Petershill Partners
Operated by Goldman Sachs Assets
Management
Interim results statement
For the six months ended 30 June
2024
GOOD STRATEGIC PROGRESS AND POSITIVE EARNINGS
MOMENTUM
Key Highlights
§ Strong first half
results with double digit growth in Partner Fee Related Earnings
with good momentum in asset raising and growth in Aggregate
Fee-paying AuM. We completed a number of strategic acquisitions and
disposals, further focusing the Company on private market
strategies, and continue to return significant capital to
shareholders. We reiterate our guidance for 2024.
§ Higher Adjusted
Profit After Tax1 for the six months ended
30 June 2024.
§ Total income of
$146m (1H 2023: $138m) and Adjusted EBIT1
of $128m (1H 2023: $120m) with Adjusted Profit After
Tax1 of $94m (1H 2023: $68m) and Adjusted
EPS1 of 8.5 cents (1H 2023 6.0
cents).
§ IFRS Profit After
Tax of $136m (1H 2023: $112m) and IFRS EPS of 12.3 cents (1H 2023:
9.9 cents), includes the unrealised change in the carrying value of
investments.
§ Completed four
acquisitions totalling $205m including the previously announced
acquisition of a stake in Kennedy Lewis Investment Management and
additional interests in three existing Partner-firms.
§ Sold a partial
interest in AKKR back to management totalling $51m, a slight
premium to the fair value at 31 December 2023.
§ Total capital return
of $222m during the first half 2024, including 2023 final dividend
payment of $113m, tender offer of $103m2 and $6m
buyback.
§ Announcement of a
special dividend of 9.0 cents (USD) per share, equivalent to $97m,
reflecting the majority return of the upfront cash proceeds
relating to the sale of the stake in LMR Partners announced on 4
September 2024, in addition to an interim dividend of 5.0 cents
(USD) per share.
§ Partner
Distributable Earnings (DE)3 of $140m, up 12% (1H 2023:
$125m).
§ Partner Fee Related
Earnings (FRE) 3 of $112m, up 13% (1H 2023:
$99m).
o Net management
fees3 14% higher year-on-year and 16%
higher year-on-year gross of transaction fees and
offsets3
o Partner FRE
margin3 of 58% (1H 2023: 59%)
§ Partner Realised
Performance Revenues (PRE) 3 of $19m, up
27% (1H 2023: $15m).
§ PRE as a percentage
of Partner Revenues3 9% (1H 2023: 8%), and
13% based on last twelve months (LTM) to June 2024 (LTM June 2023:
22%).
§ Partner Private
Markets Accrued Carried Interest3 at $696m, 14% higher
year-on-year (1H 2023: $608m).
§ Robust Partner-firm
asset raising and AuM growth with $14bn gross fee eligible assets
raised in the first half 2024.
§ Aggregate
Partner-firm AuM3 of $332bn and Aggregate
Fee-paying AuM3 of $238bn, up 11% and 21%
respectively year-over-year.
§ $8bn of fee-eligible
assets at 30 June 2024 are expected to turn on and generate
revenues in future periods.
§ Balance Sheet and
capital return remain strong.
§ Free cash flow (FCF)
1 conversion increased to 123% (1H 2023:
105%) supporting growth and the progressive dividend
policy.
§ Investments at fair
value were $5.5bn at 30 June 2024, an increase of 5% since the year
end (31 December 2023: $5.3bn)
§ Cash and investments
in money market funds totalling $97m at June 2024 (31 December
2023: $305m).
§ Book value per
share1 of 439 cents at June 2024 (31
December 2023: 431 cents).
§ Purchased 2.6m
Ordinary Shares for $6m through 30 June 2024 as part of the $50m
buyback programme announced in March 2023. A total of $32m of the
announced $50m programme was completed which was terminated and
replaced with the tender offer, which purchased 37.9m Ordinary
Shares for $103m and completed in June 2024.
Ali Raissi-Dehkordy and Robert Hamilton Kelly
commented:
"During the first six months of
2024, we were pleased with our Partner-firms' ability to raise $14
billion of fee eligible assets, despite the challenging
fund-raising environment. The robust asset raising and growth in
Fee-Paying AuM has translated into good growth in gross management
fees and FRE during the period. We also completed $205m of
acquisitions during the period, including a stake in the
alternative credit manager Kennedy Lewis Investment Management
which further diversifies our AuM exposure across private market
strategies. The recently announced disposal of our stake in LMR
Partners is consistent with our strategy and increases the focus on
private market strategies and demonstrates our ability to exit
positions at or above carrying value.
The Board continues to focus on capital
efficiency and has announced a special dividend
payment to shareholders of 9.0 cents (USD) per share,
in addition to the tender offer we completed during the period and
our progressive dividend. Whist economic uncertainty persists and
may impact near term PRE and Investment Income, we remain confident
in our diverse portfolio of high-quality Partner-firms, which
combined with our high profitability margin, significant level of
accrued performance revenues and strong cash conversion, underpins
our strategy for growth and capital return to
shareholders".
1.
Financial measure defined as Alternative Performance Measure,
or ("APM"). Further information on APMs on page 36.
2. Excludes
capitalised costs of $3.4m.
3.
Partner-firm key operating metric. Refer to the glossary on
page 33 for additional information.
2024 Guidance
§ $20 - $25bn organic
fee-eligible AuM raise and realisations of $5 - $10bn in fee-paying
AuM.
§ $200 - $230m full
year Partner FRE.
§ PRE of 15% - 30% of
total Partner Revenues.
§ Acquisitions in 2024
expected to be in-line with medium-term range of $100 - $300m per
annum.
§ 85% - 90% Company
Adjusted EBIT margin.
Subsequent Events
Subsequent to the period end, the Company
completed the disposal of its stake in LMR Partners for total
consideration of up to $258m, with the accounting fair value of the
sale consideration at closing marginally above the carrying value
of the investment in LMR Partners as at 31 December 2023 which was
$195m. The transaction is consistent with Petershill Partners'
strategic focus on private market alternative asset firms. The
impact of the sale is not expected to have a material impact on
Partner FRE given the majority of earnings going forward from LMR
Partners were expected to consist of PRE. Transaction costs
relating to the disposal of LMR Partners of approximately $3m are
expected to be incurred during 2H 2024.
Interim Dividend
The Board has approved an interim dividend
payment of 5.0 cents (USD) per share, in-line with our policy of
the interim dividend being one-third of the prior full year
dividend per share, payable on 31 October 2024 to shareholders on
the register as at close of business on 27 September 2024, with
ex-dividend date of 26 September 2024. Shareholders should note
that the default payment currency is USD, however, shareholders can
elect to have their dividends paid in either GBP or EUR. The last
day for currency elections to be registered is 11 October 2024.
Currency elections should be submitted via CREST1 in the usual manner.
Special Dividend
The Board has approved a special dividend
payment of 9.0 cents (USD) per share, payable on 31 October 2024 to
shareholders on the register as at close of business on 27
September 2024, with ex-dividend date of 26 September 2024.
Shareholders should note that the default payment currency is USD,
however, shareholders can elect to have their dividends paid in
either GBP or EUR. The last day for currency elections to be
registered is 11 October 2024. Currency elections should be
submitted via CREST1 in the usual
manner.
1. CREST:
Certificates Registry for Electronic Share Transfer - electronic
system for holding securities.
Management results
|
|
For the six months ended
30 June
|
|
|
2024
$m
|
2023
$m
|
|
Income
|
|
|
|
Partner Fee Related Earnings1
|
111.7
|
99.1
|
|
Partner Realised Performance
Revenues1
|
19.3
|
15.1
|
|
Partner Realised Investment Income1
|
9.3
|
10.6
|
|
Total Partner Distributable
Earnings1
|
140.3
|
124.8
|
|
Interest income
|
6.0
|
13.2
|
|
Total Income
|
146.3
|
138.0
|
|
Operating costs
|
|
|
|
Board of Directors' fees and
expenses
|
(0.8)
|
(0.8)
|
|
Operator charge
|
(10.5)
|
(9.4)
|
|
Profit sharing charge
|
(0.7)
|
-
|
|
Other operating expenses
|
(5.9)
|
(8.2)
|
|
Total operating costs
|
(17.9)
|
(18.4)
|
|
Adjusted Earnings Before Interest and Tax
(EBIT)
|
128.4
|
119.6
|
|
Finance income
|
0.3
|
-
|
|
Finance cost
|
(17.3)
|
(18.6)
|
|
Adjusted Earnings Before Tax (EBT)
|
111.4
|
101.0
|
|
Tax and tax related expenses
|
(17.7)
|
(32.6)
|
|
Adjusted profit after tax
|
93.7
|
68.4
|
|
Reconciliation of Adjusted profit after tax to
IFRS profit for the period after tax
|
|
|
|
Adjusted profit after tax
|
93.7
|
68.4
|
|
§ Movement in
financial assets and liabilities held at fair value
|
72.3
|
48.3
|
|
§ Divestment fee
expense
|
(17.8)
|
(5.7)
|
|
§ Transaction
costs2
|
(1.1)
|
-
|
|
§ Non-recurring
operating credit3
|
-
|
1.2
|
|
§ Change in liability
for Tax Receivables Agreement
|
(0.9)
|
(15.5)
|
|
§ Adjustment for Tax
and tax related expenses4
|
(10.2)
|
15.7
|
|
IFRS profit for the period after tax
|
136.0
|
112.4
|
1.
Partner-firm key operating metrics. Refer to the glossary on
page 33 for additional information.
2. 2024
amount includes $1.1m of deal transaction costs.
3. 2023
amount includes $1.2m in relation to a VAT reclaim.
4. Includes
deferred tax (expense) / credit related to movement in financial
assets and liabilities held at fair value.
Key Partner-firm metrics
Petershill Partners Operating Metrics
|
|
|
As at 30th
June
|
As at 30th
June
|
|
|
|
2024
|
2023
|
Δ
|
2024
|
2023
|
Δ
|
|
Aggregate Partner-firm AuM
|
($bn)
|
332
|
300
|
11%
|
332
|
300
|
11%
|
|
Aggregate Fee-paying Partner-firm
AuM
|
($bn)
|
238
|
196
|
21%
|
238
|
196
|
21%
|
|
Ownership Weighted Partner-firm AuM
|
($bn)
|
40
|
37
|
8%
|
40
|
37
|
8%
|
|
Ownership Weighted Fee-Paying Partner-firm
AuM
|
($bn)
|
30
|
26
|
15%
|
30
|
26
|
15%
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended 30th
June
|
For the last twelve months ended
30th June
|
|
|
|
2024
|
2023
|
Δ
|
2024
|
2023
|
Δ
|
|
Partner Blended Net Management Fee
Rate
|
(%)
|
1.35%
|
1.27%
|
8 bps
|
1.35%
|
1.33%
|
2 bps
|
|
Implied Blended Partner-firm FRE
Ownership
|
(%)
|
12.6%
|
13.6%
|
-100 bps
|
12.9%
|
13.5%
|
-60 bps
|
|
Partner Net Management and Advisory
Fees
|
($m)
|
192
|
169
|
14%
|
373
|
343
|
9%
|
|
Management Fees
|
($m)
|
202
|
174
|
16%
|
384
|
347
|
11%
|
|
Fee Offsets
|
($m)
|
(11)
|
(10)
|
10%
|
(18)
|
(25)
|
(28%)
|
|
Transaction and Advisory Fees
|
($m)
|
1
|
5
|
(80%)
|
7
|
21
|
(67%)
|
|
Partner Fee Related Expenses
|
($m)
|
(80)
|
(70)
|
14%
|
(157)
|
(141)
|
11%
|
|
Partner FRE
|
($m)
|
112
|
99
|
13%
|
216
|
202
|
7%
|
|
Partner Realised Performance Revenues
(PRE)
|
($m)
|
19
|
15
|
27%
|
59
|
101
|
(42%)
|
|
Partner Realised Investment Income
|
($m)
|
9
|
11
|
(18%)
|
33
|
24
|
38%
|
|
Partner Distributable Earnings
|
($m)
|
140
|
125
|
12%
|
308
|
327
|
(6%)
|
|
|
|
|
|
|
|
|
|
|
Partner FRE Margin
|
(%)
|
58%
|
59%
|
-1 pts
|
58%
|
59%
|
-1 pts
|
|
Partner Distributable Earnings
Margin
|
(%)
|
64%
|
64%
|
0 pts
|
66%
|
70%
|
-4 pts
|
|
Partner Realised PRE as a percentage of
Partner Revenue
|
(%)
|
9%
|
8%
|
1 pt
|
13%
|
22%
|
-9 pt
|
|
Partner Realised PRE over Average Aggregate
Performance Fee Eligible Partner-firm AuM*
|
(bps)
|
0.7 bps
|
0.6 bps
|
0.1 bps
|
2.1 bps
|
3.9 bps
|
-1.8 bps
|
|
|
|
|
|
|
|
|
|
* Realised Performance Fee Revenues for
the period divided by the Average Aggregate Performance Fee
Eligible Partner-firm AuM. The Average Aggregate Performance Fee
Eligible Partner-firm AuM represents the average of the beginning
and ending period stated.
Petershill Partners Operating Metrics***
|
|
|
30 Jun 2024
|
31 Mar 2024
|
31 Dec 2023
|
30 Sep 2023
|
30 Jun 2023
|
YTD**
Δ
|
|
Aggregate Partner-firm AuM
|
($bn)
|
332
|
312
|
304
|
303
|
300
|
9%
|
|
Aggregate Fee-paying Partner-firm
AuM
|
($bn)
|
238
|
225
|
221
|
197
|
196
|
8%
|
|
Average Aggregate Fee-paying Partner-firm
AuM*
|
($bn)
|
215
|
207
|
201
|
193
|
190
|
7%
|
|
Aggregate Performance Fee Eligible Partner-firm
AuM
|
($bn)
|
294
|
281
|
275
|
276
|
274
|
7%
|
|
Average Aggregate Performance Fee Eligible
Partner-firm AuM*
|
($bn)
|
280
|
274
|
270
|
265
|
258
|
4%
|
|
Additional metrics:
|
|
|
|
|
|
|
|
|
Partner Private Markets Accrued Carried
Interest
|
($m)
|
696
|
661
|
615
|
613
|
608
|
13%
|
|
Investment Capital
|
($m)
|
398
|
423
|
423
|
398
|
398
|
(6%)
|
* Average Aggregate AuM figures represent
the twelve month mean and use the start and each quarter end of the
reporting period adjusted for acquisitions and dispositions where
applicable.
** Percentage change relative to 31 December
2023.
***
Represents key Operating Metrics that reflect data reported to the
Operator on a three-month lag.
Details of results presentation
There will be a call for investors and analysts
at 9.00am BST today, 17 September 2024, hosted by Ali
Raissi-Dehkordy, Adam Van de Berghe and Gurjit Kambo to discuss
these results, followed by a Q&A session.
All interested parties are invited to
participate via telephone or the audio webcast. Please click
here to access the webcast.
Conference Call Information:
Domestic: +44(0) 330-165-3658
Domestic Freephone: 0800-279-7165
International: +1-929-477-0449
International Tollfree: 800-289-0572
Conference ID: 3387188
All participants are asked to dial in
approximately 5-10 minutes prior to the call, referencing
"Petershill Partners" when prompted.
Replay Information:
An archived replay of the call will be available
on the webcast link.
Please direct any questions regarding obtaining
access to the conference call to Petershill Partners Investor
Relations, via e-mail,
at PHP-Investor-Relations@gs.com Analyst / Investor
enquiries:
|
Gurjit Kambo
|
|
+44 (0) 207 051 2564
|
Media enquiries:
|
Brunswick Group
|
|
phll@brunswickgroup.com
|
|
Simone Selzer
|
|
+44 (0) 207 404 5959
|
About Petershill Partners
Petershill Partners plc (the "Company" or
"Petershill Partners") and its Subsidiaries (the "Group") is a
diversified, global alternatives investment group focused on
private equity and other private capital strategies. Through our
economic interests in alternative asset management firms
("Partner-firms"), we provide investors with exposure to the growth
and profitability of the alternative asset management industry. The
Company completed its initial acquisition of the portfolio of
Partner-firms on 28 September 2021 and was admitted to listing and
trading on the London Stock Exchange on 1 October 2021 (ticker:
PHLL). The Company is operated by Goldman Sachs Asset Management
("Goldman Sachs" or the "Operator") and is governed by a diverse
and fully independent Board of Directors (the "Board").
Through our Partner-firms, we have exposure to
$332 billion of Aggregate Partner-firm AuM, comprising a diverse
set of more than 250 long-term private equity and other private
capital funds where capital is typically locked in over a
multi-year horizon. These underlying funds generate recurring
management fees and the opportunity for meaningful profit
participation over the typical weighted average 8+ year lifecycle
of such funds. We believe our approach is aligned with the founders
and managers of our Partner-firms and, as a result, allows the
Company to participate in these income streams in a way that
provides high-margin, diversified and stable cash flows for our
shareholders.
For more information, visit
https://www.petershillpartners.com/homepage.html. Information on
the website is not incorporated by reference into this press
release and is provided merely for convenience.
The Operator's Report
The Company's purpose is to give investors the
opportunity to participate in the growth of the alternative asset
management industry. Despite the industry's reputation for
complexity, the Company's model is simple. Investors share in the
fees generated by first-class Partner-firms that manage alternative
investments predominantly in private markets and other unquoted
assets.
To assist readers, we refer throughout this
section to adjusted measures which the Company considers to be
Alternative Performance Measures or APMs and Operating Metrics.
APMs are non-IFRS measures that analyse our performance, using a
variety of measures that are not specifically defined under IFRS;
while Operating Metrics are non-IFRS measures that are based on the
performance of the Partner-firms which are not related to the
Group's financial statements.
APMs and Operating Metrics are used by the
Directors and the Operator to analyse the business and financial
performance, track the Company's progress, and help develop
long-term strategic plans and they also reflect more closely the
cash flow of the Company. The Directors believe that these APMs and
Operating Metrics are useful to investors, analysts and other
interested parties as supplemental measures of performance and
liquidity.
Definitions of APMs and Operating Metrics, along
with reconciliations to the relevant IFRS measures for APMs, where
appropriate, can be found in the Glossary of Key Operating Metrics
on pages 33 to 35 and Alternative Performance Measures on pages 36
to 39.
The IFRS numbers discussed and presented below
include changes in fair value of investments, and it should be
noted that, while permitted, it is not the Company's core strategy
to exit or realise these investments. Therefore, management results
are also presented, excluding the change in investments at fair
value through profit and loss and related divestment fee
expense.
The Company's results for the six months ended
30 June 2024 represent the period from 1 January 2024 through 30
June 2024 and are presented with comparative data for the six
months ended 30 June 2023.
Company Performance
The Company's income increased for the first six
months of 2024 due to higher Ownership Weighted Fee-Paying
Partner-firm AuM driving a 16% year-on-year increase in management
fees with Partner Fee Related Expenses increasing by 14%. Partner
Fee Related Earnings increased 13%, Partner Performance Related
Earnings increased 27% and Partner Realised Investment Income
decreased 18%, resulting in an overall increase in Partner
Distributable Earnings of 12% compared to the first six months of
2023. Fund-raising by Partner-firms was robust despite a
challenging asset raising environment. The $14 billion fee-eligible
AuM raised in the first half 2024 is attributable to the high
quality of our Partner-firms and the diversification of our
portfolio. Aggregate Partner-firm AuM grew 11% to $332 billion and
Aggregate Fee-paying AuM grew 21% to $238 billion year-over-year.
Ownership Weighted Partner-firm AuM increased 8% to $40 billion and
Ownership Weighted Partner-firm Fee-paying AuM increased 15% to $30
billion.
The Company's revenue model combines three types
of income from Partner-firms: management fee income, performance
fee income and investment income. Of these three, management fee
income in particular provides stable, recurring profits. Management
fee income for the first six months was $112 million (1H 2023: $99
million), performance fee income was $19 million (1H 2023: $15
million), and investment income was $9 million (1H 2023: $11
million).
The IFRS Profit for the period after tax was
$136 million (1H 2023: $112 million) equating to an Earnings Per
Share (EPS) of 12.3 cents (1H 2023: 9.9 cents). This includes an
increase in financial assets and liabilities held at fair value of
$72 million (1H 2023: $48 million), a divestment fee expense of $18
million (1H 2023: $6 million), transaction costs of $1 million (1H
2023: $nil), non-recurring operating expenses of $nil (1H 2023: $1
million credit), change in liability towards Tax Receivables
Agreement of $1 million (1H 2023: $16 million), an increase in
deferred tax of $23 million (1H 2023: $nil) and excludes an
expected payment towards the Tax Receivables Agreement of $12
million (1H 2023: $16 million).
The Company's Adjusted Profit after
tax1 was $94 million (1H 2023: $68
million). The Company's Adjusted EBIT1 for
the period was $128 million (1H 2023: $120 million), resulting in
an Adjusted EBIT margin1 of 88% (1H 2023:
87%). This highlights the key characteristics of Petershill
Partners as a business with significant growth of capital,
delivering stable and recurring revenues with a highly efficient
Adjusted EBIT margin and significant cash flow.
Dividends
The Board expects to operate a progressive
dividend policy which will reflect earnings growth over time. The
Board reviews the distributable reserves periodically, including
consideration of any material changes since the most recent audited
financial statements, ahead of proposing any dividend. The interim
dividend is set to one-third of the prior year's annual dividend
per share amount, and the final dividend proposed is set at a level
to reach the distribution for the year.
The Company paid a 2023 final dividend of $113
million (1H 2023: $125 million) or 10.1 cents per share (1H 2023:
11.0 cents) to shareholders during the six months ended 30 June
2024.
The Board has approved an interim dividend
payment of 5.0 cents (USD) per share payable on 31 October 2024 to
shareholders on the register as at close of business on 27
September 2024, with ex-dividend date of 26 September 2024.
Shareholders should note that the default payment currency is USD,
however, shareholders can elect to have their dividends paid in
either GBP or EUR. The last day for currency elections to be
registered is 11 October 2024. Currency elections should be
submitted via CREST in the usual manner.
The Board has also approved a special dividend
payment of 9.0 cents (USD) per share payable on 31 October 2024 to
shareholders on the register as at close of business on 27
September 2024, with ex-dividend date of 26 September 2024.
Shareholders should note that the default payment currency is USD,
however, shareholders can elect to have their dividends paid in
either GBP or EUR. The last day for currency elections to be
registered is 11 October 2024. Currency elections should be
submitted via CREST in the usual manner.
1.
Financial measure defined as Alternative Performance Measure,
or ("APM"). Further information on page 36.
Investments at Fair Value through Profit or
Loss
|
|
For the six months ended 30 June 2024
$m
|
|
At beginning of period
|
5,254.7
|
|
Investments (includes new, follow on, and prior
commitments, net of disposals)
|
173.6
|
|
Change in fair value of investments through
profit and loss
|
66.7
|
|
At end of period
|
5,495.0
|
The fair value of the Company's investments in
Partner-firms as of 30 June 2024 was $5,495 million (31 December
2023: $5,255 million). The increase in fair value was predominately
due to the impact of net investment activity. During the six months
ended 30 June 2024, the Company made an acquisition in Kennedy
Lewis Investment Management and additional investments in three
other existing Partner-firms and disposed fully of its holding of
FORT Investment Management and partially of its holdings of
Accel-KKR LLC.
In addition, there was an increase in the fair
value of investments through profit and loss of $67 million for the
six months ended 30 June 2024 (1H 2023: $54 million). The fair
value of the Company's investments in Partner-firms is determined
using both earnings multiples and discounted cash flow techniques,
which are common industry approaches. In valuing the investments,
key assumptions include estimates of future AuM growth, expected
management and performance fee margins, expected current and future
underlying fund returns and timing of realisations. The weighted
average discount rate used to value private markets fee related
earnings decreased modestly to 12.6% as of 30 June 2024 from 13.0%
as of 31 December 2023. The weighted average discount rate used to
value private markets performance fee related earnings increased
modestly to 25.4% for the six months ended 30 June 2024 (31
December 2023: 25.2%). Refer to Note 3, Investments at fair value
through profit or loss, beginning on page 24 for additional
details.
Cash and Investments in Money Market Funds
The Company's balance sheet is strong and
well-capitalised with sufficient cash and money market investments
to support its operational needs. On 14 December 2023, the Company
entered into a fixed term deposit of $150 million, which matured on
15 March 2024. The Company had $47 million in cash and cash
equivalents (31 December 2023: $243 million) held at its custodian,
which has a credit rating of AA and $50 million invested in money
market funds (31 December 2023: $62 million) with a credit rating
of AAA for both the current and comparative periods.
Borrowing
The Company has $500 million of long-term,
unsecured debt with an effective interest rate of 6.2% and a range
of maturities between August 2029 and August 2042. This debt was
issued in 2022 and the proceeds were used to retire $350 million of
notes outstanding at the time.
On 6 January 2023 the Company entered into a
$100 million revolving credit facility with a term of three years.
The Company is subject to a fee on the drawn and undrawn amounts.
The rate for any drawn amount is based on a reference rate plus a
spread. The interest rate on the revolving credit facility is
subject to changes in market interest rates. During the six months
ended 30 June 2024, the Company did not draw down on the revolving
credit facility. Any interest expense incurred is included in
finance cost.
Deferred Payment Obligations
Certain investments in Partner-firms are
purchased with deferred payment terms, including certain
acquisitions noted above. These deferred payment obligations
represent amounts owed by the Company at various dates in the
future. When the Company enters into deferred payment obligations,
a portion of the purchase price is recognised as finance cost
through the settlement of the payables under the effective interest
method. The interest rate used is based on the reasonable borrowing
rate for the Company at the time of the transaction. For the first
six months ended 30 June 2024, the Company incurred finance costs
including $3 million (1H 2023: $3 million) arising from deferred
payment obligations.
Deferred Consideration Receivable
Certain investments in Partner-firms have been
sold in the six months ended 30 June 2024 with deferred payment
terms. This deferred consideration represents amounts owed to the
Company at various dates in the future. When the Company enters
into a deferred consideration agreement, a portion of the sale
price is recognised as finance income through the settlement of the
receivables under the effective interest method. The interest rate
used is based on the reasonable borrowing rate for the Company at
the time of the transaction. For the first six months ended 30 June
2024, the Company earned finance income included $0.3 million (1H
2023: $nil) arising from deferred consideration
receivable.
Contingent assets and liabilities at fair value through
profit or loss
When certain investments in Partner-firms are
purchased or sold, it is probable that the Company may have to pay
or receive additional consideration based on the underlying terms
of the purchase or sale agreement respectively. As a result of deal
transactions, the Company has recorded a contingent liability of $4
million at 30 June 2024 (31 December 2023: $6 million) representing
a portion of the total consideration which is probably payable in
connection with its purchases of investments in certain
Partner-firms, based on the Partner-firms' ability to raise capital
or meet certain revenue thresholds as defined in the investment
agreements. In addition, the Company has recorded a contingent
asset of $3 million at 30 June 2024 (31 December 2023: $nil)
representing a portion of the total consideration which is probably
receivable in connection with its sale of investments in certain
Partner-firms.
Tax Receivable Agreement
The Company entered into a Tax Receivables
Agreement as part of the Initial Acquisition on 28 September 2021.
The agreement provides for the payment of 75% of cash tax savings,
if any, in U.S. federal, state and local income tax that the
Company actually realises. The cash tax savings are defined as the
difference between the taxes actually due, and the taxes due had
there been no step-up in tax basis from the Initial Acquisition.
The Company expects these payments to arise over a period of at
least 15 years. The value of these estimated payments was $176
million at 30 June 2024 (31 December 2023: $175 million) assuming
an 18% discount rate and using the Company's most recent
projections relating to the estimated timing of the payments. The
change in liability for the Tax Receivables Agreement was $1
million (1H 2023: $16 million).
The Company makes annual payments in relation to
the Tax Receivables Agreement. The amount of the payment estimated
in relation the full year of 2024 is approximately $25 million, of
which the 1H portion is expected to be $12 million (1H 2023: $16
million).
Refer to note 3 on page 96 of the 2023 Annual
Report for additional information.
Operating Expenses
Operating expenses were $37 million (1H 2023:
$23 million). Included in operating expenses for the six months
ended 30 June 2024 was $18 million expense (1H 2023: $6 million)
related to the fee payable on the divestment of investments. The
accrual is calculated and charged to the income statement
based on the fair value of the Company's investment in
Partner-firms at the balance sheet date. Divestment fees only
become payable once gains are realised. The Operator is
entitled to such divestment fee calculated at 20% of the realised
profit on the exit of an investment. Although the Company does not
intend to exit all of its investments, an accrual is reflected
representing an amount that would be payable if the Company were to
exit all of its investments. At 30 June 2024, the fee payable on
divestment of investments was $113 million (31 December 2023: $95
million). No payment was made in the six months ended 30 June
2024.
Excluding the accrual of the divestment fee,
operating expenses were $19 million (1H 2023: $17
million).
The Operator is entitled to a fee (Operator
charge) of 7.5% of Income from investments in Partner-firms. The
Operator charge for the period was $11 million (1H 2023: $9
million).
The Operator is entitled to a Profit Sharing
Charge on a quarterly basis. The Profit Sharing Charge is equal to
20% of total income from investments in Partner-firms, as defined
under IFRS, from new investments made post admission, in the
relevant quarter and only after a two-year ownership period from
the date on which the investment is closed, and subject to the
relevant investment achieving an investment return of at least 6.0
per cent. The Profit Sharing Charge for the period was $0.7 million
(1H 2023: $nil).
The Directors' fees and expenses for the period
were $0.8 million (1H 2023: $0.8 million). Fees paid to Directors
for the period are unchanged in local currency.
Other operating costs included transaction costs
of $1 million (1H 2023: $nil) and other operating expenses of $6
million (1H 2023: $8 million).
The Adjusted EBIT margin for the period was 88%
(1H 2023: 87%) reflecting the relatively low cost to operate the
Company.
Finance Cost
The finance cost for the six months ended 30
June 2024 was $17 million (1H 2023: $19 million). Finance cost
primarily comprised the interest expense of the Company's $500
million unsecured debt. Also included in the finance cost for the
six months ended 30 June 2024 is an amount of $3 million (1H 2023:
$3 million) of imputed interest relating to deferred payment
obligations and a fee of $0.7 million relating to the $100m
revolving credit facility (1H 2023: $1 million).
Tax Expense
The Company's tax charges comprise primarily
certain taxes in the United States (where the 2024 federal
corporate tax rate was 21% and state and local taxes may vary) as
well as certain taxes in the United Kingdom (where the 2024
corporate tax rate was 25%). Accordingly, the effective tax rate
payable by the Company may vary from year to year based on the
geographic mix and nature of the income earned by the Company.
Notably, a substantial amount of income derived from Management fee
income will be subject to United States federal corporate tax as
well as applicable state and local taxes. Income derived from
Performance fee income and Investment income may be subject to
taxes in the jurisdiction in which the investment in the
Partner-firm is held, including the United Kingdom.
As a result of the above considerations, as well
as the items discussed above under "Tax Receivables Agreement", the
Company calculates tax and related expenses and its Adjusted tax
and related expense rate by combining the estimated payment under
the Tax Receivables Agreement and the current tax.
Current tax expenses comprise obligations to tax
authorities related to current period reporting. Deferred tax
expenses arise with respect to temporary differences between
carrying amounts of assets and liabilities and their tax
bases.
Analysis of Tax
|
|
For the six months ended 30th June
|
|
Analysis of tax
|
2024
$m
|
2023
$m
|
|
Analysis of tax on profit
|
|
|
|
Current tax
|
5.4
|
16.8
|
|
Deferred taxation
|
22.5
|
0.1
|
|
Tax expense
|
27.9
|
16.9
|
The tax expense does not include the related
expected payments under the Tax Receivables Agreement for the
period. The amount of the payment estimated in relation the full
year of 2024 is approximately $25 million, of which the 1H portion
is expected to be $12 million (1H 2023: $16 million).
The tax and related expenses1 for the
period, which considers both the current tax and the expected
payment under the Tax Receivable Agreement ("TRA") were $18 million
(1H 2023: $33 million) and the adjusted tax and tax related expense
rate1 was 15.9% (1H 2023: 32.3%). The amount in 2023
included $13 million related to estimates from the prior period and
excluding that amount, tax and related expenses for 1H 2023 were
$20 million and the Adjusted tax and tax related expense rate for
1H 2023 was 19.4%.
1.
Financial measure defined as Alternative Performance Measure,
or ("APM"). Further information on page 36.
Capital
At 30 June 2024, the Company's issued share
capital comprised of 1,081,708,167 ordinary shares (31 December
2023: 1,122,202,824). During the six
months ended 30 June 2024, the Company purchased 2.6 million
Ordinary Shares (1H 2023: 1.8 million) for $6 million (1H 2023: $4
million), including transaction costs, as part of its share buyback
programme which commenced in 2023 and was subsequently terminated
in April 2024 to facilitate the tender offer. The Company also
purchased 37.9 million Ordinary Shares for $107 million including
transaction costs under a tender offer completed in June
2024.
Total shareholders' funds were $4,744 million as
at 30 June 2024 (31 December 2023: $4,834 million). As at 30 June
2024, there were retained earnings of $3,043 million (31 December
2023: $3,133 million). These retained earnings include the change
in fair value of investments for the period of $67 million (31
December 2023: $227 million) which does not contribute to realised
profits.
During the six months ended 30 June 2024, the
Company paid dividends totalling $113 million and bought back
Ordinary Shares from the share buyback programme and share tender
totalling $113 million, including transaction costs, resulting in a
reduction in capital of $226 million from aggregate capital return
to shareholders.
As at 30 June 2024, approximately 80% (31
December 2023: 77%) of Petershill Partners plc shares are held by
long-dated private funds managed by Goldman Sachs Asset Management.
Goldman Sachs Asset Management is the manager of these shares and
exercises discretion over how and when they could be sold in the
future, on behalf of the investors in those funds.
Subsequent Events
On 16 September 2024, the Board of Directors
approved an interim dividend of 5.0 cents (USD) per share with
respect to the six months ended 30 June 2024. The record date for
the dividend is 27 September 2024 and the payment date is 31
October 2024.
On 16 September 2024, the Board of Directors
also approved a special dividend payment of 9.0 cents (USD) per
share. The record date for the dividend is 27 September 2024 and
the payment date is 31 October 2024.
Partner-firm performance
for the six months ended 30 June 2024
(continuing operator's report)
Key Operating Metrics
We provide detail on our Partner-firms in our
Key Operating Metrics as this gives investors insight into the
revenues and revenue model of the Company.
For the six months ended 30 June 2024,
fundraising continued across the Company's Partner-firms with
Aggregate Fee-paying Partner-firm AuM growing 8% to $238 billion,
when compared to 31 December 2023. Ownership weighted Fee-paying
AuM grew 7% to $30 billion for the six months ended 30 June 2024
(31 December 2023: $28 billion). Strong Aggregate Partner-firm AuM
and Aggregate Fee-paying AuM growth are the basis for future
earnings development and highlight the positive operating dynamics
and pricing power of our high-quality Partner-firms. This growth
has translated into robust, recurring, and high-quality earnings
from our Partner-firms - with first half Partner Distributable
Earnings of $140 million, an increase of 12% compared to the
comparable period in 2023 (1H 2023: $125m).
Petershill Partners is not reliant on any one
firm, one fund-raising, one track record, or one brand. Our
approach is to invest in a range of high-quality, high-performing
alternative asset management firms, who manage a diverse range of
funds, giving the Company stable, high-quality, recurring
earnings.
Our total AuM for the six months ended 30 June
2024 comprised over 250 funds, spanning private equity, absolute
return and other private capital funds, with a weighted average
life cycle of 8+ years. That means their capital is locked in for
an average duration of 8 years, generating recurring management
fees and the opportunity for meaningful profit participation
throughout this time. We believe our long-term approach
differentiates us and provides for enhanced alignment with the key
principals at each Partner-firm and, as a result, allows the
Company to participate in their income streams in a way that
provides high-margin, diversified and stable cash flows for our
shareholders.
Partner Fee Related Earnings (FRE)
Partner FRE, drawn from management fees,
increased 13% for the six months ended 30 June 2024 to $112 million
(1H 2023: $99 million), reflecting a 16% increase in management
fees to $202 million (1H 2023: $174 million), resulting from the
increase in Ownership Weighted Partner Fee-paying AuM over the
period. Partner Fee Related Expenses were $80 million, up 14% (1H
2023: $70 million), broadly in-line with the growth in Partner Net
Management and Advisory Fees. Partner FRE margin was 58%, compared
with 59% for the six months ended 30 June 2023.
Transaction and advisory fees were $1 million
for the six months ended 30 June 2024, down from $5 million for the
six months ended 30 June 2023. Whilst there were signs of a
recovery in the transaction environment during the first half of
2024, the timing of transactions closing can impact the level of
fees generated in a single period. Partner Net Management and
Advisory Fees during 1H 2024 totalled $192 million, an increase of
14% (1H 2023: $169 million). The Partner Blended Net Management Fee
Rate was 1.35% (1H 2023: 1.27%).
Partner Realised Performance Revenues (PRE)
PRE, which represents direct participation in
the upside performance of Partner-firms' funds and products,
increased period-over-period to $19 million for the six months
ended 30 June 2024 compared to $15 million during 1H 2023, a steady
recovery reflecting a continued muted realisation environment. $18
million was attributable to the private markets strategy for the
six months ended 30 June 2024 (1H 2023: $15 million). 9% of total
Partner Revenue for the six months ended 30 June 2024 was derived
from PRE (1H 2023: 8%).
Partner-firms manage a variety of performance
fee-eligible funds at different stages of their life cycle. Due to
this diversification, the Company anticipates that Realised
Performance Revenues will be earned regularly from a wide range of
funds going forward, with a range of 15% - 30% of total
Partner-firm revenues over the medium term, assuming market
conditions and environment are broadly supportive.
Partner Private Markets Accrued Carried Interest
was $696 million at 30 June 2024, an increase of 14% compared with
the $615 million at 31 December 2023.
Partner Realised Investment Income
As an owner in the Partner-firms, the Company
shares in a percentage of the investment and balance sheet income
of the Partner-firms and realises this through a number of direct
positions in the funds of underlying Partner-firms, known as
Realised Investment Income. This totalled $9 million for the six
months ended 30 June 2024, slightly below the $11 million in 1H
2023.
Principal Risks and Uncertainties
The Company's underlying investments are
high-risk and illiquid assets within the alternative investment
industry. Its principal risks are therefore related to revenue
generated by the alternative asset managers in which the Company
invests and the performance of the Partner-firms, their funds, and
the products they manage. The Operator seeks to mitigate these
risks through active engagement and action as outlined in the
Acquisition Strategy and Investment Policy on pages 25 to 27 of the
2023 Annual Report and by carrying out due diligence work on
potential targets before entering into any investments. The
Company's business model involves the acquisition of non-control
investments in independent Partner-firms, and although the Company
has certain controls as part of contractual rights, the Company
does not control the risk tolerance of the underlying
Partner-firms.
The Board thoroughly considers the process for
identifying, evaluating and managing any significant risks faced by
the Company on an ongoing basis, and these risks are reported and
discussed at Board meetings. The Board ensures that effective
controls are in place to mitigate these risks and that a
satisfactory compliance regime exists to ensure all applicable
local and international laws and regulations are upheld.
The key areas of risk faced by the Company are
the following:
1. Alternative asset industry
risk;
2. Partner-firm revenue
risk;
3. Investment diligence
risk;
4. Macroeconomic risk;
5. Regulatory risk;
6. Key person risk;
7. Operator, administrator and
service provider resiliency and performance risk;
8. Partner-firm reporting
risk;
9. Cyber / information security
risk.
10. Liquidity risk
The principal risks and uncertainties of the
Company remain those identified in further detail in the 2023
Annual Report.
The principal risks and uncertainties outlined
above remain the most likely to affect the Company and its
investments in the second half of the year.
Statement of Directors' Responsibilities in Respect of
the Interim Results Statement
The Directors are responsible for preparing this
Interim Results Statement in accordance with applicable laws and
regulations. The Directors confirm that to the best of their
knowledge:
The unaudited condensed interim consolidated
financial statements have been prepared in accordance with UK
adopted IAS 34 Interim Financial Reporting and in accordance with
the Disclosure Guidance and Transparency Rules sourcebook of the
United Kingdom's Financial Conduct Authority, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Group; and
The Operator's Report includes a fair review of
the information required by:
§ DTR 4.2.7R of the
Disclosure Guidance and Transparency Rules, being an indication of
important events that have occurred during the first six months of
the financial year and their impact on the interim Financial
Statements; and a description of the principal risks and
uncertainties for the remaining six months of the year;
and
§ DTR 4.2.8R of the
Disclosure Guidance and Transparency Rules, being material related
party transactions that have taken place in the first six months of
the year and that have materially affected the financial position
or the performance of the entity during that period; and any
changes in the related party transactions described in the 2023
Annual Report that could do so.
The Directors of Petershill Partners plc are
listed on pages 48 to 49 of the 2023 Annual Report. A list of
current Directors is maintained on the Company's website which can
be found at www.petershillpartners.com.
On behalf of the Board
Naguib Kheraj
Chairman
16 September 2024
Independent Review Report to
Petershill Partners PLC
Report on the condensed interim consolidated
financial statements
Our conclusion
We have reviewed Petershill Partners plc's
condensed interim consolidated financial statements (the "interim
financial statements") in the Interim Results Statement of
Petershill Partners plc for the 6 month period ended 30 June 2024
(the "period").
Based on our review, nothing has come to our
attention that causes us to believe that the interim financial
statements are not prepared, in all material respects, in
accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
The interim financial statements
comprise:
§ the Condensed
Interim Consolidated Statement of Financial Position as at 30 June
2024;
§ the Condensed
Interim Consolidated Statement of Comprehensive Income for the
period then ended;
§ the Condensed
Interim Consolidated Statement of Changes in Equity for the period
then ended;
§ the Condensed
Interim Consolidated Statement of Cash Flows for the period then
ended; and
§ the explanatory
notes to the Condensed Interim Consolidated Financial
Statements.
The interim financial statements included in
the Interim Results Statement of Petershill Partners plc have been
prepared in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with
International Standard on Review Engagements (UK) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Financial Reporting Council for use in
the United Kingdom ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of
persons responsible for financial and accounting matters, and
applying analytical and other review procedures.
A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and, consequently, does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
We have read the other information contained in
the Interim Results Statement and considered whether it contains
any apparent misstatements or material inconsistencies with the
information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less
extensive than those performed in an audit as described in the
Basis for conclusion section of this report, nothing has come to
our attention to suggest that the Directors have inappropriately
adopted the going concern basis of accounting or that the Directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on
the review procedures performed in accordance with ISRE (UK) 2410.
However, future events or conditions may cause the Group to cease
to continue as a going concern.
Responsibilities for the interim financial
statements and the review
Our responsibilities and those of the
Directors
The Interim Results Statement, including the
interim financial statements, is the responsibility of, and has
been approved by the Directors. The Directors are responsible for
preparing the Interim Results Statement in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority. In preparing the Interim
Results Statement, including the interim financial statements, the
Directors are responsible for assessing the Group's ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but
to do so.
Our responsibility is to express a conclusion on
the interim financial statements in the Interim Results Statement
based on our review. Our conclusion, including our Conclusions
relating to going concern, is based on procedures that are less
extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report. This report, including the
conclusion, has been prepared for and only for the Company for the
purpose of complying with the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct
Authority and for no other purpose. We do not, in giving this
conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent
in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
16 September 2024
CONDENSED INTERIM Consolidated Statement of
Comprehensive Income
For the six months ended 30 June 2024
|
|
Note
|
For the six months ended
30 June 2024
(Unaudited)
$m
|
For the six months ended
30 June 2023
(Unaudited)
$m
|
|
Income
|
|
|
|
|
Income from investments in Partner-firms
derived from:
|
2
|
|
|
|
Management fee income
|
|
111.7
|
99.1
|
|
Performance fee income
|
|
19.3
|
15.1
|
|
Investment income
|
|
9.3
|
10.6
|
|
Total income from investments in
Partner-firms
|
|
140.3
|
124.8
|
|
|
|
|
|
|
Interest income from investments in money
market funds
|
3
|
4.4
|
13.2
|
|
Interest income from other assets
|
4
|
1.6
|
-
|
|
Total interest income
|
|
6.0
|
13.2
|
|
|
|
|
|
|
Total income
|
|
146.3
|
138.0
|
|
|
|
|
|
|
Movement in financial assets and liabilities
held at fair value
|
|
|
|
|
Change in investments at fair value through
profit or loss
|
3
|
66.7
|
48.3
|
|
Change in contingent consideration at fair
value through profit or loss
|
3
|
5.6
|
-
|
|
Total movement in financial assets and
liabilities held at fair value
|
|
72.3
|
48.3
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
Board of Directors' fees and
expenses
|
16
|
(0.8)
|
(0.8)
|
|
Operator charge
|
5, 16
|
(10.5)
|
(9.4)
|
|
Profit sharing charge
|
5, 16
|
(0.7)
|
-
|
|
Divestment fee expense
|
5, 16
|
(17.8)
|
(5.7)
|
|
Other operating expenses
|
|
(7.0)
|
(7.0)
|
|
Total expenses
|
|
(36.8)
|
(22.9)
|
|
Operating profit for the period
|
|
181.8
|
163.4
|
|
|
|
|
|
|
Finance income / (expense)
|
|
|
|
|
Finance income
|
3
|
0.3
|
-
|
|
Finance cost
|
7
|
(17.3)
|
(18.6)
|
|
Change in liability for Tax Receivables
Agreement
|
16
|
(0.9)
|
(15.5)
|
|
Total finance income / (expense)
|
|
(17.9)
|
(34.1)
|
|
|
|
|
|
|
Profit for the period before tax
|
|
163.9
|
129.3
|
|
Tax expense
|
6
|
(27.9)
|
(16.9)
|
|
Profit for the period after tax
|
|
136.0
|
112.4
|
|
Profit and total comprehensive income for the
period
|
|
136.0
|
112.4
|
|
|
|
|
|
|
Profit and total comprehensive income
attributable to:
|
|
|
|
|
Equity holders of the Company
|
|
136.0
|
112.4
|
|
Earnings per share
|
|
|
|
|
Basic and diluted earnings per share
(cents)
|
8
|
12.27
|
9.90
|
The accompanying notes on pages 20 to 32 form
an integral part of these condensed interim consolidated financial
statements.
CONDENSED INTERIM Consolidated Statement of
Financial Position
As at 30 June 2024
|
|
Note
|
30 June
2024
(Unaudited)
$m
|
31 December
2023
(Audited)
$m
|
|
Non-current assets
|
|
|
|
|
Investments at fair value through profit or
loss
|
3
|
5,495.0
|
5,254.7
|
|
Contingent consideration at fair value through
profit or loss
|
3
|
3.2
|
-
|
|
Deferred consideration receivable
|
3
|
12.2
|
-
|
|
|
|
5,510.4
|
5,254.7
|
|
Current assets
|
|
|
|
|
Investments in money market funds at fair value
through profit or loss
|
3
|
49.6
|
62.3
|
|
Cash and cash equivalents
|
4
|
47.1
|
242.9
|
|
Deferred consideration receivable
|
3
|
11.4
|
-
|
|
Trade and other receivables
|
9
|
92.3
|
127.4
|
|
|
|
200.4
|
432.6
|
|
Total assets
|
|
5,710.8
|
5,687.3
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Unsecured notes payable
|
10
|
494.1
|
493.8
|
|
Deferred payment obligations
|
2, 3
|
34.9
|
7.3
|
|
Liability for Tax Receivables
Agreement
|
16
|
151.0
|
150.5
|
|
Contingent consideration at fair value through
profit or loss
|
3
|
-
|
3.9
|
|
Deferred tax liability
|
6
|
30.7
|
8.2
|
|
Fee payable on divestment of
investments
|
5, 16
|
112.6
|
94.8
|
|
|
|
823.3
|
758.5
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
6.4
|
6.9
|
|
Deferred payment obligations
|
2, 3
|
91.5
|
44.6
|
|
Interest payable
|
11
|
10.0
|
10.0
|
|
Profit sharing charge payable
|
5, 16
|
0.4
|
0.1
|
|
Operator charge payable
|
5, 16
|
6.3
|
6.6
|
|
Contingent consideration at fair value through
profit or loss
|
3
|
4.0
|
2.5
|
|
Liability for Tax Receivables
Agreement
|
16
|
24.6
|
24.2
|
|
|
|
143.2
|
94.9
|
|
Total liabilities
|
|
966.5
|
853.4
|
|
Net assets
|
|
4,744.3
|
4,833.9
|
|
Equity
|
|
|
|
|
Share capital
|
12
|
10.8
|
11.2
|
|
Share premium
|
12
|
-
|
-
|
|
Other reserve
|
12
|
1,689.6
|
1,689.6
|
|
Capital redemption reserve
|
12
|
0.9
|
0.5
|
|
Retained earnings
|
13
|
3,043.0
|
3,132.6
|
|
Total shareholders' funds
|
|
4,744.3
|
4,833.9
|
|
Number of ordinary shares in issue at period /
year end
|
12
|
1,081,708,167
|
1,122,202,824
|
|
Net assets per share (cents)
|
14
|
438.59
|
430.75
|
The condensed interim consolidated financial
statements (unaudited) of the Group were approved and authorised
for issue by the Board of Directors on 16 September 2024 and signed
on its behalf by:
|
Naguib Kheraj
|
|
Mark Merson
|
|
Chairman
|
|
Director
|
The accompanying notes on pages 20 to 32 form an
integral part of these condensed interim consolidated financial
statements.
Condensed interim consolidated statement of
changes in equity
For the six months ended 30 June 2024
(unaudited)
|
|
Note
|
Share capital
$m
|
Share premium
$m
|
Other reserve
$m
|
Capital redemption reserve
$m
|
Retained
earnings
$m
|
Total
$m
|
|
Opening net assets attributable to shareholders
at 1 January 2024
|
|
11.2
|
-
|
1,689.6
|
0.5
|
3,132.6
|
4,833.9
|
|
Repurchase and cancellation of Ordinary
Shares
|
12
|
(0.4)
|
-
|
-
|
0.4
|
(112.5)
|
(112.5)
|
|
Dividends paid
|
15
|
-
|
-
|
-
|
-
|
(113.1)
|
(113.1)
|
|
Profit and total comprehensive
income
|
|
-
|
-
|
-
|
-
|
136.0
|
136.0
|
|
Closing net assets attributable to shareholders
at 30 June 2024
|
|
10.8
|
-
|
1,689.6
|
0.9
|
3,043.0
|
4,744.3
|
For the six months ended 30 June 2023
(unaudited)
|
|
Note
|
Share capital
$m
|
Share premium
$m
|
Other reserve
$m
|
Capital redemption reserve
$m
|
Retained
losses
$m
|
Total
$m
|
|
Opening net assets attributable to shareholders
at 1 January 2023
|
|
11.4
|
3,346.7
|
1,689.6
|
0.3
|
(328.7)
|
4,719.3
|
|
Repurchase and cancellation of Ordinary
Shares
|
12
|
(0.1)
|
-
|
-
|
0.1
|
(3.5)
|
(3.5)
|
|
Dividends paid
|
15
|
-
|
-
|
-
|
-
|
(124.9)
|
(124.9)
|
|
Share premium cancellation
|
12
|
-
|
(3,346.7)
|
-
|
-
|
3,346.7
|
-
|
|
Profit and total comprehensive
income
|
|
-
|
-
|
-
|
-
|
112.4
|
112.4
|
|
Closing net assets attributable to shareholders
at 30 June 2023
|
|
11.3
|
-
|
1,689.6
|
0.4
|
3,002.0
|
4,703.3
|
The accompanying notes on pages 20 to 32 form
an integral part of these condensed interim consolidated financial
statements.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF
CASH FLOWS
For the six months ended 30 June 2024
|
|
Note
|
For the six months ended 30 June 2024
(Unaudited
$m)
|
For the six months ended 30 June 2023
(Unaudited
$m)
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
Profit for the period before tax
|
|
163.9
|
129.3
|
|
|
|
|
|
|
Adjustments to reconcile operating profit for
the financial period to net cash flows from operating
activities:
|
|
|
|
|
Reinvestment of income from investments in
Partner-firms
|
|
(19.5)
|
(23.9)
|
|
Movement in investments at fair value through
profit or loss
|
3
|
(66.7)
|
(48.3)
|
|
Movement in trade and other
receivables
|
|
29.2
|
26.1
|
|
Movement in trade and other payables
|
|
0.3
|
(5.2)
|
|
Movement in fee payable on divestment of
investments
|
5
|
17.8
|
5.7
|
|
Movement in profit sharing charge
payable
|
5
|
0.3
|
-
|
|
Movement in operator charge payable
|
5
|
(0.3)
|
(16.3)
|
|
Movement in contingent consideration at fair
value through profit or loss
|
3
|
(5.6)
|
-
|
|
Finance income / expense
|
|
17.9
|
34.1
|
|
Purchase of investments in money market
funds
|
3
|
(663.3)
|
(122.8)
|
|
Sale of investments in money market
funds
|
3
|
680.5
|
166.4
|
|
Reinvested interest income from investments in
money market funds
|
3
|
(4.4)
|
(13.2)
|
|
Taxes paid
|
|
(7.4)
|
(8.2)
|
|
Net cash inflows from operating
activities
|
|
142.7
|
123.7
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
Purchase of investments at fair value through
profit or loss
|
|
(124.2)
|
(45.2)
|
|
Disposal of investments at fair value through
profit or loss
|
|
26.2
|
-
|
|
Net cash outflows from investing
activities
|
|
(98.0)
|
(45.2)
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
Dividends paid
|
15
|
(113.1)
|
(124.9)
|
|
Interest expense payments
|
11
|
(14.1)
|
(14.1)
|
|
Repayment and cancellation of share
capital
|
12
|
(113.3)
|
(3.5)
|
|
Payment under Tax Receivables
Agreement
|
16
|
-
|
(8.5)
|
|
Net cash outflows from financing
activities
|
|
(240.5)
|
(151.0)
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
during the period
|
|
(195.8)
|
(72.5)
|
|
Cash and cash equivalents at the beginning of
the period
|
|
242.9
|
97.6
|
|
Cash and cash equivalents at the end of the
period
|
|
47.1
|
25.1
|
|
|
|
|
|
|
Non-cash investing activities
|
|
|
|
|
In kind distribution of investments at fair
value through profit or loss
|
|
0.7
|
-
|
The accompanying notes on pages 20 to 32 form
an integral part of these condensed interim consolidated financial
statements.
Notes to the Condensed Interim Consolidated
Financial Statements (Unaudited)
For the six months ended 30 June 2024
1. General Information
Petershill Partners plc (the "Company") is a
company limited by shares, incorporated, registered and domiciled
in England and Wales, whose shares are publicly traded on the
main market of the London Stock Exchange. The unaudited condensed
interim consolidated financial statements of
Petershill Partners plc for the period from 1 January 2024 to
30 June 2024 comprise the Company, its subsidiaries and its
indirect subsidiaries together referred to as the
"Group".
The Company was incorporated, registered and
domiciled in England and Wales under the UK Companies Act 2006 (as
amended) as a private company limited by shares under the name
Delta Epsilon Limited on 24 March 2021 with the registered number
13289144. On 12 August 2021, the Company was re-registered as a
public limited company as Delta Epsilon plc, and on 2 September
2021, the Company was renamed Petershill Partners plc.
2. Basis of preparation and significant
accounting policies
i. Basis of
preparation
The unaudited condensed interim consolidated
financial statements of the Group have been prepared and approved
by the Board of Directors in accordance with the Disclosure
Guidance and Transparency Rules of the Financial Conduct Authority
and IAS 34 Interim Financial Reporting as adopted for use in
the UK. The unaudited condensed interim consolidated financial
statements should be read in conjunction with the 2023 Annual
Report and Financial Statements (together "Annual Report") prepared
and approved by the Board of Directors in accordance with
UK-adopted International Accounting Standards ("IFRS") and with the
requirements of the Companies Act 2006 as applicable to companies
reporting under those standards.
The unaudited condensed interim consolidated
financial statements are presented to the nearest million United
States Dollar ($m), the functional and reporting currency of
the Company.
The financial information for the six months
ended 30 June 2024 contained within this half year financial report
does not constitute statutory accounts as defined in section 434 of
the Companies Act 2006. The statutory accounts for the year to 31
December 2023 have been reported on by PricewaterhouseCoopers LLP
and delivered to the Registrar of Companies. The report of the
auditors (i) was unqualified, (ii) did not include a reference to
any matters which the auditors drew attention by way of emphasis
without qualifying their report, and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act
2006.
The unaudited condensed interim consolidated
financial statements have been prepared on a going concern basis
under the historical cost convention, as modified by the
revaluation of financial assets and liabilities at fair value
through profit or loss.
The principal accounting policies are set out
below.
Certain figures for the six months ended 30 June
2023 in the Condensed Interim Consolidated Statement of Financial
Position and Condensed Interim Consolidated Statement of Cash Flows
have been re-categorised to conform to current year presentation.
The Operator charge payable has been disaggregated from Trade and
other payables. This re-categorisation did not have any impact on
the consolidated financial result for the six months ended 30 June
2024 and 30 June 2023.
ii. Significant accounting
policies
The accounting policies applied by the Group for
the unaudited condensed interim consolidated financial statements
are consistent with those described on pages 84 to 95 of the 2023
Annual Report. There was no change in the current period to the
critical accounting estimates and judgements applied in 2023, which
are stated on pages 95 to 97 of the 2023 Annual Report. On 1
January 2024, there was a restructure of the Group and the
accounting policies as disclosed in the 2023 Annual Report have
been consistently applied to account for the restructure. Further
information on the restructure is disclosed in notes 2(viii) and
16.
iii. Segmental reporting
As discussed in the 2023 Annual Report, the
Operator serves as the Group's alternative investment fund manager
for purposes of the UK Alternative Investment Fund Managers
Regulations and EU Alternative Investment Fund Managers Directive,
and pursuant to the Operator Agreement has delegated its portfolio
management functions to the Investment Manager, which has further
delegated the provision of portfolio management services to the
Investment Advisor. The Investment Advisor, acting as the chief
operating decision-maker, is responsible for allocating resources
and assessing performance of the operating segments. The management
of the Group including assessment of performance, budgets and
liquidity is managed for the portfolio as a whole and not by
discrete segments. Hence, the Investment Advisor has concluded that
the Group is organised into one main operating segment.
For the six months ended 30 June 2024, the Group
derived 83% (1H 2023: 90%) of its current income from North America
and the remaining 17% (1H 2023: 10%) from Europe. 90% (31 December
2023: 91%) of the Group's non-current assets are located in North
America and the remaining 10% (31 December 2023: 9%) are located in
Europe.
iv. Related parties
The Group restructure, as noted in notes 2(viii)
and 16, resulted in changes to the Group's related parties. There
was no change to the overall amounts or timing of transactions with
related parties. Further information is disclosed in note
5.
v. Share capital
Financial instruments issued by the Company are
treated as equity if the holder has only a residual interest in the
assets of the Company after the deduction of all liabilities. The
Company's Ordinary Shares are classified as equity
instruments.
Incremental costs directly attributable to the
issue of new shares ("Share issue costs") are shown as a deduction
against proceeds from share premium.
The cost of repurchasing Ordinary Shares
including the related stamp duty and transactions costs is charged
to Retained earnings and dealt with in the Unaudited Condensed
Interim Consolidated Statement of Changes in Equity. Share
repurchase transactions are accounted for on a trade date basis.
The nominal value of ordinary share capital and Redeemable Deferred
Shares repurchased and cancelled is transferred out of 'Share
capital' and into the 'Capital redemption reserve'.
vi. New and amended standards and
interpretations
Accounting standards and interpretations have
been published and will be mandatory for the Group's and Company's
accounting periods beginning on or after 1 January 2024 or later
periods. The following are the new or amended accounting standards
or interpretations applicable to the Group.
§ Disclosure of
Accounting Policies - Amendments to IAS 1 and IFRS Practice
Statement 2 - Non-current Liabilities with Covenants (issued
October 2022 and effective for annual periods beginning on or after
1 January 2024); and
§ Amendments to IAS 1
- Classification of Liabilities as Current or Non-current (issued
January 2020 and effective for annual periods beginning on or after
1 January 2024).
These amendments have been adopted and the
impact of these amendments to the Company and the Group is not
material.
Certain amendments to the accounting standards
have been published that are not mandatory for 30 June 2024
reporting periods and have not been early adopted by the Group.
These amendments are not expected to have a material impact to the
Company and the Group in the current or future reporting periods or
on foreseeable future transactions.
§ Amendments to IFRS 9
and IFRS 7 - Classification and Measurement of Financial
Instruments (issued May 2024 and effective for annual periods
beginning on or after 1 January 2026); and
§ IFRS 18 -
Presentation and Disclosure in Financial Statements (issued April
2024 and effective for annual periods beginning on or after 1
January 2027).
vii. Assessment of investment entity
The Board of Directors has determined that the
Company and its Subsidiaries are not an investment entity and
therefore the Company's financial statements have been prepared on
a consolidated basis, as required by IFRS 10 'Consolidated
Financial Statements'. Accordingly, the Company has not applied the
provisions of Para 31 of IFRS 10 that requires an investment
company to measure its investment in subsidiaries at fair value
through profit or loss. Instead, the Company will consolidate the
subsidiaries that it controls.
Please refer to page 92 of the 2023 Annual
Report for a detailed discussion.
viii. Basis of consolidation of subsidiaries
IFRS 10 requires a parent to consolidate the
subsidiaries that it controls. Consolidation of the subsidiaries
shall begin from the date the parent obtains control of the
subsidiaries and ceases when the parent loses control of the
subsidiaries. A parent controls the subsidiaries when the parent is
exposed, or has rights, to variable returns from its involvement
with the subsidiaries and has the ability to affect those returns
through its power over the subsidiaries.
The Company consolidates its subsidiaries to the
extent it is exposed or has rights to variable returns from its
involvement with the subsidiaries and has the ability to affect
those returns through its power over the subsidiaries.
The unaudited condensed interim consolidated
financial statements of the Group include the accounts of the
Company and its subsidiaries listed below. Refer to page 92 and 93
of the 2023 Annual Report for a detailed discussion of the basis of
consolidation of Subsidiaries. There have been no changes in the
basis of consolidation of subsidiaries since 31 December
2023.
|
Name of Subsidiary
|
Registered office
|
Purpose
|
Interest as at
30-Jun-24
|
Interest as
at
31-Dec-23
|
|
Held directly
|
|
|
|
|
|
Petershill Partners Ltd1
|
One Nexus Way Camana Bay, KY1-9005, Cayman
Islands
|
Investment holding company
|
100%
|
100%
|
|
Petershill Partners II Ltd1
|
One Nexus Way Camana Bay, KY1-9005, Cayman
Islands
|
Investment holding company
|
100%
|
100%
|
|
Petershill Partners, Inc.1
|
251 Little Falls Drive Wilmington, DE
19808,
United States of America
|
Investment holding company
|
100%
|
100%
|
|
Petershill Partners II, Inc.1,3
|
251 Little Falls Drive Wilmington, DE
19808,
United States of America
|
Investment holding company
|
100%
|
-
|
|
Held indirectly
|
|
|
|
|
|
PHP DE 1 LP2,3
|
251 Little Falls Drive Wilmington, DE
19808,
United States of America
|
Investment holding company
|
100%
|
-
|
|
PHP DE 2 LP2,3
|
251 Little Falls Drive Wilmington, DE
19808,
United States of America
|
Investment holding company
|
100%
|
-
|
|
PHP C1 LP2,3
|
One Nexus Way Camana Bay, KY1-9005, Cayman
Islands
|
Investment holding company
|
100%
|
-
|
|
PHP C2 LP2,3
|
One Nexus Way Camana Bay, KY1-9005, Cayman
Islands
|
Investment holding company
|
100%
|
-
|
|
Petershill Partners GP Sub I Series
LLC4
|
251 Little Falls Drive Wilmington, DE
19808,
United States of America
|
Investment holding company
|
100%
|
100%
|
|
Petershill Partners GP Sub II Series
LLC4
|
251 Little Falls Drive Wilmington, DE
19808,
United States of America
|
Investment holding company
|
100%
|
100%
|
|
Petershill Partners GP Sub III Series
LLC4
|
251 Little Falls Drive Wilmington, DE
19808,
United States of America
|
Investment holding company
|
100%
|
100%
|
|
Petershill Partners GP Sub IV Series
LLC4
|
251 Little Falls Drive Wilmington, DE
19808,
United States of America
|
Investment holding company
|
100%
|
100%
|
|
PHP Aggregator GP Ltd5
|
One Nexus Way Camana Bay, KY1-9005,
Cayman Islands
|
General Partner of Cayman domiciled Petershill
holding companies
|
100%
|
100%
|
|
Cook Holdings Series LLC6
|
251 Little Falls Drive, Wilmington, DE
19808,
United States of America
|
Investment holding company
|
100%
|
100%
|
|
Knight Holdings Series LLC6
|
251 Little Falls Drive, Wilmington, DE
19808,
United States of America States of America
|
Investment holding company
|
100%
|
100%
|
|
Lyndhurst Holdings LP6
|
One Nexus Way, Camana Bay, KY1-9005,
Cayman Islands
|
Investment holding company
|
100%
|
100%
|
|
Plum Holdings LP6
|
One Nexus Way, Camana Bay, KY1-9005,
Cayman Islands
|
Investment holding company
|
100%
|
100%
|
|
Peasy Holdings LP6
|
One Nexus Way, Camana Bay, KY1-9005,
Cayman Islands
|
Investment holding company
|
100%
|
100%
|
1. Referred
to as Petershill Subsidiaries.
2. Referred
to as Petershill Splitter Subsidiaries.
3. Acquired
by the Group on 1 January 2024.
4. Held
through the Petershill Splitter Subsidiaries and referred to as
Petershill Blockers.
5. Held
through Petershill Partners Ltd.
6. Held
through the Petershill Blockers and the Petershill Splitter
Subsidiaries and referred to as Petershill holding
companies.
I. Consolidation of Petershill Subsidiaries and
Petershill Blockers
The Company wholly owns the issued interests of
the Petershill Subsidiaries and is able to exercise control and
power over the Petershill Subsidiaries. Petershill Partners Ltd
wholly owns the shares of the Petershill Blockers listed above. The
financial statements of the Petershill Subsidiaries and Petershill
Blockers are consolidated in preparing the financial statements of
the Group.
II. Consolidation of Petershill Splitter
Subsidiaries
On 1 January 2024, new subsidiaries (the
"Petershill Splitter Subsidiaries") were introduced into the Group
structure to enable employees of the Operator to be direct
beneficiaries of a portion of the Profit Sharing Charge and
Divestment Fee (if any) payable by the Group to the Operator. This
was done to align the interests in the incentives of the Group, the
Operator and the employees of the Operator. There is no change to
the amount or timing of any Profit Sharing Charge and Divestment
Fee payable by the Group under the original Operator Agreement.
Furthermore, this arrangement is not expected to give rise to any
material tax consequences for the Group and all initial and ongoing
costs of implementing this arrangement are borne by the
Operator.
Effective from 1 January 2024, each of the
Petershill Subsidiaries entered into a Contribution Agreement with
the appropriate Petershill Splitter Subsidiary whereby the
Petershill Subsidiaries transferred all of their investments,
including their interest in the Petershill Blockers and Petershill
holding companies, to the Petershill Splitter Subsidiaries in
return for interest in the Petershill Splitter Subsidiaries at the
carrying value of the same date (the "Restructure").
The Petershill Splitter Subsidiaries are substantially owned
by the respective Petershill Subsidiaries and are fully
consolidated into the Group's net asset value. The remainder of the
Petershill Splitter Subsidiaries are owned by the respective
special limited partners (the "Special Limited Partners").
The Special Limited Partners are invested in the Petershill
Splitter Subsidiaries to share a portion of the Profit Sharing
Charge and the Divestment Fee along with the Operator and do not
have any other economic interest in the Petershill Splitter
Subsidiaries (refer to notes 5 and 16). The transaction is not
considered to be a business combination due to the nature of
involving entities under common control, which falls outside of the
scope of IFRS 3.
III. Consolidation of Petershill holding
companies
The Company has consolidated its investment in
series and classes of assets that it wholly owns and controls in
the Petershill holding companies. Such classes of assets and
liabilities are ring-fenced from the overall legal entity and
treated as a silo in line with IFRS 10. Such assets of a series or
class cannot be used for payment of liabilities of another series
or class. Holders of other series or class do not have rights or
obligations related to the assets or to residual cash flows from
those assets of other series or classes. Series or classes that are
not directly or indirectly controlled by the Company are not
considered to be Subsidiaries and are accordingly not
consolidated.
The Petershill Subsidiaries, Petershill Splitter
Subsidiaries, Petershill Blockers and Petershill holding companies
are collectively referred to as the Subsidiaries.
ix. Elimination of intra-group balances and
transactions
Intra-group balances and any unrealised gains
arising from intra-group transactions are eliminated in preparing
the condensed interim consolidated financial statements. Unrealised
losses are eliminated unless the costs cannot be recovered. The
financial results of Subsidiaries that are included in the
condensed interim consolidated financial statements are included
from the date that control commences until the date that control
ceases.
x. Going Concern
In accordance with the Companies Act 2006, the
Board of Directors has a responsibility to evaluate whether the
Group has adequate resources to continue its operational existence
for the foreseeable future and at least for the 12 months following
the issuance of the financial statements.
The Board of Directors has made an assessment of
going concern, which takes into account the current performance and
the Group's outlook, including future projections of profitability
and cash flows as well as a downside scenario using information
that is available as of the date of these financial statements, and
the Group's access to the revolving credit facility and its debt
arrangements, details of which are set out in the Operator's Report
on page 8.
The Group's business model involves earning
income from investments in Partner-firms. The Group's investments
in Partner-firms are long-term and the Group has no exit strategy
for its investments. As a result, the Group expects long-term
recurring revenues from its investments in Partner-firms. Income
from investments in Partner-firms is derived from management fee
income, performance fee income and investment income. Management
fee income is typically based on private capital commitment funds
managed by the Partner-firms with a weighted average life cycle of
8 or more years. The income from management fees is therefore
stable and recurring. Income derived from performance fee income
and investment income from Partner-firms is dependent on underlying
fund and underlying investment performance of the Partner-firms.
The Group has a low, and relatively predicable, cost structure.
When taken together with the visibility into the income from
investments in Partner-firms, the Group has reasonably stable
earnings.
As at 30 June 2024, the Group has $47.1 million
(31 December 2023: $242.9 million) of cash and cash equivalents
along with $49.6 million (31 December 2023: $62.3 million) of
investments in money market instruments and a revolving credit
facility of $100.0 million, none of which has been drawn down
(refer to note 11 for further details) reflecting a strong
liquidity position to meet operating costs. In making the
assessment of going concern, the Board has considered a downside
scenario in the future outlook. A downside scenario includes:
a reduction in income from Partner-firms derived from performance
fee income and investment income as well as a decline in fee-paying
AuM held by absolute return funds.
The Board of Directors acknowledges its
responsibilities related to the financial statements. Based on this
analysis outlined above, the Board of Directors is comfortable that
the Group has sufficient cash to support its ongoing operations and
meet its liquidity requirements in the downside
scenario.
Given the above, the Board of Directors
considers it appropriate to prepare the financial statements of the
Group on a going concern basis for the period of at least twelve
months from the date of issue of these unaudited condensed interim
consolidated financial statements as set out in note
2(i).
3. Investments at fair value
through profit or loss
Non-current investments
The Group's non-current investments comprise of
investments in Partner-firms, which manage a diversified portfolio
of investments in private equity, absolute return, private credit,
and private real assets.
|
|
For the six months ended 30 June 2024
$m
|
For the
year ended
31 December 2023
$m
|
|
Opening balance
|
5,254.7
|
4,958.9
|
|
Additions1
|
222.3
|
66.8
|
|
Disposals
|
(49.4)
|
-
|
|
In kind distributions of investments in
Partner-firms2
|
0.7
|
0.2
|
|
Other movements
|
-
|
1.8
|
|
Change in investments at fair value through
profit or loss3
|
66.7
|
227.0
|
|
Closing balance
|
5,495.0
|
5,254.7
|
1. Of the
above additions, an amount of $105.8 million (31 December 2023:
$57.0 million) comprises consideration payable on a deferred basis
and dividend reinvestments and an amount of $116.5 million (31
December 2023: $9.8 million) comprises consideration payable on an
upfront basis.
2. This
represents in kind distribution of investments at fair value
through profit or loss.
3. Of the
above, a gain of $67.4 million (31 December 2023: gain of $227.0
million) relates to unrealised gain/(loss) on fair value of
investments held at period/year end and a (loss) of $0.7 million
(31 December 2023: $nil) relates to realised gain/(loss) on fair
value of investments on disposals.
Current investments
The Group invests certain cash balances in money
market funds representing a collective investment scheme promoted
by an affiliate of the Operator. The Money Market Funds are AAA
rated and the Group holds these investments for cash management
purposes with the intent to manage excess cash and ensure these can
be readily liquidated to meet the Group's investment commitments.
These investments are redeemable at short notice and have been
classified as debt investments. As at 30 June 2024, the Group held
investments in Money Market Funds of $49.6 million (31 December
2023: $62.3 million) and during the six months ended 30 June 2024
earned interest of $4.4 million (1H 2023: $13.2
million).
Fair value measurements
IFRS 13 requires disclosure of fair value
measurement by level. The level of fair value hierarchy within the
financial assets or financial liabilities is determined on the
basis of the lowest level input that is significant to the fair
value measurement. Financial assets and financial liabilities are
classified in their entirety into only one of the following three
levels:
§ Level 1 - quoted
prices (unadjusted) in active markets for identical assets or
liabilities;
§ Level 2 - inputs
other than quoted prices included within Level 1 that are
observable for the assets or liabilities, either directly (i.e., as
prices) or indirectly (i.e., derived from prices); and
§ Level 3 - inputs for
assets or liabilities that are not based on observable market data
(unobservable inputs).
The determination of what constitutes
"observable" requires significant judgement by the Group. The Board
of Directors considers observable data to be market data that is
readily available, regularly distributed or updated, reliable and
verifiable, not proprietary, and provided by independent sources
that are actively involved in the relevant market.
The following tables analyse within the fair
value hierarchy the assets and liabilities (by class) measured at
fair value:
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
30 June 2024
|
$m
|
$m
|
$m
|
$m
|
|
Assets
|
|
|
|
|
|
Investments in money market funds at fair value
through profit or loss
|
-
|
49.6
|
-
|
49.6
|
|
Investments in Partner-firms at fair value
through profit or loss
|
-
|
-
|
5,495.0
|
5,495.0
|
|
Contingent consideration at fair value through
profit or loss
|
-
|
3.2
|
-
|
3.2
|
|
Liabilities
|
|
|
|
|
|
Contingent consideration at fair value through
profit or loss (current and non-current)
|
-
|
-
|
(4.0)
|
(4.0)
|
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
31 December 2023
|
$m
|
$m
|
$m
|
$m
|
|
Assets
|
|
|
|
|
|
Investments in money market funds at fair value
through profit or loss
|
-
|
62.3
|
-
|
62.3
|
|
Investments in Partner-firms at fair value
through profit or loss
|
0.2
|
-
|
5,254.5
|
5,254.7
|
|
Liabilities
|
|
|
|
|
|
Contingent consideration at fair value through
profit or loss (current and non-current)
|
-
|
-
|
(6.4)
|
(6.4)
|
The fair value of investments in money market
funds is based on the daily published net asset value of each fund
and is therefore considered Level 2. Due to the nature of the
investments in Partner-firms, they are always expected to be
classified as Level 3. The fair value of contingent consideration
is determined based on a combination of unobservable inputs,
including discounted cash flow models, probability-weighted
scenarios, and the Operator's assessment of performance targets.
Given the reliance on significant judgment and estimation, the fair
value measurement can be classified as Level 3. However, if
observable market data significantly influences the valuation, it
may be classified as Level 2.
There have been no transfers between levels
during the period. Any transfers between the levels would be
accounted for on the last day of each financial period.
Sensitivity analysis to significant changes in
unobservable inputs within Level 3 hierarchy
Key assumptions including the future fund raises
by Partner-firms, future performance of funds managed by the
Partner-firms, the timing of exits of investments managed by
Partner-firms and margins of the Partner-firms are estimates made
by the Operator and are not certain. The choice of discount rate or
market multiple is somewhat correlated to the assumptions made
above. The discount rates and multiples are therefore considered to
be the significant unobservable inputs used in the fair value
measurement categorised within Level 3 of the fair value hierarchy.
These, together with a quantitative sensitivity analysis as at 30
June 2024 and 31 December 2023, are as shown below:
|
Level 3 Investments
|
Market Value
as at 30 June 2024
|
Significant unobservable
inputs by valuation technique1
|
Range of significant unobservable inputs as
at
30 June 2024
|
Weighted Average
|
Reasonable Shift4
|
Valuation Sensitivity
|
|
|
Investments in Management Companies: Private
Markets
|
Market Approach:
|
|
|
-/+
|
-
|
+
|
|
|
1,203.8
|
Profit Multiple - FRE2
|
10.0x - 23.5x
|
13.9x
|
1.0x
|
$(90.6)
|
$91.8
|
|
|
380.8
|
Asset Based Multiple
|
1.0x
|
1.0x
|
10.0%
|
(38.1)
|
38.1
|
|
|
|
|
|
|
|
|
|
|
|
Income Approach:
|
|
|
|
|
|
|
|
1,725.3
|
Terminal Multiple - FRE2
|
5.4x - 17.0x
|
13.1x
|
0.7x
|
(45.5)
|
47.8
|
|
|
Discount Rate - FRE
|
8.0% - 18.4%
|
12.6%
|
1.0%
|
(111.4)
|
123.8
|
|
|
1,517.2
|
Terminal Multiple - PRE3
|
3.2x - 10.0x
|
5.6x
|
0.8x
|
(24.6)
|
25.4
|
|
|
Discount Rate - PRE
|
13.0% - 33.0%
|
25.4%
|
2.0%
|
(105.0)
|
121.1
|
|
|
|
139.7
|
Calibrated Price of Recent
Investment
|
n/a
|
n/a
|
10.0%
|
(14.0)
|
14.0
|
|
|
Investments in Management Companies: Absolute
Return
|
Market Approach:
|
|
|
-/+
|
-
|
+
|
|
134.4
|
Profit Multiple - FRE2
|
7.4x
|
7.4x
|
1.6x
|
$(10.6)
|
$10.6
|
|
83.0
|
Profit Multiple - PRE3
|
4.1x - 5.6x
|
4.7x
|
2.0x
|
(13.2)
|
13.2
|
|
17.5
|
Asset Based Multiple
|
1.0x
|
1.0x
|
10.0%
|
(1.7)
|
1.7
|
|
|
|
|
|
|
|
|
|
Income Approach:
|
|
|
|
|
|
|
192.7
|
Terminal Multiple - FRE2
|
5.7x - 7.4x
|
7.3x
|
1.1x
|
(14.5)
|
19.0
|
|
Discount Rate - FRE
|
13.6% - 17.6%
|
13.8%
|
2.0%
|
(14.5)
|
19.0
|
|
100.6
|
Terminal Multiple - PRE3
|
3.3x - 5.6x
|
4.5x
|
0.7x
|
(7.1)
|
9.5
|
|
Discount Rate - PRE
|
18.0% - 30.0%
|
22.8%
|
3.3%
|
(7.1)
|
9.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 3 Investments
|
Market Value
as at 31 December 2023
|
Significant unobservable
inputs by valuation technique1
|
Range of significant unobservable inputs as
at
31 December 2023
|
Weighted Average
|
Reasonable Shift4
|
Valuation Sensitivity
|
|
|
|
Investments in Management Companies: Private
Markets
|
Market Approach:
|
|
|
-/+
|
-
|
+
|
|
|
|
$1,201.9
|
Profit Multiple - FRE2
|
10.0x - 23.5x
|
14.5x
|
1.0x
|
$(87.3)
|
$87.4
|
|
|
|
405.6
|
Asset Based Multiple
|
1.0x
|
1.0x
|
10.0%
|
(40.6)
|
40.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Approach:
|
|
|
|
|
|
|
|
|
1,670.3
|
Terminal Multiple - FRE2
|
4.7x - 17.5x
|
13.2x
|
0.7x
|
(42.0)
|
43.4
|
|
|
|
Discount Rate - FRE
|
8.0% - 21.4%
|
13.0%
|
1.0%
|
(110.1)
|
122.3
|
|
|
|
1,460.9
|
Terminal Multiple - PRE3
|
2.7x - 10.0x
|
5.5x
|
0.8x
|
(32.9)
|
34.1
|
|
|
|
Discount Rate - PRE
|
13.0% - 37.0%
|
25.2%
|
2.0%
|
(107.0)
|
123.6
|
|
|
|
Investments in Management Companies: Absolute
Return
|
Market Approach:
|
|
|
-/+
|
-
|
+
|
|
135.2
|
Profit Multiple - FRE2
|
8.2x
|
8.2x
|
1.6x
|
$(10.1)
|
$10.1
|
|
82.8
|
Profit Multiple - PRE3
|
4.5x - 5.0x
|
4.7x
|
2.0x
|
(14.2)
|
14.2
|
|
17.5
|
Asset Based Multiple
|
1.0x
|
1.0x
|
10.0%
|
(1.7)
|
1.7
|
|
|
|
|
|
|
|
|
|
Income Approach:
|
|
|
|
|
|
|
178.1
|
Terminal Multiple - FRE2
|
6.1x - 7.5x
|
7.4x
|
1.1x
|
(13.2)
|
17.4
|
|
Discount Rate - FRE
|
13.3% - 16.4%
|
13.6%
|
2.0%
|
(13.2)
|
17.4
|
|
102.0
|
Terminal Multiple - PRE3
|
3.3x - 5.3x
|
4.5x
|
0.7x
|
(7.6)
|
10.1
|
|
Discount Rate - PRE
|
19.0% - 30.3%
|
22.9%
|
3.4%
|
(7.5)
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. The fair
value of any one instrument is determined using multiple valuation
techniques. For example, market comparable and discounted cash
flows may be used together to determine fair value. Therefore, the
Level 3 balance encompasses both of these techniques.
2. The
range consists of multiples on management fee related earnings
("FRE") and may represent historical or forward-looking
multiples.
3. The
range consists of multiples on performance related earnings ("PRE")
and may represent historical or forward-looking
multiples.
4. The
increase or decrease in the unobservable inputs may not be shifted
negatively and positively by an equal amount. For the asset
categories that have different reasonable possible shifts, the
above table discloses the weighted average of the respective
negative and positive shifts.
As the Group's investments are generally not
publicly quoted, valuations require meaningful judgement to
establish a range of values, and the ultimate value at which an
investment is realised may differ from its most recent valuation
and the difference may be significant.
An increase / decrease in the underlying
discount rate of 1% would result in a decrease / increase in the
fair value of the contingent consideration of
-$0.02 million / +$0.04 million (31 December 2023: -$0.04 million /
+$0.02 million) respectively.
The below is a reconciliation of Level 3 assets
and liabilities held at fair value through profit or
loss:
|
Level 3 Instrument
|
|
For the six months
ended 30 June 2024
$m
|
For the year ended
31 December 2023
$m
|
|
Assets
|
|
|
|
|
Opening balance
|
|
5,254.5
|
4,958.9
|
|
Additions1
|
|
222.3
|
66.8
|
|
Disposals
|
|
(48.5)
|
-
|
|
Other movements
|
|
-
|
1.8
|
|
Change in investments at fair value through
profit or loss2
|
|
66.7
|
227.0
|
|
Closing balance
|
|
5,495.0
|
5,254.5
|
1. Of the
above, an amount of $105.8 million (31 December 2023: $57.0
million) relates to consideration payable on a deferred basis and
dividend reinvestments and an amount of $116.5 million (31 December
2023: $9.8 million) includes consideration payable on an upfront
basis.
2. Of the
above, an amount of $67.4 million (31 December 2023: $227.0
million) relates unrealised gain/(loss) on fair value of
investments held at period/year end.
In addition to above, the Group has $3.2
million (31 December 2023: $nil) of Level 2 assets and $4.0 million
(31 December 2023: $6.4 million) of Level 3 liabilities as at 30
June 2024. The assets represent a portion of the total
consideration which is probable under the contingent consideration
agreements in connection with its sale of investments in certain
Partner-firms, wherein the Group may receive additional
consideration based on the underlying terms of the sale agreement.
The liabilities represent a portion of the total consideration
which is probable under the contingent consideration agreements in
connection with investments in certain Partner-firms wherein the
Group may have to pay additional consideration based on the
underlying Partner-firm's ability to raise capital or meet certain
revenue thresholds as defined in the investment agreements. The
Group recorded a net fair value movement in contingent
consideration of $5.6 million in the Condensed Interim Consolidated
Statement of Comprehensive Income, comprising of $3.2 million
increase in contingent consideration assets and $2.4 million
decrease in contingent consideration liabilities.
Deferred consideration receivable
The Group has $23.6 million (31 December 2023:
$nil) of deferred consideration receivable recorded in the
Condensed Interim Consolidated Statement of Financial Position as
at 30 June 2024. The assets represent a portion of the total
consideration which is due to the Group on a deferred basis in
connection with its sale of investments in certain Partner-firms.
The assets are held at amortised cost. During the six months ended
30 June 2024, the Group recorded $0.3 million (1H 2023: $nil) of
finance income in the Condensed Interim Consolidated Statement of
Comprehensive Income in relation to the accretion of the
assets.
Deferred payment obligations
The Group has $126.4 million (31 December 2023:
$51.9 million) of deferred payment obligations recorded in the
Condensed Interim Consolidated Statement of Financial Position as
at 30 June 2024. These liabilities represent a portion of the total
consideration which is due from the Group on a deferred basis in
connection with its purchases of investments in certain
Partner-firms wherein the Group is required to pay additional
consideration on an agreed future date. The liabilities are held at
amortised cost. During the six months ended 30 June 2024, the Group
recorded $2.5 million (1H 2023: $3.3 million) of finance cost in in
the Condensed Interim Consolidated Statement of Comprehensive
Income in relation to the amortisation of the
liabilities.
4. Cash and cash
equivalents
|
|
|
30 June
2024
$m
|
31 December 2023
$m
|
|
Cash at bank
|
|
47.1
|
92.9
|
|
Fixed term deposit
|
|
-
|
150.0
|
|
|
|
47.1
|
242.9
|
On 14 December 2023, the Company entered into a
fixed term deposit of $150.0 million, which matured on 15 March
2024. Interest was earned on the fixed term deposit at a rate of
5.4% per annum. During the six months ended 30 June 2024, the
Company earned $1.6 million (1H 2023: $nil) of interest in relation
to the fixed term deposit which is recorded as interest income from
other assets in the Condensed Interim Consolidated Statement of
Comprehensive Income.
5. Operator charges
On 1 January 2024, the Special Limited Partner
contributed to each of the Petershill Splitter Subsidiaries as part
of the Restructure (see note 2(viii)) in return for a share in the
Profit Sharing Charge and Divestment Fee previously due solely to
the Operator. The total fees due to be paid by the Group does not
change as a result.
Recurring Operating Charges
Under the Operator Agreement, the Operator is
entitled to a recurring operating charge on a quarterly basis, such
Recurring Operating Charges consisting of, in aggregate, 7.5% of
the Group's relevant income from investments, as defined under
IFRS, for the relevant quarter. For the six months ended 30 June
2024, the income attributable to assets owned by the Group on which
Recurring Operating Charges was earned amounted to $140.3 million
(1H 2023: $124.8 million).
Amounts recorded as Recurring Operating Charges
during the six months ended 30 June 2024 were $10.5 million (1H
2023: $9.4 million) and an amount of $6.3 million (31 December
2023: $6.6 million) was outstanding as at 30 June 2024. These
amounts will be paid in accordance with the terms of the Operator
Agreement.
Profit Sharing Charge
The Operator and Special Limited Partner are
entitled to a profit sharing charge (the "Profit Sharing Charge")
on a quarterly basis in arrears, which in aggregate shall be an
amount equal to 20% of the total dividend income from each new
investment ("New Investment") made by the Group after the Admission
in the relevant fiscal quarter (net of any Recurring Operating
Charges in respect of such New Investment), beginning in the ninth
fiscal quarter from the date on which the New Investment closed and
subject to such New Investment having achieved a return of 6% per
annum calculated using the total invested capital funded to the
pertinent date. These amounts will be paid in accordance with the
terms of the Operator Agreement.
The aggregate of the Recurring Operating Charges
and the Profit Sharing Charge is capped at 15% of the Group's
income from investments in Partner-firms for the relevant quarter
excluding any Divestment Fee payable for such quarter.
Amounts recorded as Profit Sharing Charge during
the six months ended 30 June 2024 were $0.3 million and $0.4
million to the Operator and Special Limited Partner respectively
(1H 2023: $nil and $nil), and an amount of $0.1 million and $0.3
million (31 December 2023: $0.1 million and $nil) was outstanding
to the Operator and Special Limited Partner as at 30 June 2024
respectively. These amounts will be paid in accordance with the
terms of the Operator Agreement.
Divestment Fee
The Operator and Special Limited Partner are
entitled to a divestment fee ("Divestment Fee") calculated at 20%
of the total Divestment Profit in the relevant quarter in relation
to the Group's investments. Divestment Profit refers to the cash
flows realised from the sale or divestment of assets calculated as
the sale price minus the contribution value of such asset,
excluding any dividend income received over the holding period and
on which the Group has already paid Recurring Operating Charges
and, in the case of New Investments, Profit Sharing
Charges.
Although the Group does not have an exit
strategy for its investments, it may be subject to exits or
realisations at underlying Partner-firms, as such an accrual is
reflected in the accounts representing an amount that would be
payable if the Group were to exit all of its investments at the
fair value reflected on these financial statements. As at 30 June
2024, a Divestment Fee expense amount of $112.6 million, of which
$89.7 million and $22.9 million is due to the Operator and Special
Limited Partner respectively (31 December 2023: $94.8 million and
$nil respectively) has been accrued towards divestment fee payable,
of which $6 thousand is realised.
6. Tax
The Group's interim income tax expense or
benefit is calculated using the best estimate of the weighted
average annual effective tax rate for the full financial year
applied to the year-to-date profit/(loss) before tax. Items not
included in the weighted average annual effective tax rate are
recognised in full in the interim period and relate to the impact
of (1) the Company's year-to-date unrealised gains and losses; (2)
movement in unrecognised deferred tax; (3) de-recognition of the
deferred tax assets related to the sale of certain Partner-firms;
(4) unrealised changes in contingent consideration and divestment
fee expense; and (5) income and expenses in jurisdictions that are
either not subject to tax or cannot be reasonably estimated. The
Group's effective tax rate differs from the standard rate of
corporation tax due to the following: (1) tax rates in certain
jurisdictions; (2) income and expenses not included for tax
purposes; (3) temporary differences subject to initial recognition
exception; and (4) de-recognition of the deferred tax assets
related to the sale of certain Partner-firms.
The Group's effective tax rate for the six
months ended 30 June 2024 was 17.0% (1H 2023: 13.9%), resulting in
a corporate tax expense of $27.9 million (1H 2023: $16.9 million).
The increase in the effective tax rate is attributable to the
discrete expense related to the de-recognition of the deferred tax
assets related to the sale of certain Partner-firms.
In 2022, the UK Government confirmed its
intention to implement the G20-Organisation for Economic
Co-operation and Development Inclusive Framework Pillar 2 rules in
the UK, including a Qualified Domestic Minimum Top-Up Tax and
Income Inclusion rule. This legislation, which was enacted in 2023,
will seek to ensure that UK headquartered multinational enterprises
pay a minimum tax rate of 15 per cent on UK and overseas profits
arising after 31 December 2023. The legislation applies for a
period to groups with revenues in excess of €750 million in at
least two of the previous four periods and so the Group is not
currently expected to be within the scope of the legislation for
either the 2024 or 2025 periods and any future periods will
continue to be assessed going forward.
7. Finance cost
|
|
For the six months ended
30 June 2024
|
For the six months ended
30 June 2023
|
|
Interest on Deferred payment
obligations
|
2.5
|
3.3
|
|
Interest on Unsecured Notes
|
14.1
|
14.1
|
|
Commitment fees
|
0.2
|
0.2
|
|
Borrowing cost amortisation
|
0.3
|
0.3
|
|
Other finance charges
|
0.2
|
0.7
|
|
|
17.3
|
18.6
|
8. Earnings per share
|
|
For the six months ended
30 June 2024
|
For the six months ended
30 June 2023
|
|
Profit attributable to equity holders of the
Company - $m
|
136.0
|
112.4
|
|
Weighted average number of Ordinary Shares in
issue
|
1,108,758,893
|
1,135,192,342
|
|
Basic and diluted earnings per Share from
continuing operations in the period (cents)
|
12.27
|
9.90
|
The weighted average number of shares for the
six months ended 30 June 2024 and 30 June 2023 is calculated on a
time weighted basis based on the timing of issue and redemption of
Ordinary Shares. There are no dilutive shares in issue.
9. Trade and other receivables
|
|
30 June 2024
$m
|
31 December 2023
$m
|
|
Amounts receivable from Investments
|
72.7
|
105.9
|
|
Tax recoverable
|
13.8
|
10.4
|
|
Prepayments
|
1.3
|
1.9
|
|
Other receivables
|
4.5
|
9.2
|
|
|
92.3
|
127.4
|
10. Unsecured notes payable
On 24 August 2022, the Petershill Partners, Inc.
issued US private placement senior unsecured notes (the "Unsecured
Notes") to a group of institutional investors. The Unsecured Notes
issued by the Petershill Partners, Inc. are guaranteed by the
Company.
The Notes are comprised of five
tranches:
|
Notes
|
Notional
(US$)
|
Tenor
(years)
|
Maturity
|
Fixed
Coupon
|
|
Series A
|
125,000,000
|
7
|
2029
|
5.51%
|
|
Series B
|
175,000,000
|
10
|
2032
|
5.54%
|
|
Series C
|
80,000,000
|
12
|
2034
|
5.69%
|
|
Series D
|
80,000,000
|
15
|
2037
|
5.84%
|
|
Series E
|
40,000,000
|
20
|
2042
|
6.14%
|
Petershill Partners, Inc. may be subject to pay
a Make-Whole Amount (as contained in the Note Purchase Agreement)
contingent upon certain principal repayment, prepayment, or
redemption of the Unsecured Notes in accordance with the provisions
of the Note Purchase Agreement. Absent an intent by the Group to
prepay the Unsecured Notes, no accrual for such Make-Whole Amount
has been made as at 30 June 2024.
In accordance with the Note Purchase Agreement,
Petershill Partners, Inc. is subject to various financial and
non-financial covenants. The two financial covenants that
Petershill Partners, Inc. must adhere to are (1) the leverage ratio
shall not exceed 4:1 and (2) the AuM shall not be less than the
required minimum AuM amount (as defined in the Note Purchase
Agreement). The Operator monitors the covenant requirements on at
least a six-monthly basis. There have been no breaches of these
covenants during the period.
As at 30 June 2024, the outstanding amount of
the Unsecured Notes was $500 million (31 December 2023: $500
million). The carrying value of the Unsecured Notes was reported at
amortised cost and was net of unamortised debt issuance costs of
$5.9 million (31 December 2023: $6.2 million) in an amount of
$494.1million (31 December 2023: $493.8 million). For the six
months ended 30 June 2024, the effective interest rate on the
Unsecured Notes was 6.2% (1H 2023: 6.2%) per annum.
As at 30 June 2024, the fair value of the
Unsecured Notes payable is estimated at $482.0 million (31 December
2023: $467.0 million) calculated based on discounted cash flows
using a discount rate of 6.2% at 30 June 2024 (31 December 2023:
6.6%). The Unsecured Notes payable would be classified as Level 3
in the fair value hierarchy due to the use of unobservable inputs,
including the Group's own credit risk. A 3% increase / decrease in
the underlying discount rate would result in a movement in net
assets of approximately -$88.0 million / +$114.0 million
respectively (31 December 2023: -$87.0 million / +$113.6 million)
or -18.3% / +23.7% (31 December 2023: -18.6% / +24.3%).
11. Net Debt Reconciliation
|
|
30 June 2024
$m
|
31 December 2023
$m
|
|
Unsecured Notes Payable
|
494.1
|
493.8
|
|
Interest payable
|
10.0
|
10.0
|
|
|
504.1
|
503.8
|
Liabilities from financing activities for the
six months ended 30 June 2024:
|
|
Unsecured Notes Payable
$m
|
Interest Payable
$m
|
|
Net debt at 1 January 2024
|
493.8
|
10.0
|
|
Repayment of interest
|
-
|
(14.1)
|
|
Interest expense
|
-
|
14.1
|
|
Borrowing cost amortised
|
0.3
|
-
|
|
Net debt as at 30 June 2024
|
494.1
|
10.0
|
Liabilities from financing activities for the
year ended 31 December 2023:
|
|
Unsecured Notes Payable
$m
|
Interest Payable
$m
|
|
Net debt at 1 January 2023
|
493.2
|
10.0
|
|
Repayment of interest
|
-
|
(28.3)
|
|
Interest expense
|
-
|
28.3
|
|
Borrowing cost amortised
|
0.6
|
-
|
|
Net debt as at 31 December 2023
|
493.8
|
10.0
|
On 9 January 2023, three of the Petershill
Subsidiaries (Petershill Partners, Inc., Petershill Partners Ltd
and Petershill Partners II Ltd) entered into a revolving credit
facility of $100.0 million with a financial institution. Interest
charged on the facility is the aggregate of Margin plus the Term
Reference Rate. The entities did not draw on the facility during
the six months ended 30 June 2024 or year ended 31 December 2023.
Costs incurred in relation to this arrangement have been
capitalised as a prepayment and are amortised over the length of
the facility, and are recorded within Trade and other receivables
on the Condensed Interim Consolidated Statement of Financial
Position.
12. Share capital and other
reserves
For the six months ended 30 June 2024
|
Date
|
Issued and fully paid
|
Number of shares issued /
(cancelled)
|
Share capital
$m
|
Share premium
$m
|
Other reserve
$m
|
Capital redemption reserve
$m
|
Total
$m
|
|
Shares at
|
|
|
|
|
|
|
|
1 January 2024
|
|
1,122,202,824
|
11.2
|
-
|
1,689.6
|
0.5
|
1,701.3
|
|
|
Repurchase and cancellation of Ordinary Shares
- $0.01
|
(40,494,657)
|
(0.4)
|
-
|
-
|
0.4
|
-
|
|
Closing balance as at 30 June 2024
|
1,081,708,167
|
10.8
|
-
|
1,689.6
|
0.9
|
1,701.3
|
For the six months ended 30 June
2023
|
Date
|
Issued and fully paid
|
Number of shares issued /
(cancelled)
|
Share capital
$m
|
Share premium
$m
|
Other reserve
$m
|
Capital redemption reserve
$m
|
Total
$m
|
|
Shares at
|
|
|
|
|
|
|
|
1 January 2023
|
|
1,135,399,597
|
11.4
|
3,346.7
|
1,689.6
|
0.3
|
5,048.0
|
|
|
Repurchase and cancellation of Ordinary Shares
- $0.01
|
(1,801,091)
|
(0.1)
|
-
|
-
|
0.1
|
-
|
|
|
Share premium cancellation
|
-
|
-
|
(3,346.7)
|
-
|
-
|
(3,346.7)
|
|
Closing balance as at 30 June 2023
|
1,133,598,506
|
11.3
|
-
|
1,689.6
|
0.4
|
1,701.3
|
On 17 May 2023, the Company commenced a share
buyback programme of up to $50 million. During the six months ended
30 June 2024, the Company repurchased and cancelled 2,623,705
Ordinary Shares (1H 2023: 1,801,091 Ordinary Shares) as part of its
buyback program for a total consideration of $5.8 million (1H 2023:
$3.5 million) including transaction costs. The programme was
subsequently terminated on 11 April 2024.
The Company's shareholders approved the
cancellation of the amount standing to the credit of the Company's
share premium account in full (the "Reduction of Capital") at its
annual general meeting held on 24 May 2023. A formal approval of
the same was obtained on 20 June 2023 by His Majesty's High Court
in England (the "Court"), Accordingly, the Reduction of
Capital became effective which created additional distributable
reserves of approximately $3,346.7 million. Accordingly, the amount
standing to the credit of the share premium account was transferred
to Retained earnings.
On 23 April 2024, the Company proposed a tender
of up to $100 million of Ordinary Shares. On 31 May 2024, the
tender offer closed and 37,870,952 Ordinary Shares were purchased
and cancelled for a total consideration of $106.7 million,
including transaction costs.
As at 30 June 2024, the Company's issued share
capital comprised 1,081,708,167 Ordinary Shares (31 December 2023:
1,122,202,824 Ordinary Shares) of $0.01 each. Ordinary shareholders
are entitled to all dividends paid by the Company. The Company does
not have a limited amount of authorised capital.
13. Retained earnings
|
|
For the six months ended 30 June 2024
$m
|
For the year ended 31 December 2023
$m
|
|
Opening balance
|
3,132.6
|
(328.7)
|
|
Profit and total comprehensive
income
|
136.0
|
321.1
|
|
Dividends paid
|
(113.1)
|
(180.2)
|
|
Repurchase and cancellation of Ordinary
Shares
|
(112.5)
|
(26.3)
|
|
Share premium cancellation
|
-
|
3,346.7
|
|
Closing balance
|
3,043.0
|
3,132.6
|
14. Net assets per share
|
|
30 June 2024
|
31 December 2023
|
|
Net Assets ($m)
|
4,744.3
|
4,833.9
|
|
Number of ordinary shares issued
|
1,081,708,167
|
1,122,202,824
|
|
Net assets per share (cents)
|
438.59
|
430.75
|
15. Dividends declared and paid
Dividends on Ordinary shares were paid during
the six months ended 30 June 2024 of $113.1 million (1H 2023:
$124.9 million) being 10.1 cents (USD) per share (1H 2023: 11.0
cents (USD) per share). The dividends were paid on 14 June
2024.
16. Related party transactions
Board of Directors
Directors' fees for the six months ended 30 June
2024 amounted to $0.8 million (1H 2023: $0.8 million), and an
amount of $0.1 million was outstanding as at 30 June 2024 (31
December 2023: $nil). Amounts paid to the Board of Directors as
reimbursements of travel and other incidental expenses during the
six months ended 30 June 2024 amounted to $39 thousand (2023: $15
thousand), and an amount of $nil was outstanding as at 30 June 2024
(31 December 2023: $nil).
The Board of Directors held beneficial interest
in 1,134,999 Ordinary Shares in the Company as at 30 June 2024 (31
December 2023: 1,094,999 Ordinary Shares).
Money Market Funds
As at 30 June 2024, the Group held an investment
of $49.6 million (31 December 2023: $62.3 million) in money market
funds that are managed by affiliates of the Operator. During
the six months ended 30 June 2024, the Group earned interest income
of $4.4 million (1H 2023: $13.2 million) from investments held in
such money market funds managed by affiliates of the
Operator.
Transactions with Petershill Funds
As at 30 June 2024, the Petershill Funds,
managed by wholly owned subsidiaries of the Goldman Sachs Group
acting as the investment manager, owned approximately 79.5% (31
December 2023: 76.6%) of the Company. As at 30 June 2024, the Group
had amounts payable to the Petershill Funds of $2.1 million (31
December 2023: $0.2 million) and amounts receivable from the
Petershill Funds of $2.4 million (31 December 2023: $6.1 million).
These will be settled in the ordinary course of
business.
Tax Receivables Agreement
As discussed in note 2(v)(ii) of the 2023 Annual
Report, the Group has entered into a Tax Receivables Agreement with
Petershill Funds, an affiliate of the Operator and the Goldman
Sachs Group, which will require the Group to pay 75% of the amount
of cash tax savings, if any, in US federal, state and local income
tax that the Group realises as a result of the tax benefits
associated with the increase in tax basis that arose on the Group's
acquisition of the Partner-firms from the Petershill Funds. As of
30 June 2024, the carrying value of liability for the Tax
Receivables Agreement was $175.6 million (31 December 2023: $174.7
million). During the six months ended 30 June 2024, payments
totalling $nil (1H 2023: $8.5 million) were made in relation to the
Tax Receivables Agreement liability.
Operator
The Operator is an affiliate and wholly owned
subsidiary of the Goldman Sachs Group and provides advice to the
Group on the origination and completion of new investments, the
management of the portfolio and on realisations, as well as on
funding requirements, subject to approval by the Board of
Directors. For the provision of services under the Operator
Agreement, the Operator earns a Profit Sharing Charge, Recurring
Operating Charges and Divestment Fee, as detailed in note
5.
The Operator may, in its discretion, pay certain
of the Group's fees or expenses and the Group will reimburse the
Operator for the payment of any such fee or expense. During the six
months ended 30 June 2024, the Operator did not pay any of the
Group's fees or expenses under this arrangement (1H 2023: none) and
no amount was due at period end.
Special Limited Partner
The Special Limited Partner is an affiliate of
the Goldman Sachs Group and acts as a special limited partner to
the Petershill Splitter Subsidiaries. The Special Limited Partner
earns a Profit Sharing Charge and Divestment Fee, as detailed in
note 5.
Transactions with Goldman Sachs Bank USA
Goldman Sachs Bank USA ("GSBUSA") is an
affiliate and wholly owned subsidiary of the Goldman Sachs Group.
On 14 December 2023, the Company placed a fixed term deposit with
GSBUSA for $150.0 million. The fixed term deposit matured on 15
March 2024 and accrued interest at a rate of 5.40% per annum.
During the six months ended 30 June 2024, interest of $1.6 million
(1H 2023: $nil) was earned and was received upon
maturity.
17. Ultimate controlling party
The Board of Directors has reviewed the
shareholders of the Company and has concluded that there is no
ultimate controlling party. The Company has a diversified investor
base that does not cede control to any single investor or a group
of investors. Although the Petershill Funds own 79.5% (31 December
2023: 76.6%) of the Company, Goldman Sachs Asset Management and its
affiliates were the beneficial owner of less than 1% of the
Ordinary Shares of the Company as at 30 June 2024.
The Petershill Funds are managed by Goldman
Sachs Asset Management and its affiliates acting as the investment
manager of the Petershill Funds under the supervision of an
independent board of directors of the Petershill Funds. Goldman
Sachs Asset Management and its affiliates act in in their capacity
as agent for the Equity shareholders of the Company and such a
relationship does not give rise to controlling
ownership.
18. Subsequent events
The Directors have evaluated activity through 16
September 2024, the date that the unaudited interim consolidated
financial statements were available to be issued.
On 16 September 2024, the Board of Directors
approved an interim dividend of 5.0 cents (USD) per share with
respect to the six months ended 30 June 2024. The record date for
the dividend is 27 September 2024 and the payment date is 31
October 2024.
On 16 September 2024, the Board of Directors
approved a special dividend payment of 9.0 cents (USD) per share.
The record date for the dividend is 27 September 2024 and the
payment date is 31 October 2024.
The Directors concluded that no other events
took place that would require material adjustments to the amounts
recognised in these unaudited interim consolidated financial
statements.
glossary of key operating metrics
This document contains certain key operating
metrics that are not defined or recognised under IFRS.
The Operator and the Directors use these key
operating metrics to help evaluate trends, assess the performance
of the Partner-firms and the Company, analyse and test dividends
received from the Partner-firms and inform operating, budgeting and
re-investment decisions. The Directors believe that these metrics,
which present certain operating and other information in respect of
the Partner-firms, provide an enhanced understanding of the
underlying portfolios and performance of the Partner-firms and are
therefore essential to assessing the investments and performance of
the Company.
The key operating metrics described in this
section are derived from financial and other information reported
to the Operator by the Partner-firms. The Operator, with the
assistance of an independent accounting firm, performs due
diligence procedures on the information provided by the
Partner-firms. It should be noted, however, that these due
diligence procedures do not constitute an audit.
In addition, each Partner-firm may account for
and define certain financial and other information differently from
one another. For example, each Partner-firm may calculate its
fee-paying AuM differently, the result of which being that the
inputs of the Company's Aggregate Fee-paying AuM are not
consistently calculated.
Whilst the operating metrics described in this
section are similar to those used by other alternative asset
managers, there are no generally accepted principles governing
their calculation, and the criteria upon which these metrics are
based can vary from firm to firm. These metrics, by themselves, do
not provide a sufficient basis to compare the Partner-firms' or the
Company's performance with that of other companies.
None of Partner Distributable Earnings, Partner
FRE, Partner Realised Performance Revenues or Partner Realised
Investment Income are measures of or provide any indication of
profits available for the purpose of a distribution by the Company
within the meaning of section 830 of the Companies Act 2006, or of
any Partner-firm in accordance with the equivalent applicable
rules.
Aggregate Fee-paying AuM
Aggregate Fee-paying AuM is defined as the
portion of Aggregate Partner-firm AuM for which Partner-firms are
entitled to receive management fees, as reported by the
Partner-firms to the Operator. The principal difference between
Aggregate Fee-paying AuM and Aggregate Partner-firm AuM is that
Aggregate Fee-paying AuM typically excludes co-investment on which
Partner-firms generally do not charge fees and, to a lesser extent,
fund commitments in Partner-firm funds (i) on which fees are only
earned on investment, rather than from the point of commitment and
(ii) where capital has been raised but fees have not yet been
activated. This may also include legacy assets where fees are no
longer being charged.
The Operator and the Directors consider
Aggregate Fee-paying AuM to be a meaningful measure of the
Partner-firms' capital base upon which they earn management fees
and use the measure in assessing the management fee-related
performance of the Partner-firms and to inform operating, budgeting
and re-investment decisions.
Aggregate Partner-firm AuM
Aggregate Partner-firm AuM is defined as the sum
of (a) the net asset value of the Partner-firms' underlying funds
and investment vehicles, and in most cases includes co-investment
vehicles, GP commitments and other non fee-paying investment
vehicles and (b) uncalled commitments from these entities, as
reported by the Partner-firms to the Operator from time to time and
aggregated by the Operator without material adjustment. This is an
aggregated figure across all Partner-firms and includes
Partner-firm AuM outside of the Company's ownership interest in the
Partner-firms.
The Operator and the Directors consider
Aggregate Partner-firm AuM to be a meaningful measure of the size,
scope and composition of the Partner-firms, as well as of their
capital-raising activities. The Operator uses Aggregate
Partner-firm AuM to inform operating, budgeting and reinvestment
decisions.
Aggregate Performance Fee Eligible Partner-firm
AuM
The amount of Aggregate Partner-firm AuM that is
eligible for performance fees.
AuM and Associated Data
The data presented in this document for the
following key operating metrics reflects AuM data reported to the
Operator on a three-month lag. This three-month data lag is due to
the timing of the financial information received by the Operator
from the Partner-firms, which generally require at least 90 days
following each period end to present final financial information to
the Operator. The key operating metrics reflected on a three-month
lag are:
§ Aggregate
Partner-firm AuM
§ Aggregate Fee-paying
Partner-firm AuM
§ Average Aggregate
Fee-paying Partner-firm AuM
§ Aggregate
Performance Fee Eligible Partner-firm AuM
§ Average Aggregate
Performance Fee Eligible Partner-firm AuM
§ Partner Blended Net
Management Fee Rate
§ Implied Blended
Partner-firm FRE Ownership
§ Investment
Capital
Implied Blended Partner-firm FRE Ownership
Implied Blended Partner-firm FRE Ownership is
defined as the weighted average of the Company's ownership stake in
the Partner-firms' management fee-related earnings and is
calculated based on the contribution of average Aggregate
Fee-paying AuM from Partner-firms in each period. It will therefore
be expected to change to some degree from period to period based on
the contribution to average Aggregate Fee-paying AuM of each
Partner-firm, even if the actual ownership of each underlying
Partner-firm does not change. Excludes new acquisitions where
Petershill has not yet started to receive or have only received
partial period amounts of Partner Net Management and Advisory
Fees.
The Operator and the Directors consider Implied
Blended Partner-firm FRE Ownership to be a meaningful measure of
the composition of the Company's investments.
Investment Capital
Investment Capital is defined as the sum of the
reported value of the balance sheet investments from the
Partner-firms. The Operator and the Directors consider Investment
Capital to be a meaningful measure of the performance of the
Partner-firms' balance sheet investments and potential future
Partner Realised Investment Income. The Operator therefore uses
Investment Capital to assess future expected Partner Realised
Investment Income and inform operating, budgeting and reinvestment
decisions.
In respect of Investment Capital, the data may
be adjusted for any known valuation impacts following the reporting
date of the information received from the Partner-firms.
Ownership weighted AuM
Ownership weighted AuM represents the sum of the
Company's ownership stakes in each Partner-firm's AuM.
Ownership weighted Fee-Paying AuM
Ownership weighted Fee-paying AuM represents the
sum of the Company's ownership stakes in each Partner-firm's
Fee-paying AuM.
Partner Blended Net Management Fee Rate
Partner Blended Net Management Fee Rate is
defined as Partner Net Management and Advisory Fees for the period,
divided by the average Aggregate Fee-paying AuM weighted for the
Company's ownership interests in each Partner-firm. The average
Aggregate Fee-paying AuM is calculated as the mean of the Aggregate
Fee-paying AuM at the start and the end of the reporting period and
excludes new acquisitions where the Company has not yet started to
receive or have only received partial period amounts of Partner Net
Management and Advisory Fees.
The Operator and the Directors consider Partner
Blended Net Management Fee Rate to be a key metric in assessing the
Company's overall management fee-related performance.
Partner Distributable Earnings and Partner Distributable
Earnings Margin
Partner Distributable Earnings is defined as the
sum of Partner FRE, Partner Realised Performance Revenues and
Partner Realised Investment Income. Partner Distributable Earnings
Margin is defined as Partner Distributable Earnings divided by the
sum of Partner Net Management and Advisory Fees, Partner Realised
Performance Revenues and Partner Realised Investment
Income.
The Operator and the Directors consider Partner
Distributable Earnings and Partner Distributable Earnings Margin to
be meaningful measures of the overall performance of the
Partner-firms and key performance indicators of the Company's total
income from investments in management companies. The Operator uses
this metric to analyse and test dividends received from the
Partner-firms, as well as to inform operating, budgeting and
re-investment decisions. These measures reflect any contractual
margin protections or revenue share interests that the Company may
have with the Partner-firms, which means that the Partner
Distributable Earnings Margin may differ from the margins achieved
by other shareholders or partners of the Partner-firms.
Partner Fee Related Earnings (FRE) and Partner FRE
Margin
Partner FRE is defined as Partner Net Management
and Advisory Fees, less the Partner-firms' operating expenses,
fixed and bonus compensation, net interest income/(expense) and
taxes (but not performance fee-related expenses) allocable to the
Company's share of Partner Net Management and Advisory Fees, as
reported by the Partner-firms to the Operator, and subject to
applicable contractual margin protections in respect of certain
Partner-firms. Partner FRE Margin is defined as Partner FRE divided
by Partner Net Management and Advisory Fees.
The Operator and the Directors consider Partner
FRE and Partner FRE Margin to be meaningful measures of the
management fee-related earnings of the Partner-firms and key
performance indicators of the Company's income from investments in
management companies derived from management fee income. The
Operator uses this metric to analyse and test dividends received
from the Partner-firms, as well as to inform operating, budgeting
and reinvestment decisions.
Petershill Funds
The Petershill Funds refers to the following
entities: Petershill II L.P. and Petershill II Offshore L.P.,
Petershill Private Equity L.P., Petershill Private Equity Offshore
L.P., Vintage VII L.P. and related entities and certain
co-investment vehicles.
Partner Net Management and Advisory Fees
Partner Net Management and Advisory Fees is
defined as the Company's aggregate proportionate share of the
Partner-firms' net management fees (as reported by the
Partner-firms to the Operator), including monitoring and advisory
fees and less any management fee offsets, payable by the
Partner-firms' funds to their respective Partner-firms for the
provision of investment management and advisory
services.
Certain Partner-firms provide transaction and
advisory services, as well as services to monitor ongoing
operations of portfolio companies. Management fees paid to the
Partner-firms may be subject to fee offsets, which are reductions
to management fees and are based on a percentage of monitoring fees
and transaction and advisory fees paid by portfolio companies to
the Partner-firms.
The Operator and the Directors consider Partner
Net Management and Advisory Fees to be a meaningful measure of the
management fee-related performance of the Partner-firms, and the
Operator uses this metric to analyse and test income received from
the Partner-firms and to inform operating, budgeting and
reinvestment decisions.
Partner Private Markets Accrued Carried
Interest
Partner Private Markets Accrued Carried Interest
is defined as the Company's proportionate share of the
Partner-firms' balance sheet accrued carry (as reported by the
Partner-firms to the Operator) and represents the Company's
proportionate share of the accumulated balance of unrealised
profits from the Partner-firms' funds.
The Operator and the Company consider Partner
Accrued Carried Interest to be a meaningful measure of the
performance of the private markets Partner-firms and potential
future private markets Partner Realised Performance Revenues.
Absolute return performance fees are not accrued and are instead
realised annually. The Operator uses Partner Accrued Carried
Interest to assess future expected carried interest payments and
inform operating, budgeting and re-investment decisions. This key
operating metric reflects data reported to the Operator on a
three-month lag.
Partner Realised Investment Income
Partner Realised Investment Income is defined as
the Company's aggregate proportionate share of Partner-firm
earnings resulting from the realised gains and losses, or any
distributed income, from the investments held on Partner-firms'
balance sheets, as reported by the Partner-firms to the Operator.
Partner Realised Investment Income is also realised by the Company
through a limited number of direct stakes in certain Partner-firms'
funds. Realised Investment Income includes income that has been
realised but not yet paid, as well as amounts that are realised and
either fully or partially reinvested.
The Company's share of the Partner-firms'
investment and balance sheet income will be lower than its share of
the Partner-firms' management fee-related earnings because the
Company's ownership stake in the Partner-firms' investment and
balance sheet income is lower than its ownership stake in the
Partner-firms' management fee-related earnings.
The Operator and the Directors consider Partner
Realised Investment Income to be a meaningful measure of the
investment performance of certain assets held by the Partner-firms
and key performance indicator of the Company's income from
investments in management companies derived from investment income.
The Operator uses this metric to analyse and test dividends
received from the Partner-firms, as well as to inform operating,
budgeting and reinvestment decisions.
Partner Realised Performance Revenues
Partner Realised Performance Revenues is defined
as the Company's aggregate proportionate share of the
Partner-firms' realised carried interest allocations and incentive
fees payable by the Partner-firms' funds to their respective
Partner-firms, less any realised performance fee-related expenses
of the Partner-firms allocable to the Company's share of
performance fee-related revenues, as reported by the Partner-firms
to the Operator.
The Company's share of the Partner-firms'
performance fee-related earnings will be lower than its share of
the Partner-firms' management fee-related earnings because the
Company's ownership stake in the Partner-firms' performance
fee-related earnings is lower than its ownership stake in the
Partner-firms' management fee-related earnings.
The Operator and the Directors consider Partner
Realised Performance Revenues to be a meaningful measure of the
performance fee-related earnings of the Partner-firms and key
performance indicator of the Company's income from investments in
management companies derived from performance fee income. The
Operator uses this metric to analyse and test dividends received
from the Partner-firms, as well as to inform operating, budgeting
and reinvestment decisions.
Partner Revenues
Partner Revenues is defined as the sum of
Partner Net Management and Advisory Fees, Partner Realised
Performance Revenues and Partner Realised Investment
Income.
The Operator and the Directors consider Partner
Revenues to be a meaningful measure of the overall performance of
the Partner-firms. The Operator uses this metric to inform
operating, budgeting and re-investment decisions.
Weighted Average Capital Duration
Weighted Average Capital Duration is a key
measure of the long term, locked-up capital of Aggregate Fee-paying
Partner-firm AuM. It is defined as the average life of the
underlying Partner-firm funds weighted based on Fee-paying
AuM.
Alternative Performance Measures
("APMs")
The IFRS and APM basis numbers discussed and
presented below include significant 'unrealised' and non-cash items
that include changes in fair value of investments, and it should be
noted that while permitted, it is not the Company's core strategy
to exit or realise these investments. Therefore, management results
are also presented excluding the unrealised change in fair value of
investments at fair value through profit and loss and related
divestment fee expense.
APMs are used by the Directors and the Operator
to analyse the business and financial performance, track the
Company's progress, and help develop long-term strategic plans and
they also reflect more closely the cash flow of the Company. The
Directors believe that these APMs are used by investors, analysts
and other interested parties as supplemental measures of
performance and liquidity.
Net cash position at end of period / year
Cash and cash equivalents plus investments in
money market funds and deferred consideration receivable less
deferred payment obligations, long term debt and contingent
consideration at fair value through profit or loss.
|
|
|
30 June 2024
$m
|
31 December 2023
$m
|
|
Cash and cash equivalents
|
|
47.1
|
242.9
|
|
Investments in money market funds at fair value
through profit or loss
|
49.6
|
62.3
|
|
Deferred consideration receivable
|
23.6
|
-
|
|
Deferred payment obligations
|
|
(126.4)
|
(51.9)
|
|
Unsecured Notes payable (gross)
|
|
(500.0)
|
(500.0)
|
|
Contingent consideration at fair value through
profit or loss
|
|
(4.0)
|
(6.4)
|
|
Net cash position at period / year
end
|
|
(510.1)
|
(253.1)
|
Free cash flow
The Net cash flows from operating activities
less Purchase of investments in money market funds, Sale of
investments in money market funds, Reinvestment of income from
investments in Partner-firms and money market funds and Taxes paid
as a percent of the Adjusted EBIT. This amount can differ period
over period as the timing of settlement of certain income from
investments in Partner-firms may vary.
|
|
|
For the six
months ended
30 June 2024
$m
|
For the six
months ended
30 June 2023
$m
|
|
Net cash inflows from operating
activities
|
|
142.7
|
123.7
|
|
Purchase of investments in money market
funds
|
|
663.3
|
122.8
|
|
Sale of investments in money market
funds
|
|
(680.5)
|
(166.4)
|
|
Reinvestment of income from investments in
Partner-firms
|
19.5
|
23.9
|
|
Reinvestment of interest income from
investments in money market funds
|
4.4
|
13.2
|
|
Taxes paid
|
|
7.4
|
8.2
|
|
Adjusted net cash inflows from operating
activities
|
|
156.8
|
125.4
|
|
Adjusted EBIT
|
|
128.4
|
119.6
|
|
Free cash flow
|
|
122.1%
|
104.8%
|
Book value
Total shareholders' funds
|
|
|
30 June 2024
$m
|
31 December 2023
$m
|
|
Total shareholders' funds
|
|
4,744.3
|
4,833.9
|
Book value per share
Total shareholders' funds divided by the number
of Ordinary Shares in issue at period / year end.
|
|
|
30 June 2024
|
31 December 2023
|
|
Total shareholders' funds ($m)
|
|
4,744.3
|
4,833.9
|
|
Number of Ordinary Shares in issue at period /
year end
|
|
1,081,708,167
|
1,122,202,824
|
|
Book value per share (cents)
|
|
438.59
|
430.75
|
Adjusted Earnings before interest and tax
("EBIT")
Sum of total income and expenses excluding
transaction costs and non-recurring operating charges before net
finance result and before income taxes, change in investments at
fair value through profit or loss, change in contingent
consideration at fair value through profit or loss and divestment
fee expense.
|
|
|
For the six
months ended
30 June 2024
|
For the six
months ended
30 June 2023
|
|
|
|
$m
|
$m
|
|
Total income
|
|
146.3
|
138.0
|
|
Board of Directors' fees and
expenses
|
|
(0.8)
|
(0.8)
|
|
Operator charge
|
|
(10.5)
|
(9.4)
|
|
Profit sharing charge
|
|
(0.7)
|
-
|
|
Other operating expenses
|
|
(7.0)
|
(7.0)
|
|
Transaction costs
|
|
1.1
|
-
|
|
Non-recurring operating credit
|
|
-
|
(1.2)
|
|
Adjusted Earnings before interest and tax
(EBIT)
|
|
128.4
|
119.6
|
Adjusted EBIT margin
Adjusted EBIT divided by Total
income.
|
|
|
For the six
months ended
30 June 2024
|
For the six
months ended
30 June 2023
|
|
|
|
$m
|
$m
|
|
Total income
|
|
146.3
|
138.0
|
|
Adjusted EBIT
|
|
128.4
|
119.6
|
|
Adjusted EBIT margin
|
|
87.8%
|
86.7%
|
Adjusted Earnings Before Tax ("EBT")
Sum of total income and expenses excluding
divestment fee expense, income taxes, change in liability for Tax
Receivables Agreement, change in investments at fair value through
profit or loss, change in contingent consideration at fair value
through profit or loss, transaction costs and non-recurring
operating charges.
|
|
|
For the six
months ended
30 June 2024
|
For the six
months ended
30 June 2023
|
|
|
|
$m
|
$m
|
|
Total income
|
|
146.3
|
138.0
|
|
Board of Directors' fees and
expenses
|
|
(0.8)
|
(0.8)
|
|
Operator charge
|
|
(10.5)
|
(9.4)
|
|
Profit sharing charge
|
|
(0.7)
|
-
|
|
Other operating expenses
|
|
(7.0)
|
(7.0)
|
|
Finance income
|
|
0.3
|
-
|
|
Finance cost
|
|
(17.3)
|
(18.6)
|
|
Transaction costs
|
|
1.1
|
-
|
|
Non-recurring operating credit
|
|
-
|
(1.2)
|
|
Adjusted Earnings before tax (EBT)
|
|
111.4
|
101.0
|
Tax and tax related expenses
The current tax plus the actual / expected
payment under the Tax Receivables Agreement for the current
period.
|
|
|
For the six
months ended
30 June 2024
|
For the six
months ended
30 June 2023
|
|
|
|
$m
|
$m
|
|
Current tax
|
|
(5.4)
|
(16.9)
|
|
Expected payment under the Tax Receivables
Agreement
|
(12.3)
|
(15.7)
|
|
Tax and tax related expenses
|
|
(17.7)
|
(32.6)
|
Adjusted tax and tax related
expense rate
The Tax and tax related expenses divided by the
Adjusted EBT.
|
|
|
For the six
months ended
30 June 2024
|
For the six
months ended
30 June 2023
|
|
|
|
$m
|
$m
|
|
Tax and related expenses
|
|
(17.7)
|
(32.6)
|
|
Adjusted Earnings before tax (EBT)
|
|
111.4
|
101.0
|
|
Adjusted tax and tax related expense
rate
|
|
15.9%
|
32.3%
|
Adjusted profit after tax
Sum of total income and expense excluding
divestment fee expense, income taxes, change in liability for Tax
Receivables Agreement, change in investments at fair value through
profit or loss, change in contingent consideration at fair value
through profit or loss, transaction costs and non-recurring
operating charges and including tax and related expenses under Tax
Receivables Agreement.
|
|
|
For the six
months ended
30 June 2024
|
For the six
months ended
30 June 2023
|
|
|
|
$m
|
$m
|
|
Total income
|
|
146.3
|
138.0
|
|
Board of Directors' fees and
expenses
|
|
(0.8)
|
(0.8)
|
|
Operator charge
|
|
(10.5)
|
(9.4)
|
|
Profit sharing charge
|
|
(0.7)
|
-
|
|
Other operating expenses
|
|
(7.0)
|
(7.0)
|
|
Finance income
|
|
0.3
|
-
|
|
Finance cost
|
|
(17.3)
|
(18.6)
|
|
Transaction costs
|
|
1.1
|
-
|
|
Non-recurring operating credit
|
|
-
|
(1.2)
|
|
Tax and tax related expenses
|
|
(17.7)
|
(32.6)
|
|
Adjusted profit after tax
|
|
93.7
|
68.4
|
Adjusted Earnings Per Share ("EPS")
Adjusted profit after tax divided by weighted
average number of Ordinary Shares in issue.
|
|
|
For the six
months ended
30 June 2024
|
For the six
months ended
30 June 2023
|
|
Adjusted profit after tax ($m)
|
|
93.7
|
68.4
|
|
Weighted average number of Ordinary Shares in
issue
|
|
1,108,758,893
|
1,135,192,342
|
|
Adjusted Earnings per share (EPS)
(cents)
|
|
8.45
|
6.03
|
This results announcement has been prepared
solely to provide additional information to shareholders and meets
the relevant requirements of the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority. The results
announcement should not be relied on by any other party or for any
other purpose. Whilst the Company aims to provide a
diversified investment approach, diversification does not protect
an investor from market risk and does not ensure a
profit.
These written materials are not an offer of
securities for sale in the United States. Securities may not be
offered or sold in the United States absent registration under the
US Securities Act of 1933, as amended, or an exemption therefrom.
The issuer has not and does not intend to register any securities
under the US Securities Act of 1933, as amended, and does not
intend to offer any securities to the public in the United States.
Any securities of Petershill Partners plc referred to herein have
not been and will not be registered under the US Investment Company
Act of 1940, as amended, and may not be offered or sold in the
United States or to "U.S. persons" (as defined in Regulation S
under the US Securities Act of 1933, as amended) other than to
"qualified purchasers" as defined in the US Investment Company Act
of 1940, as amended. No money, securities or other consideration
from any person inside the United States is being solicited and, if
sent in response to the information contained in these written
materials, will not be accepted.
Any tender offer made by the Company would be
made in the US pursuant to an exemption from certain US tender
offer rules and otherwise in accordance with the requirements of UK
legislation. In accordance with normal UK market practice and Rule
14e-5(b) of the US Exchange Act, the Company, its nominees, its
brokers (acting as agents), any financial advisers or any of their
respective affiliates could from time to time make certain
purchases of, or arrangements to purchase, Company securities
outside the United States, other than pursuant to any such tender
offer, before or during the period in which such tender offer
remains open for acceptance, including sales and purchases of
securities effected by any financial advisers acting as market
makers in the Company securities. These purchases could occur
either in the open market at prevailing prices or in private
transactions at negotiated prices. Any information about such
purchases would be disclosed as required in the United Kingdom,
would be reported to a Regulatory Information Service and would be
available on the London Stock Exchange website,
http://www.londonstockexchange.com.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking
statements that involve substantial risks and uncertainties. You
can identify these statements by the use of forward-looking
terminology such as "may," "will," "should," "expect,"
"anticipate," "project," "target," "estimate," "intend,"
"continue," or "believe" or the negatives thereof or other
variations thereon or comparable terminology. You should read
statements that contain these words carefully because they discuss
our plans, strategies, prospects and expectations concerning the
business, operating results, financial condition and other similar
matters. These statements represent the Company's belief regarding
future events that, by their nature, are uncertain and outside of
the Company's control. There are likely to be events in the future,
however, that we are not able to predict accurately or control. Any
forward-looking statement made by us in this press release is based
upon information known to the Company on the date of this press
release and speaks only as of such date. Accordingly, no assurance
can be given that any particular expectation will be met and
readers are cautioned not to place undue reliance on forward
looking statements. Additionally, forward looking statements
regarding past trends or activities should not be taken as a
representation that such trends or activities will continue in the
future. Other than in accordance with its legal or regulatory
obligations (including under the UK Listing Rules and the
Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority), the Company undertakes no obligation to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events or otherwise.