CapMan Plc 1-9/2018 Interim Report 1 November 2018 at 8.30 a.m. EET
CapMan Plc’s Interim Report 1 January-30 September 2018 – Fee income grew by 24 per cent
Performance and main events for the review period 1 January-30 September 2018:
Group turnover was MEUR 27.1 (MEUR 26.0 1 January -30 September 2017).
Management fees and fees from services were MEUR 23.9 combined (MEUR 19.4), growth was 24 per cent.
Operating profit was MEUR 14.9 (MEUR 22.9).
Profit for the period after taxes was MEUR 11.7 (MEUR 18.7).
Diluted earnings per share for the period were 7.5 cents (12.4 cents, of which the sale of Idean in Q1 2017 had an impact of 5.2 cents.)
CapMan Growth Fund’s exit from Fluido had a significant positive impact on CapMan’s result.
CapMan Infra held a first close of MEUR 115 in its first fund targeting above MEUR 300.
Ville Poukka, Managing Partner of CapMan Infra, has been appointed to CapMan’s Management Group as of 1 November 2018.
This stock exchange release is a summary of CapMan Plc’s 1-9/2018 Interim Report. The complete report is available in pdf-format as an attachment to this release and on the company’s website at https://www.capman.com/newsroom/financial-reports/.
|Operating profit, MEUR||14.9||22.9|
|Profit for the period, MEUR||11.7||18.7|
|Earnings per share, cents||7.5||12.6|
|Earnings per share, diluted, cents||7.5||12.4|
|Return on equity, % p.a.||11.7||18.2|
|Return on investment, % p.a.||11.1||15.1|
|Equity ratio, %||58.0||55.7|
|Net gearing, %||14.6||16.4|
Joakim Frimodig, CEO:
“CapMan’s strong growth continued in the third quarter of the year. Fees from the Management Company and Service businesses grew by approx. 24 per cent in January-September 2018 compared to the corresponding period last year. In addition to the positive growth trend, fee-based profitability has improved significantly in 2018. This development was supported by management fees from new funds, continued strong growth in the Service business and improved cost efficiency.
Recent developments in our newer business areas reinforce the positive direction of our company.
Our Growth fund’s exit from Fluido was very successful for all fund investors. CapMan is the largest investor in the Growth fund with a holding of approx. 30 per cent, and the exit from Fluido contributed significantly to CapMan’s third quarter result. The transaction is another excellent example of our Growth team’s successful value creation work.
CapMan Infra has established itself as a significant new business area as we today announced the first closing of our first infrastructure fund. We have already raised MEUR 115 for the fund and investor demand for the product has been strong. We believe that the infrastructure fund will reach its target size, above MEUR 300, during next year. The new fund starts accumulating management fees from first closing and contributes significantly to management fees as it reaches its target size. We have made a MEUR 30 commitment to the fund, and we expect it to contribute positively to our own investments longer term.
Returns from our own investments have developed well especially due to successful exits. The recent uncertainty in the stock market emphasises the importance of managing our market portfolio. We take the increased market volatility into account by, among others, deploying more efficient portfolio protection strategies utilising derivatives. We also continue allocating our capital in line with our strategy from market investments to private assets, which tend to correlate less with the general market development. CapMan’s commitment to the new Infra fund serves as an example of this.
We are currently working on several growth initiatives relating to fundraising for new funds, restructuring of existing funds, new mandate-based projects and M&A opportunities. The aforementioned initiatives may, when realised, quickly and significantly strengthen CapMan’s fee and return profile. The initiatives promote our long-term strategic objective, which is to become the leading Nordic private assets manager with an increasingly versatile product offering to serve an increasingly expanded customer base.”
Financial objectives and outlook estimate for 2018
CapMan’s objective is to pay an annually increasing dividend to its shareholders.
The combined growth objective for Management Company and Service business is more than 10 per cent p.a. on average. The objective for return on equity is more than 20 per cent p.a. on average. CapMan’s equity ratio target is more than 60 per cent.
CapMan expects to achieve these financial objectives gradually and key figures are expected to show fluctuation on annual basis considering the nature of the business. CapMan expects fees from services to continue to grow and have an impact on results from the Management Company and Service business in 2018. Our objective is to improve the profitability of Management Company and Service business before carried interest income and any possible items affecting comparability.
The return on CapMan’s investments have a substantial impact on CapMan’s overall result. The development of industries and local economies, inflation development, valuation multiples of peer companies, exchange rates and various other factors outside of CapMan’s control influence fair value development of CapMan’s overall investments in addition to company and real estate specific development.
CapMan’s objective is to improve results longer term, taking into account annual fluctuations affecting the business. For these and other above-mentioned reasons, CapMan does not provide numeric estimates for 2018. Items affecting comparability are described in the Tables section of this report.
Press, analyst and investor conference today at 10.00 a.m. EET
CapMan’s management will present the result for the review period to press, analysts and investors and review the market situation in a press conference to be held at 10.00 a.m. EET at CapMan’s head office in Helsinki, address Ludviginkatu 6, 00130 Helsinki. The press and analyst conference will be held in Finnish. To join the conference, please register with firstname.lastname@example.org. Welcome!
Helsinki, 1 November 2018
Board of Directors
Niko Haavisto, CFO, tel. +358 50 465 4125
NASDAQ Helsinki Ltd
CapMan is a leading Nordic private asset expert with an active approach to value-creation in its target companies and assets. We offer a wide selection of investment products and services. As one of the Nordic private equity pioneers we have developed hundreds of companies and real estate and created substantial value in these businesses and assets over the last 30 years. CapMan employs today approximately 120 private equity professionals and has approximately €2.8 billion in assets under management. We mainly manage the assets of our customers, the investors, but also make investments from our own balance sheet. Our objective is to provide attractive returns and innovative solutions to investors. Our current investment strategies cover Real Estate, Buyout, Russia, Credit, Growth Equity and Infra. We also have a growing service business that currently includes procurement services (CaPS), fundraising advisory (Scala Fund Advisory), and fund management services. www.capman.com