For release                                                                                                            11 September 2024

Dunedin Enterprise Investment Trust PLC

Half year ended 30 June 2024

Dunedin Enterprise Investment Trust PLC, the private equity investment trust which specialises in investing in UK mid-market buyouts, announces its results for the half year ended 30 June 2024.

Financial Highlights:

·    Net asset value total return: 2.1%

·    Net asset value per share at 30 June 2024: 627.6p, after 10p dividend (624.8p at 31/12/23)

·    Share price total return: 1.8%

·    Share price at 30 June 2024: 502.5p (510.5p at 31/12/23)

·    Total net assets: £34.5m (of which 74% cash)

·    Interim dividend 23p per share payable 4 October 2024

·    £204m returned to shareholders since 2012

Comparative Total Return Performance (%)

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Chairman's Statement

The total return in the half year to 30 June 2024 was 2.1% in terms of net asset value per share which increased from 624.8p to 627.6p in the half year. This is stated after allowing for a final dividend of 10.0p (paid in January 2024), relating to the year ended 31 December 2023.

The share price total return was 1.8% during the period under review. The price of 502.5p at 30 June 2024 represented a discount of 19.9% to the net asset value of 627.6p per share.

Since a managed wind-down was approved by shareholders in 2016 we have distributed £147m to shareholders and delivered a NAV total return per share of 166.2% and, in terms of share price, 288.5%. This compares favourably with returns of 82.1% and 86.1% in the FTSE Small Cap and the FTSE All-Share indices respectively.

Portfolio

Unrealised valuation increases totalling £0.7m were offset by value decreases of £0.3m. The valuation uplift was principally generated from EV (£0.6m). The valuation reduction was at FRA (£0.3m).

Following the half year end Dunedin Buyout Fund III LP entered into a legally binding agreement for the realisation of its investment in EV.  Proceeds from the sale will amount to £2.6m and the transaction is expected to complete by the end of 2024.

Further details are provided in the Manager's Review.

Cash, Commitments & Liquidity

At 30 June 2024 the Company held cash and near cash equivalents totalling £25.5m out of total net assets of £34.5m. At that date there were outstanding commitments to limited partnership funds of £6.9m, consisting of £6.2m to Dunedin-managed funds and £0.7m to Realza.

Dividends

A dividend of 10.0p per share relating to the year ended 31 December 2023 was paid to shareholders in January 2024, amounting to £0.6m.  An interim dividend of 23.0p per share relating to the year ended 31 December 2024 is to be paid to shareholders on 4 October 2024.

Outlook

In my Chairman's Statement in the Annual Report for the year ended 31 December 2023 I set out the Board's thinking on the optimum way of returning cash to shareholders and mentioned that one of the options open to us was to place the Company into a members' voluntary liquidation. With the sale of EV, which is likely to complete by the end of the year, we will only be left with four underlying investments, none of which is likely to be realised in the immediate future. We have therefore decided, after consulting our advisers, that we should proceed with a members' voluntary liquidation. We intend to send to shareholders proposals for such a liquidation following completion of the EV realisation.

Duncan Budge

11 September 2024

Manager's Review

Results for the six months to 30 June 2024

In the six months to 30 June 2024, the net asset value per share total return was 2.1%, after taking account of dividends paid for 2023 of 10.0p per share (paid in January 2024). This compares with an increase in the FTSE Small Cap Index (ex Inv. Cos) over the same period of 8.9%.

Net asset and cash movements in the half year to 30 June 2024

The movement in net asset value is summarised in the table below: -

Cash movements in the half year to 30 June 2024 can be summarised as follows: -

Portfolio composition and movements

Dunedin Enterprise holds investments in unquoted companies through: -

•           Dunedin managed funds, and

•           Third party managed funds.

The portfolio movements can be analysed as shown in the table below: -

*1 - in addition the Company held net current assets of £5.9m

Realisations

There were no significant realisations in the half year.

Following the half year end on 4 August 2024 Dunedin Buyout Fund III LP entered into a legally binding agreement for the realisation of its investment in EV, a provider of high-performance video cameras and quantitative visual analytics to the global energy industry. Proceeds from the sale, net of carried interest, will amount to £2.6m, consisting entirely of capital.  The transaction is subject to regulatory approval and is expected to complete in Q4 2024.

Investment activity

A further £0.2m was drawn down by Dunedin and third-party managed funds to meet management fees and ongoing expenses.

Unrealised movements in valuations

Unrealised valuation increases in the half year amounted to £0.7m.  As noted above a legally binding agreement for the sale of EV was entered into in August 2024.  EV has been valued at the expected proceeds from the sale contributing £0.6m of the total uplift.

The unrealised valuation decrease at FRA in the half year was £0.3m. Trading at FRA has not progressed as quickly as expected with maintainable EBITDA reducing by 7% in the half year. However, trading and the outlook for the remainder of the year are positive.

The portfolio continues to be valued in accordance with the International Private Equity Venture Capital valuation guidelines (www.privateequityvaluation.com).

Dunedin LLP

11 September 2024

Current Investments

by value at 30 June 2024

Total return of current investments

at 30 June 2024

*¹ - dividends and capital

*² - valuations stated before carried interest

Top Investments

EV

EV is a UK headquartered, global market leader in the provision of high performance, harsh environment, video cameras and quantitative visual analytics to the global energy industry.

It offers a highly specialist service, providing skilled engineers to operate its market leading cameras in the most difficult down-hole conditions. The high-resolution video images produced by EV's cameras allow oil and gas well operators to identify, quantify and solve problems rapidly. EV has offices in Dubai, Perth, Kuala Lumpur, Calgary, Aberdeen, Houston and Norwich. It has a further presence in seventeen worldwide locations across Europe, Canada, USA, South America, West Africa, the Middle East, Asia and Australasia. The business employs more than 100 staff.

Percentage of equity held                           9.5%

Cost of Investment                                    £8.3m

Directors' valuation                                  £3.3m

Percentage of net assets                              9.4%

Realza

Realza Capital FCR is a Spanish private equity fund making investments in Spain and Portugal. The fund is limited to investing 15% of commitments in Portugal. Dunedin Enterprise's investment is held via Dunedin Fund of Funds LP.

The fund invests in companies with leading market positions and attractive growth prospects either through organic growth or through merger & acquisition activity. Realza seeks to invest in companies with an enterprise value normally ranging from €20m to €100m. The fund's typical equity investment ranges from €10m to €25m.

Realza has two investments remaining: -

•           a producer of premium tomatoes; and

•           a producer of cannabis for medicinal and pharmaceutical use.

Percentage of equity held                           8.9%

Cost of Investment                                    £4.1m

Directors' valuation                                  £3.2m

Percentage of net assets                              9.4%

FRA

FRA is an international consultancy that provides forensic accounting, data analytics and e-discovery expertise, helping businesses respond to regulatory investigations in an increasingly regulated global environment.

FRA works on some of the largest and most complex regulatory investigations globally. Its clients are typically blue-chip multinational corporates seeking advice to help navigate regulatory scrutiny, effect compliant cross-border data transfer, and manage risk. The company has offices in London, Dubai, Dallas, New York, Washington DC, Paris, Zurich, Stockholm and Seoul. It also runs data centres near each office location as well as in Montreal.

Percentage of equity held                           5.2%

Cost of Investment                                    £2.0m

Directors' valuation                                  £3.2m

Percentage of net assets                              9.2%

Thredd

Thredd is a UK headquartered payments processing business providing customers with leading edge payment processing and ancillary services. Customers include new emerging fintech or challenger banks, offering a significantly differentiated proposition for their clients; as well as specialist payment firms serving the travel, insurance and foreign exchange markets. It offers a best in class, scalable payment processing platform with flexibility, innovative features and an accelerated speed to market for new market entrants. It has over 100 clients, including many UK fintech and challenger banks, and is seeing significant growth opportunities from emerging overseas challenger banks as they seek to disrupt their own domestic banking markets.

Percentage of equity held                           1.5%

Cost of Investment                                    £2.0m

Directors' valuation                                      £-m

Percentage of net assets                                  -%