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Final results for the Year Ended 31 December 2023

Oakley Capital
14.03.24
5 min read

Oakley Capital Investments Limited (“OCI” or the “Company”) today announces its final results for the year ended 31 December 2023. OCI is a listed investment company providing consistent, long-term returns in excess of the FTSE All-Share Index by investing in funds managed by Oakley Capital (“Oakley”).

The Oakley Funds invest primarily in unquoted, profitable, pan-European businesses with recurring revenues, and across four focus sectors. Oakley’s origination capabilities with proven value creation drivers help management teams accelerate growth and produce consistently superior returns for investors.

Strong growth and investment activity in a period of macroeconomic uncertainty

NAV per share

684p

as at 31 December 2023

Net Asset Value

£1,207m

as at 31 December 2023

Total NAV return per share

4%

as at 31 December 2023 (+27 pence)

Highlights for the year ended 31 December 2023

 

  • Total shareholder return of 18%
  • Investments of £175 million and share of proceeds of £266 million
  • Outstanding commitments of £1,015 million
  • Year-end cash and available credit facilities of £382
  • Final dividend of 2.25 pence, taking dividends declared to 4.5 pence

 

 

 

 

 

Portfolio highlights

 

  • Average portfolio company year-on-year EBITDA growth of 14% (2022: 22%)
  • Average portfolio company valuation multiple (EV/EBITDA) of 16.4x (2022: 15.9x)
  • Portfolio value increase was driven 65% by EBITDA growth, and 35% by multiple expansion
  • Average net debt/EBITDA ratio of 4.2x (2022: 4.3x)
  • The key drivers of NAV growth were:
    • IU Group (+10 pence): enrolments grew 30%+ to 140,000+ students
    • North Sails (+9 pence): revenue and profits hit record and ahead of target
    • Idealista (+7 pence): strong results across core markets in Southern Europe
    • Foreign exchange: (-12 pence): 2+% change in EUR:GBP

Portfolio overview

OCI’s portfolio of private equity investments delivered robust trading during the period:

Earnings

An average 14% organic EBITDA growth demonstrates the portfolio’s ability to sustain performance through economic cycles

Valuations

The average valuation multiple modestly increased to 16.4x, partially reflecting strength in peer multiples. The 4% increase in total NAV reflects a cautious approach to trading outlook and portfolio company valuation multiples.

Leverage

Average net debt/EBITDA declined to 4.2x which compares to a private equity industry average of between 6 to 7x

Proceeds

OCI’s look-through share of proceeds from exits and refinancings during the year totalled £266 million, consisting of:

  • Realisations- £240 million- IU Group at gross return of 85% IRR
  • Refinancings- £26 million- idealista and Cegid completed debt refinancings

Investments

OCI made a total look-through investment of £175 million which included:

New platform deals
Reinvestment
Follow-on investments
Venture investments
New platform deals
Reinvestment
Follow-on investments
Venture investments
News Technology
Oakley Capital invests in domains & hosting provider Webcentral 26.10.23

£50 million - Thomas’ London Day Schools, Liberty Dental Group and Webcentral

IU Group

Oakley Capital extends IU Group partnership with continuation vehicle

£66 million - IU Group, benefitting from the next phase of the company’s growth which is focused on leveraging AI and internationalisation

Business Services
vLex combines with Fastcase to form the world’s largest law firm subscriber base 04.04.23

£35 million- in addition to vLex’s acquisition of Fastcase, and the acquisition of 7Mind by 7NXT which owns and operates fitness platform Gymondo, 22 bolt-on acquisitions were completed by portfolio companies

Touring Capital

Oakley Capital announces partnership with Touring Capital

£24 million- investments in Oakley Touring Venture Fund and PROfounders III portfolio companies.

Post balance-sheet events

Further new platform deals - c.£80 million- investments in Alerce and Steer Automotive Group. These transactions are expected to complete within H1 2024.

Direct investments

The Board continues to work towards the resolution and value maximisation of OCI’s two direct investments of Time Out and North Sails. Developments in 2023 included: the receipt of an in-specie dividend of Time Out shares from the ongoing closure of Fund I which rationalised OCI’s Time Out holdings in a single direct stake, giving greater autonomy over the holding; and converting OCI’s outstanding North Sails loans and accrued interest into preferred equity. This was done alongside a wider organisational and capital restructure of the North Sails Group which improves OCI’s overall security, creates an incentive for redemption and helps simplify the North Sails’ capital structure, enhancing the attraction of the business to future investors. Time Out recently publicly reported strong half year results while North Sails delivered another record year for 2023.

Read more about OCI’s direct investments in the Annual Report here.

Cash & commitments

OCI made a total commitment of $100 million in Oakley Touring Venture Fund and €190 million in Origin II, taking the total outstanding commitments to the Oakley Funds to £1,015 million as at 31 December 2023. This will be deployed into new investments over the next five years. OCI’s total liquidity as at 31 December 2023 was £382 million, comprising £207 million of cash on the balance sheet and £175 million in undrawn credit facilities. The Board closely monitors anticipated fund drawdowns and projected liquidity and will continue its long-term commitment to share buybacks when appropriate.

See OCI’s Balance Sheet in the Annual Report here.

Outlook

The underlying portfolio is expected to continue generating strong earnings growth in spite of the prevailing macroeconomic uncertainty, while investment activity is anticipated to remain robust after a busy period:

  • Portfolio companies continue to benefit from long-term trends including the consumer shift to digital search and spend, businesses’ shift to the cloud and to outsourcing, and resilient demand for education and up-skilling
  • There remains a strong environment for new investment opportunities with five new deals signed in the last four months, laying the foundations for future earnings and NAV growth
  • OCI’s enhanced balance sheet and liquidity means it can fully participate in the Investment Adviser’s strong pipeline with opportunities in due diligence weighted towards Southern and Western Europe, and Technology, Education and Business Services sectors
Quote Caroline Foulger

It is testament to the resilience of the underlying portfolio and Oakley’s active management that, in spite of the unsettled nature of the global economy, the Company continued to deliver. Most importantly, total shareholder return was 18%, taking the annualised five-year total shareholder return to 24%. OCI continues to offer one of the most accessible ways to gain exposure to pan-European private equity through one of the industry’s best performing managers.

Caroline Foulger

Chair — Oakley Capital Investments

Quote Peter Dubens

We are in a period of sustained uncertainty, triggered by macroeconomic volatility but also technological disruption not least with the advent of generative AI. While this can create challenges for our portfolio companies and the entrepreneurs we partner with, it can also create opportunities. Many of our existing investments are already leveraging AI to boost productivity and, in some cases, to completely pivot their business models. “Meanwhile, our approach to partnership and strong track record in value creation continue to make Oakley the partner of choice for ambitions founders and management teams who are building disruptive leaders in often highly fragmented markets.

Peter Dubens

Founder and Managing Partner — Oakley Capital

If you would like to know more, contact a member of the OCI team.

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