTM revenue growth(3) 16.0% 21.5%
================================================ ============== ==============
Portfolio year-over-year LTM EBITDA growth(3) 14.1% 18.5%
================================================ ============== ==============
Enterprise Value / EBITDA valuation multiple(3) 16.3x 17.2x
================================================ ============== ==============
Net debt / EBITDA multiple (3) 4.4x 4.8x
------------------------------------------------ -------------- --------------
Derived Investments - operational metrics
Derived Investments - operational metrics 30 June 23 31 December 22
----------
Debt average yield to maturity 13.3% 12.1%
=========================================== ========== ==============
Debt average years to maturity 4.6 5.1
=========================================== ========== ==============
Debt average income yield 11.4% 9.9%
------------------------------------------- ---------- --------------
Other Invested Portfolio highlights
Invested Portfolio analysis(11) EURm EURm % %
----- ------- ---
* AEVI 2.2 0%
================================ ===== ======= === ====
* AEVII 23.5 2%
================================ ===== ======= === ====
* AVIII 62.8 6%
================================ ===== ======= === ====
* AIX 309.5 25%
================================ ===== ======= === ====
* AX 394.0 32%
================================ ===== ======= === ====
* AXI (8.2) 0%
================================ ===== ======= === ====
* AMI 26.1 2%
================================ ===== ======= === ====
* AMI II (1.1) 0%
================================ ===== ======= === ====
* ADF 51.4 4%
================================ ===== ======= === ====
* ADF II 0.5 0%
================================ ===== ======= === ====
* AGI (1.8) 0%
================================ ===== ======= === ====
Private Equity 858.9 71%
================================ ===== ======= === ====
* Derived Debt 341.7 28%
================================ ===== ======= === ====
* Derived Equity 13.8 1%
================================ ===== ======= === ====
Derived Investments 355.5 29%
-------------------------------- ----- ------- --- ----
Total 1,214.7 100%
-------------------------------- ----- ------- --- ----
Footnotes
1 "Total NAV Return" means the movement in the Adjusted NAV
per share over the quarter plus any dividends paid. "Total
Return" reflects the sub-portfolio performance on a stand-alone
basis. It excludes items at the overall AGA level such
as cash, management fees, and costs
2 Adjusted NAV reflects Total NAV of EUR1,301.8m less performance
fee reserve of EUR3.1m
3 Gross Asset Value weighted average of the respective metric
across the portfolio. LTM Revenue growth and LTM EBITDA
growth rates exclude companies where EBITDA is not meaningful
such as financial services or high growth business with
fluctuations in EBITDA. Net debt/EBITDA multiple and EV/EBITDA
valuation multiple excluded companies where EBITDA is not
meaningful such as financial services or high growth business
valued on a revenue basis.
4 Valuation uplifts on exits are calculated based on the
total actual or estimated sales proceeds and income as
appropriate since the last Unaffected Valuation. Unaffected
Valuation is determined as the fair value in the last quarter
before exit, when valuation is not affected by the exit
process (i.e. because an exit was signed, or an exit was
sufficiently close to being signed that the Apax Funds
incorporated the expected exit multiple into the quarter
end valuation). Where applicable, average uplifts of partial
exits and IPO's includes proceeds received and the closing
fair value at period end. Private Equity Aggregate Gross
IRR and Gross MOIC calculated based on the expected aggregate
cash flows in euro across all funds for the deals signed
and/or IPO'd in the period. Gross IRR represents concurrent
Gross IRR.
5 Represents AGA's look-through cost to investments acquired
by the Apax Funds during H1 2023. For Apax Funds which
are yet to hold their final close, these amounts remain
subject to change due to equalisation adjustments
6 Weighted by AGA invested cost in AVIII, AIX and AX at 30
June 2023. Excludes financial services companies where
Net Debt/EBITDA is not relevant. Excludes maturity dates
in relation to portfolio companies with public equity.
Excludes AMI, AMI II, ADF, ADF II and AGI.
7 Derived Debt constant currency returns and S&P LSTA leveraged
loan index rebased to 100 and compounded on a quarterly
basis. Bloomberg source for S&P LSTA leveraged loan index
8 Other reflects net current assets.
9 FX on cash includes the revaluation of cash balances and
net gain or losses arising from the differences in exchange
rates between transaction dates and settlement dates, and
unrealised net gains or losses arising from the translation
into euro of assets and liabilities (other than investments)
which are not denominated in euro
10 Movement in the performance fee reserve reflects the performance
fee reserve accrued by the Company's at 30 June 23. This
does not represent the underlying Private Equity portfolio's
carried interest.
11 Invested Portfolio excludes cash and cash equivalents,
revolving credit facility drawn and net current assets,
including these the NAV was EUR1,301.8m and Adjusted NAV
was EUR1,298.7m reflecting adjustment of EUR3.1m for the
estimated performance fee reserve accrued.
Notes
1. Note that references in this announcement to Apax Global Alpha
Limited have been abbreviated to "AGA" or "the Company". References
to Apax Partners LLP have been abbreviated to "Apax" or "the
Investment Adviser"
2. Please be advised that this announcement may contain inside
information as stipulated under the Market Abuse Regulations
(EU) NO. 596/2014 ("MAR")
3. This announcement is not for release, publication or distribution,
directly or indirectly, in whole or in part, into or within
the United States or to "US persons" (as defined in Regulation
S under the United States Securities Act of 1933, as amended
(the "Securities Act")) or into or within Australia, Canada,
South Africa or Japan. Recipients of this announcement in jurisdictions
outside the UK should inform themselves about and observe any
applicable legal requirements in their jurisdictions. In particular,
the distribution of the announcement may be restricted by law
in certain jurisdictions
4. The information presented herein is not an offer for sale within
the United States of any equity shares or other securities
of Apax Global Alpha Limited ("AGA"). AGA has not been and
will not be registered under the US Investment Company Act
of 1940, as amended (the "Investment Company Act"). In addition,
AGA's shares (the "Shares") have not been and will not be registered
under the Securities Act or any other applicable law of the
United States. Consequently, the Shares may not be offered
or sold or otherwise transferred within the United States,
or to, or for the account or benefit of, US Persons, except
pursuant to an exemption from the registration requirements
of the Securities Act and under circumstances which will not
require AGA to register under the Investment Company Act. No
public offering of the Shares is being made in the United States
5. This announcement may include forward-looking statements. The
words "expect", "anticipate", "intends", "plan", "estimate",
"aim", "forecast", "project" and similar expressions (or their
negative) identify certain of these forward-looking statements.
These forward-looking statements are statements regarding AGA's
intentions, beliefs or current expectations concerning, among
other things, AGA's results of operations, financial condition,
liquidity, prospects, growth and strategies. The forward-looking
statements in this presentation are based on numerous assumptions
regarding AGA's present and future business strategies and
the environment in which AGA will operate in the future. Forward-looking
statements involve inherent known and unknown risks, uncertainties
and contingencies because they relate to events and depend
on circumstances that may or may not occur in the future and
may cause the actual results, performance or achievements of
AGA to be materially different from those expressed or implied
by such forward looking statements. Many of these risks and
uncertainties relate to factors that are beyond AGA's ability
to control or estimate precisely, such as future market conditions,
currency fluctuations, the behaviour of other market participants,
the actions of regulators and other factors such as AGA's ability
to continue to obtain financing to meet its liquidity needs,
changes in the political, social and regulatory framework in
which AGA operates or in economic or technological trends or
conditions. Past performance should not be taken as an indication
or guarantee of future results, and no representation or warranty,
express or implied, is made regarding future performance. AGA
expressly disclaims any obligation or undertaking to release
any updates or revisions to these forward-looking statements
to reflect any change in AGA's expectations with regard thereto
or any change in events, conditions or circumstances on which
any statement is based after the date of this announcement,
or to update or to keep current any other information contained
in this announcement. Accordingly, undue reliance should not
be placed on the forward-looking statements, which speak only
as of the date of this announcement.
About Apax Global Alpha Limited
AGA is a Guernsey registered closed-ended investment Company
listed on the London Stock Exchange. It is regulated by the
Guernsey Financial Services Commission.
AGA's objective is to provide shareholders with capital
appreciation from its investment portfolio and regular dividends.
The Company is targeting an annualised Total Return, across
economic cycles, of 12-15% (net of fees and expenses) including a
dividend yield of 5% of Net Asset Value.
The investment policy of the Company is to make Private Equity
investments in Apax Funds, and Debt Investments, derived from the
insights gained via Apax's Private Equity activities.
Further information regarding the Company and its publications
are available on the Company's website at
www.apaxglobalalpha.com.
About Apax Partners LLP
Apax Partners LLP ("Apax") is a leading global private equity
advisory firm. For over 50 years, Apax has worked to inspire growth
and
ideas that transform businesses. The firm has raised and advised
funds with aggregate commitments of more than $65 billion. The
Apax
Funds invest in companies across four global sectors of Tech,
Services, Healthcare, and Internet/Consumer. These funds provide
long-term equity financing to build and strengthen world-class
companies. For further information about Apax, please visit
www.apax.com.
Apax is authorised and regulated by the Financial Conduct
Authority in the UK.
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