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Summarised audited financial statements for the year ended 30 June 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 AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024
Year ended Year ended
30 June 2024 30 June 2023
Net asset value per share ("NAV") GBP 1.292 1.296
Loss for the year GBP (278 836) (3 062 172)
Loss per share pence (0.383) (4.21)
Headline loss per share pence (0.383) (4.21)
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 ("AltX") of the JSE Limited ("JSE").
PRINCIPAL ACTIVITY
The principal activity of the Company is to hold investments in high quality, growth businesses across Europe, with a
focus on the United Kingdom ("UK"). 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 successfully concluded two exits.
As previously reported, the board intends to return surplus cash flow to shareholders from the sale of investments in the
future. Furthermore, it has no intention of raising further equity from shareholders. Therefore, the Company will not
consider new investments other than follow-on investments into the existing portfolio. The board will manage the
existing portfolio in line with the investment thesis and exit horizon of each asset to maximise returns for shareholders.
The board's decision provides UPL shareholders with a reasonable line of sight to liquidity from the sale of its
investments. UPL has an undrawn term loan facility of £8.8 million, which provides the Company with sufficient
liquidity to cover working capital requirements and potential follow-on investments into the existing portfolio. The
available liquidity will be considered following the sale of each investment, with excess cash returned to shareholders.
In terms of the Management Agreement concluded between UPL and Argo, the current team of investment professionals
will continue to manage the portfolio of investments until they are realised. UPL and Argo are aligned to maximise
returns for shareholders.
The current team has formed a new vehicle with a view to making future investments. They will expand the team and
create sufficient capacity to originate and execute new investment opportunities. They intend to raise capital for potential
investments on a deal-by-deal basis.
An update on investments held at the reporting date is presented below.
PortmanDentex ("PD")
https://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 share in Dentex to PD for £30.3m cash and the balance in shares in
PD, which resulted in UPL becoming a minority shareholder in PD following the merger between Portman and Dentex.
Over the last 12 months, PD management has made significant progress with integrating the two businesses from an
operational perspective. PD traded ahead of the prior year and budget in the first three quarters of their financial year
ending 30 September 2024. Demand for private dental services remains resilient despite the challenging macroeconomic
environment.
PD negotiated an increase in its debt facilities in September 2023. To secure the increase, shareholders were required to
invest additional funds in the business. PD raised the additional funds from the existing shareholders in August 2023 by
issuing front-ranking PIK Notes and Preference Share instruments. UPL elected to follow its proportional rights,
subscribing for £1.4m worth of PIK Notes.
The merger of Portman and Dentex brought significant scale to the business, which is important when operating a multi-
site healthcare business. 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.
This is particularly important given the significant increase in interest rates since the merger, which has resulted in a
higher cost of capital when evaluating investments.
As reported previously, PD obtained a third-party valuation of the group to determine a reference point for secondary
share transactions with dentists and staff shareholders. The valuation was lower than the carrying value of UPL's
shareholding in PD. The primary reason for the lower valuation is a reduction in the valuation multiple from that used
for the Portman and Dentex merger valuation. Valuation multiples in the dental sector globally are lower than they were
at the time of signing the merger transaction in August 2022, principally because of significantly higher interest rates
and inflationary pressure. In March 2024, UPL decided to impair the carrying value of its aggregate holding in PD
(ordinary equity, loan notes and PIK notes) from £30,788,385 to £25,404,991, which is in line with the third-party
valuation. There were no further changes to the valuation at 30 June 2024.
Workwell (formerly JSA Services Limited)
www.workwellsolutions.com
Workwell offers a comprehensive suite of workforce management solutions, ranging from compliant worker
engagement to back-office services and recruitment technology, supporting clients' growth by facilitating access to
global talent.
During April 2024, Workwell acquired Precision Consulting Group ("PGC") based in Austin, Texas. PGC is a highly
respected Employer of Record ("EoR") and Agency of Record ("AoR") provider to contractors working across the USA
and Canada. This acquisition was Workwell's largest to date, significantly expanding its international presence and
capabilities and establishing itself as a premium operator in the international cross-border contractor payment market.
From a trading perspective Workwell is feeling the effects of tough market conditions in the UK, with revenue largely
flat compared to the prior year. Although revenue for the year to date is below plan, the UK business is performing well
relative to its closest competitors. Management has responded admirably to the market conditions by remaining very
client focused and demonstrating good cost management despite inflationary pressures that have prevailed during the
period.
By contrast, the international business outside the UK is performing well, showing good growth in revenue and profit
for the year to date. The integration of the international businesses into an umbrella brand called Workwell Global is
progressing well and sets the group up for continued growth in future. Pleasingly, the cross-selling opportunities between
Workwell and PGC that were identified when the deal was done are being delivered, with shared leads being converted
into signed up new customers.
Management has performed a preliminary assessment of specific policies that are contained in the Employment Rights
Bill that has been published by the new Labour government in the UK. While a detailed analysis will only be possible
once further details are available, there do not appear to be any areas of undue concern at this stage.
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 Asset Management division ended the half year to 30 June 2024 with Assets Under Management ("AUM") of
$1.4bn, with the Primary Investments ("PI") fund achieving a return of 3.2% for the period, in line with its benchmark.
The performance of the two existing Strategic Investment ("SI") funds continues to be very satisfactory, delivering
gross IRR's of 19% and 17% respectively since their launch dates. A new SI fund focused on Korean real estate credit
and anchored by a Middle Eastern sovereign wealth fund was successfully launched in July.
In the banking businesses, the profitability of both Cheoun Savings Bank and Solution Bank for the half year to June
was impacted by increased credit provisioning against their loan books. Provisioning levels are conservative and both
banks expect improved business conditions in the second half of the year.
SC Lowy will celebrate its 15th anniversary on 1 October 2024, a significant milestone in the history of the business.
Aside from the impact of foreign exchange translation, there were no changes to the valuation of this investment at 30
June 2024.
Xcede Group (Formerly Techstream Group) ("Xcede")
www.xcede.com
Xcede is a global recruitment specialist operating in the UK, Europe, North America, and Asia. 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.
Xcede has made significant progress in the last 12 months as the new management team that was introduced in the first
half of 2023 has taken several strategic steps to position the business for sustained growth. During the period, they have
significantly invested in new systems and support function capability. At the same time, Xcede has divested of its South
African and Spanish operations to increase focus and investment in the UK, its largest market.
The global recruitment market remains challenging, with various industry participants reporting subdued activity. This
is particularly pronounced in the permanent placement side of the business, with the contracting division demonstrating
more resilience. Against this backdrop, Xcede reported growth in profitability during its financial year ending 31
December 2023, with improved operating margins.
Trading conditions in the recruitment market during the current year have remained tough. Management has responded
by focusing on customers and margins, tight management of cash and expenses and improving efficiencies. The
company is well positioned to take advantage of any improvement in market conditions.
During December 2023, Xcede negotiated an extension of its debt facilities. To support the process, UPL advanced
£2.1m of shareholder funding by subscribing for additional front-ranking loan note instruments.
There were no further changes to the valuation at 30 June 2024.
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, its vacuum system significantly reduces pathogen
distribution and improves health and hygiene.
As previously reported, progress has been made this year, particularly in relation to the sale of units 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 £1.00.
FINANCIAL REVIEW
For the year under review, interest income of £1,358,537 comprised of interest earned from the loan advanced to Xcede.
Other income includes an amount of £60,800, earned by the Company as a raising fee for advancing additional loans to
Xcede during the year.
The Company recognised a fair value loss of £253,580 on the remeasurement of investments at fair value through profit
or loss. These amounts comprise the adjustments to the valuations in the Company's underlying investments, as well as
the foreign currency translation of SC Lowy, which is denominated in US Dollars.
Management fees accrued during the year amounted to £1,853,426 incurred in terms of the investment management
agreement between the Company and Argo. General and administrative expenses amounting to £580,801 were 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 year 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 £1,102,590.
The Company incurred interest of £32,643 during the year on the RMB term loan facility.
Short-form announcement
This short-form announcement is the responsibility of the directors and is only a summary of the information in the full
announcement and accordingly does not contain full or complete details. The full announcement was published on SENS
on 12 September 2024, and can be found on the Company's website www.universalpartners.mu and can be accessed
using the following JSE link https://senspdf.jse.co.za/documents/2024/jse/isse/UPLE/FY24Result.pdf.
Any investment decisions by shareholders and/or investors should be based on the full 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. The Board of Universal Partners accepts full responsibility for the
accuracy of the information in this communique.
In line with the Company's investment strategy to maximise the value of the investments, dividends are not declared on
a regular basis. Accordingly, no dividend has been declared for the quarter under review. In line with the strategic
update, surplus cash flow from the sale of investments in future will be distributed to shareholders.
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 September 2024
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: 12-09-2024 08:00:00
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