Stock Exchange Release - 12 May 2009

CapMan Plc Group Interim Report 1 January - 31 March 2009

Performance and main events during the review period:

  • The Group’s turnover totalled MEUR 8.3 (January–March 2008: MEUR 7.2).
  • The Group posted an operating loss of MEUR 4.7 (operating profit of MEUR 0.4) as a result of negative change in the fair value of fund investments.
  • Profit/loss before taxes was MEUR -4.6 (MEUR 0.7) and profit/loss after taxes was MEUR -3.7 (MEUR 0.5).
  • Profit/loss attributable to owners of the parent company was MEUR -3.8 (MEUR 0.5). Earnings per share were -5.5 cents (0.6 cents).
  • Cash flow before financing was MEUR 1.3 (MEUR -4.9).
  • Liquid assets on 31 March totalled MEUR 33.7 (MEUR 12.1).
  • Capital under management increased from year-end to MEUR 3,434.4 (MEUR 3,407.5 on 31 December 2008 and MEUR 3,016.7 on 31 March 2008).
  • The size of CapMan’s hybrid bond issue increased to MEUR 28 during the review period (MEUR 20 on 31 December 2008).
  • CapMan has adopted Management company business and Fund investment business operating segments in the Group’s financial reporting as of 1 January 2009. Private Equity and Real Estate activities are reported separately under the Management company business.
  • In the review period, the Management company business recorded profit/loss of MEUR 0.0 (MEUR 0.4) and the Fund investment business recorded profit/loss of MEUR -3.7 (MEUR 0.1).
  • CapMan’s objective is to invest in its future funds 1–5% of their original capital depending on the fund’s demand and CapMan’s own investment capacity.

CEO Heikki Westerlund comments on the events of the review period and on future prospects:

”CapMan’s operating environment has been even more challenging in early 2009. Fundraising as well as M&A and real estate activity have practically been in a standstill throughout the first quarter. We are eagerly awaiting market developments over the following 12–18 months. If the real economy gradually starts to recover during 2010 and the market simultaneously sees forced sales, it will create a highly attractive investment landscape for private equity investors.

The businesses of our portfolio companies and real estate assets have continued to develop moderately in spite of the difficult environment. Our most challenging investments are in those sectors that are undergoing intense structural change, such as the automobile industry. The slowdown of the global economy has been clearly reflected in other sectors, but for example the debt servicing capabilities of our portfolio companies haven’t in general been endangered. There have also been positive developments in the funds’ portfolios, for example the opening of the Skanssi shopping center near Turku and the positive share price development of Public Market Fund’s first portfolio company Nobia. We are in a good position to continue our investment operations and to support our current portfolio companies as our funds have approx. EUR one billion in capital for making new and add-on investments. One of our key priorities has been to upgrade cooperation with Nordic banks.

The management company business has reported breakeven, since our new buyout fund will start to pay management fees in the second quarter subsequent to closing of the fund’s first investment. The profitability level of the management company business remains good. At the moment there is no proper exit market in place; however we believe that some companies that have developed very well could be exited during this year. The decline in the fair value of our fund investments continued, reflecting the fall in valuations of peer companies and the expected weak year-on-year performance across portfolio companies. The fair value changes have no impact on Group’s cash flows and CapMan has a good cash position after issuing hybrid bond on the markets.

To read CapMan Plc Group’s Interim Report in PDFformat, please click below:
CapMan Plc Group Interim Report 1 January – 31 March 2009