TIDMESO TIDMEO.P TIDMEC.P TIDMEL.P
RNS Number : 9469O
EPE Special Opportunities Limited
06 February 2023
EPE Special Opportunities Limited
("ESO" or the "Company")
Trading Statement
The Board of EPE Special Opportunities is pleased to provide an
update on the Company's performance for the year ended 31 January
2023.
Summary
-- The Company's performance in the year ended 31 January 2023
has been affected by adverse macro-economic conditions and a
recessionary environment. The Board and Investment Advisor expect
these headwinds to continue through the immediate period but look
forward to the normalisation of trading conditions over the medium
term. Notwithstanding these headwinds, the Company was pleased to
announce the completion of a new investment in Denzel's Limited
("Denzel's") in October 2022. Looking ahead, the Board and
Investment Advisor will continue to adopt a careful approach,
monitoring economic conditions, maintaining a prudent level of
liquidity at the Company and positioning the portfolio to navigate
the complicated operating environment. As a result of the
uncertainty on market outlook, the Board expects a challenging
environment to complete further acquisitions or disposals within
the portfolio in the near term.
-- The unaudited estimate of the Net Asset Value ("NAV") per
share of the Company as at 31 January 2023 was 334 pence,
representing a decrease of 27 per cent. on the NAV per share of 456
pence as at 31 January 2022. The unaudited estimate has been
prepared using the Company's historic valuation methodology and
accounting principles.
-- The share price of the Company as at 31 January 2023 was 170
pence, representing a decrease of 45 per cent. on the share price
of 309 pence as at 31 January 2022.
-- In January 2023, Luceco released a trading update for the
year ended 31 December 2022, announcing trading in line with market
expectations. The group announced sales of GBP206 million, with
trading impacted by continuing customer destocking. The business
expects to generate operating profit of GBP20 - 22 million, at the
upper end of prior guidance. The business achieved record cash
generation supporting further deleveraging, with net debt of 0.8x
LTM EBITDA as at 31 December 2022.
-- The Rayware Group's ("Rayware") trading has been impacted by
a confluence of challenges, including customer destocking,
decreased consumer confidence and supply chain disruption. The
business expects performance to strengthen over the coming period,
benefitting from abating input cost, supply chain and customer
destocking pressures. The business has continued to develop its
presence in international markets, and has appointed Alec Taylor,
former director of Bradshaw International, as a non-executive
director and made a number of additions to the US sales team to
support the strategic focus on the US market.
-- Whittard of Chelsea ("Whittard") has performed robustly, with
the business' retail channel trading strongly, benefitting from
strengthening footfall and returning tourist volumes. Whittard has
made encouraging progress in its international channels, with the
business' new South Korean franchise partner progressing its store
rollout, and with new wholesale customers secured in the US and
Europe. The business completed the relocation of its head office to
Milton Park in Oxfordshire in April 2022.
-- David Phillips made good progress, despite the wider
inflationary environment, generating strong cash generation in the
period. The business is focussed on achieving further growth in its
existing channels and accessing greater profitability through
efficiencies and scale.
-- Pharmacy2U has continued to experience growth in its core NHS
online prescription channel and has been focussed on building scale
in its primary Bardon facility to increase operational
efficiency.
-- EPIC Acquisition Corp ("EAC") has progressed to advanced
discussions with a number of European consumer brands regarding a
potential business combination. EAC continues to actively source
and review a pipeline of attractive targets.
-- In October 2022, the Company announced a GBP2.0 million
investment in Denzel's. Denzel's is a fast-growing, healthy and
sustainable premium dog snacks brand. Denzel's operates an
omni-channel distribution strategy, underpinned by listings in some
of the UK's leading retailers and hospitality locations as well as
e-commerce channels. The Investment Advisor intends to work closely
with Denzel's to help deliver its growth strategy, which is focused
on the launch of new products, notably high value and functional
dog treats, as well as growth of both offline and online
distribution channels.
-- The Company's investments in Atlantic Credit Opportunities
Fund and Prelude Structured Alternatives Master Fund are in the
process of realisation, with the distribution of proceeds to the
Company to be completed in the coming period.
-- The Company had cash balances of GBP24.5 million as at 31
January 2023. In July 2022, the Company agreed the extension of the
maturity of GBP4.0 million of unsecured loan notes to July 2023,
with an option for the Company to further extend the maturity to
July 2024. The Company has GBP20.7 million zero dividend preference
shares ("ZDP") maturing in December 2026 and no other third-party
debt outstanding.
-- In September and October 2022, the Company completed buybacks
in the market totalling 1.9 million ordinary shares (or 5.4 per
cent. of the Company's issued ordinary share capital) at a weighted
average share price of 139 pence.
-- As at 31 January 2023, the Company's unquoted portfolio was
valued at a weighted average EBITDA to enterprise value multiple of
6.7x (excluding assets investing for growth) and the portfolio had
a low level of third party leverage with net debt at 1.3x EBITDA in
aggregate .
Mr Clive Spears, Chairman, commented: "The Company has faced
significant macro-economic headwinds in the period, but the Board
and Investment Advisor have maintained a careful approach,
positioning the portfolio and the Company accordingly. The Company
was pleased to announce the completion of the new investment in
Denzel's and continues to review a pipeline of attractive
investments. The Board would like to note its appreciation of the
Investment Advisor and the portfolio management teams for their
efforts through a complicated period. The Board will monitor the
progress of the portfolio over the coming months and looks forward
to updating shareholders at the half year."
The person responsible for releasing this information on behalf
of the Company is Amanda Robinson of Langham Hall Fund Management
(Jersey) Limited.
Enquiries:
EPIC Investment Partners LLP +44 (0) 207 269 8865
Alex Leslie
Langham Hall Fund Management (Jersey) Limited +44 (0) 15 3488 5200
Amanda Robinson
Cardew Group Limited +44 (0) 207 930 0777
Richard Spiegelberg
Numis Securities Limited +44 (0) 207 260 1000
Nominated Advisor: Stuart Skinner
Corporate Broker: Charles Farquhar
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END
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February 06, 2023 02:00 ET (07:00 GMT)
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