EPE Special Opps Ltd - Trading Statement
RNS Number : 9285N
EPE Special Opportunities Limited
04 February 2021

EPE Special Opportunities Limited

("ESO" or the "Company")


Trading Statement


The Board of EPE Special Opportunities Limited is pleased to provide an update on the Company's performance for the year ended 31 January 2021.



·      The unaudited estimate of the Company's Net Asset Value ("NAV") as at 31 January 2021 is 437.63 pence per share, an increase of 38.0 per cent on the NAV per share of 317.18 pence as at 31 January 2020. The unaudited estimate has been prepared using the Company's historic valuation methodology and accounting principles.


·      The Company's share price as at 31 January 2021 was 271.00 pence, representing an increase of 36.2 per cent. on the share price of 199.00 pence as at 31 January 2020.


·      The Company has overall performed well in the face of significant disruption caused by the spread of COVID-19 and the resultant economic headwinds. The Board, Investment Advisor and the management of the portfolio companies have continued to prioritise the protection and wellbeing of colleagues, whilst safeguarding the financial position of the Company and its investments. Worryingly however, lockdowns have continued into 2021 and the cost of the pandemic to livelihoods and the wider economy remains to be counted.


·      The disruption to the economy could lead to businesses needing further financial support over the coming 12-18 months. This dynamic is both an investment opportunity and a portfolio risk for the Company. The Board continues to examine new investment opportunities as identified by the Investment Advisor.


·      Liquidity at the Company is circa £28.0 million. The Company has £3.9 million of outstanding unsecured loan notes repayable in July 2022. The Company has no other third-party debt outstanding. 


·      On 21 January 2021, Luceco plc released its full year trading statement for the year ended 31 December 2020. The business reported year-on-year revenue growth of 2.3 per cent. despite disruption in the first half of 2020. In addition, the business achieved year-on-year gross margin gains (40 per cent. vs. 36 per cent. in the prior year) and increased profitability (£30 million operating profit vs. £18 million in the prior year) following the successful implementation of manufacturing improvements, a shift in sales mix towards high margin professional sales and tight control of overheads. Net debt improved by £9.1 million over the year to £18.3 million at year end. In November 2020, the Company sold 4.0 million shares in Luceco plc, returning £10.0 million cash to ESO, whilst retaining a 24.9 per cent. holding in the business.


·      Whittard of Chelsea has experienced unprecedented disruption during the year ended 31 December 2020. UK retail stores were closed for multiple periods throughout year which led to a reduction in Whittard's group sales of 20 per cent. when compared to the year ended 31 December 2019. Whittard's UK retail stores were the largest and most profitable sales channel in 2019 and sales were 60 per cent. down for the same period in 2020. Lockdowns and landlord inflexibility continue to blight UK retail and much more must be done to mitigate the disruption and costs that are no fault of hard-pressed retailers. Despite the disruption to the UK store estate, Whittard has only remained EBITDA positive through the period due to growth in UK ecommerce. Over the period, the business has continued to pursue compelling international opportunities with the Asian part of the business trading strongly. Corporate gifting, online marketplaces and new geographies also provide encouragement for the future.


·      David Phillips made pleasing progress in the period, building on the profitable and growing platform established in the prior period. The business maintained overall sales levels and improved EBITDA year on year by £2.9 million. Growth in profitability was achieved due to the ongoing benefits of the turnaround and, more recently, through efficiencies identified through the COVID-19 crisis.


·      Building on its impressive growth trajectory, Pharmacy2U experienced significant sales growth as patients sought direct-to-home alternatives to collecting prescriptions in high street pharmacies. The business's new distribution facility began dispensing live orders in November 2020.


·      In September 2020, the Company completed a £1.9 million investment into Atlantic Credit Opportunities Fund, a commingled distressed credit fund, and in November 2020, the Company completed a $2.5 million investment in a segregated account of Prelude Structured Alternatives Master Fund LP, a multi-manager hedge fund platform invested in high yield credit securities. Both investments aim to benefit from increased credit markets opportunities in the coming period.


·      The Company's unquoted portfolio is valued at a weighted average EBITDA to enterprise value multiple of 5.8x (excluding Pharmacy2U, which is valued on a sales multiple). The Company's portfolio has in aggregate 0.3x third party net debt to EBITDA.


·      Between November and December 2020, the Company completed buybacks in the market totaling 799,480 ordinary shares (or 2.4 per cent. of the Company's issued ordinary share capital).


Mr Clive Spears, Chairman, commented: "The performance of the Company in the year ended 31 January 2021 was pleasing overall in the face of acute disruption caused by the spread of COVID-19. The Board would like to thank the Investment Advisor, the Company's other service providers, colleagues and employees across the portfolio for their efforts over this challenging and unprecedented period. The Board looks forward to releasing the audited report and accounts for year ended 31 January 2021 in due course."

The person responsible for releasing this information on behalf of the Company is Amanda Robinson of Langham Hall Fund Management (Jersey) Limited.




EPIC Private Equity 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 / Huw Jeremy

Corporate Broker:

Charles Farquhar


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