String of exits boost Candover interims

The listed vehicle of UK private equity firm Candover has reported a 6.4 percent rise in first half NAV per share, while pre-tax profits increased 9.8 percent to £12.3m.

Candover Investments, the publicly quoted division of UK private equity firm Candover, has reported a strong performance in the first half of 2004, primarily due to five significant realisations during the period.

The firm reported total net assets of £270.9 million (€397 million; $487 million), an increase of 6.4 percent over the six months to June 30, 2004.

Candover’s net asset value per share increased 18.8 percent on the prior 12 months, compared with a 13.1 percent rise in the FTSE All-Share Index over the same period.

The plc’s net revenue return before tax increased 9.8 percent, up from £11.2 million in 2003 to £12.3 million and the interim dividend increased from 13.5 pence to 15 pence.

Candover’s performance was boosted by five major exits during the six-month period, including the £245 million sale of exhibition venue Earls Court & Olympia; the sale of its stake in UK leisure operator Bourne Leisure and the sale of Irish packaging group Clondalkin to Warburg Pincus for €630 million in February.

The remaining two realisations were the sale of its stake in European heating company Baxi Group to BC Partners and the 4.6x return on the disposition of its residual shares in clinical research services company Inveresk. The five disposals realised £44.4 million and produced gains over cost of £21.5 million.

Although the company did not make any new investments in the period to June 30 2004, since then it has made two significant commitments. In July, the firm acquired the speciality film manufacturing division of UCB group for €320 million and participated in the €729 million consortium acquisition of Vetco International from Swiss-Swedish engineering group ABB.

Commenting on the results, Stephen Curran, chairman of Candover said: “The evidence from the second quarter shows that activity levels have been increasing, particularly in the French and German markets. Our focus for the remainder of 2004 will be to continue actively to invest the Candover 2001 Fund.”

Curran also said he expected that until the 2001 Fund portfolio matures, the level of realisation activity will be more subdued in the next few months.

The €2.7 billion 2001 Fund, which closed in June 2002, is understood to be more than 55 percent invested at this stage.