Wrap Text
Summarised unaudited financial statements for the quarter and six months ended 31 December 2024
UNIVERSAL PARTNERS LIMITED
(Incorporated in the Republic of Mauritius)
(Registration number: 138035 C1/GBL)
SEM share code: UPL.N0000
JSE share code: UPL
ISIN: MU0526N00007
("Universal Partners" or "UPL" or "the Company"))
SUMMARISED UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTER AND SIX MONTHS ENDED 31 DECEMBER 2024
Quarter Six months Quarter Six months Year
ended ended ended ended ended
31 December 31 December 31 December 31 December 30 June
2024 2024 2023 2023 2024
Net asset value per share ("NAV") GBP 1.196 1.196 1.297 1.297 1.292
Net asset value per share ("NAV") ZAR 28.16 28.16 30.19 30.19 29.69
(Loss) / profit for the quarter / period GBP (6 274 684) (6 981 964) 36 291 65 998 (278 836)
(Loss) / earnings per share pence (8.61) (9.58) 0.05 0.09 (0.383)
Headline (loss) / earnings per share pence (8.61) (9.58) 0.05 0.09 (0.383)
Universal Partners has a primary listing on the Official Market of the Stock Exchange of Mauritius Ltd ("SEM") and a secondary
listing on the Alternative Exchange of the JSE Limited ("JSE").
PRINCIPAL ACTIVITY
The principal activity of the Company is to hold investments in high quality, growth businesses in the United Kingdom ("UK") and
Europe. The Company's investment mandate also allows up to 20% of total funds at the time an investment is made to be invested
outside the UK and Europe.
BUSINESS REVIEW
Since its listing on the SEM and the JSE, the Company has worked closely with its investment advisor, Argo Investment Managers
("Argo"), to identify potential investments that meet its investment criteria.
The Company has made six investments since listing and has successfully concluded two exits.
An update on investments held at the reporting date is presented below.
PortmanDentex ("PD")
www.portmandentex.com
PD is one of Europe's largest dental care platforms, with over 400 dental practices in the UK, Ireland, the Nordics, Benelux, and
France. In April 2023, UPL sold its shares in Dentex to PD for £30.3m cash and the balance for shares in PD, which resulted in
UPL becoming a minority shareholder in PD following the merger between Portman and Dentex.
The final phase of the integration of the two businesses involved implementing an ERP system. The HR and CRM systems have
been successfully integrated, with the accounting integration scheduled for completion in the next quarter. Efficiencies and cost
savings are materialising, and PD is performing slightly ahead of their EBITDA budget for the first quarter ending December 2024.
Demand for private dental services remains strong despite macroeconomic challenges. Additionally, measures are being introduced
to strengthen recruitment, enhance succession planning, and ensure a stable supply of dental professionals.
Following negotiations with its existing lender, PD has secured a larger debt facility on attractive terms, provided that PD
shareholders invest an additional £35m of equity. This equity will be raised via the issue of front ranking Loan Notes earning an
attractive return. The Loan Notes will be subordinated to external debt but will rank ahead of the existing equity. UPL intends to
follow its proportional right and to invest circa £1.5m in the Loan Notes.
The new facility includes an additional acquisition facility to accommodate PD's buy and build strategy. However, whilst PD is still
actively considering further acquisition opportunities in the UK and the rest of Europe, management remains disciplined in pursuing
only significantly value-enhancing acquisition opportunities.
Workwell ("WW")
www.workwellsolutions.com
Workwell provides employment (EOR), engagement (AOR), outsourcing and compliance services for mobile, remote and flexible
labour. Workwell's solutions enable end hirers, recruitment businesses and job platforms to access global talent directly and
indirectly, through permanent staff, freelancers and self-employed contractors.
On 3 February 2025, WW completed the acquisition of Eastridge Workforce Management ("EWM"), a prominent tech-enabled
EOR provider based in San Diego, California, from Eastridge Workforce Solutions. This carve-out acquisition follows the
company's recent acquisition of Precision Global Consulting Group ("PGC") Group in April 2024 and represents another significant
step in Workwell's strategy to accelerate growth and expand its footprint in North America, the world's largest hiring market. The
acquisition of EWM brings the group's total revenue to over $2 billion, with circa $400 million of revenue and over 40% of group
management fees generated from North America, further solidifying the company's position in the region.
WW funded the acquisition of EWM using a committed debt facility provided to the group.
WW delivered a sound performance during the three months to December, the first quarter of the new financial year. While revenue
was marginally below budget, this was offset by overhead savings, resulting in EBITDA that was on budget.
The top performer during the quarter was Workwell Global, comprising PGC in North America and Workwell International that
services European clients. The Outsourcing division also showed good growth in revenue, both in the UK and internationally. The
Accountancy Services division, which is focused on the UK market, grew its revenues marginally but felt the impact of a subdued
economic environment.
Management continues to focus on integrating and consolidating the various companies within the group, with a view to maximising
efficiencies and delivering cross-selling opportunities. Continued development of the IT platform remains a top priority, with the
focus for Q2 being further integration of the PGC systems, additional portal security and functionality, as well as integration of the
European operations into the proprietary Evertime pay and bill system.
Following the successful integration of PGC into the Workwell Group, the fair value of UPL's investment in WW has been adjusted
to the price per share that was used for the rollover reinvestment from PGC shareholders in April 2024. This has resulted in an
increase in fair value of £4.7m.
SC Lowy Partners ("SC Lowy")
www.sclowy.com
SC Lowy is a leading investment management group focused on credit investing & lending in Asia, Europe and the Middle East.
The group experienced a strong last quarter for their financial year ended December 2024 and is projecting a circa 40% increase in
profit before tax ("PBT") for the year, subject to completion of the annual audit. Despite a small reduction in AUM, the Asset
Management division is projected to double its EBITDA compared to the prior year, boosted by higher performance fees and a
reduction in costs. Solution Bank (Italy) delivered profits in line with the record year experienced in 2023 and Cheoun Savings Bank
(South Korea) is projected to increase PBT by 30%. Both banks remain well capitalised and continue to achieve attractive ROE
ratios above 15%.
At the end of December, the board of SC Lowy decided wind down the PI fund and initiate an orderly return of capital to investors
in the fund over the next 12-18 months. This decision was taken after careful consideration and following engagement with the
larger investors in the fund, many of whom had served redemption notices. SC Lowy is in the process of establishing a replacement
fund that better matches investor needs and believe that they will retain a fair proportion of the amounts distributed from the PI
fund.
The performance of the Strategic Investment ("SI") funds continues to be excellent. Good progress is being made on raising funds
for SI IV, with total commitments received of $135m following a second close in December. The deployment of capital raised for
the Korea Real Estate Private Credit Fund has been rapid and it is expected that the anchor investor in the fund will provide further
capital to capture additional investment opportunities that have been identified. Management intends to launch a credit fund focused
on the MENAT region during 2025 and are projecting an increase in overall AUM for the year ahead.
Xcede Group (Formerly Techstream Group) ("Xcede")
www.xcede.com
Xcede is a global recruitment specialist operating in the UK, Europe and North America. It operates under two brands: Xcede and
EarthStream. Xcede provides recruitment services in the data, software, cloud infrastructure, and cyber security markets, while
EarthStream is a global energy recruitment specialist.
The previous report to shareholders detailed that a major debtor was experiencing liquidity problems and that it was uncertain
whether this customer would be able to settle the amount owed to Xcede. On 21 November, the customer announced that it had filed
for Chapter 11 bankruptcy proceedings in Texas, USA. This was an unprecedented event with the customer having raised substantial
equity and debt investment from a variety of credible investors. The board of Xcede has subsequently decided to provide in full for
the amount owed (circa £1.6m) by this customer, as there is no certainty that any of this debt will be recovered.
The impact of this provision on Xcede's results for the year ended December 2024 was severe. Accordingly, the board of UPL has
decided to impair the value of the Loan Notes of this investment by an amount of £11.4m, writing it down to a nominal value of £1
as reflected in the financial results presented below.
Despite this setback, UPL believes that the management team at Xcede is performing well and that it is in the interests of UPL
shareholders to provide ongoing financial support to Xcede. Accordingly, UPL advanced an additional £900,000 of funding at the
end of January. This comprised restructuring the existing shareholder capital stack by eliminating UPL's front ranking loan notes
and increasing our ordinary shareholding via a debt for equity swap arrangement, whilst ensuring that management retain a
meaningful stake in the business. In return, the lenders to Xcede have extended the terms of their debt and provided short-term
headroom to the business. We believe that Xcede now has the necessary financial headroom to deliver its business plan for 2025
and beyond.
While the recruitment sector in the UK remains depressed, Xcede has got off to a decent start for the new year and appears to be on
track to deliver the budgeted profitability for the first quarter to end March. In line with the strategy to simplify and improve the
business, the Singapore office is being closed. This follows the closure of the offices in South Africa and Spain and leaves the
business focused on its major markets of the UK, DACH and the USA.
Propelair
www.propelair.com
Propelair has reinvented the toilet to deliver, through its unique IP and design, one of the most water efficient, economical and
hygienic systems available. The Propelair toilet utilises 1.5 litres of water per flush versus a traditional toilet that uses around 9 litres
of water per flush. In addition, it significantly reduces pathogen distribution and improves health and hygiene.
As previously reported, constructive progress is still being made in the Middle East and South Africa. However, the Company is
still significantly behind its original business plan and, accordingly, we continue to value this investment at a nominal £1.
FINANCIAL REVIEW
The Company recognised a fair value gain of £5,462,896 for the quarter on the remeasurement of investments at fair value through
profit or loss. This amount comprises the revaluation of WW as well as the exchange rate adjustment to the valuation in the
Company's underlying investment in SC Lowy which is denominated in US Dollars.
As mentioned above, an amount of £11,356,570 was impaired during the quarter relating to the Company's investment in Xcede.
Management fees for the quarter amounted to £462,395 incurred in terms of the investment management agreement between the
Company and Argo. General and administrative expenses amounting to £135,739 were also incurred. The accrual for performance
fees is calculated on the revaluation of the Company's investments. These fees, which are recalculated quarterly, only become
payable to Argo if the Company realises the expected profit on disposal of the investments. No performance fees are payable to
Argo until a successful exit of an investment has been achieved. During the quarter under review, there was a net reversal of the
accrual for performance fees previously recognised, which had a positive impact on the income statement of £281,076.
The Company incurred interest of £55,927 during the quarter on the RMB term loan facility.
ADDITIONAL INFORMATION
This announcement is the responsibility of the directors and is only a summary of the information in the summarised unaudited
financial statements for the quarter and six months ended 31 December 2024 ("results announcement") and accordingly does not
contain full or complete details. The results announcement was published on SENS on 12 February 2025, and can be found on the
Company's website www.universalpartners.mu and can be accessed using the following JSE cloudlink
https://senspdf.jse.co.za/documents/2025/jse/isse/UPLE/Q225Result.pdf.
Any investment decisions by shareholders and/or investors should be based on the results announcement released on SENS and
published on the Company's website.
Copies of this report are available to the public, free of charge, at the registered office of the Company, c/o Intercontinental Trust
Limited, Level 3 Alexander House, 35 Cybercity, Ebene 72201, Mauritius.
Copies of the statement of direct or indirect interest of the Senior Officers of the Company pursuant to rule 8(2)(m) of the Securities
(Disclosure of Obligations of Reporting Issuers) Rules 2007 are available to the public upon request to the Company Secretary at
the registered office of the Company at c/o Intercontinental Trust Limited, Level 3 Alexander House, 35 Cybercity, Ebene 72201,
Mauritius.
In line with the Company's strategy to maximise the value of the investments and return surplus cash flow from the sale of
investments in the future, dividends are not declared on a regular basis. Accordingly, no dividend has been declared for the quarter
under review.
The Board of Universal Partners accepts full responsibility for the accuracy of the information contained in this announcement.
By order of the Board
Mauritius – 12 February 2025
Company Secretary
Intercontinental Trust Limited
For further information please contact:
SEM authorised representative
JSE sponsor and sponsor Company Secretary
Java Capital Perigeum Capital Intercontinental Trust Ltd
Tel: +27 (0)78 456 9999 Tel: +230 402 0890 Tel: +230 403 0800
Date: 12-02-2025 07:30:00
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