Final Results for the Year Ended 31 December 2022
Updated : 15:25
9 March 2023
Oakley Capital Investments Limited
Final results for the Year Ended 31 December 2022
Oakley Capital Investments Limited1 ("OCI" or the "Company") today announces its final results for the year ended 31 December 2022. OCI is a listed investment company providing consistent, long-term returns in excess of the FTSE All-Share Index by investing in the Funds managed by Oakley Capital2 ("Oakley"), thereby capturing the outperformance of a leading private equity manager.
The Oakley Funds3 invest primarily in unquoted, profitable, pan-European businesses with recurring revenues, and across three sectors: Technology, Consumer and Education. Oakley's origination capabilities combined with proven value creation drivers help management teams accelerate growth and produce consistently superior returns for investors.
A focused portfolio of tech-enabled businesses delivers another year of outperformance
Highlights for the year ended 31 December 2022
● | Net Asset Value ("NAV") per share of 662 pence and NAV of £1,167 million |
● | Total NAV return per share of 24% (+128 pence) |
● | Total shareholder return of 1% |
● | Additional investments made of £271 million and share of proceeds of £244 million |
● | Year-end cash and available credit facility of £210 million |
● | Outstanding commitments of £929 million |
● | Buy-back and cancellation of 2.2 million shares |
● | Final dividend of 2.25 pence, taking dividends declared to 4.5 pence |
Portfolio highlights
● | Average portfolio company year-on-year EBITDA growth of 22% (2021: 30%) |
● | Average portfolio company valuation multiple (EV/EBITDA) of 15.9x (2021: 15.3x) |
● | Portfolio value increase was driven 65% by EBITDA growth, and 35% by multiple expansion primarily from exits |
● | Average net debt/EBITDA ratio of 4.3x (2021: 4.2x) |
● | The key drivers of NAV growth were: |
- | IU Group (+64 pence): continuing strong growth in enrolments, reaching 100,000 students during the year |
- | Contabo (+26 pence): sale of business at 105% premium to book value |
- | Grupo Primavera (+21 pence): valuation uplift following its strategic combination with Cegid |
- | Foreign exchange (+29 pence): 5% change in EUR:GBP |
To better reflect the drivers of performance and the increasingly diverse weighting of each investee company within the portfolio, OCI has enhanced its reporting metrics from a simple, straight average to a weighted average based on its look through fair value in the underlying portfolio company investments. As such and unless stated otherwise, all ratios and EBITDA growth percentages are now published on a weighted average basis. To compare ratios and for current and historic data calculated on both a straight average and weighted average basis, please refer to this table.
Proceeds
OCI's share of proceeds from realisations and refinancings totalled £244 million, consisting of:
● | Realisations: £234 million from five realisations at an average 5x gross money multiple and an average premium to carrying value of c.70%. They include: |
- | TechInsights - £59 million from Fund III's investment realisation |
- | Contabo - £61 million from Fund IV's investment realisation |
- | Facile - £54 million from Fund III's investment realisation |
- | Seedtag - £14 million from Origin's partial investment realisation |
- | Wishcard - £45 million from Fund IV's investment realisation |
● | Refinancings: £10 million combined - both Wishcard and idealista completed refinancings, demonstrating the quality of their earnings growth |
Investments
During the period, OCI made a total look-through investment of £2714 million comprising £216 million of new investments and £55 million of follow-on investments. The new investments comprise:
● | TechInsights (Fund IV) - £35 million - reinvestment in the content information platform for the chip industry |
● | Vice Golf (Origin) - £11 million - a digital-first golf ball and apparel brand |
● | Contabo (Fund V) - £34 million - reinvestment in the SME-focused cloud hosting platform |
● | Affinitas (Fund IV) - £9 million - a global K-12 schools group |
● | Phenna Group & CTS (Fund V) - £73 million - leading providers of TICC ('testing, inspection, certification and compliance') services |
● | Facile (Fund V) - £45 million - reinvestment in Italy's leading price comparison website |
● | vLex (Origin) - £9 million - a cloud-based, global legal information platform |
Follow-on investments include Grupo Primavera (now part of Cegid) and Alessi in Fund III; TechInsights' acquisition of Strategy Analytics in Fund IV; and direct debt investments in Time Out and North Sails.
During the period, OCI also completed the buyback and cancellation of 2.2 million shares at an average price of 407 pence per share, resulting in a NAV uplift of c.2 pence. The OCI Board remains committed to its share buyback programme.
Cash & commitments
● | Liquid resources - OCI's total liquidity at year end was £210 million, comprising £110 million of cash and a £100 million credit facility |
● | Total outstanding commitments - following OCI's €800 million commitment to Oakley Capital Fund V and €30 million commitment to Oakley Capital PROfounders Fund III during the year, OCI's total outstanding commitments to the Oakley Funds amounted to £929 million as at 31 December 2022. In excess of £200 million of this is forecast not to be drawn, and the remainder is expected to be deployed into new investments over the next five years |
● | Dividends declared of 4.5 pence of which final 2.25 pence to be paid on 21 April 2023 to shareholders on the register on or before 17 March 2023 |
Outlook
The prevailing macroeconomic environment is likely to have an impact on portfolio company trading in 2023. However, resilient earnings growth, and demand for Oakley's attractive assets are expected to continue driving NAV growth in the year ahead:
● | The portfolio of 26 European businesses continues to profit from long-term megatrends including the shift to online solutions by businesses and consumers, and the growing, global demand for quality, accessible education |
● | The companies typically benefit from being both digitally disruptive and having recurring revenue streams. This results in predictable and stable cashflows that can grow by taking market share, rather than by relying on market growth |
● | Continued liquidity and anticipated future exits as a result of growing demand for investee companies will enable OCI to take full advantage of the investment adviser's origination strategy and pipeline |
Caroline Foulger, Chair of Oakley Capital Investments Limited, commented:
"We are pleased to report that OCI has continued to generate strong NAV growth during a period of considerable market volatility and macroeconomic uncertainty. Despite numerous head winds our underlying portfolio of private businesses generated double-digit profit growth and this, together with strong demand for our investee companies, pushed OCI's net assets to c.£1.2 billion. As we look to the year ahead, the Board remains confident in Oakley's ability to continue sourcing attractive investment opportunities, and to support its portfolio companies accelerate growth and create value."
Peter Dubens, Managing Partner of Oakley Capital Limited, commented:
"Oakley remains focused on applying the same investment strategy and capabilities we have developed and validated over two decades of investing through economic cycles: backing profitable, enduring businesses led by talented, proven entrepreneurs, and then partnering with them to strengthen, professionalise and grow the businesses they founded."
The Annual Report and Accounts are available on the Company's website at https://www.oakleycapitalinvestments.com/investor-centre/results-and-reports/
A video overview of the 12-month performance is also available here https://www.oakleycapitalinvestments.com/news-and-media/videos/
The Company's Q1 2023 trading update is expected to be released on 26 April 2023.
- ends -
Results presentation
A live presentation of the results, delivered by Oakley Capital Partner Steven Tredget, will take place at 9:00am today, Thursday 9 March 2023. The presentation will be available to view via video webcast at the following link: https://www.investis-live.com/oakley-capital/63f4c21e33aa1a1200cf68eb/oasj
For further information please contact:
Oakley Capital Limited
+44 20 7766 6900
Steven Tredget
Greenbrook Communications Limited
+44 20 7952 2000
Rob White / Michael Russell
Liberum Capital Limited (Financial Adviser & Broker)
+44 20 3100 2000
Chris Clarke / Darren Vickers / Owen Matthews
Notes:
LEI Number: 213800KW6MZUK12CQ815
1 About Oakley Capital Investments Limited ("OCI")
OCI is a Specialist Fund Segment ("SFS") traded investment vehicle that aims to provide shareholders with consistent long-term capital growth in excess of the FTSE All-Share Index by providing liquid access to private equity returns through investment in the Oakley Funds.
A video introduction to OCI is available at https://oakleycapitalinvestments.com/videos/
The contents of the OCI website are not incorporated into, and do not form part of, this announcement.
2 Oakley Capital, the Investment Adviser
Founded in 2002, Oakley Capital Limited has demonstrated the repeated ability to source attractive growth assets at attractive prices. To do this it relies on its sector and regional expertise, its ability to tackle transaction complexity and its deal generating entrepreneur network.
3 The Oakley Funds
Oakley Capital Private Equity L.P. and its successor funds, Oakley Capital Private Equity II, Oakley Capital Private Equity III, Oakley Capital IV, Oakley Capital V and Oakley Capital Origin Fund and are unlisted lower-mid to mid-market private equity funds that aim to provide investors with significant long-term capital appreciation. The investment strategy of the Funds is to focus on buy-out opportunities in industries with the potential for growth, consolidation and performance improvement. The Oakley family of funds also includes PROfounders funds, which are venture capital funds focused on investments in entrepreneur-led, private businesses across Europe.
4 Includes £2 million look-through investments in PROfounders portfolio companies acquired during the year.
Important information
Specialist Fund Segment securities are not admitted to the Official List of the Financial Conduct Authority. Therefore, the Company has not been required to satisfy the eligibility criteria for admission to listing on the Official List and is not required to comply with the Financial Conduct Authority's Listing Rules.
The Specialist Fund Segment is intended for institutional, professional, professionally advised and knowledgeable investors who understand, or who have been advised of, the potential risk from investing in companies admitted to the Specialist Fund Segment.
This announcement may include "forward-looking statements". These forward-looking statements are statements regarding the Company's objectives, intentions, beliefs or current expectations with respect to, amongst other things, the Company's financial position, business strategy, results of operations, liquidity, prospects and growth. Forward-looking statements are subject to risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Accordingly the Company's actual future financial results, operational performance and achievements may differ materially from those expressed in, or implied by, the statements. Given these uncertainties, prospective investors are cautioned not to place any undue reliance on such forward-looking statements, which speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the Company's expectations with regard to them or any change in events, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Listing Rules or Prospectus Regulation Rules of the Financial Conduct Authority or other applicable laws, regulations or rules.
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