- The Group generated PLN 3.8 million in gross profit – less than the year before mainly due to higher variable remuneration costs
- The Company generated variable remuneration for the management of MCI.CreditVentures 2.0 FIZ (PLN 0.4 million) and the MCI.EuroVentures sub-fund 1.0 (PLN 0.1 million)
- This year, PEM will disburse no less than PLN 10 million in dividend from the 2017 profit and retained earnings It continues to carry out the buyback of its own shares initiated in November 2017
- Michał Staszkiewicz and Arkadiusz Podziewski joined the team. The former took the position of Vice President of Private Equity Managers S.A. and MCI Capital TFI S.A., and the latter became a Partner in the investment team responsible for the buyout area.
As at the end of Q1 2018, gross assets managed by the Group amounted to PLN 2.3 billion, whereas net assets totalled PLN 2.0 billion. Revenues from management in this period reached PLN 12.4 million and were higher by 6.6% compared to Q1 2017, which also contributed to an increase in gross profit on core operations (a 7.2% increase).
In Q1 2018, PEM Group generated a gross profit of PLN 3.8 million compared to a PLN 4.8 million gross profit generated in the same period of the previous year. The decrease in gross profit in Q1 2018 resulted mainly from an increase in general administrative costs (PLN 5.5 million in Q1 2018 compared to PLN 4.5 million in Q1 2017), mainly as a result of an increase in variable remuneration costs (an increase in carry fee provisions due to an increase in the valuation of portfolio companies).
KEY ACHIEVEMENTS OF THE QUARTER
‘In Q1, we focused on building the value of our portfolio companies and we were able to successfully exit the Venture Capital investment managed by the Internet Ventures fund. At the same time, we further developed our fundraising channels: in addition to the sale of certificates for three of our funds, we continued to issue MCI.PrivateVentures public bonds. Positive developments in our investment portfolios translated into good rates of return for our funds and satisfactory financial results’, said Tomasz Czechowicz, President of the Management Board of Private Equity Managers S.A.
In February 2018, the MCI.PrivateVentures FIZ fund (comprising MCI.TechVentures and MCI.EuroVentures) issued a third series of bonds with a total nominal value of PLN 40 million under a public issue programme aimed at individual investors. The pool of available bonds was exhausted and the fund’s debt securities were taken up by 747 investors. Bonds were issued for a four-year period.
At the end of Q1 2018, the Internet Ventures fund sold all shares in the Zdrowegeny.pl website (formerly Platforma Badań Genetycznych). Diagnostyka Sp. z o.o., an industry investor, became the new owner.
STRENGTHENING COMPETENCES IN FUNDRAISING AND THE INVESTMENT TEAM
At the beginning of April, Michał Staszkiewicz, formerly associated with Franklin Tempeton Investments, joined the Management Boards of MCI Capital TFI and PEM. As Vice President of the Management Board, he will be responsible for leading the fundraising team and liaising with the investment certificate distribution network. One of the key tasks of the new Vice President is the expansion of the customer base for MCI.EuroVentures, MCI.TechVentures and MCI.CreditVentures certificates and offering the Group’s unique products to selected private investors in Poland.
At the start of the year, Arkadiusz Podziewski joined the investment team as a Partner. He is responsible for investments in the buyout area (mature companies), primarily in the industry 4.0 and B2B services areas. Arkadiusz Podziewski was formerly associated with Darby and Innova Capital private equity funds.
Since its stock market début in 2015, PEM has continuously shared its profit with its shareholders. Last year the Company paid PLN 10 million in dividends. On 28 March, the Management Board adopted a resolution recommending that the Annual General Meeting allocate at least PLN 10 million of the 2017 profit and of the reserves generated from profits from previous years for dividend payment, which results in dividends for shareholders of not less than PLN 2.93 per share. At the current prices, this represents a dividend rate of more than eight per cent.
Since 9 November 2017, PEM has been conducting a share buyback programme. In accordance with the resolution of the Management Board, not more than 125,000 own shares can be bought back.
‘In the Management Board’s opinion, the current PEM share price does not reflect the company’s favourable liquidity and financial standing. The share buyback is our response to this situation and an attempt to stabilise the prices. Since the commencement of the buyback until 18 April, or the last day on which we purchased shares, PEM bought back 3,559 standard shares, constituting 0.1% of its initial capital. We will continue with the buyback programme in 2018,’ said Ewa Ogryczak, Vice President of the Management Board and CFO of Private Equity Managers S.A.