Five new investments in first six months
Deutsche Beteiligungs AG: Consolidated net income of 18.9 million euros
Frankfurt am Main, 14 June 2013. Deutsche Beteiligungs AG (DBAG) posted good progress in the first half of its 2012/2013 financial year (1 November to 31 October). After making two new investments in the first quarter, the Company has signed agreements on another three since early February. In the period from 1 November 2012 to 30 April 2013, DBAG took investment decisions amounting to 26.8 million euros. Alongside its buyout fund, DBAG acquired Heytex Bramsche, Formel D and Stephan Machinery. Jointly with its fund for expansion financings DBAG also invested in PSS and inexio. The existing portfolio recorded a good performance over the same period. Thus, DBAG ended the first six-month period posting a consolidated net income of 18.9 million euros, according to the interim report at 30 April 2013 issued today.
The consolidated net income of 18.9 million euros (thereof second quarter: 11.4 million euros) corresponds to earnings per share of 1.39 euros. Adjusted for the dividend and surplus dividend totalling 1.20 euros per share paid in March, this result led to a change in net asset value per share, up from 19.46 euros at 31 October 2012 to 19.65 euros at 30 April 2013, representing a return on net asset value of 7.6 percent. The preceding year’s six-month period ended with consolidated net income of 27.7 million euros (thereof second quarter: 20.9 million euros), while net asset value gained 12.1 percent; in the preceding year, a one-off effect of 11.0 million euros arising from a reversal of provisions had a positive impact on the consolidated net income. DBAG regularly calls attention to the fact that interim results are of limited significance for a conclusive assessment of the Company’s performance, due to the long-term nature of its business and the erratic swings in external influential factors, such as valuation ratios in the stock markets; this holds particularly true for comparisons of individual quarters.
The consolidated net income of 18.9 million euros is founded on the stability of DBAG’s portfolio companies, but also derives from the upbeat sentiment in the stock markets, which is reflected in higher valuation multiples. The gain also mirrors the fact that the planned improvement in the net expense ratio of DBAG is on track.
Nearly all portfolio companies not valued at acquisition cost because of their short holding period in the portfolio contributed positively to the half-yearly result. The data after the first months of the year confirms that the budgets framed by these companies are sound. The companies are implementing their agreed plans of action, which serve as the basis for many expected improvements such as in operational processes. However, the data from the portfolio companies also reflects an easing of business dynamism in key regions and the persistent crisis in southern Europe.
The greatest value gain in the six-month period came from DBAG’s largest investment, Homag Group AG, a listed company, due a rise in the price of Homag shares. This led to a value gain of 12.3 million euros, which represents more than half of the net result of valuation and disposal totalling 23.1 million euros. The second-largest contribution comes from Coveright Surfaces Holding following the sale of the last of its business operations, a transaction that DBAG had announced after the first quarter.
“We expect to take further positive investment decisions in the coming months and complement the portfolio by adding new attractive companies,” the Board of Management stated in the interim report by this listed private equity company. As to its earnings forecast, DBAG said: “Whether and to what extent we will be able to record a further increase in value for our investments and, with that, in consolidated net income, for the current year depends on both the economic environment and on other factors – such as the sentiment in the stock markets at the reporting dates – that are, of course, difficult to foresee.”