Source - PRN

Capital for Colleagues plc / EPIC: CFCP / Market: ISDX / Sector: Investment

3 October 2016

CAPITAL FOR COLLEAGUES PLC

(‘Capital for Colleagues’ or the ‘Company’)

QUARTERLY INVESTMENT UPDATE

Capital for Colleagues, the investment vehicle focused on opportunities in the Employee Owned Business (‘EOB’) sector, is pleased to announce an investment update in respect of the quarter ended 31 August 2016. 

Key Statistics for the quarter:

  • GBP 5,042,735 (: GBP ) lent or invested in a portfolio of unquoted EOBs, 12 publicly traded companies displaying demonstrable employee engagement and 1 short term readily realisable instrument

  • Net Asset Value (‘NAV’) of GBP 5,249,017 (: GBP )

  • NAV per share of 54.54 pence (: pence per share)

    Material developments in the quarter:

  • GBP 0.5 million invested in Anthesis Consulting Group Limited, a specialist consultancy offering commercially-driven sustainability services and solutions;

  • GBP 150,000 short term loan to Place 2 Place Logistics Limited converted into equity;

  • GBP 50,000 invested in 2C Services Limited, an employee owned information technology service provider with its own state of the art private cloud hosting infrastructure; and

  • GBP 250,000 fixed term loan to The Homebuilding Centre (Holdings) Ltd converted into equity and GBP 97,000 short term loans consolidated into a single 3-year loan.

    John Eckersley, Chief Executive of Capital for Colleagues, said: ‘We are delighted to have secured our investments in Anthesis and 2C Services and made further progress in aligning our interests more directly with employee stakeholders by converting debt to equity investments in portfolio companies. We continue to see many opportunities in the EOB sector, despite mixed economic signals following the Brexit vote, and we remain confident that we can generate attractive financial returns through our commitment to investment in this sector’.

    Further information on the Company’s investment portfolio is set out below.

    UNQUOTED INVESTMENTS

    As at 31 August 2016, the Company’s portfolio of unquoted investments comprised 16 companies operating across a range of sectors.

Value of Investment
(GBP)
% of Portfolio
INDUSTRIALS
Construction and Materials
                Civils Store Limited
                Ecomerchant Natural Building Materials Ltd
                TPS Investment Holdings Limited

400,000
250,000
245,874

8.48
5.30
5.21
Industrial Engineering
                FJ Holdings Limited
                Ham Baker Adams Limited

911,667
405,000

19.32
8.58
Industrial Transportation
                Place 2 Place Logistics Limited

150,000

3.18
Support Services
                Anthesis Consulting Group Limited
                Cotswold Valves Limited
                CSM Site Supplies Limited
                Hire and Supplies Limited            
                Merrko Group Limited
                MI Accountancy Solutions Limited

500,000
220,000
190,000
389,055
256,153
50,000

10.60
4.66
4.03
8.24
5.43
1.06
TOTAL INDUSTRIALS 3,967,749 84.08
RETAIL
General Retailers
                The Homebuilding Centre (Holdings) Limited

341,836

7.24
TOTAL RETAIL 341,611 7.24
TECHNOLOGY
Software & Computer Services
                2C Services Limited
                Computer Application Services Limited
                Figure Consulting Limited

50,020
259,500
100,000

1.06
5.50
2.12
TOTAL TECHNOLOGY 359,500 8.68
TOTAL UNQUOTED PORTFOLIO 4,719,105 100%

The loans and investments made by the Company to unquoted EOBs are aimed at delivering equity-like returns and bear interest at rates of between 9% and 24%.  Each loan or investment is tailored to the individual investee company’s operating performance and specific working capital needs.

The Directors believe that the unquoted EOBs in the Company’s portfolio currently generate total turnover of around GBP 67.0 million per annum and support approximately 550 jobs.

Total Unquoted Investments as at 31 August 2016

Cost (including short term loans): GBP 4,509,193

Valuation (including capitalised costs): GBP 4,719,105

PUBLICLY TRADED INVESTMENTS

Whilst the Company’s core investment focus is on private EOBs, Capital for Colleagues currently has interests in 12 investments listed on the London Stock Exchange’s main market or on AIM. The Directors believe that investing in such publicly traded entities, each of which displays demonstrable employee engagement, offers the potential to deliver a better return for shareholders than leaving the cash on deposit, whilst allowing the Company to realise cash relatively quickly if it is required for investment elsewhere. For the same reasons, as at 31 August 2016, the Company also held a short-term investment in a multi asset managed fund.

Total Publicly Traded Investments as at 31 August 2016

Valuation – publicly traded companies: GBP 64,029

Valuation – managed fund: GBP 259,846

BASIS OF VALUATION

Each of the unquoted investments is included at the Directors’ assessment of fair value, in accordance with International Private Equity and Venture Capital Guidelines. Nevertheless, as a matter of prudence, the Directors have provided for an amount equivalent to 2 per cent. of the value of the unquoted investments for possible impairment. The Directors do not, however, believe that any impairment is necessary in respect of any of the Company’s current unquoted investments.

Each of the publicly traded investments is included at its closing mid-market valuation on 31 August 2016.

No account has been taken of any potential taxation liability in respect of the increase in value of investments.

The Directors of the Company are responsible for the contents of this announcement.

**ENDS**

For further information, please visit www.capitalforcolleagues.com or contact:


CAPITAL FOR COLLEAGUES PLC
Richard Bailey, Chairman
John Eckersley, Chief Executive

0161 233 4891
PETERHOUSE CORPORATE FINANCE LIMITED
Mark Anwyl
Duncan Vasey
020 7469 0930

Notes

Capital for Colleagues is an investment company focused on the Employee Owned Business (‘EOB’) sector.  The Company has a clear strategy aimed at investing in, advising and growing established, mainly UK-based, EOBs as well as assisting companies which are looking to launch employee ownership schemes, providing the capital and advice to help them achieve their objectives.

Capital for Colleagues has a proven management team, with a wide network of contacts and affiliates, as well as established access to investment opportunities, enabling the Company to execute its strategy and identify and capitalise on EOB-focused investment opportunities.