Back to all announcements

DJ EPE Special Opportunities Limited Interim Review and Unaudited Financial Statements

TIDMESO TIDMEO.P TIDMEC.P TIDMEL.P

RNS Number : 7357L

EPE Special Opportunities Limited

10 September 2019

EPE Special Opportunities Limited

("ESO" or the "Company")

Interim Review and Unaudited Financial Statements for the six months ended 31 July 2019

The Board of EPE Special Opportunities Limited are pleased to announce the Company's Interim Review and Unaudited Financial Statements for the six months ended 31 July 2019.

Summary:

-- The Board were deeply saddened to announce the death of Geoffrey Vero, the Company's Chairman, in May of this year, and wish to extend our deepest sympathies to his family and friends. The Board and Investment Advisor would like to acknowledge the many years of support Mr Vero gave ESO, his fellow Directors, the shareholders and the Investment Advisor, and re-iterate our gratitude for his outstanding leadership of the Company.

-- The Net Asset Value ("NAV") at 31 July 2019 was 245.54 pence per share, an increase of 19.7 per cent on the NAV per share of 205.19 pence as at 31 January 2019.

-- The share price at 31 July 2019 was 191.00 pence, representing an increase of 28.6 per cent on the share price of 148.57 pence as at 31 January 2019.

-- The strong performance of the Company's NAV per share has been driven primarily by a 83.5 per cent rise in value of the Company's largest asset, Luceco plc. In September 2019, Luceco plc released its Interim Report, announcing solid performance for the six months ended 30 June 2019. The business announced strengthening trading momentum and improved profitability in the period, as well as the achievement of further operational improvements and continued gross margin gains. The business further announced that net debt equated to 1.5x last twelve month EBITDA. The value of Luceco plc, however, remains volatile given price fluctuations in listed shares.

-- Whittard of Chelsea has maintained a robust growth trajectory throughout the period. The business's UK retail estate continues to outperform a weak UK retail market. Recruitment in the business's international division has been focused on developing and executing the business's digital and physical strategy for the Far East. The business has engaged a new Taiwanese franchise partner, opening 3 new stores in the period.

-- David Phillips has made progress in its turnaround plan, with the implementation of further operational improvements and sales initiatives. The business completed the disposal of a division in June 2019, simplifying its operations and reducing its cost base.

-- Pharmacy2U continues to execute its growth strategy, supported by capital raised in 2018. Customer acquisition has been aided by reduced churn rates, with the business achieving a record number of registered customers and orders delivered in the period.

-- The Board continues closely to monitor developments in the UK's exit from the European Union, including the risk of short term uncertainty and market volatility.

-- The Investment Advisor continues to identify and review a wide range of investment opportunities. The Company maintains a strong liquidity position to allow it to take advantage of such opportunities. Conservative pricing and a thorough, risk-weighted analysis of value creation potential remain essential to the consideration of proposed investments.

-- On 14 May 2019, the Company entered an agreement to acquire the carried interest entitlement and outstanding accrual in ESO Investments 1 LP, a limited partnership which held the Company's indirect interests in Luceco plc, Whittard of Chelsea and Pharmacy2U. The consideration for the transaction was satisfied by the issue of ordinary shares in the Company. The transaction both maximises the Company's long-term liquidity and increases long-term alignment with the Investment Advisor.

-- In the months of June and July 2019, the Company completed buybacks in the market, retiring 387,278 or 1.2 per cent of the Company's ordinary shares.

-- The portfolio remains conservatively valued with a weighted average Enterprise Value equating to an EBITDA multiple of 3.8x for unquoted assets (excluding assets investing for growth). The underlying portfolio is relatively unleveraged with 1.0x third party net debt to EBITDA in aggregate.

-- The gross asset cover for the outstanding unsecured loans of GBP3.9 million equates to 21.8x. Overall liquidity at the Company is GBP27.0 million.

-- The Board would like to welcome David Pirouet, who joined the Board in June 2019 as a non-executive Director and head of the Audit and Risk Committee. Mr Pirouet was an Audit and Assurance partner at PricewaterhouseCoopers Channel Islands LLP for over 20 years, retiring in 2009. The Board are confident his experience in audit, private equity and the wider financial services sector will be a valuable addition to the Company.

Mr Clive Spears, Chairman, commented: "The performance of the Company in the period has been encouraging. The recovery in the profitability of Luceco plc, the Company's largest asset, as well as continued progress across the rest of the portfolio, has contributed to improved financial performance over the period. Nonetheless, the Board remains mindful of Brexit and the potential risks posed to the Company and its portfolio. I would like to extend my gratitude to the Investment Advisor, EPE, as well as my fellow Directors and professional advisors, for their hard work and diligence during the first half of the year".

The Interim Review and Unaudited Financial Statements for the six months ended 31 July 2019 are also available on the Company's website at the following address: www.epespecialopportunities.com

The person responsible for releasing this information on behalf of the Company is Hilary Jones of R&H Fund Services (Jersey) Limited.

Enquiries:

 
EPIC Private Equity LLP              +44 (0) 207 269 8865 
                                      Alex Leslie 
 
R&H Fund Services (Jersey) Limited   +44 (0) 1534 825 323 
                                      Hilary Jones 
 
Cardew Group Limited                 +44 (0) 207 930 0777 
                                      Richard Spiegelberg 
 
Numis Securities Limited             +44 (0) 207 260 1000 
Nominated Advisor:                   Stuart Skinner / Hugh Jonathan 
Corporate Broker:                    Charles Farquhar 
 

Chairman's Statement

The performance of EPE Special Opportunities Limited ("ESO" or the "Company") for the six months ending 31 July 2019 has been encouraging. The recovery in the profitability of Luceco plc, the Company's largest asset, as well as continued progress across the rest of the portfolio, has contributed to improved financial performance over the period. Nonetheless, the Board remains mindful of Brexit and the potential risks posed to the Company and its portfolio.

My fellow Directors and I were deeply saddened to announce the death of Geoffrey Vero, the Company's Chairman, in May of this year, and wish to extend our deepest sympathies to his family and friends. Mr Vero was appointed Chairman of the Board in 2006 and made an invaluable contribution to the Company, leading it through the financial crisis of 2008 and a number of significant and complex corporate transactions. Under Mr Vero's stewardship the Company grew and flourished, benefitting at all times from his integrity and considerable expertise as a chartered accountant, businessman and investor. The Board and I would like to acknowledge the many years of support Mr Vero gave ESO, his fellow Directors, the shareholders and the Investment Advisor, and express our gratitude for his outstanding leadership of the Company.

I would like to welcome David Pirouet, who joined the Board in June 2019 as a non-executive Director and head of the Audit and Risk Committee. Mr Pirouet was an Audit and Assurance partner at PricewaterhouseCoopers Channel Islands LLP for over 20 years, retiring in 2009. During his tenure, Mr Pirouet specialised in the alternative investment management area, leading the business's Hedge Fund and business recovery practices for over four years. The Board and I are confident his experience in audit, private equity and the wider financial services sector will be a valuable addition to the Company.

The economic outlook for the UK remains subject to significant headwinds, both with regard to the outcome of the EU exit process and the possibility of a change of government during the coming period. Underlying economic performance has been mixed; UK annual GDP growth has been muted, with the 1.8 per cent growth recorded in Q1 2019 expected to soften. The labour market has remained resilient however, with unemployment at multi-decade lows and real wage growth strong. Political and economic developments, and their implications across the portfolio remain subject to close review by the Board.

The Net Asset Value ("NAV") per share of the Company as at 31 July 2019 was 245.54 pence per share, representing an increase of 19.7 per cent. on the NAV per share of 205.19 pence as at 31 January 2019. The share price of the Company as at 31 July 2019 was 191.00 pence, representing an increase of 28.6 per cent. on the share price of 148.57 pence as at 31 January 2019. The strong performance of the Company's NAV per share has been driven primarily by a 83.5 per cent. rise in value of the Company's largest asset, Luceco plc.

Luceco plc's share price has made pleasing gains in the first half of 2019. The business announced strengthening trading momentum and improved profitability in the period, as well as the achievement of further operational improvements and continued gross margin gains. The business further announced that net debt equated to 1.5x last twelve month EBITDA. The value of Luceco plc, however, remains volatile given price fluctuations in listed shares.

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review and Unaudited Financial Statements

TIDMESO TIDMEO.P TIDMEC.P TIDMEL.P

RNS Number : 7357L

EPE Special Opportunities Limited

10 September 2019

EPE Special Opportunities Limited

("ESO" or the "Company")

Interim Review and Unaudited Financial Statements for the six months ended 31 July 2019

The Board of EPE Special Opportunities Limited are pleased to announce the Company's Interim Review and Unaudited Financial Statements for the six months ended 31 July 2019.

Summary:

-- The Board were deeply saddened to announce the death of Geoffrey Vero, the Company's Chairman, in May of this year, and wish to extend our deepest sympathies to his family and friends. The Board and Investment Advisor would like to acknowledge the many years of support Mr Vero gave ESO, his fellow Directors, the shareholders and the Investment Advisor, and re-iterate our gratitude for his outstanding leadership of the Company.

-- The Net Asset Value ("NAV") at 31 July 2019 was 245.54 pence per share, an increase of 19.7 per cent on the NAV per share of 205.19 pence as at 31 January 2019.

-- The share price at 31 July 2019 was 191.00 pence, representing an increase of 28.6 per cent on the share price of 148.57 pence as at 31 January 2019.

-- The strong performance of the Company's NAV per share has been driven primarily by a 83.5 per cent rise in value of the Company's largest asset, Luceco plc. In September 2019, Luceco plc released its Interim Report, announcing solid performance for the six months ended 30 June 2019. The business announced strengthening trading momentum and improved profitability in the period, as well as the achievement of further operational improvements and continued gross margin gains. The business further announced that net debt equated to 1.5x last twelve month EBITDA. The value of Luceco plc, however, remains volatile given price fluctuations in listed shares.

-- Whittard of Chelsea has maintained a robust growth trajectory throughout the period. The business's UK retail estate continues to outperform a weak UK retail market. Recruitment in the business's international division has been focused on developing and executing the business's digital and physical strategy for the Far East. The business has engaged a new Taiwanese franchise partner, opening 3 new stores in the period.

-- David Phillips has made progress in its turnaround plan, with the implementation of further operational improvements and sales initiatives. The business completed the disposal of a division in June 2019, simplifying its operations and reducing its cost base.

-- Pharmacy2U continues to execute its growth strategy, supported by capital raised in 2018. Customer acquisition has been aided by reduced churn rates, with the business achieving a record number of registered customers and orders delivered in the period.

-- The Board continues closely to monitor developments in the UK's exit from the European Union, including the risk of short term uncertainty and market volatility.

-- The Investment Advisor continues to identify and review a wide range of investment opportunities. The Company maintains a strong liquidity position to allow it to take advantage of such opportunities. Conservative pricing and a thorough, risk-weighted analysis of value creation potential remain essential to the consideration of proposed investments.

-- On 14 May 2019, the Company entered an agreement to acquire the carried interest entitlement and outstanding accrual in ESO Investments 1 LP, a limited partnership which held the Company's indirect interests in Luceco plc, Whittard of Chelsea and Pharmacy2U. The consideration for the transaction was satisfied by the issue of ordinary shares in the Company. The transaction both maximises the Company's long-term liquidity and increases long-term alignment with the Investment Advisor.

-- In the months of June and July 2019, the Company completed buybacks in the market, retiring 387,278 or 1.2 per cent of the Company's ordinary shares.

-- The portfolio remains conservatively valued with a weighted average Enterprise Value equating to an EBITDA multiple of 3.8x for unquoted assets (excluding assets investing for growth). The underlying portfolio is relatively unleveraged with 1.0x third party net debt to EBITDA in aggregate.

-- The gross asset cover for the outstanding unsecured loans of GBP3.9 million equates to 21.8x. Overall liquidity at the Company is GBP27.0 million.

-- The Board would like to welcome David Pirouet, who joined the Board in June 2019 as a non-executive Director and head of the Audit and Risk Committee. Mr Pirouet was an Audit and Assurance partner at PricewaterhouseCoopers Channel Islands LLP for over 20 years, retiring in 2009. The Board are confident his experience in audit, private equity and the wider financial services sector will be a valuable addition to the Company.

Mr Clive Spears, Chairman, commented: "The performance of the Company in the period has been encouraging. The recovery in the profitability of Luceco plc, the Company's largest asset, as well as continued progress across the rest of the portfolio, has contributed to improved financial performance over the period. Nonetheless, the Board remains mindful of Brexit and the potential risks posed to the Company and its portfolio. I would like to extend my gratitude to the Investment Advisor, EPE, as well as my fellow Directors and professional advisors, for their hard work and diligence during the first half of the year".

The Interim Review and Unaudited Financial Statements for the six months ended 31 July 2019 are also available on the Company's website at the following address: www.epespecialopportunities.com

The person responsible for releasing this information on behalf of the Company is Hilary Jones of R&H Fund Services (Jersey) Limited.

Enquiries:

 
EPIC Private Equity LLP              +44 (0) 207 269 8865 
                                      Alex Leslie 
 
R&H Fund Services (Jersey) Limited   +44 (0) 1534 825 323 
                                      Hilary Jones 
 
Cardew Group Limited                 +44 (0) 207 930 0777 
                                      Richard Spiegelberg 
 
Numis Securities Limited             +44 (0) 207 260 1000 
Nominated Advisor:                   Stuart Skinner / Hugh Jonathan 
Corporate Broker:                    Charles Farquhar 
 

Chairman's Statement

The performance of EPE Special Opportunities Limited ("ESO" or the "Company") for the six months ending 31 July 2019 has been encouraging. The recovery in the profitability of Luceco plc, the Company's largest asset, as well as continued progress across the rest of the portfolio, has contributed to improved financial performance over the period. Nonetheless, the Board remains mindful of Brexit and the potential risks posed to the Company and its portfolio.

My fellow Directors and I were deeply saddened to announce the death of Geoffrey Vero, the Company's Chairman, in May of this year, and wish to extend our deepest sympathies to his family and friends. Mr Vero was appointed Chairman of the Board in 2006 and made an invaluable contribution to the Company, leading it through the financial crisis of 2008 and a number of significant and complex corporate transactions. Under Mr Vero's stewardship the Company grew and flourished, benefitting at all times from his integrity and considerable expertise as a chartered accountant, businessman and investor. The Board and I would like to acknowledge the many years of support Mr Vero gave ESO, his fellow Directors, the shareholders and the Investment Advisor, and express our gratitude for his outstanding leadership of the Company.

I would like to welcome David Pirouet, who joined the Board in June 2019 as a non-executive Director and head of the Audit and Risk Committee. Mr Pirouet was an Audit and Assurance partner at PricewaterhouseCoopers Channel Islands LLP for over 20 years, retiring in 2009. During his tenure, Mr Pirouet specialised in the alternative investment management area, leading the business's Hedge Fund and business recovery practices for over four years. The Board and I are confident his experience in audit, private equity and the wider financial services sector will be a valuable addition to the Company.

The economic outlook for the UK remains subject to significant headwinds, both with regard to the outcome of the EU exit process and the possibility of a change of government during the coming period. Underlying economic performance has been mixed; UK annual GDP growth has been muted, with the 1.8 per cent growth recorded in Q1 2019 expected to soften. The labour market has remained resilient however, with unemployment at multi-decade lows and real wage growth strong. Political and economic developments, and their implications across the portfolio remain subject to close review by the Board.

The Net Asset Value ("NAV") per share of the Company as at 31 July 2019 was 245.54 pence per share, representing an increase of 19.7 per cent. on the NAV per share of 205.19 pence as at 31 January 2019. The share price of the Company as at 31 July 2019 was 191.00 pence, representing an increase of 28.6 per cent. on the share price of 148.57 pence as at 31 January 2019. The strong performance of the Company's NAV per share has been driven primarily by a 83.5 per cent. rise in value of the Company's largest asset, Luceco plc.

Luceco plc's share price has made pleasing gains in the first half of 2019. The business announced strengthening trading momentum and improved profitability in the period, as well as the achievement of further operational improvements and continued gross margin gains. The business further announced that net debt equated to 1.5x last twelve month EBITDA. The value of Luceco plc, however, remains volatile given price fluctuations in listed shares.

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review and Unaudited Financial Statements

TIDMESO TIDMEO.P TIDMEC.P TIDMEL.P

RNS Number : 7357L

EPE Special Opportunities Limited

10 September 2019

EPE Special Opportunities Limited

("ESO" or the "Company")

Interim Review and Unaudited Financial Statements for the six months ended 31 July 2019

The Board of EPE Special Opportunities Limited are pleased to announce the Company's Interim Review and Unaudited Financial Statements for the six months ended 31 July 2019.

Summary:

-- The Board were deeply saddened to announce the death of Geoffrey Vero, the Company's Chairman, in May of this year, and wish to extend our deepest sympathies to his family and friends. The Board and Investment Advisor would like to acknowledge the many years of support Mr Vero gave ESO, his fellow Directors, the shareholders and the Investment Advisor, and re-iterate our gratitude for his outstanding leadership of the Company.

-- The Net Asset Value ("NAV") at 31 July 2019 was 245.54 pence per share, an increase of 19.7 per cent on the NAV per share of 205.19 pence as at 31 January 2019.

-- The share price at 31 July 2019 was 191.00 pence, representing an increase of 28.6 per cent on the share price of 148.57 pence as at 31 January 2019.

-- The strong performance of the Company's NAV per share has been driven primarily by a 83.5 per cent rise in value of the Company's largest asset, Luceco plc. In September 2019, Luceco plc released its Interim Report, announcing solid performance for the six months ended 30 June 2019. The business announced strengthening trading momentum and improved profitability in the period, as well as the achievement of further operational improvements and continued gross margin gains. The business further announced that net debt equated to 1.5x last twelve month EBITDA. The value of Luceco plc, however, remains volatile given price fluctuations in listed shares.

-- Whittard of Chelsea has maintained a robust growth trajectory throughout the period. The business's UK retail estate continues to outperform a weak UK retail market. Recruitment in the business's international division has been focused on developing and executing the business's digital and physical strategy for the Far East. The business has engaged a new Taiwanese franchise partner, opening 3 new stores in the period.

-- David Phillips has made progress in its turnaround plan, with the implementation of further operational improvements and sales initiatives. The business completed the disposal of a division in June 2019, simplifying its operations and reducing its cost base.

-- Pharmacy2U continues to execute its growth strategy, supported by capital raised in 2018. Customer acquisition has been aided by reduced churn rates, with the business achieving a record number of registered customers and orders delivered in the period.

-- The Board continues closely to monitor developments in the UK's exit from the European Union, including the risk of short term uncertainty and market volatility.

-- The Investment Advisor continues to identify and review a wide range of investment opportunities. The Company maintains a strong liquidity position to allow it to take advantage of such opportunities. Conservative pricing and a thorough, risk-weighted analysis of value creation potential remain essential to the consideration of proposed investments.

-- On 14 May 2019, the Company entered an agreement to acquire the carried interest entitlement and outstanding accrual in ESO Investments 1 LP, a limited partnership which held the Company's indirect interests in Luceco plc, Whittard of Chelsea and Pharmacy2U. The consideration for the transaction was satisfied by the issue of ordinary shares in the Company. The transaction both maximises the Company's long-term liquidity and increases long-term alignment with the Investment Advisor.

-- In the months of June and July 2019, the Company completed buybacks in the market, retiring 387,278 or 1.2 per cent of the Company's ordinary shares.

-- The portfolio remains conservatively valued with a weighted average Enterprise Value equating to an EBITDA multiple of 3.8x for unquoted assets (excluding assets investing for growth). The underlying portfolio is relatively unleveraged with 1.0x third party net debt to EBITDA in aggregate.

-- The gross asset cover for the outstanding unsecured loans of GBP3.9 million equates to 21.8x. Overall liquidity at the Company is GBP27.0 million.

-- The Board would like to welcome David Pirouet, who joined the Board in June 2019 as a non-executive Director and head of the Audit and Risk Committee. Mr Pirouet was an Audit and Assurance partner at PricewaterhouseCoopers Channel Islands LLP for over 20 years, retiring in 2009. The Board are confident his experience in audit, private equity and the wider financial services sector will be a valuable addition to the Company.

Mr Clive Spears, Chairman, commented: "The performance of the Company in the period has been encouraging. The recovery in the profitability of Luceco plc, the Company's largest asset, as well as continued progress across the rest of the portfolio, has contributed to improved financial performance over the period. Nonetheless, the Board remains mindful of Brexit and the potential risks posed to the Company and its portfolio. I would like to extend my gratitude to the Investment Advisor, EPE, as well as my fellow Directors and professional advisors, for their hard work and diligence during the first half of the year".

The Interim Review and Unaudited Financial Statements for the six months ended 31 July 2019 are also available on the Company's website at the following address: www.epespecialopportunities.com

The person responsible for releasing this information on behalf of the Company is Hilary Jones of R&H Fund Services (Jersey) Limited.

Enquiries:

 
EPIC Private Equity LLP              +44 (0) 207 269 8865 
                                      Alex Leslie 
 
R&H Fund Services (Jersey) Limited   +44 (0) 1534 825 323 
                                      Hilary Jones 
 
Cardew Group Limited                 +44 (0) 207 930 0777 
                                      Richard Spiegelberg 
 
Numis Securities Limited             +44 (0) 207 260 1000 
Nominated Advisor:                   Stuart Skinner / Hugh Jonathan 
Corporate Broker:                    Charles Farquhar 
 

Chairman's Statement

The performance of EPE Special Opportunities Limited ("ESO" or the "Company") for the six months ending 31 July 2019 has been encouraging. The recovery in the profitability of Luceco plc, the Company's largest asset, as well as continued progress across the rest of the portfolio, has contributed to improved financial performance over the period. Nonetheless, the Board remains mindful of Brexit and the potential risks posed to the Company and its portfolio.

My fellow Directors and I were deeply saddened to announce the death of Geoffrey Vero, the Company's Chairman, in May of this year, and wish to extend our deepest sympathies to his family and friends. Mr Vero was appointed Chairman of the Board in 2006 and made an invaluable contribution to the Company, leading it through the financial crisis of 2008 and a number of significant and complex corporate transactions. Under Mr Vero's stewardship the Company grew and flourished, benefitting at all times from his integrity and considerable expertise as a chartered accountant, businessman and investor. The Board and I would like to acknowledge the many years of support Mr Vero gave ESO, his fellow Directors, the shareholders and the Investment Advisor, and express our gratitude for his outstanding leadership of the Company.

I would like to welcome David Pirouet, who joined the Board in June 2019 as a non-executive Director and head of the Audit and Risk Committee. Mr Pirouet was an Audit and Assurance partner at PricewaterhouseCoopers Channel Islands LLP for over 20 years, retiring in 2009. During his tenure, Mr Pirouet specialised in the alternative investment management area, leading the business's Hedge Fund and business recovery practices for over four years. The Board and I are confident his experience in audit, private equity and the wider financial services sector will be a valuable addition to the Company.

The economic outlook for the UK remains subject to significant headwinds, both with regard to the outcome of the EU exit process and the possibility of a change of government during the coming period. Underlying economic performance has been mixed; UK annual GDP growth has been muted, with the 1.8 per cent growth recorded in Q1 2019 expected to soften. The labour market has remained resilient however, with unemployment at multi-decade lows and real wage growth strong. Political and economic developments, and their implications across the portfolio remain subject to close review by the Board.

The Net Asset Value ("NAV") per share of the Company as at 31 July 2019 was 245.54 pence per share, representing an increase of 19.7 per cent. on the NAV per share of 205.19 pence as at 31 January 2019. The share price of the Company as at 31 July 2019 was 191.00 pence, representing an increase of 28.6 per cent. on the share price of 148.57 pence as at 31 January 2019. The strong performance of the Company's NAV per share has been driven primarily by a 83.5 per cent. rise in value of the Company's largest asset, Luceco plc.

Luceco plc's share price has made pleasing gains in the first half of 2019. The business announced strengthening trading momentum and improved profitability in the period, as well as the achievement of further operational improvements and continued gross margin gains. The business further announced that net debt equated to 1.5x last twelve month EBITDA. The value of Luceco plc, however, remains volatile given price fluctuations in listed shares.

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -2-

Whittard of Chelsea has maintained a robust growth trajectory throughout the period. The business's UK retail estate continues to outperform a weak UK retail market. Recruitment in the business's international division has been focused on developing and executing the business's digital and physical strategy for the Far East. The business has engaged a new Taiwanese franchise partner, opening 3 new stores in the period.

David Phillips has made progress in its turnaround plan, with the implementation of further operational improvements and sales initiatives. The business completed the disposal of a division in June 2019, simplifying its operations and reducing its cost base. The Board continues to monitor the investment closely given the nascent turnaround and the risk posed to performance from a slowdown in the UK property and construction markets.

Pharmacy2U continues to execute its growth strategy, supported by capital raised in 2018. Customer acquisition has been aided by reduced churn rates, with the business achieving a record number of registered customers and orders delivered in the period.

The Company has taken several actions in the period with regards to its capital structure. On 14 May 2019, the Company entered an agreement to acquire the carried interest entitlement and outstanding accrual in ESO Investments 1 LP, a limited partnership which held the Company's indirect interests in Luceco plc, Whittard of Chelsea and Pharmacy2U. The consideration for the transaction was satisfied by the issue of ordinary shares in the Company. The transaction both maximises the Company's long-term liquidity and increases long-term alignment with the Investment Advisor. In addition, in the months of June and July, the Company completed buybacks of shares in the market, retiring 387,278 or 1.2 per cent of the Company's ordinary shares.

The Investment Advisor continues to identify and review a wide range of investment opportunities. The Company maintains a strong liquidity position to allow it to take advantage of such opportunities. Conservative pricing and a thorough, risk-weighted analysis of value creation potential remain essential to the consideration of proposed investments.

I would like to extend my gratitude to the Investment Advisor, my fellow Directors and the Company's professional advisors for their hard work and diligence during the first half of the year.

Clive Spears

Chairman

9 September 2019

Investment Advisor's Report

The Investment Advisor (the "IA") remains focused on the growth in value of the Company's portfolio, both through the development of existing assets and the pursuit of attractive new investment opportunities. The IA is confident that, while the UK market is subject to significant uncertainty in the short-term, the Company's long-term investment horizon provides it with a competitive and differentiated position in the market.

The IA was deeply saddened to learn of the passing of Geoffrey Vero, the Company's Chairman, in May 2019. The IA wishes to echo the sentiments of the Chairman and express its gratitude to Mr Vero for the dedication and support given to ESO during his long and successful tenure. The IA would like to extend its sincerest condolences to Mr Vero's family and friends.

The Company

The NAV per share of the Company as at 31 July 2019 was 245.54 pence per share, representing an increase of 19.7 per cent. on the NAV per share of 205.19 pence as at 31 January 2019. The share price of the Company as at 31 July 2019 was 191.00 pence, representing an increase of 28.6 per cent. on the share price of 148.57 pence as at 31 January 2019.

Based on the latest NAV, as set out above, the gross asset cover for the total outstanding loans of GBP3.9 million is 21.8x. Cash balances now stand at GBP27.0 million (including cash held by underlying associates in which the Company is the sole investor).

The Company completed a corporate reorganisation on 14 May 2019. The Company acquired the carried interest accrual in ESO Investments 1 LP, which held ESO's indirect interests in Luceco, Whittard of Chelsea and Pharmacy2U. The consideration for the carried interest was satisfied by the issue of 4.4 million ordinary shares in the Company, issued at a premium of 22.3 per cent to the mid-market closing price of the Company's ordinary shares on the date of transaction. The Company has also completed buybacks of shares in the market in the period, returning to the Company's treasury 1.2 per cent of existing share capital.

The Portfolio

Third party net debt remains modest across the Company's private equity portfolio, standing at 1.0x EBITDA in aggregate. The Company has maintained a disciplined approach to the valuation of the portfolio's assets with its weighted average enterprise value equating to an EBITDA multiple of 3.8x for unquoted assets (excluding assets investing for growth).

The share price of Luceco plc, the Company's largest asset, rose by 83.5 per cent. in the six months to 31 July 2019. On 9 September 2019, Luceco released its Interim Report, announcing solid performance for the six months ending 30 June 2019. The business achieved a 10.1% increase in sales in the period compared to the prior year, underpinned by continued gross margin and operational improvements, contributing to an improved operating margin of 8.5%. The business further announced that net debt had reduced to 1.5x last twelve month EBITDA. As at 31 July 2019, Luceco plc constituted circa 49.5 per cent. of the Company's GAV, with the balance being constituted by other investments and cash.

Whittard of Chelsea delivered continuing growth over the period, in line with budget and comfortably ahead of the prior year. Sales performance was underpinned by continued momentum in the business's UK retail portfolio, achieving like for like growth despite the challenges across the wider sector. This solid trading performance has been augmented by an improvement in product margin and the realisation of operational efficiencies, generating profitability ahead of budget and the prior year. The business has increased its strategic focus on international growth opportunities during the period. The business's China division has recruited in order to develop its high growth multi-channel strategy in the region. In addition, the business has engaged a new franchise partner in Taiwan, with three new stores opened in the period.

David Phillips has continued to stabilise over the period. However, the UK property market remains soft and is subject to further uncertainty, in particular in relation to Brexit. The business completed the disposal of its Local Authority Housing division in June 2019, simplifying its operations and reducing its cost base. The IA continues to monitor and support the business's recovery to further establish the business's nascent turnaround.

Pharmacy2U has maintained its high growth trajectory over the period. The business's customer acquisition activities have benefited from improved performance across its marketing channels and a reduction in churn in the customer base. Trading has further benefited from a recovery in margins in the business's NHS channel and operational improvements.

The IA continues to monitor the Company's investment in European Capital Private Debt Fund, which has completed deployment of the Company's committed capital in the fund.

EPIC Private Equity LLP

Investment Advisor to the Company

9 September 2019

Biographies of the Directors

 
 Clive Spears                                David Pirouet 
 Clive Spears retired from the               David Pirouet joined PricewaterhouseCoopers 
  Royal Bank of Scotland                      Channel Islands LLP in 1980, retiring 
  International Limited in December           in 2009 after being an Audit and 
  2003 as Deputy Director of Jersey           Assurance Partner for over 20 
  after 32 years of service. His              years. During his 29 years at 
  main activities prior to retirement         the rm Mr Pirouet specialised 
  included Product Development,               in the nancial services sector, 
  Corporate Finance, Trust and Offshore       in particular in the alternative 
  Company Services and he was Head            investment management area and 
  of Joint Venture Fund Administration        also led the business's Hedge 
  with Rawlinson & Hunter. Mr Spears          Fund and business recovery practices 
  is an Associate of the Chartered            for over four years. Mr Pirouet 
  Institute of Bankers and a Member           currently holds a number of non-executive 
  of the Chartered Institute for              positions across private equity, 
  Securities & Investment. He has             infrastructure and corporate debt. 
  accumulated a well spread portfolio         Mr Pirouet's appointments currently 
  of directorships centring on private        include non-executive Director 
  equity, infrastructure and corporate        and Chair of the Audit and Risk 
  debt. His appointments currently            committee for GCP Infrastructure 
  include being Chairman of Nordic            Investments (FTSE 250 listed company). 
  Capital Limited and being director 
  and Head of the Investment Committee 
  for GCP Infrastructure Investments 
  (FTSE 250 listed company). 
                                            -------------------------------------------- 
 Heather Bestwick                            Robert Qyayle, 
                                            -------------------------------------------- 
 Heather Bestwick has been a nancial         Robert Quayle quali ed as an English 
  services professional for 25 years,         solicitor at Linklaters & Paines 
  onshore in the City of London               in 1974 after reading law at Selwyn 
  and offshore in the Cayman Islands          College, Cambridge. He subsequently 
  and Jersey. She quali ed as an              practiced in London and the Isle 
  English solicitor, specialising             of Man as a partner in Travers 

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -2-

Whittard of Chelsea has maintained a robust growth trajectory throughout the period. The business's UK retail estate continues to outperform a weak UK retail market. Recruitment in the business's international division has been focused on developing and executing the business's digital and physical strategy for the Far East. The business has engaged a new Taiwanese franchise partner, opening 3 new stores in the period.

David Phillips has made progress in its turnaround plan, with the implementation of further operational improvements and sales initiatives. The business completed the disposal of a division in June 2019, simplifying its operations and reducing its cost base. The Board continues to monitor the investment closely given the nascent turnaround and the risk posed to performance from a slowdown in the UK property and construction markets.

Pharmacy2U continues to execute its growth strategy, supported by capital raised in 2018. Customer acquisition has been aided by reduced churn rates, with the business achieving a record number of registered customers and orders delivered in the period.

The Company has taken several actions in the period with regards to its capital structure. On 14 May 2019, the Company entered an agreement to acquire the carried interest entitlement and outstanding accrual in ESO Investments 1 LP, a limited partnership which held the Company's indirect interests in Luceco plc, Whittard of Chelsea and Pharmacy2U. The consideration for the transaction was satisfied by the issue of ordinary shares in the Company. The transaction both maximises the Company's long-term liquidity and increases long-term alignment with the Investment Advisor. In addition, in the months of June and July, the Company completed buybacks of shares in the market, retiring 387,278 or 1.2 per cent of the Company's ordinary shares.

The Investment Advisor continues to identify and review a wide range of investment opportunities. The Company maintains a strong liquidity position to allow it to take advantage of such opportunities. Conservative pricing and a thorough, risk-weighted analysis of value creation potential remain essential to the consideration of proposed investments.

I would like to extend my gratitude to the Investment Advisor, my fellow Directors and the Company's professional advisors for their hard work and diligence during the first half of the year.

Clive Spears

Chairman

9 September 2019

Investment Advisor's Report

The Investment Advisor (the "IA") remains focused on the growth in value of the Company's portfolio, both through the development of existing assets and the pursuit of attractive new investment opportunities. The IA is confident that, while the UK market is subject to significant uncertainty in the short-term, the Company's long-term investment horizon provides it with a competitive and differentiated position in the market.

The IA was deeply saddened to learn of the passing of Geoffrey Vero, the Company's Chairman, in May 2019. The IA wishes to echo the sentiments of the Chairman and express its gratitude to Mr Vero for the dedication and support given to ESO during his long and successful tenure. The IA would like to extend its sincerest condolences to Mr Vero's family and friends.

The Company

The NAV per share of the Company as at 31 July 2019 was 245.54 pence per share, representing an increase of 19.7 per cent. on the NAV per share of 205.19 pence as at 31 January 2019. The share price of the Company as at 31 July 2019 was 191.00 pence, representing an increase of 28.6 per cent. on the share price of 148.57 pence as at 31 January 2019.

Based on the latest NAV, as set out above, the gross asset cover for the total outstanding loans of GBP3.9 million is 21.8x. Cash balances now stand at GBP27.0 million (including cash held by underlying associates in which the Company is the sole investor).

The Company completed a corporate reorganisation on 14 May 2019. The Company acquired the carried interest accrual in ESO Investments 1 LP, which held ESO's indirect interests in Luceco, Whittard of Chelsea and Pharmacy2U. The consideration for the carried interest was satisfied by the issue of 4.4 million ordinary shares in the Company, issued at a premium of 22.3 per cent to the mid-market closing price of the Company's ordinary shares on the date of transaction. The Company has also completed buybacks of shares in the market in the period, returning to the Company's treasury 1.2 per cent of existing share capital.

The Portfolio

Third party net debt remains modest across the Company's private equity portfolio, standing at 1.0x EBITDA in aggregate. The Company has maintained a disciplined approach to the valuation of the portfolio's assets with its weighted average enterprise value equating to an EBITDA multiple of 3.8x for unquoted assets (excluding assets investing for growth).

The share price of Luceco plc, the Company's largest asset, rose by 83.5 per cent. in the six months to 31 July 2019. On 9 September 2019, Luceco released its Interim Report, announcing solid performance for the six months ending 30 June 2019. The business achieved a 10.1% increase in sales in the period compared to the prior year, underpinned by continued gross margin and operational improvements, contributing to an improved operating margin of 8.5%. The business further announced that net debt had reduced to 1.5x last twelve month EBITDA. As at 31 July 2019, Luceco plc constituted circa 49.5 per cent. of the Company's GAV, with the balance being constituted by other investments and cash.

Whittard of Chelsea delivered continuing growth over the period, in line with budget and comfortably ahead of the prior year. Sales performance was underpinned by continued momentum in the business's UK retail portfolio, achieving like for like growth despite the challenges across the wider sector. This solid trading performance has been augmented by an improvement in product margin and the realisation of operational efficiencies, generating profitability ahead of budget and the prior year. The business has increased its strategic focus on international growth opportunities during the period. The business's China division has recruited in order to develop its high growth multi-channel strategy in the region. In addition, the business has engaged a new franchise partner in Taiwan, with three new stores opened in the period.

David Phillips has continued to stabilise over the period. However, the UK property market remains soft and is subject to further uncertainty, in particular in relation to Brexit. The business completed the disposal of its Local Authority Housing division in June 2019, simplifying its operations and reducing its cost base. The IA continues to monitor and support the business's recovery to further establish the business's nascent turnaround.

Pharmacy2U has maintained its high growth trajectory over the period. The business's customer acquisition activities have benefited from improved performance across its marketing channels and a reduction in churn in the customer base. Trading has further benefited from a recovery in margins in the business's NHS channel and operational improvements.

The IA continues to monitor the Company's investment in European Capital Private Debt Fund, which has completed deployment of the Company's committed capital in the fund.

EPIC Private Equity LLP

Investment Advisor to the Company

9 September 2019

Biographies of the Directors

 
 Clive Spears                                David Pirouet 
 Clive Spears retired from the               David Pirouet joined PricewaterhouseCoopers 
  Royal Bank of Scotland                      Channel Islands LLP in 1980, retiring 
  International Limited in December           in 2009 after being an Audit and 
  2003 as Deputy Director of Jersey           Assurance Partner for over 20 
  after 32 years of service. His              years. During his 29 years at 
  main activities prior to retirement         the rm Mr Pirouet specialised 
  included Product Development,               in the nancial services sector, 
  Corporate Finance, Trust and Offshore       in particular in the alternative 
  Company Services and he was Head            investment management area and 
  of Joint Venture Fund Administration        also led the business's Hedge 
  with Rawlinson & Hunter. Mr Spears          Fund and business recovery practices 
  is an Associate of the Chartered            for over four years. Mr Pirouet 
  Institute of Bankers and a Member           currently holds a number of non-executive 
  of the Chartered Institute for              positions across private equity, 
  Securities & Investment. He has             infrastructure and corporate debt. 
  accumulated a well spread portfolio         Mr Pirouet's appointments currently 
  of directorships centring on private        include non-executive Director 
  equity, infrastructure and corporate        and Chair of the Audit and Risk 
  debt. His appointments currently            committee for GCP Infrastructure 
  include being Chairman of Nordic            Investments (FTSE 250 listed company). 
  Capital Limited and being director 
  and Head of the Investment Committee 
  for GCP Infrastructure Investments 
  (FTSE 250 listed company). 
                                            -------------------------------------------- 
 Heather Bestwick                            Robert Qyayle, 
                                            -------------------------------------------- 
 Heather Bestwick has been a nancial         Robert Quayle quali ed as an English 
  services professional for 25 years,         solicitor at Linklaters & Paines 
  onshore in the City of London               in 1974 after reading law at Selwyn 
  and offshore in the Cayman Islands          College, Cambridge. He subsequently 
  and Jersey. She quali ed as an              practiced in London and the Isle 
  English solicitor, specialising             of Man as a partner in Travers 

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -2-

Whittard of Chelsea has maintained a robust growth trajectory throughout the period. The business's UK retail estate continues to outperform a weak UK retail market. Recruitment in the business's international division has been focused on developing and executing the business's digital and physical strategy for the Far East. The business has engaged a new Taiwanese franchise partner, opening 3 new stores in the period.

David Phillips has made progress in its turnaround plan, with the implementation of further operational improvements and sales initiatives. The business completed the disposal of a division in June 2019, simplifying its operations and reducing its cost base. The Board continues to monitor the investment closely given the nascent turnaround and the risk posed to performance from a slowdown in the UK property and construction markets.

Pharmacy2U continues to execute its growth strategy, supported by capital raised in 2018. Customer acquisition has been aided by reduced churn rates, with the business achieving a record number of registered customers and orders delivered in the period.

The Company has taken several actions in the period with regards to its capital structure. On 14 May 2019, the Company entered an agreement to acquire the carried interest entitlement and outstanding accrual in ESO Investments 1 LP, a limited partnership which held the Company's indirect interests in Luceco plc, Whittard of Chelsea and Pharmacy2U. The consideration for the transaction was satisfied by the issue of ordinary shares in the Company. The transaction both maximises the Company's long-term liquidity and increases long-term alignment with the Investment Advisor. In addition, in the months of June and July, the Company completed buybacks of shares in the market, retiring 387,278 or 1.2 per cent of the Company's ordinary shares.

The Investment Advisor continues to identify and review a wide range of investment opportunities. The Company maintains a strong liquidity position to allow it to take advantage of such opportunities. Conservative pricing and a thorough, risk-weighted analysis of value creation potential remain essential to the consideration of proposed investments.

I would like to extend my gratitude to the Investment Advisor, my fellow Directors and the Company's professional advisors for their hard work and diligence during the first half of the year.

Clive Spears

Chairman

9 September 2019

Investment Advisor's Report

The Investment Advisor (the "IA") remains focused on the growth in value of the Company's portfolio, both through the development of existing assets and the pursuit of attractive new investment opportunities. The IA is confident that, while the UK market is subject to significant uncertainty in the short-term, the Company's long-term investment horizon provides it with a competitive and differentiated position in the market.

The IA was deeply saddened to learn of the passing of Geoffrey Vero, the Company's Chairman, in May 2019. The IA wishes to echo the sentiments of the Chairman and express its gratitude to Mr Vero for the dedication and support given to ESO during his long and successful tenure. The IA would like to extend its sincerest condolences to Mr Vero's family and friends.

The Company

The NAV per share of the Company as at 31 July 2019 was 245.54 pence per share, representing an increase of 19.7 per cent. on the NAV per share of 205.19 pence as at 31 January 2019. The share price of the Company as at 31 July 2019 was 191.00 pence, representing an increase of 28.6 per cent. on the share price of 148.57 pence as at 31 January 2019.

Based on the latest NAV, as set out above, the gross asset cover for the total outstanding loans of GBP3.9 million is 21.8x. Cash balances now stand at GBP27.0 million (including cash held by underlying associates in which the Company is the sole investor).

The Company completed a corporate reorganisation on 14 May 2019. The Company acquired the carried interest accrual in ESO Investments 1 LP, which held ESO's indirect interests in Luceco, Whittard of Chelsea and Pharmacy2U. The consideration for the carried interest was satisfied by the issue of 4.4 million ordinary shares in the Company, issued at a premium of 22.3 per cent to the mid-market closing price of the Company's ordinary shares on the date of transaction. The Company has also completed buybacks of shares in the market in the period, returning to the Company's treasury 1.2 per cent of existing share capital.

The Portfolio

Third party net debt remains modest across the Company's private equity portfolio, standing at 1.0x EBITDA in aggregate. The Company has maintained a disciplined approach to the valuation of the portfolio's assets with its weighted average enterprise value equating to an EBITDA multiple of 3.8x for unquoted assets (excluding assets investing for growth).

The share price of Luceco plc, the Company's largest asset, rose by 83.5 per cent. in the six months to 31 July 2019. On 9 September 2019, Luceco released its Interim Report, announcing solid performance for the six months ending 30 June 2019. The business achieved a 10.1% increase in sales in the period compared to the prior year, underpinned by continued gross margin and operational improvements, contributing to an improved operating margin of 8.5%. The business further announced that net debt had reduced to 1.5x last twelve month EBITDA. As at 31 July 2019, Luceco plc constituted circa 49.5 per cent. of the Company's GAV, with the balance being constituted by other investments and cash.

Whittard of Chelsea delivered continuing growth over the period, in line with budget and comfortably ahead of the prior year. Sales performance was underpinned by continued momentum in the business's UK retail portfolio, achieving like for like growth despite the challenges across the wider sector. This solid trading performance has been augmented by an improvement in product margin and the realisation of operational efficiencies, generating profitability ahead of budget and the prior year. The business has increased its strategic focus on international growth opportunities during the period. The business's China division has recruited in order to develop its high growth multi-channel strategy in the region. In addition, the business has engaged a new franchise partner in Taiwan, with three new stores opened in the period.

David Phillips has continued to stabilise over the period. However, the UK property market remains soft and is subject to further uncertainty, in particular in relation to Brexit. The business completed the disposal of its Local Authority Housing division in June 2019, simplifying its operations and reducing its cost base. The IA continues to monitor and support the business's recovery to further establish the business's nascent turnaround.

Pharmacy2U has maintained its high growth trajectory over the period. The business's customer acquisition activities have benefited from improved performance across its marketing channels and a reduction in churn in the customer base. Trading has further benefited from a recovery in margins in the business's NHS channel and operational improvements.

The IA continues to monitor the Company's investment in European Capital Private Debt Fund, which has completed deployment of the Company's committed capital in the fund.

EPIC Private Equity LLP

Investment Advisor to the Company

9 September 2019

Biographies of the Directors

 
 Clive Spears                                David Pirouet 
 Clive Spears retired from the               David Pirouet joined PricewaterhouseCoopers 
  Royal Bank of Scotland                      Channel Islands LLP in 1980, retiring 
  International Limited in December           in 2009 after being an Audit and 
  2003 as Deputy Director of Jersey           Assurance Partner for over 20 
  after 32 years of service. His              years. During his 29 years at 
  main activities prior to retirement         the rm Mr Pirouet specialised 
  included Product Development,               in the nancial services sector, 
  Corporate Finance, Trust and Offshore       in particular in the alternative 
  Company Services and he was Head            investment management area and 
  of Joint Venture Fund Administration        also led the business's Hedge 
  with Rawlinson & Hunter. Mr Spears          Fund and business recovery practices 
  is an Associate of the Chartered            for over four years. Mr Pirouet 
  Institute of Bankers and a Member           currently holds a number of non-executive 
  of the Chartered Institute for              positions across private equity, 
  Securities & Investment. He has             infrastructure and corporate debt. 
  accumulated a well spread portfolio         Mr Pirouet's appointments currently 
  of directorships centring on private        include non-executive Director 
  equity, infrastructure and corporate        and Chair of the Audit and Risk 
  debt. His appointments currently            committee for GCP Infrastructure 
  include being Chairman of Nordic            Investments (FTSE 250 listed company). 
  Capital Limited and being director 
  and Head of the Investment Committee 
  for GCP Infrastructure Investments 
  (FTSE 250 listed company). 
                                            -------------------------------------------- 
 Heather Bestwick                            Robert Qyayle, 
                                            -------------------------------------------- 
 Heather Bestwick has been a nancial         Robert Quayle quali ed as an English 
  services professional for 25 years,         solicitor at Linklaters & Paines 
  onshore in the City of London               in 1974 after reading law at Selwyn 
  and offshore in the Cayman Islands          College, Cambridge. He subsequently 
  and Jersey. She quali ed as an              practiced in London and the Isle 
  English solicitor, specialising             of Man as a partner in Travers 

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -3-

  in ship nance, with City rm Norton          Smith Braithwaite. He served as 
  Rose, and worked in their London            Clerk of Tynwald (the Isle of 
  and Greek of ces for 8 years.               Man's parliament) for periods 
  Ms Bestwick subsequently practised          totalling 12 years and holds a 
  and became a partner with global            number of public and private appointments, 
  offshore law rm Walkers in the              and is active in the voluntary 
  Cayman Islands, and Managing Partner        sector. Mr. Quayle is Chairman 
  of the Jersey of ce. Ms Bestwick            of the Isle of Man Steam Packet 
  sits on the boards of the manager           Company Limited and a number of 
  of the Deutsche Bank dbX hedge              other companies in the nancial 
  fund platform, a shipping fund,             services and distribution sectors. 
  a credit fund managed by Highland 
  Capital Management and the States 
  of Jersey incorporated company 
  holding Jersey's affordable housing. 
                                            -------------------------------------------- 
 Nicholas Wilson 
 Nicholas Wilson has over 40 years 
  of experience in hedge funds, 
  derivatives and global asset management. 
  He has run offshore branch operations 
  for Mees Pierson Derivatives Limited, 
  ADM Investor Services International 
  Limited and several other London 
  based nancial services companies. 
  He is Chairman of Gulf Investment 
  Fund plc, a premium listed company, 
  and, until recently, was chairman 
  of Alternative Investment Strategies 
  Limited. He is a resident of the 
  Isle of Man. 
 

Biographies of the Investment Advisor

EPIC Private Equity LLP ("EPE" or the "Investment Advisor") was founded in June 2001 and is independently owned by its Partners. EPE focuses on niche investment opportunities with a focus on special situations, distressed, growth and buyout transactions, special purpose acquisition companies, private investments in public equities, as well as primary and secondary limited partner transactions

 
 Giles Brand                                 Hiren Patel 
 Giles Brand is a Managing Partner           Hiren Patel is a Managing Partner 
  and the founder of EPE. He is               and EPE's Finance Director and 
  currently the non-executive chairman        Compliance Officer. He has worked 
  of Whittard of Chelsea and non-executive    in the investment management industry 
  chairman of Luceco plc. Before              for the past ten years. Before 
  joining EPE, Giles was a founding           joining EPEA and EPE, Hiren was 
  Director of EPIC Investment Partners,       finance director of EPIC Investment 
  a fund management business which            Partners and was employed at Groupama 
  at sale to Syndicate Asset Management       Asset Management where he was the 
  plc had US$5 billion under management       Group Financial Controller. 
  and spent five years working 
  in Mergers and Acquisitions at 
  Baring Brothers in Paris and 
  London. Giles read History at 
  Bristol University. 
                                            ----------------------------------------- 
 Robert Fulford                              James Henderson 
                                            ----------------------------------------- 
 Robert Fulford is an Investment             James Henderson is an Investment 
  Director of EPE. He previously              Director of EPE. He previously 
  worked at Barclaycard Consumer              worked in the Investment Banking 
  Europe before joining EPE. Whilst           division at Deutsche Bank before 
  at Barclaycard, Robert as the               joining EPE. Whilst at Deutsche 
  Senior Manager for Strategic                Bank he worked on a number of M&A 
  Insight and was responsible for             transactions and IPOs in the energy, 
  identifying, analysing and responding       property, retail and gaming sectors, 
  to competitive forces. Prior                as well as providing corporate 
  to Barclaycard, Robert was a                broking advice to mandated clients. 
  strategy consultant at Oliver               He manages the Company's investment 
  Wyman Financial Services, where             in Pharmacy2U. James read Modern 
  he worked with a range of major             History at Oxford University and 
  retail banking and institutional            Medicine at Nottingham University. 
  clients in the UK, mainland Europe, 
  Middle East and Africa, specialising 
  in strategy and risk modelling. 
  He manages the Company's investment 
  in David Phillips and Whittard 
  of Chelsea, where he is currently 
  a non-executive director. Robert 
  read Engineering at Cambridge 
  University. 
                                            ----------------------------------------- 
 Alex Leslie                                 Ian Williams 
------------------------------------------  ----------------------------------------- 
 Alex Leslie is an Investment                Ian Williams is an Investment Director 
  Director of EPE. He previously              of EPE. Before joining EPE, he 
  worked in Healthcare Investment             was a partner at Lyceum Capital 
  Banking at Piper Jaffray. Whilst            where he was responsible for deal 
  at Piper Jaffray he worked on               origination with a primary focus 
  a number of M&A transactions                on the business services and software 
  and equity fundraisings within              sectors, as well as financial services, 
  the Biotechnology, Specialty                education and health sectors. Prior 
  Pharmaceutical and Medical Technology       to Lyceum, Ian was a Director at 
  sectors. He manages the Company's           Arbuthnot Securities, involved 
  investments in Luceco plc and               in transactions including IPOs, 
  Process Components, where he                secondary fund raisings and M&A, 
  is currently a non-executive                focusing on the support services, 
  director. Alex read Human Biological        healthcare, transport & IT sectors. 
  and Social Sciences at Oxford               Ian read Politics and Economics 
  University and obtained an MPhil            at the University of Bristol. 
  in Management from the Judge 
  Business School at Cambridge 
  University. 
------------------------------------------  ----------------------------------------- 
 

Independent Review Report to EPE Special Opportunities Limited

Conclusion

We have been engaged by the company to review the condensed set of consolidated financial statements in the half-yearly report for the six months ended 31 July 2019 which comprises the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Statement of Changes in Equity, the Condensed Consolidated Statement of Cash Flows and the related explanatory notes.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of consolidated financial statements in the half-yearly report for the six months ended 31 July 2019 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and the AIM Rules.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. We read the other information contained in the half-yearly report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of consolidated financial statements.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

The impact of uncertainties due to the UK exiting the European Union on our review

Uncertainties related to the effects of Brexit are relevant to understanding our review of the condensed consolidated financial statements. Brexit is one of the most significant economic events for the UK, and at the date of this report its effects are subject to unprecedented levels of uncertainty of outcomes, with the full range of possible effects unknown. An interim review cannot be expected to predict the unknowable factors or all possible future implications for a company and this is particularly the case in relation to Brexit.

Directors' responsibilities

The half-yearly report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.

The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the EU. The Directors are responsible for preparing the condensed set of consolidated financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted by the EU.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of consolidated financial statements in the half-yearly report based on our review

The purpose of our review work and to whom we owe our responsibilities

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -3-

  in ship nance, with City rm Norton          Smith Braithwaite. He served as 
  Rose, and worked in their London            Clerk of Tynwald (the Isle of 
  and Greek of ces for 8 years.               Man's parliament) for periods 
  Ms Bestwick subsequently practised          totalling 12 years and holds a 
  and became a partner with global            number of public and private appointments, 
  offshore law rm Walkers in the              and is active in the voluntary 
  Cayman Islands, and Managing Partner        sector. Mr. Quayle is Chairman 
  of the Jersey of ce. Ms Bestwick            of the Isle of Man Steam Packet 
  sits on the boards of the manager           Company Limited and a number of 
  of the Deutsche Bank dbX hedge              other companies in the nancial 
  fund platform, a shipping fund,             services and distribution sectors. 
  a credit fund managed by Highland 
  Capital Management and the States 
  of Jersey incorporated company 
  holding Jersey's affordable housing. 
                                            -------------------------------------------- 
 Nicholas Wilson 
 Nicholas Wilson has over 40 years 
  of experience in hedge funds, 
  derivatives and global asset management. 
  He has run offshore branch operations 
  for Mees Pierson Derivatives Limited, 
  ADM Investor Services International 
  Limited and several other London 
  based nancial services companies. 
  He is Chairman of Gulf Investment 
  Fund plc, a premium listed company, 
  and, until recently, was chairman 
  of Alternative Investment Strategies 
  Limited. He is a resident of the 
  Isle of Man. 
 

Biographies of the Investment Advisor

EPIC Private Equity LLP ("EPE" or the "Investment Advisor") was founded in June 2001 and is independently owned by its Partners. EPE focuses on niche investment opportunities with a focus on special situations, distressed, growth and buyout transactions, special purpose acquisition companies, private investments in public equities, as well as primary and secondary limited partner transactions

 
 Giles Brand                                 Hiren Patel 
 Giles Brand is a Managing Partner           Hiren Patel is a Managing Partner 
  and the founder of EPE. He is               and EPE's Finance Director and 
  currently the non-executive chairman        Compliance Officer. He has worked 
  of Whittard of Chelsea and non-executive    in the investment management industry 
  chairman of Luceco plc. Before              for the past ten years. Before 
  joining EPE, Giles was a founding           joining EPEA and EPE, Hiren was 
  Director of EPIC Investment Partners,       finance director of EPIC Investment 
  a fund management business which            Partners and was employed at Groupama 
  at sale to Syndicate Asset Management       Asset Management where he was the 
  plc had US$5 billion under management       Group Financial Controller. 
  and spent five years working 
  in Mergers and Acquisitions at 
  Baring Brothers in Paris and 
  London. Giles read History at 
  Bristol University. 
                                            ----------------------------------------- 
 Robert Fulford                              James Henderson 
                                            ----------------------------------------- 
 Robert Fulford is an Investment             James Henderson is an Investment 
  Director of EPE. He previously              Director of EPE. He previously 
  worked at Barclaycard Consumer              worked in the Investment Banking 
  Europe before joining EPE. Whilst           division at Deutsche Bank before 
  at Barclaycard, Robert as the               joining EPE. Whilst at Deutsche 
  Senior Manager for Strategic                Bank he worked on a number of M&A 
  Insight and was responsible for             transactions and IPOs in the energy, 
  identifying, analysing and responding       property, retail and gaming sectors, 
  to competitive forces. Prior                as well as providing corporate 
  to Barclaycard, Robert was a                broking advice to mandated clients. 
  strategy consultant at Oliver               He manages the Company's investment 
  Wyman Financial Services, where             in Pharmacy2U. James read Modern 
  he worked with a range of major             History at Oxford University and 
  retail banking and institutional            Medicine at Nottingham University. 
  clients in the UK, mainland Europe, 
  Middle East and Africa, specialising 
  in strategy and risk modelling. 
  He manages the Company's investment 
  in David Phillips and Whittard 
  of Chelsea, where he is currently 
  a non-executive director. Robert 
  read Engineering at Cambridge 
  University. 
                                            ----------------------------------------- 
 Alex Leslie                                 Ian Williams 
------------------------------------------  ----------------------------------------- 
 Alex Leslie is an Investment                Ian Williams is an Investment Director 
  Director of EPE. He previously              of EPE. Before joining EPE, he 
  worked in Healthcare Investment             was a partner at Lyceum Capital 
  Banking at Piper Jaffray. Whilst            where he was responsible for deal 
  at Piper Jaffray he worked on               origination with a primary focus 
  a number of M&A transactions                on the business services and software 
  and equity fundraisings within              sectors, as well as financial services, 
  the Biotechnology, Specialty                education and health sectors. Prior 
  Pharmaceutical and Medical Technology       to Lyceum, Ian was a Director at 
  sectors. He manages the Company's           Arbuthnot Securities, involved 
  investments in Luceco plc and               in transactions including IPOs, 
  Process Components, where he                secondary fund raisings and M&A, 
  is currently a non-executive                focusing on the support services, 
  director. Alex read Human Biological        healthcare, transport & IT sectors. 
  and Social Sciences at Oxford               Ian read Politics and Economics 
  University and obtained an MPhil            at the University of Bristol. 
  in Management from the Judge 
  Business School at Cambridge 
  University. 
------------------------------------------  ----------------------------------------- 
 

Independent Review Report to EPE Special Opportunities Limited

Conclusion

We have been engaged by the company to review the condensed set of consolidated financial statements in the half-yearly report for the six months ended 31 July 2019 which comprises the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Statement of Changes in Equity, the Condensed Consolidated Statement of Cash Flows and the related explanatory notes.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of consolidated financial statements in the half-yearly report for the six months ended 31 July 2019 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and the AIM Rules.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. We read the other information contained in the half-yearly report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of consolidated financial statements.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

The impact of uncertainties due to the UK exiting the European Union on our review

Uncertainties related to the effects of Brexit are relevant to understanding our review of the condensed consolidated financial statements. Brexit is one of the most significant economic events for the UK, and at the date of this report its effects are subject to unprecedented levels of uncertainty of outcomes, with the full range of possible effects unknown. An interim review cannot be expected to predict the unknowable factors or all possible future implications for a company and this is particularly the case in relation to Brexit.

Directors' responsibilities

The half-yearly report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.

The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the EU. The Directors are responsible for preparing the condensed set of consolidated financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted by the EU.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of consolidated financial statements in the half-yearly report based on our review

The purpose of our review work and to whom we owe our responsibilities

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -3-

  in ship nance, with City rm Norton          Smith Braithwaite. He served as 
  Rose, and worked in their London            Clerk of Tynwald (the Isle of 
  and Greek of ces for 8 years.               Man's parliament) for periods 
  Ms Bestwick subsequently practised          totalling 12 years and holds a 
  and became a partner with global            number of public and private appointments, 
  offshore law rm Walkers in the              and is active in the voluntary 
  Cayman Islands, and Managing Partner        sector. Mr. Quayle is Chairman 
  of the Jersey of ce. Ms Bestwick            of the Isle of Man Steam Packet 
  sits on the boards of the manager           Company Limited and a number of 
  of the Deutsche Bank dbX hedge              other companies in the nancial 
  fund platform, a shipping fund,             services and distribution sectors. 
  a credit fund managed by Highland 
  Capital Management and the States 
  of Jersey incorporated company 
  holding Jersey's affordable housing. 
                                            -------------------------------------------- 
 Nicholas Wilson 
 Nicholas Wilson has over 40 years 
  of experience in hedge funds, 
  derivatives and global asset management. 
  He has run offshore branch operations 
  for Mees Pierson Derivatives Limited, 
  ADM Investor Services International 
  Limited and several other London 
  based nancial services companies. 
  He is Chairman of Gulf Investment 
  Fund plc, a premium listed company, 
  and, until recently, was chairman 
  of Alternative Investment Strategies 
  Limited. He is a resident of the 
  Isle of Man. 
 

Biographies of the Investment Advisor

EPIC Private Equity LLP ("EPE" or the "Investment Advisor") was founded in June 2001 and is independently owned by its Partners. EPE focuses on niche investment opportunities with a focus on special situations, distressed, growth and buyout transactions, special purpose acquisition companies, private investments in public equities, as well as primary and secondary limited partner transactions

 
 Giles Brand                                 Hiren Patel 
 Giles Brand is a Managing Partner           Hiren Patel is a Managing Partner 
  and the founder of EPE. He is               and EPE's Finance Director and 
  currently the non-executive chairman        Compliance Officer. He has worked 
  of Whittard of Chelsea and non-executive    in the investment management industry 
  chairman of Luceco plc. Before              for the past ten years. Before 
  joining EPE, Giles was a founding           joining EPEA and EPE, Hiren was 
  Director of EPIC Investment Partners,       finance director of EPIC Investment 
  a fund management business which            Partners and was employed at Groupama 
  at sale to Syndicate Asset Management       Asset Management where he was the 
  plc had US$5 billion under management       Group Financial Controller. 
  and spent five years working 
  in Mergers and Acquisitions at 
  Baring Brothers in Paris and 
  London. Giles read History at 
  Bristol University. 
                                            ----------------------------------------- 
 Robert Fulford                              James Henderson 
                                            ----------------------------------------- 
 Robert Fulford is an Investment             James Henderson is an Investment 
  Director of EPE. He previously              Director of EPE. He previously 
  worked at Barclaycard Consumer              worked in the Investment Banking 
  Europe before joining EPE. Whilst           division at Deutsche Bank before 
  at Barclaycard, Robert as the               joining EPE. Whilst at Deutsche 
  Senior Manager for Strategic                Bank he worked on a number of M&A 
  Insight and was responsible for             transactions and IPOs in the energy, 
  identifying, analysing and responding       property, retail and gaming sectors, 
  to competitive forces. Prior                as well as providing corporate 
  to Barclaycard, Robert was a                broking advice to mandated clients. 
  strategy consultant at Oliver               He manages the Company's investment 
  Wyman Financial Services, where             in Pharmacy2U. James read Modern 
  he worked with a range of major             History at Oxford University and 
  retail banking and institutional            Medicine at Nottingham University. 
  clients in the UK, mainland Europe, 
  Middle East and Africa, specialising 
  in strategy and risk modelling. 
  He manages the Company's investment 
  in David Phillips and Whittard 
  of Chelsea, where he is currently 
  a non-executive director. Robert 
  read Engineering at Cambridge 
  University. 
                                            ----------------------------------------- 
 Alex Leslie                                 Ian Williams 
------------------------------------------  ----------------------------------------- 
 Alex Leslie is an Investment                Ian Williams is an Investment Director 
  Director of EPE. He previously              of EPE. Before joining EPE, he 
  worked in Healthcare Investment             was a partner at Lyceum Capital 
  Banking at Piper Jaffray. Whilst            where he was responsible for deal 
  at Piper Jaffray he worked on               origination with a primary focus 
  a number of M&A transactions                on the business services and software 
  and equity fundraisings within              sectors, as well as financial services, 
  the Biotechnology, Specialty                education and health sectors. Prior 
  Pharmaceutical and Medical Technology       to Lyceum, Ian was a Director at 
  sectors. He manages the Company's           Arbuthnot Securities, involved 
  investments in Luceco plc and               in transactions including IPOs, 
  Process Components, where he                secondary fund raisings and M&A, 
  is currently a non-executive                focusing on the support services, 
  director. Alex read Human Biological        healthcare, transport & IT sectors. 
  and Social Sciences at Oxford               Ian read Politics and Economics 
  University and obtained an MPhil            at the University of Bristol. 
  in Management from the Judge 
  Business School at Cambridge 
  University. 
------------------------------------------  ----------------------------------------- 
 

Independent Review Report to EPE Special Opportunities Limited

Conclusion

We have been engaged by the company to review the condensed set of consolidated financial statements in the half-yearly report for the six months ended 31 July 2019 which comprises the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Statement of Changes in Equity, the Condensed Consolidated Statement of Cash Flows and the related explanatory notes.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of consolidated financial statements in the half-yearly report for the six months ended 31 July 2019 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and the AIM Rules.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. We read the other information contained in the half-yearly report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of consolidated financial statements.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

The impact of uncertainties due to the UK exiting the European Union on our review

Uncertainties related to the effects of Brexit are relevant to understanding our review of the condensed consolidated financial statements. Brexit is one of the most significant economic events for the UK, and at the date of this report its effects are subject to unprecedented levels of uncertainty of outcomes, with the full range of possible effects unknown. An interim review cannot be expected to predict the unknowable factors or all possible future implications for a company and this is particularly the case in relation to Brexit.

Directors' responsibilities

The half-yearly report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly report in accordance with the AIM Rules.

The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as adopted by the EU. The Directors are responsible for preparing the condensed set of consolidated financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted by the EU.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of consolidated financial statements in the half-yearly report based on our review

The purpose of our review work and to whom we owe our responsibilities

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -4-

This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

KPMG Audit LLC

Chartered Accountants

Heritage Court

41 Athol Street

Douglas

Isle of Man IM99 1HN

9 September 2019

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 31 July 2019

 
                                                                                              1 Feb      1 Feb 2018 
                                                                                            2018 to       to 31 Jan 
                                                   1 Feb 2019 to 31 Jul                      31 Jul            2019 
                                                           2019                                2018 
                                             Revenue        Capital          Total            Total           Total 
                                         (unaudited)    (unaudited)    (unaudited)      (unaudited)       (audited) 
                                       -------------  -------------  -------------    -------------    ------------ 
 Note                                            GBP            GBP            GBP              GBP             GBP 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Income 
        Interest income                       94,630              -         94,630          115,815         276,328 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Total income                          94,630              -         94,630          115,815         276,328 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Expenses 
        Investment advisor's 
  5      fees                              (747,247)              -      (747,247)        (549,493)     (1,137,117) 
        Administration fees                 (85,428)              -       (85,428)         (75,345)       (148,566) 
        Directors' fees                     (77,000)              -       (77,000)         (77,000)       (154,000) 
        Directors' and Officers' 
         insurance                          (11,496)              -       (11,496)          (4,102)        (11,705) 
        Professional fees                  (675,530)              -      (675,530)        (821,460)       (855,046) 
        Board meeting and 
         travel expenses                     (3,102)              -        (3,102)          (4,978)        (12,340) 
        Auditors' remuneration              (33,376)              -       (33,376)         (20,376)        (35,217) 
        Bank charges                           (566)              -          (566)            (512)         (1,008) 
        Irrecoverable VAT                      (450)              -          (450)                -               - 
        Share-based payment 
  6      expense                            (42,695)              -       (42,695)         (69,567)       (120,544) 
        Sundry expenses                      (6,402)              -        (6,402)          (9,885)        (40,183) 
        Listing fees                        (60,636)              -       (60,636)         (16,557)        (38,425) 
        Nominated advisor 
         and broker fees                    (26,994)              -       (26,994)         (33,086)        (57,758) 
        Net foreign exchange 
         loss                                (1,753)              -        (1,753)                -         (2,049) 
        Total expenses                   (1,772,675)              -    (1,772,675)      (1,682,361)     (2,613,958) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Net expenses                     (1,678,045)              -    (1,678,045)      (1,566,546)     (2,337,630) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Gains on investments 
        Gain/(loss) on investments 
         at fair value through 
  7      profit or loss                            -     14,453,782     14,453,782     (10,714,584)     (3,864,447) 
        Gain/(loss) for the 
         period/year on investments                -     14,453,782     14,453,782     (10,714,584)     (3,864,447) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Interest on unsecured 
  12     loan note instruments             (159,842)              -      (159,842)        (309,382)       (469,225) 
        Profit/(loss) for 
         the period/year before 
         taxation                        (1,837,887)     14,453,782     12,615,895     (12,590,512)     (6,671,302) 
        Taxation                                   -              -              -                -               - 
                                       -------------  ------------- 
        Profit/(loss) for 
         the period/year                 (1,837,887)     14,453,782     12,615,895     (12,590,512)     (6,671,302) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Other comprehensive 
         income                                    -              -              -                -               - 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Total comprehensive 
         income/(loss) for 
         the period/year                 (1,837,887)     14,453,782     12,615,895     (12,590,512)     (6,671,302) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Basic earnings/(loss) 
         per ordinary share 
  10     (pence)                              (5.90)          46.40          40.50          (44.49)         (23.47) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Diluted earnings/(loss) 
         per ordinary share 
  10     (pence)                              (5.90)          46.40          40.50          (44.49)         (23.47) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
 

The total column of this statement represents the Group's Consolidated Statement of Comprehensive Income, prepared in accordance with IFRS as adopted by the EU. The supplementary revenue return and capital return columns are prepared in accordance with the Board of Directors' agreed principles. All items derive from continuing activities.

Condensed Consolidated Statement of Financial Position

As at 31 July 2019

 
                                                     31 July        31 January              31 July 
                                                        2019              2019                 2018 
                                                 (unaudited)         (audited)          (unaudited) 
 Note                                                    GBP               GBP                  GBP 
       --------------------------------      ---------------      ------------      --------------- 
        Non-current assets 
        Investments at fair value 
  7      through profit or loss                   59,965,060        34,793,620           36,510,977 
                                                  59,965,060        34,793,620           36,510,977 
       --------------------------------      ---------------      ------------      --------------- 
        Current assets 
        Cash and cash equivalents                 26,177,016        29,125,615           22,019,716 
        Trade and other receivables                  214,434           301,728              232,358 
                                                  26,391,450        29,427,343           22,252,074 
       --------------------------------      ---------------      ------------      --------------- 
        Current liabilities 
        Trade and other payables                   (503,939)         (492,878)            (335,833) 
        Provision for professional 
         fees                                      (320,000)                 -            (700,000) 
                                                   (823,939)         (492,878)          (1,035,833) 
       --------------------------------      ---------------      ------------      --------------- 
        Net current assets                        25,567,511        28,934,465           21,216,241 
       --------------------------------      ---------------      ------------      --------------- 
        Non-current liabilities 
  12    Unsecured loan note instruments          (3,925,914)       (3,915,612)          (3,905,309) 
                                                 (3,925,914)       (3,915,612)          (3,905,309) 
       --------------------------------      ---------------      ------------      --------------- 
        Net assets                                81,606,657        59,812,473           53,821,909 
       --------------------------------      ---------------      ------------      --------------- 
        Equity 
  9     Share capital                              1,707,589         1,503,286            1,503,286 
  9     Share premium                             13,489,826         3,867,209            3,867,209 
        Capital reserve                           59,170,725        44,716,943           37,866,806 

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -4-

This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

KPMG Audit LLC

Chartered Accountants

Heritage Court

41 Athol Street

Douglas

Isle of Man IM99 1HN

9 September 2019

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 31 July 2019

 
                                                                                              1 Feb      1 Feb 2018 
                                                                                            2018 to       to 31 Jan 
                                                   1 Feb 2019 to 31 Jul                      31 Jul            2019 
                                                           2019                                2018 
                                             Revenue        Capital          Total            Total           Total 
                                         (unaudited)    (unaudited)    (unaudited)      (unaudited)       (audited) 
                                       -------------  -------------  -------------    -------------    ------------ 
 Note                                            GBP            GBP            GBP              GBP             GBP 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Income 
        Interest income                       94,630              -         94,630          115,815         276,328 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Total income                          94,630              -         94,630          115,815         276,328 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Expenses 
        Investment advisor's 
  5      fees                              (747,247)              -      (747,247)        (549,493)     (1,137,117) 
        Administration fees                 (85,428)              -       (85,428)         (75,345)       (148,566) 
        Directors' fees                     (77,000)              -       (77,000)         (77,000)       (154,000) 
        Directors' and Officers' 
         insurance                          (11,496)              -       (11,496)          (4,102)        (11,705) 
        Professional fees                  (675,530)              -      (675,530)        (821,460)       (855,046) 
        Board meeting and 
         travel expenses                     (3,102)              -        (3,102)          (4,978)        (12,340) 
        Auditors' remuneration              (33,376)              -       (33,376)         (20,376)        (35,217) 
        Bank charges                           (566)              -          (566)            (512)         (1,008) 
        Irrecoverable VAT                      (450)              -          (450)                -               - 
        Share-based payment 
  6      expense                            (42,695)              -       (42,695)         (69,567)       (120,544) 
        Sundry expenses                      (6,402)              -        (6,402)          (9,885)        (40,183) 
        Listing fees                        (60,636)              -       (60,636)         (16,557)        (38,425) 
        Nominated advisor 
         and broker fees                    (26,994)              -       (26,994)         (33,086)        (57,758) 
        Net foreign exchange 
         loss                                (1,753)              -        (1,753)                -         (2,049) 
        Total expenses                   (1,772,675)              -    (1,772,675)      (1,682,361)     (2,613,958) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Net expenses                     (1,678,045)              -    (1,678,045)      (1,566,546)     (2,337,630) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Gains on investments 
        Gain/(loss) on investments 
         at fair value through 
  7      profit or loss                            -     14,453,782     14,453,782     (10,714,584)     (3,864,447) 
        Gain/(loss) for the 
         period/year on investments                -     14,453,782     14,453,782     (10,714,584)     (3,864,447) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Interest on unsecured 
  12     loan note instruments             (159,842)              -      (159,842)        (309,382)       (469,225) 
        Profit/(loss) for 
         the period/year before 
         taxation                        (1,837,887)     14,453,782     12,615,895     (12,590,512)     (6,671,302) 
        Taxation                                   -              -              -                -               - 
                                       -------------  ------------- 
        Profit/(loss) for 
         the period/year                 (1,837,887)     14,453,782     12,615,895     (12,590,512)     (6,671,302) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Other comprehensive 
         income                                    -              -              -                -               - 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Total comprehensive 
         income/(loss) for 
         the period/year                 (1,837,887)     14,453,782     12,615,895     (12,590,512)     (6,671,302) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Basic earnings/(loss) 
         per ordinary share 
  10     (pence)                              (5.90)          46.40          40.50          (44.49)         (23.47) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Diluted earnings/(loss) 
         per ordinary share 
  10     (pence)                              (5.90)          46.40          40.50          (44.49)         (23.47) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
 

The total column of this statement represents the Group's Consolidated Statement of Comprehensive Income, prepared in accordance with IFRS as adopted by the EU. The supplementary revenue return and capital return columns are prepared in accordance with the Board of Directors' agreed principles. All items derive from continuing activities.

Condensed Consolidated Statement of Financial Position

As at 31 July 2019

 
                                                     31 July        31 January              31 July 
                                                        2019              2019                 2018 
                                                 (unaudited)         (audited)          (unaudited) 
 Note                                                    GBP               GBP                  GBP 
       --------------------------------      ---------------      ------------      --------------- 
        Non-current assets 
        Investments at fair value 
  7      through profit or loss                   59,965,060        34,793,620           36,510,977 
                                                  59,965,060        34,793,620           36,510,977 
       --------------------------------      ---------------      ------------      --------------- 
        Current assets 
        Cash and cash equivalents                 26,177,016        29,125,615           22,019,716 
        Trade and other receivables                  214,434           301,728              232,358 
                                                  26,391,450        29,427,343           22,252,074 
       --------------------------------      ---------------      ------------      --------------- 
        Current liabilities 
        Trade and other payables                   (503,939)         (492,878)            (335,833) 
        Provision for professional 
         fees                                      (320,000)                 -            (700,000) 
                                                   (823,939)         (492,878)          (1,035,833) 
       --------------------------------      ---------------      ------------      --------------- 
        Net current assets                        25,567,511        28,934,465           21,216,241 
       --------------------------------      ---------------      ------------      --------------- 
        Non-current liabilities 
  12    Unsecured loan note instruments          (3,925,914)       (3,915,612)          (3,905,309) 
                                                 (3,925,914)       (3,915,612)          (3,905,309) 
       --------------------------------      ---------------      ------------      --------------- 
        Net assets                                81,606,657        59,812,473           53,821,909 
       --------------------------------      ---------------      ------------      --------------- 
        Equity 
  9     Share capital                              1,707,589         1,503,286            1,503,286 
  9     Share premium                             13,489,826         3,867,209            3,867,209 
        Capital reserve                           59,170,725        44,716,943           37,866,806 

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -4-

This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

KPMG Audit LLC

Chartered Accountants

Heritage Court

41 Athol Street

Douglas

Isle of Man IM99 1HN

9 September 2019

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 31 July 2019

 
                                                                                              1 Feb      1 Feb 2018 
                                                                                            2018 to       to 31 Jan 
                                                   1 Feb 2019 to 31 Jul                      31 Jul            2019 
                                                           2019                                2018 
                                             Revenue        Capital          Total            Total           Total 
                                         (unaudited)    (unaudited)    (unaudited)      (unaudited)       (audited) 
                                       -------------  -------------  -------------    -------------    ------------ 
 Note                                            GBP            GBP            GBP              GBP             GBP 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Income 
        Interest income                       94,630              -         94,630          115,815         276,328 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Total income                          94,630              -         94,630          115,815         276,328 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Expenses 
        Investment advisor's 
  5      fees                              (747,247)              -      (747,247)        (549,493)     (1,137,117) 
        Administration fees                 (85,428)              -       (85,428)         (75,345)       (148,566) 
        Directors' fees                     (77,000)              -       (77,000)         (77,000)       (154,000) 
        Directors' and Officers' 
         insurance                          (11,496)              -       (11,496)          (4,102)        (11,705) 
        Professional fees                  (675,530)              -      (675,530)        (821,460)       (855,046) 
        Board meeting and 
         travel expenses                     (3,102)              -        (3,102)          (4,978)        (12,340) 
        Auditors' remuneration              (33,376)              -       (33,376)         (20,376)        (35,217) 
        Bank charges                           (566)              -          (566)            (512)         (1,008) 
        Irrecoverable VAT                      (450)              -          (450)                -               - 
        Share-based payment 
  6      expense                            (42,695)              -       (42,695)         (69,567)       (120,544) 
        Sundry expenses                      (6,402)              -        (6,402)          (9,885)        (40,183) 
        Listing fees                        (60,636)              -       (60,636)         (16,557)        (38,425) 
        Nominated advisor 
         and broker fees                    (26,994)              -       (26,994)         (33,086)        (57,758) 
        Net foreign exchange 
         loss                                (1,753)              -        (1,753)                -         (2,049) 
        Total expenses                   (1,772,675)              -    (1,772,675)      (1,682,361)     (2,613,958) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Net expenses                     (1,678,045)              -    (1,678,045)      (1,566,546)     (2,337,630) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Gains on investments 
        Gain/(loss) on investments 
         at fair value through 
  7      profit or loss                            -     14,453,782     14,453,782     (10,714,584)     (3,864,447) 
        Gain/(loss) for the 
         period/year on investments                -     14,453,782     14,453,782     (10,714,584)     (3,864,447) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Interest on unsecured 
  12     loan note instruments             (159,842)              -      (159,842)        (309,382)       (469,225) 
        Profit/(loss) for 
         the period/year before 
         taxation                        (1,837,887)     14,453,782     12,615,895     (12,590,512)     (6,671,302) 
        Taxation                                   -              -              -                -               - 
                                       -------------  ------------- 
        Profit/(loss) for 
         the period/year                 (1,837,887)     14,453,782     12,615,895     (12,590,512)     (6,671,302) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Other comprehensive 
         income                                    -              -              -                -               - 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Total comprehensive 
         income/(loss) for 
         the period/year                 (1,837,887)     14,453,782     12,615,895     (12,590,512)     (6,671,302) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Basic earnings/(loss) 
         per ordinary share 
  10     (pence)                              (5.90)          46.40          40.50          (44.49)         (23.47) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
        Diluted earnings/(loss) 
         per ordinary share 
  10     (pence)                              (5.90)          46.40          40.50          (44.49)         (23.47) 
       ----------------------------    -------------  -------------  -------------    -------------    ------------ 
 

The total column of this statement represents the Group's Consolidated Statement of Comprehensive Income, prepared in accordance with IFRS as adopted by the EU. The supplementary revenue return and capital return columns are prepared in accordance with the Board of Directors' agreed principles. All items derive from continuing activities.

Condensed Consolidated Statement of Financial Position

As at 31 July 2019

 
                                                     31 July        31 January              31 July 
                                                        2019              2019                 2018 
                                                 (unaudited)         (audited)          (unaudited) 
 Note                                                    GBP               GBP                  GBP 
       --------------------------------      ---------------      ------------      --------------- 
        Non-current assets 
        Investments at fair value 
  7      through profit or loss                   59,965,060        34,793,620           36,510,977 
                                                  59,965,060        34,793,620           36,510,977 
       --------------------------------      ---------------      ------------      --------------- 
        Current assets 
        Cash and cash equivalents                 26,177,016        29,125,615           22,019,716 
        Trade and other receivables                  214,434           301,728              232,358 
                                                  26,391,450        29,427,343           22,252,074 
       --------------------------------      ---------------      ------------      --------------- 
        Current liabilities 
        Trade and other payables                   (503,939)         (492,878)            (335,833) 
        Provision for professional 
         fees                                      (320,000)                 -            (700,000) 
                                                   (823,939)         (492,878)          (1,035,833) 
       --------------------------------      ---------------      ------------      --------------- 
        Net current assets                        25,567,511        28,934,465           21,216,241 
       --------------------------------      ---------------      ------------      --------------- 
        Non-current liabilities 
  12    Unsecured loan note instruments          (3,925,914)       (3,915,612)          (3,905,309) 
                                                 (3,925,914)       (3,915,612)          (3,905,309) 
       --------------------------------      ---------------      ------------      --------------- 
        Net assets                                81,606,657        59,812,473           53,821,909 
       --------------------------------      ---------------      ------------      --------------- 
        Equity 
  9     Share capital                              1,707,589         1,503,286            1,503,286 
  9     Share premium                             13,489,826         3,867,209            3,867,209 
        Capital reserve                           59,170,725        44,716,943           37,866,806 

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -5-

        Revenue reserve                            7,238,517         9,725,035           10,584,608 
        Total equity                              81,606,657        59,812,473           53,821,909 
       --------------------------------      ---------------      ------------      --------------- 
        Net asset value per share 
  11     (pence)                                      245.54            205.19               190.18 
       --------------------------------      ---------------      ------------      --------------- 
 

Condensed Consolidated Statement of Changes in Equity

For the six months ended 31 July 2019

 
                                                    Six months ended 31 July 2019 
                                                     (unaudited) 
                                            Share        Share        Capital       Revenue 
                                          capital      premium        reserve       reserve          Total 
                                              GBP          GBP            GBP           GBP            GBP 
------------------------------------   ----------  -----------  -------------  ------------  ------------- 
 Balance at 1 February 
  2019                                  1,503,286    3,867,209     44,716,943     9,725,035     59,812,473 
 Total comprehensive income/(loss) 
  for the period                                -            -     14,453,782   (1,837,887)     12,615,895 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Contributions by and distributions 
  to owners 
 Share-based payment charge                     -            -              -        42,695         42,695 
 Cash received from JSOP 
  participants                                  -            -              -        77,866         77,866 
 Purchase of shares                      (19,364)            -              -     (769,192)      (788,556) 
 Issue of new shares                      223,667    9,622,617              -             -      9,846,284 
 Total transactions with 
  owners                                  204,303    9,622,617              -     (648,631)      9,178,289 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Balance at 31 July 2019                1,707,589   13,489,826     59,170,725     7,238,517     81,606,657 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 
                                                    Year ended 31 January 
                                                     2019 (audited) 
                                            Share        Share        Capital       Revenue 
                                          capital      premium        reserve       reserve          Total 
                                              GBP          GBP            GBP           GBP            GBP 
------------------------------------   ----------  -----------  -------------  ------------  ------------- 
 Balance at 1 February 
  2018                                  1,503,286    3,867,209     48,581,390    12,390,969     66,342,854 
 Total comprehensive loss 
  for the year                                  -            -    (3,864,447)   (2,806,855)    (6,671,302) 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Contributions by and distributions 
  to owners 
 Share-based payment charge                     -            -              -       120,544        120,544 
 Share ownership scheme 
  participation                                 -            -              -        20,377         20,377 
 Total transactions with 
  owners                                        -            -              -       140,921        140,921 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Balance at 31 January 
  2019                                  1,503,286    3,867,209     44,716,943     9,725,035     59,812,473 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 
                                                    Six months ended 31 July 2018 
                                                     (unaudited) 
                                            Share        Share        Capital       Revenue 
                                          capital      premium        reserve       reserve          Total 
                                              GBP          GBP            GBP           GBP            GBP 
------------------------------------   ----------  -----------  -------------  ------------  ------------- 
 Balance at 1 February 
  2018                                  1,503,286    3,867,209     48,581,390    12,390,969     66,342,854 
 Total comprehensive loss 
  for the period                                -            -   (10,714,584)   (1,875,928)   (12,590,512) 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Contributions by and distributions 
  to owners 
 Share-based payment charge                     -            -              -        69,567         69,567 
 Total transactions with 
  owners                                        -            -              -        69,567         69,567 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Balance at 31 July 2018                1,503,286    3,867,209     37,866,806    10,584,608     53,821,909 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 

Condensed Consolidated Statement of Cash Flows

For the six months ended 31 July 2019

 
                                                  1 Feb 2019        1 Feb 2018          1 Feb 2018 
                                                   to 31 Jul         to 31 Jan           to 31 Jul 
                                                        2019              2019                2018 
                                                 (unaudited)         (audited)         (unaudited) 
                                                         GBP               GBP                 GBP 
---------------------------------------       --------------      ------------      -------------- 
 Operating activities 
 Interest income received                             10,639           187,516               7,368 
 Expenses paid                                   (1,399,008)       (2,591,918)         (1,047,984) 
 Net cash used in operating activities           (1,388,369)       (2,404,402)         (1,040,616) 
--------------------------------------------  --------------      ------------      -------------- 
 Investing activities 
 Purchase of investments                           (700,000)       (3,008,113)           (700,000) 
 Sale of investments                                       -        10,906,961                   - 
 Net cash (used in)/from investing 
  activities                                       (700,000)         7,898,848           (700,000) 
--------------------------------------------  --------------      ------------      -------------- 
 Financing activities 
 Unsecured loan note repurchases                           -       (3,987,729)         (3,987,729) 
 Unsecured loan note interest paid                 (149,540)         (448,620)           (299,080) 
 Purchase of shares                                (788,556)                 -                   - 
 Share ownership scheme participation                 77,866            20,377                   - 
 Net cash used in financing activities             (860,230)       (4,415,972)         (4,286,809) 
--------------------------------------------  --------------      ------------      -------------- 
 (Decrease)/Increase in cash and 
  cash equivalents                               (2,948,599)         1,078,474         (6,027,425) 
 Cash and cash equivalents at start 
  of period/year                                  29,125,615        28,047,141          28,047,141 
--------------------------------------------  --------------      ------------      -------------- 
 Cash and cash equivalents at end 
  of period/year                                  26,177,016        29,125,615          22,019,716 
--------------------------------------------  --------------      ------------      -------------- 
 

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended 31 July 2019

   1    The Company 

The Company was incorporated with limited liability in the Isle of Man on 25 July 2003. The Company then re-registered under the Isle of Man Companies Act 2006, with registration number 008597V. On 11 September 2018, the Company re-registered under the Bermuda Companies Act 1981, with registration number 53954. The Company moved its operations to Jersey with immediate effect on 17 May 2017 and subsequently operates from Jersey only.

The Company's ordinary shares are quoted on AIM, a market operated by the London Stock Exchange, and the Growth Market of the NEX Exchange.

The interim consolidated financial statements as at and for the six months ended 31 July 2019 comprise the Company and its subsidiaries (together "the Group"). The interim consolidated financial statements are unaudited.

The consolidated financial statements of the Group as at and for the year ended 31 January 2019 are available upon request from the Company's business office at Ordnance House, 31 Pier Road, St Helier, Jersey, JE4 8PW and the registered office at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda, or at www.epespecialopportunities.com.

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -5-

        Revenue reserve                            7,238,517         9,725,035           10,584,608 
        Total equity                              81,606,657        59,812,473           53,821,909 
       --------------------------------      ---------------      ------------      --------------- 
        Net asset value per share 
  11     (pence)                                      245.54            205.19               190.18 
       --------------------------------      ---------------      ------------      --------------- 
 

Condensed Consolidated Statement of Changes in Equity

For the six months ended 31 July 2019

 
                                                    Six months ended 31 July 2019 
                                                     (unaudited) 
                                            Share        Share        Capital       Revenue 
                                          capital      premium        reserve       reserve          Total 
                                              GBP          GBP            GBP           GBP            GBP 
------------------------------------   ----------  -----------  -------------  ------------  ------------- 
 Balance at 1 February 
  2019                                  1,503,286    3,867,209     44,716,943     9,725,035     59,812,473 
 Total comprehensive income/(loss) 
  for the period                                -            -     14,453,782   (1,837,887)     12,615,895 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Contributions by and distributions 
  to owners 
 Share-based payment charge                     -            -              -        42,695         42,695 
 Cash received from JSOP 
  participants                                  -            -              -        77,866         77,866 
 Purchase of shares                      (19,364)            -              -     (769,192)      (788,556) 
 Issue of new shares                      223,667    9,622,617              -             -      9,846,284 
 Total transactions with 
  owners                                  204,303    9,622,617              -     (648,631)      9,178,289 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Balance at 31 July 2019                1,707,589   13,489,826     59,170,725     7,238,517     81,606,657 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 
                                                    Year ended 31 January 
                                                     2019 (audited) 
                                            Share        Share        Capital       Revenue 
                                          capital      premium        reserve       reserve          Total 
                                              GBP          GBP            GBP           GBP            GBP 
------------------------------------   ----------  -----------  -------------  ------------  ------------- 
 Balance at 1 February 
  2018                                  1,503,286    3,867,209     48,581,390    12,390,969     66,342,854 
 Total comprehensive loss 
  for the year                                  -            -    (3,864,447)   (2,806,855)    (6,671,302) 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Contributions by and distributions 
  to owners 
 Share-based payment charge                     -            -              -       120,544        120,544 
 Share ownership scheme 
  participation                                 -            -              -        20,377         20,377 
 Total transactions with 
  owners                                        -            -              -       140,921        140,921 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Balance at 31 January 
  2019                                  1,503,286    3,867,209     44,716,943     9,725,035     59,812,473 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 
                                                    Six months ended 31 July 2018 
                                                     (unaudited) 
                                            Share        Share        Capital       Revenue 
                                          capital      premium        reserve       reserve          Total 
                                              GBP          GBP            GBP           GBP            GBP 
------------------------------------   ----------  -----------  -------------  ------------  ------------- 
 Balance at 1 February 
  2018                                  1,503,286    3,867,209     48,581,390    12,390,969     66,342,854 
 Total comprehensive loss 
  for the period                                -            -   (10,714,584)   (1,875,928)   (12,590,512) 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Contributions by and distributions 
  to owners 
 Share-based payment charge                     -            -              -        69,567         69,567 
 Total transactions with 
  owners                                        -            -              -        69,567         69,567 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Balance at 31 July 2018                1,503,286    3,867,209     37,866,806    10,584,608     53,821,909 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 

Condensed Consolidated Statement of Cash Flows

For the six months ended 31 July 2019

 
                                                  1 Feb 2019        1 Feb 2018          1 Feb 2018 
                                                   to 31 Jul         to 31 Jan           to 31 Jul 
                                                        2019              2019                2018 
                                                 (unaudited)         (audited)         (unaudited) 
                                                         GBP               GBP                 GBP 
---------------------------------------       --------------      ------------      -------------- 
 Operating activities 
 Interest income received                             10,639           187,516               7,368 
 Expenses paid                                   (1,399,008)       (2,591,918)         (1,047,984) 
 Net cash used in operating activities           (1,388,369)       (2,404,402)         (1,040,616) 
--------------------------------------------  --------------      ------------      -------------- 
 Investing activities 
 Purchase of investments                           (700,000)       (3,008,113)           (700,000) 
 Sale of investments                                       -        10,906,961                   - 
 Net cash (used in)/from investing 
  activities                                       (700,000)         7,898,848           (700,000) 
--------------------------------------------  --------------      ------------      -------------- 
 Financing activities 
 Unsecured loan note repurchases                           -       (3,987,729)         (3,987,729) 
 Unsecured loan note interest paid                 (149,540)         (448,620)           (299,080) 
 Purchase of shares                                (788,556)                 -                   - 
 Share ownership scheme participation                 77,866            20,377                   - 
 Net cash used in financing activities             (860,230)       (4,415,972)         (4,286,809) 
--------------------------------------------  --------------      ------------      -------------- 
 (Decrease)/Increase in cash and 
  cash equivalents                               (2,948,599)         1,078,474         (6,027,425) 
 Cash and cash equivalents at start 
  of period/year                                  29,125,615        28,047,141          28,047,141 
--------------------------------------------  --------------      ------------      -------------- 
 Cash and cash equivalents at end 
  of period/year                                  26,177,016        29,125,615          22,019,716 
--------------------------------------------  --------------      ------------      -------------- 
 

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended 31 July 2019

   1    The Company 

The Company was incorporated with limited liability in the Isle of Man on 25 July 2003. The Company then re-registered under the Isle of Man Companies Act 2006, with registration number 008597V. On 11 September 2018, the Company re-registered under the Bermuda Companies Act 1981, with registration number 53954. The Company moved its operations to Jersey with immediate effect on 17 May 2017 and subsequently operates from Jersey only.

The Company's ordinary shares are quoted on AIM, a market operated by the London Stock Exchange, and the Growth Market of the NEX Exchange.

The interim consolidated financial statements as at and for the six months ended 31 July 2019 comprise the Company and its subsidiaries (together "the Group"). The interim consolidated financial statements are unaudited.

The consolidated financial statements of the Group as at and for the year ended 31 January 2019 are available upon request from the Company's business office at Ordnance House, 31 Pier Road, St Helier, Jersey, JE4 8PW and the registered office at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda, or at www.epespecialopportunities.com.

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -5-

        Revenue reserve                            7,238,517         9,725,035           10,584,608 
        Total equity                              81,606,657        59,812,473           53,821,909 
       --------------------------------      ---------------      ------------      --------------- 
        Net asset value per share 
  11     (pence)                                      245.54            205.19               190.18 
       --------------------------------      ---------------      ------------      --------------- 
 

Condensed Consolidated Statement of Changes in Equity

For the six months ended 31 July 2019

 
                                                    Six months ended 31 July 2019 
                                                     (unaudited) 
                                            Share        Share        Capital       Revenue 
                                          capital      premium        reserve       reserve          Total 
                                              GBP          GBP            GBP           GBP            GBP 
------------------------------------   ----------  -----------  -------------  ------------  ------------- 
 Balance at 1 February 
  2019                                  1,503,286    3,867,209     44,716,943     9,725,035     59,812,473 
 Total comprehensive income/(loss) 
  for the period                                -            -     14,453,782   (1,837,887)     12,615,895 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Contributions by and distributions 
  to owners 
 Share-based payment charge                     -            -              -        42,695         42,695 
 Cash received from JSOP 
  participants                                  -            -              -        77,866         77,866 
 Purchase of shares                      (19,364)            -              -     (769,192)      (788,556) 
 Issue of new shares                      223,667    9,622,617              -             -      9,846,284 
 Total transactions with 
  owners                                  204,303    9,622,617              -     (648,631)      9,178,289 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Balance at 31 July 2019                1,707,589   13,489,826     59,170,725     7,238,517     81,606,657 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 
                                                    Year ended 31 January 
                                                     2019 (audited) 
                                            Share        Share        Capital       Revenue 
                                          capital      premium        reserve       reserve          Total 
                                              GBP          GBP            GBP           GBP            GBP 
------------------------------------   ----------  -----------  -------------  ------------  ------------- 
 Balance at 1 February 
  2018                                  1,503,286    3,867,209     48,581,390    12,390,969     66,342,854 
 Total comprehensive loss 
  for the year                                  -            -    (3,864,447)   (2,806,855)    (6,671,302) 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Contributions by and distributions 
  to owners 
 Share-based payment charge                     -            -              -       120,544        120,544 
 Share ownership scheme 
  participation                                 -            -              -        20,377         20,377 
 Total transactions with 
  owners                                        -            -              -       140,921        140,921 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Balance at 31 January 
  2019                                  1,503,286    3,867,209     44,716,943     9,725,035     59,812,473 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 
                                                    Six months ended 31 July 2018 
                                                     (unaudited) 
                                            Share        Share        Capital       Revenue 
                                          capital      premium        reserve       reserve          Total 
                                              GBP          GBP            GBP           GBP            GBP 
------------------------------------   ----------  -----------  -------------  ------------  ------------- 
 Balance at 1 February 
  2018                                  1,503,286    3,867,209     48,581,390    12,390,969     66,342,854 
 Total comprehensive loss 
  for the period                                -            -   (10,714,584)   (1,875,928)   (12,590,512) 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Contributions by and distributions 
  to owners 
 Share-based payment charge                     -            -              -        69,567         69,567 
 Total transactions with 
  owners                                        -            -              -        69,567         69,567 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 Balance at 31 July 2018                1,503,286    3,867,209     37,866,806    10,584,608     53,821,909 
-------------------------------------  ----------  -----------  -------------  ------------  ------------- 
 

Condensed Consolidated Statement of Cash Flows

For the six months ended 31 July 2019

 
                                                  1 Feb 2019        1 Feb 2018          1 Feb 2018 
                                                   to 31 Jul         to 31 Jan           to 31 Jul 
                                                        2019              2019                2018 
                                                 (unaudited)         (audited)         (unaudited) 
                                                         GBP               GBP                 GBP 
---------------------------------------       --------------      ------------      -------------- 
 Operating activities 
 Interest income received                             10,639           187,516               7,368 
 Expenses paid                                   (1,399,008)       (2,591,918)         (1,047,984) 
 Net cash used in operating activities           (1,388,369)       (2,404,402)         (1,040,616) 
--------------------------------------------  --------------      ------------      -------------- 
 Investing activities 
 Purchase of investments                           (700,000)       (3,008,113)           (700,000) 
 Sale of investments                                       -        10,906,961                   - 
 Net cash (used in)/from investing 
  activities                                       (700,000)         7,898,848           (700,000) 
--------------------------------------------  --------------      ------------      -------------- 
 Financing activities 
 Unsecured loan note repurchases                           -       (3,987,729)         (3,987,729) 
 Unsecured loan note interest paid                 (149,540)         (448,620)           (299,080) 
 Purchase of shares                                (788,556)                 -                   - 
 Share ownership scheme participation                 77,866            20,377                   - 
 Net cash used in financing activities             (860,230)       (4,415,972)         (4,286,809) 
--------------------------------------------  --------------      ------------      -------------- 
 (Decrease)/Increase in cash and 
  cash equivalents                               (2,948,599)         1,078,474         (6,027,425) 
 Cash and cash equivalents at start 
  of period/year                                  29,125,615        28,047,141          28,047,141 
--------------------------------------------  --------------      ------------      -------------- 
 Cash and cash equivalents at end 
  of period/year                                  26,177,016        29,125,615          22,019,716 
--------------------------------------------  --------------      ------------      -------------- 
 

Notes to the Condensed Consolidated Interim Financial Statements

For the six months ended 31 July 2019

   1    The Company 

The Company was incorporated with limited liability in the Isle of Man on 25 July 2003. The Company then re-registered under the Isle of Man Companies Act 2006, with registration number 008597V. On 11 September 2018, the Company re-registered under the Bermuda Companies Act 1981, with registration number 53954. The Company moved its operations to Jersey with immediate effect on 17 May 2017 and subsequently operates from Jersey only.

The Company's ordinary shares are quoted on AIM, a market operated by the London Stock Exchange, and the Growth Market of the NEX Exchange.

The interim consolidated financial statements as at and for the six months ended 31 July 2019 comprise the Company and its subsidiaries (together "the Group"). The interim consolidated financial statements are unaudited.

The consolidated financial statements of the Group as at and for the year ended 31 January 2019 are available upon request from the Company's business office at Ordnance House, 31 Pier Road, St Helier, Jersey, JE4 8PW and the registered office at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda, or at www.epespecialopportunities.com.

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -6-

During the six months ended 31 July 2019, the Company completed a corporate reorganisation. Subsequent to this reorganisation, the Company's portfolio investments are held in three associates (ESO Investments 1 Limited, ESO Investments 2 Limited and ESO Alternative Investments LP). The remainder of the Company's subsidiary companies and associates are to be dissolved.

At 31 July 2019, the Company has two wholly owned subsidiary companies. EPIC Reconstruction Property Company (IOM) Limited, a company incorporated on 29 October 2005 in the Isle of Man and Corvina Limited, a company incorporated on 16 November 2012 in the Isle of Man.

At 31 July 2019, the Company also had interests in six partnerships and three limited companies that are treated as associates. The partnerships comprise one limited liability partnership and five limited partnerships.

The principal activity of the Group and its associates is to arrange income yielding financing for growth, buyout and special situations and holding the investments and its associates with a view to exiting in due course at a profit.

The Company has no employees.

   2    Statement of compliance 

These interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

The interim consolidated financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 January 2019.

The interim consolidated financial statements were approved by the Board of Directors on 9 September 2019.

   3    Significant accounting policies 

The accounting policies applied in these interim consolidated financial statements are the same as those applied in the Group's consolidated financial statements as at and for the year ended 31 January 2019.

The presentation of investments in and loans to associates has been changed in order to present these balances in one line in each of the Consolidated Statement of Financial Position and Statement of Consolidated Comprehensive Income, being 'Investments at fair value through profit or loss' and 'Gain/loss on investments' respectively.

Brexit

The major effects of Brexit, if executed, will be felt only once the country actually leaves the EU, with the nature and magnitude of these effects dependent on the terms of exit and the success of subsequent trade negotiations. Whilst the exact terms of Brexit are yet to be finalised and the ultimate outcome is uncertain, the Board have made an assessment of the potential effect on the Group and do not believe that Brexit will have a material impact on the investment activities of the Group at this point in time, although the risk posed is uncertain and increasing as a result of political developments.

   4    Financial risk management 

The Group financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 January 2019.

   5    Investment advisory, administration and performance fees 

Investment advisory fees

Company

As agreed on the 31 August 2010, the investment advisory fee payable to EPIC Private Equity LLP ("EPE") is calculated at 2% of the Group's Net Asset Value ("NAV"), with a minimum of GBP325,000 payable per annum. The charge for the current period was GBP747,247 (period ended 31 July 2018: GBP549,493; year ended 31 January 2019: GBP1,137,117).

On 9 September 2019, the Company revised the investment advisory fee payable to EPE. From the date of the revision, investment advisory fee shall be calculated as 2% of the Group's NAV where the Group's NAV is less than GBP100 million; otherwise the investment advisory fee shall be calculated as the greater of GBP2.0 million or the sum of 2% of the Group's NAV comprising Level 3 portfolio assets (i.e. unquoted assets), 1% of the Group's NAV comprising Level 1 assets (i.e. quoted assets), no fees on assets which are managed or advised by a third-party manager, 0.5% of the Group's net cash (if greater than nil), and 2% of the Group's net cash (if less than nil) (i.e. reducing fees for net debt positions).

Administration fees

On 17 May 2018, and concurrent with the move of the Company's operations to Jersey, R&H Fund Services (Jersey) Limited ("R&H") were appointed as the Company's administrators

The provision of accounting and financial administration services has been delegated to EPE Administration Limited. The fee payable to EPEA is at a rate of 0.15% per annum of the Group's NAV. The charge for the current period was GBP57,012 (period ended 31 July 2018: GBP45,187; year ended 31 January 2019: GBP88,438).

On 9 September 2019, the Company revised the fee payable to EPEA Administration Limited. From the date of the revision, fee shall be calculated as 0.15% of the Group's NAV where the Group's NAV is less than GBP100 million (subject to a minimum fee of GBP35,000); otherwise the advisory fee shall be calculated as 0.15% of GBP100 million plus a fee of 0.1% of the excess of the Group's NAV above GBP100 million.

Performance fees

During the 6 months of 31 July 2019, as part of the buyout of carried interest entitlement and accrual in ESO Investments 1 LP, the assets of ESO Investments 1 LP were transferred to new holding companies, ESO Investments 1 Limited and ESO Investments 2 Limited, with revised performance fee structures. It is anticipated that legacy holding vehicles, which no longer hold portfolio assets, will be dissolved and no material performance fees are outstanding or will accrue before dissolution.

Acquisition of carried interest in ESO 1 LP

On 9 May 2019, the Company entered into an agreement to acquire the carried interest entitlement and outstanding accrual in ESO Investments 1 LP from the Investment Advisor (and related parties). The total consideration of GBP9,846,284 paid through issuance of 4,473,347 ordinary shares in the Company, issued at 220.11 pence each. As a result, the Group owns 100% of the limited partner interest in ESO 1 LP and there was no carried interest at 31 July 2019 (year ended 31 January 2019: Balance of GBP6,796,947). The charge for carried interest for the period was GBP3,049,337.

Profit share in ESO Investments 1 Limited

The distribution policy of ESO Investments 1 Limited includes an allocation of profits to the Investment Advisor such that, for each investment where a returns hurdle of 8% per annum has been achieved, the Investment Advisor is entitled to receive 20% of the increase in the base value of investment. For the period ended 31 July 2019, no amount has been credited to the carry account of the Investment Advisor in the records of ESO Investments 1 Limited.

Profit share in ESO Investments 2 Limited

The distribution policy of ESO Investments 2 Limited includes an allocation of profit to the Investment Advisor such that, for each investment where a returns hurdle of 8% per annum has been achieved, the Investment Advisor is entitled to receive 20% of the increase in the base value of investment. For the period ended 31 July 2019, GBP898,913 has been credited to the carry account of the Investment Advisor in the records of ESO Investments 2 Limited.

   6    Share-based payment expense 

Certain employees (including Directors) of the Company and the Investment Advisors receive remuneration in the form of equity settled share-based payment transactions, through a Joint Share Ownership Plan ("JSOP").

The cost of equity settled transactions with certain Directors of the Company and other participants (including employees, members and consultants of the Investment Advisor) ("Participants") is measured by reference to the fair value at the date on which they are granted. The fair value is determined based on the share price of the equity instrument at the grant date.

The EBT was created to award shares to Participants as part of the JSOP. Participants are awarded a certain number of shares ("Matching Shares") which vest after three years. In order to receive their Matching Share allocation Participants are required to purchase shares in the Company on the open market ("Bought Shares"). The Participant will then be entitled to acquire a joint ownership interest in the Matching Shares for the payment of a nominal amount, on the basis of one joint ownership interest in one Matching Share for every Bought Share they acquire in the relevant award period.

The EBT holds the Matching Shares jointly with the Participant until the award vests.

The EBT held 1,035,624 (31 January 2019: 1,035,624) matching shares at 31 July 2019 which have traditionally not voted.

The amount expensed in the income statement has been calculated by reference to the grant date fair value of the equity instrument and the estimated number of equity instruments to be issued after the vesting period, less the nominal amount paid for the joint ownership interest in the Matching Shares. The total expense recognised on the share based payments during the period amounts to GBP42,695 (period ended 31 July 2018: GBP69,567; year ended 31 January 2019: GBP120,544).

   7    Investments at fair value through profit or loss 
 
                                              31 January 
                               31 July 2019         2019   31 July 2018 
                                (unaudited)    (audited)    (unaudited) 
                                        GBP          GBP            GBP 
 Investments in associates       59,965,060   34,793,620     36,510,977 
                                 59,965,060   34,793,620     36,510,977 
                              -------------  -----------  ------------- 
 

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -6-

During the six months ended 31 July 2019, the Company completed a corporate reorganisation. Subsequent to this reorganisation, the Company's portfolio investments are held in three associates (ESO Investments 1 Limited, ESO Investments 2 Limited and ESO Alternative Investments LP). The remainder of the Company's subsidiary companies and associates are to be dissolved.

At 31 July 2019, the Company has two wholly owned subsidiary companies. EPIC Reconstruction Property Company (IOM) Limited, a company incorporated on 29 October 2005 in the Isle of Man and Corvina Limited, a company incorporated on 16 November 2012 in the Isle of Man.

At 31 July 2019, the Company also had interests in six partnerships and three limited companies that are treated as associates. The partnerships comprise one limited liability partnership and five limited partnerships.

The principal activity of the Group and its associates is to arrange income yielding financing for growth, buyout and special situations and holding the investments and its associates with a view to exiting in due course at a profit.

The Company has no employees.

   2    Statement of compliance 

These interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

The interim consolidated financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 January 2019.

The interim consolidated financial statements were approved by the Board of Directors on 9 September 2019.

   3    Significant accounting policies 

The accounting policies applied in these interim consolidated financial statements are the same as those applied in the Group's consolidated financial statements as at and for the year ended 31 January 2019.

The presentation of investments in and loans to associates has been changed in order to present these balances in one line in each of the Consolidated Statement of Financial Position and Statement of Consolidated Comprehensive Income, being 'Investments at fair value through profit or loss' and 'Gain/loss on investments' respectively.

Brexit

The major effects of Brexit, if executed, will be felt only once the country actually leaves the EU, with the nature and magnitude of these effects dependent on the terms of exit and the success of subsequent trade negotiations. Whilst the exact terms of Brexit are yet to be finalised and the ultimate outcome is uncertain, the Board have made an assessment of the potential effect on the Group and do not believe that Brexit will have a material impact on the investment activities of the Group at this point in time, although the risk posed is uncertain and increasing as a result of political developments.

   4    Financial risk management 

The Group financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 January 2019.

   5    Investment advisory, administration and performance fees 

Investment advisory fees

Company

As agreed on the 31 August 2010, the investment advisory fee payable to EPIC Private Equity LLP ("EPE") is calculated at 2% of the Group's Net Asset Value ("NAV"), with a minimum of GBP325,000 payable per annum. The charge for the current period was GBP747,247 (period ended 31 July 2018: GBP549,493; year ended 31 January 2019: GBP1,137,117).

On 9 September 2019, the Company revised the investment advisory fee payable to EPE. From the date of the revision, investment advisory fee shall be calculated as 2% of the Group's NAV where the Group's NAV is less than GBP100 million; otherwise the investment advisory fee shall be calculated as the greater of GBP2.0 million or the sum of 2% of the Group's NAV comprising Level 3 portfolio assets (i.e. unquoted assets), 1% of the Group's NAV comprising Level 1 assets (i.e. quoted assets), no fees on assets which are managed or advised by a third-party manager, 0.5% of the Group's net cash (if greater than nil), and 2% of the Group's net cash (if less than nil) (i.e. reducing fees for net debt positions).

Administration fees

On 17 May 2018, and concurrent with the move of the Company's operations to Jersey, R&H Fund Services (Jersey) Limited ("R&H") were appointed as the Company's administrators

The provision of accounting and financial administration services has been delegated to EPE Administration Limited. The fee payable to EPEA is at a rate of 0.15% per annum of the Group's NAV. The charge for the current period was GBP57,012 (period ended 31 July 2018: GBP45,187; year ended 31 January 2019: GBP88,438).

On 9 September 2019, the Company revised the fee payable to EPEA Administration Limited. From the date of the revision, fee shall be calculated as 0.15% of the Group's NAV where the Group's NAV is less than GBP100 million (subject to a minimum fee of GBP35,000); otherwise the advisory fee shall be calculated as 0.15% of GBP100 million plus a fee of 0.1% of the excess of the Group's NAV above GBP100 million.

Performance fees

During the 6 months of 31 July 2019, as part of the buyout of carried interest entitlement and accrual in ESO Investments 1 LP, the assets of ESO Investments 1 LP were transferred to new holding companies, ESO Investments 1 Limited and ESO Investments 2 Limited, with revised performance fee structures. It is anticipated that legacy holding vehicles, which no longer hold portfolio assets, will be dissolved and no material performance fees are outstanding or will accrue before dissolution.

Acquisition of carried interest in ESO 1 LP

On 9 May 2019, the Company entered into an agreement to acquire the carried interest entitlement and outstanding accrual in ESO Investments 1 LP from the Investment Advisor (and related parties). The total consideration of GBP9,846,284 paid through issuance of 4,473,347 ordinary shares in the Company, issued at 220.11 pence each. As a result, the Group owns 100% of the limited partner interest in ESO 1 LP and there was no carried interest at 31 July 2019 (year ended 31 January 2019: Balance of GBP6,796,947). The charge for carried interest for the period was GBP3,049,337.

Profit share in ESO Investments 1 Limited

The distribution policy of ESO Investments 1 Limited includes an allocation of profits to the Investment Advisor such that, for each investment where a returns hurdle of 8% per annum has been achieved, the Investment Advisor is entitled to receive 20% of the increase in the base value of investment. For the period ended 31 July 2019, no amount has been credited to the carry account of the Investment Advisor in the records of ESO Investments 1 Limited.

Profit share in ESO Investments 2 Limited

The distribution policy of ESO Investments 2 Limited includes an allocation of profit to the Investment Advisor such that, for each investment where a returns hurdle of 8% per annum has been achieved, the Investment Advisor is entitled to receive 20% of the increase in the base value of investment. For the period ended 31 July 2019, GBP898,913 has been credited to the carry account of the Investment Advisor in the records of ESO Investments 2 Limited.

   6    Share-based payment expense 

Certain employees (including Directors) of the Company and the Investment Advisors receive remuneration in the form of equity settled share-based payment transactions, through a Joint Share Ownership Plan ("JSOP").

The cost of equity settled transactions with certain Directors of the Company and other participants (including employees, members and consultants of the Investment Advisor) ("Participants") is measured by reference to the fair value at the date on which they are granted. The fair value is determined based on the share price of the equity instrument at the grant date.

The EBT was created to award shares to Participants as part of the JSOP. Participants are awarded a certain number of shares ("Matching Shares") which vest after three years. In order to receive their Matching Share allocation Participants are required to purchase shares in the Company on the open market ("Bought Shares"). The Participant will then be entitled to acquire a joint ownership interest in the Matching Shares for the payment of a nominal amount, on the basis of one joint ownership interest in one Matching Share for every Bought Share they acquire in the relevant award period.

The EBT holds the Matching Shares jointly with the Participant until the award vests.

The EBT held 1,035,624 (31 January 2019: 1,035,624) matching shares at 31 July 2019 which have traditionally not voted.

The amount expensed in the income statement has been calculated by reference to the grant date fair value of the equity instrument and the estimated number of equity instruments to be issued after the vesting period, less the nominal amount paid for the joint ownership interest in the Matching Shares. The total expense recognised on the share based payments during the period amounts to GBP42,695 (period ended 31 July 2018: GBP69,567; year ended 31 January 2019: GBP120,544).

   7    Investments at fair value through profit or loss 
 
                                              31 January 
                               31 July 2019         2019   31 July 2018 
                                (unaudited)    (audited)    (unaudited) 
                                        GBP          GBP            GBP 
 Investments in associates       59,965,060   34,793,620     36,510,977 
                                 59,965,060   34,793,620     36,510,977 
                              -------------  -----------  ------------- 
 

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -6-

During the six months ended 31 July 2019, the Company completed a corporate reorganisation. Subsequent to this reorganisation, the Company's portfolio investments are held in three associates (ESO Investments 1 Limited, ESO Investments 2 Limited and ESO Alternative Investments LP). The remainder of the Company's subsidiary companies and associates are to be dissolved.

At 31 July 2019, the Company has two wholly owned subsidiary companies. EPIC Reconstruction Property Company (IOM) Limited, a company incorporated on 29 October 2005 in the Isle of Man and Corvina Limited, a company incorporated on 16 November 2012 in the Isle of Man.

At 31 July 2019, the Company also had interests in six partnerships and three limited companies that are treated as associates. The partnerships comprise one limited liability partnership and five limited partnerships.

The principal activity of the Group and its associates is to arrange income yielding financing for growth, buyout and special situations and holding the investments and its associates with a view to exiting in due course at a profit.

The Company has no employees.

   2    Statement of compliance 

These interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

The interim consolidated financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 January 2019.

The interim consolidated financial statements were approved by the Board of Directors on 9 September 2019.

   3    Significant accounting policies 

The accounting policies applied in these interim consolidated financial statements are the same as those applied in the Group's consolidated financial statements as at and for the year ended 31 January 2019.

The presentation of investments in and loans to associates has been changed in order to present these balances in one line in each of the Consolidated Statement of Financial Position and Statement of Consolidated Comprehensive Income, being 'Investments at fair value through profit or loss' and 'Gain/loss on investments' respectively.

Brexit

The major effects of Brexit, if executed, will be felt only once the country actually leaves the EU, with the nature and magnitude of these effects dependent on the terms of exit and the success of subsequent trade negotiations. Whilst the exact terms of Brexit are yet to be finalised and the ultimate outcome is uncertain, the Board have made an assessment of the potential effect on the Group and do not believe that Brexit will have a material impact on the investment activities of the Group at this point in time, although the risk posed is uncertain and increasing as a result of political developments.

   4    Financial risk management 

The Group financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 January 2019.

   5    Investment advisory, administration and performance fees 

Investment advisory fees

Company

As agreed on the 31 August 2010, the investment advisory fee payable to EPIC Private Equity LLP ("EPE") is calculated at 2% of the Group's Net Asset Value ("NAV"), with a minimum of GBP325,000 payable per annum. The charge for the current period was GBP747,247 (period ended 31 July 2018: GBP549,493; year ended 31 January 2019: GBP1,137,117).

On 9 September 2019, the Company revised the investment advisory fee payable to EPE. From the date of the revision, investment advisory fee shall be calculated as 2% of the Group's NAV where the Group's NAV is less than GBP100 million; otherwise the investment advisory fee shall be calculated as the greater of GBP2.0 million or the sum of 2% of the Group's NAV comprising Level 3 portfolio assets (i.e. unquoted assets), 1% of the Group's NAV comprising Level 1 assets (i.e. quoted assets), no fees on assets which are managed or advised by a third-party manager, 0.5% of the Group's net cash (if greater than nil), and 2% of the Group's net cash (if less than nil) (i.e. reducing fees for net debt positions).

Administration fees

On 17 May 2018, and concurrent with the move of the Company's operations to Jersey, R&H Fund Services (Jersey) Limited ("R&H") were appointed as the Company's administrators

The provision of accounting and financial administration services has been delegated to EPE Administration Limited. The fee payable to EPEA is at a rate of 0.15% per annum of the Group's NAV. The charge for the current period was GBP57,012 (period ended 31 July 2018: GBP45,187; year ended 31 January 2019: GBP88,438).

On 9 September 2019, the Company revised the fee payable to EPEA Administration Limited. From the date of the revision, fee shall be calculated as 0.15% of the Group's NAV where the Group's NAV is less than GBP100 million (subject to a minimum fee of GBP35,000); otherwise the advisory fee shall be calculated as 0.15% of GBP100 million plus a fee of 0.1% of the excess of the Group's NAV above GBP100 million.

Performance fees

During the 6 months of 31 July 2019, as part of the buyout of carried interest entitlement and accrual in ESO Investments 1 LP, the assets of ESO Investments 1 LP were transferred to new holding companies, ESO Investments 1 Limited and ESO Investments 2 Limited, with revised performance fee structures. It is anticipated that legacy holding vehicles, which no longer hold portfolio assets, will be dissolved and no material performance fees are outstanding or will accrue before dissolution.

Acquisition of carried interest in ESO 1 LP

On 9 May 2019, the Company entered into an agreement to acquire the carried interest entitlement and outstanding accrual in ESO Investments 1 LP from the Investment Advisor (and related parties). The total consideration of GBP9,846,284 paid through issuance of 4,473,347 ordinary shares in the Company, issued at 220.11 pence each. As a result, the Group owns 100% of the limited partner interest in ESO 1 LP and there was no carried interest at 31 July 2019 (year ended 31 January 2019: Balance of GBP6,796,947). The charge for carried interest for the period was GBP3,049,337.

Profit share in ESO Investments 1 Limited

The distribution policy of ESO Investments 1 Limited includes an allocation of profits to the Investment Advisor such that, for each investment where a returns hurdle of 8% per annum has been achieved, the Investment Advisor is entitled to receive 20% of the increase in the base value of investment. For the period ended 31 July 2019, no amount has been credited to the carry account of the Investment Advisor in the records of ESO Investments 1 Limited.

Profit share in ESO Investments 2 Limited

The distribution policy of ESO Investments 2 Limited includes an allocation of profit to the Investment Advisor such that, for each investment where a returns hurdle of 8% per annum has been achieved, the Investment Advisor is entitled to receive 20% of the increase in the base value of investment. For the period ended 31 July 2019, GBP898,913 has been credited to the carry account of the Investment Advisor in the records of ESO Investments 2 Limited.

   6    Share-based payment expense 

Certain employees (including Directors) of the Company and the Investment Advisors receive remuneration in the form of equity settled share-based payment transactions, through a Joint Share Ownership Plan ("JSOP").

The cost of equity settled transactions with certain Directors of the Company and other participants (including employees, members and consultants of the Investment Advisor) ("Participants") is measured by reference to the fair value at the date on which they are granted. The fair value is determined based on the share price of the equity instrument at the grant date.

The EBT was created to award shares to Participants as part of the JSOP. Participants are awarded a certain number of shares ("Matching Shares") which vest after three years. In order to receive their Matching Share allocation Participants are required to purchase shares in the Company on the open market ("Bought Shares"). The Participant will then be entitled to acquire a joint ownership interest in the Matching Shares for the payment of a nominal amount, on the basis of one joint ownership interest in one Matching Share for every Bought Share they acquire in the relevant award period.

The EBT holds the Matching Shares jointly with the Participant until the award vests.

The EBT held 1,035,624 (31 January 2019: 1,035,624) matching shares at 31 July 2019 which have traditionally not voted.

The amount expensed in the income statement has been calculated by reference to the grant date fair value of the equity instrument and the estimated number of equity instruments to be issued after the vesting period, less the nominal amount paid for the joint ownership interest in the Matching Shares. The total expense recognised on the share based payments during the period amounts to GBP42,695 (period ended 31 July 2018: GBP69,567; year ended 31 January 2019: GBP120,544).

   7    Investments at fair value through profit or loss 
 
                                              31 January 
                               31 July 2019         2019   31 July 2018 
                                (unaudited)    (audited)    (unaudited) 
                                        GBP          GBP            GBP 
 Investments in associates       59,965,060   34,793,620     36,510,977 
                                 59,965,060   34,793,620     36,510,977 
                              -------------  -----------  ------------- 
 

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -7-

Investment roll forward schedule

 
                                            31 July 2019 
                                             (unaudited) 
                                                     GBP 
 Investments at 31 January 2019               34,793,620 
 Purchases                                       700,000 
 Buy out of accrued carried interest           9,846,284 
 Other movement                                  171,374 
 Fair value movement                          14,453,782 
--------------------------------------  ---------------- 
 Investments at 31 July 2019                  59,965,060 
--------------------------------------  ---------------- 
 

Investment in associates

Investments in associates comprise equity and debt investments in ESO Investments 1 LP, ESO Alternative Investments LP, ESO Investments 2 LP, ESO Investments (DP) Limited, ESO Investments (PC) LLP, ESO Investments 1 Limited and ESO Investments 2 Limited which are stated at fair value through profit and loss. The associates have also accounted for their equity and debt investments at fair value.

   8    Fair values of financial instruments 

The fair values of financial assets and financial liabilities that are traded in an active market are based on quoted market prices. For all other financial instruments, the Group determines fair values using other valuation techniques based on the IPEV guidelines.

For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgement depending on liquidity, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.

The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

-- Level 1: Inputs that are quoted market prices (unadjusted) in active markets for identical instruments;

-- Level 2: Inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using; quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques in which all significant inputs are directly or indirectly observable from market data;

-- Level 3: Inputs that are unobservable. This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments but for which significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

Various valuation techniques may be applied in determining the fair value of investments held as Level 3 in the fair value hierarchy. The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.

Valuation models that employ significant unobservable inputs require a higher degree of management judgement and estimation in the determination of fair value. Management judgement and estimation are usually required for the selection of the appropriate valuation model to be used. As discussed below, the Investment Advisor has elected to use the Sales and EBITDA multiple valuation models as a benchmark in arriving at the fair value of investments held as Level 3 in the fair value hierarchy.

Valuation framework

The Group has developed a valuation framework with respect to the measurement of fair values. The valuation of investments is performed by the Investment Advisor, who determines fair values using the IPEV guidelines. The following approach is used:

-- 'Fair value' is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance risk;

-- The Sales/EBITDA multiple valuation models is used as a benchmark and is based on budgeted Sales/EBITDA for the next financial year;

-- Loans made are valued at cost but impairment tested based on the enterprise value derived from the valuation.

Fair value hierarchy - Financial instruments measured at fair value

The table below analyses the underlying investments held by the associates measured at fair value at the reporting date by the level in the fair value hierarchy into which the fair value measurement is categorised. Debt securities are also included, as these are also stated at fair value with the Investment Advisor assessing the fair value of the total investment, which includes debt and equity. The amounts are based on the values recognised in the statement of financial position of the associates. All fair value measurements below are recurring. The value of ESO's share of other assets and liabilities carried at fair value in the statement of financial position of the associates detailed in the balance sheet and note 7, but not included in the table below, detailing the fair value of the portfolio investments only, amounted to GBP1,697,692 for the period ended 31 July 2019 (31 January 2019: GBP1,830,483).

 
                                                   Level 1                   Level 3                           Total 
 31 July 2019                                          GBP                       GBP                             GBP 
-------------------------------   ------------------------  ------------------------  ------------------------------ 
 Financial assets at fair value 
  through profit or loss 
 Unlisted private equity 
  investments                                            -                 3,076,144                       3,076,144 
 Listed private equity 
  investments                                   43,006,827                         -                      43,006,827 
 Debt securities, unlisted                               -                13,083,310                      13,083,310 
 Total investments                              43,006,827                16,159,454                      59,166,281 
--------------------------------  ------------------------  ------------------------  ------------------------------ 
 
 ESO Limited Share                              42,107,914                16,159,454                      58,267,368 
 Minority Interest Share                           898,913                         -                         898,913 
 Total investments                              43,006,827                16,159,454                      59,166,281 
--------------------------------  ------------------------  ------------------------  ------------------------------ 
 
                                                   Level 1                   Level 3                           Total 
 31 January 2019                                       GBP                       GBP                             GBP 
-------------------------------   ------------------------  ------------------------  ------------------------------ 
 Financial assets at fair value 
  through profit or loss 
 Unlisted private equity 
  investments                                            -                 3,130,983                       3,130,983 
 Listed private equity 
  investments                                   23,442,246                         -                      23,442,246 
 Debt securities, unlisted                               -                13,595,893                      13,595,893 
 Total investments                              23,442,246                16,726,876                      40,169,122 
--------------------------------  ------------------------  ------------------------  ------------------------------ 
 
 ESO Limited Share                              18,753,797                14,209,340                      32,963,137 
 Minority Interest Share                         4,688,449                 2,517,536                       7,205,985 
 Total investments                              23,442,246                16,726,876                      40,169,122 
--------------------------------  ------------------------  ------------------------  ------------------------------ 
 

The following table shows a reconciliation of the opening balances to the closing balances for fair value measurements in Leve1 3 of the fair value hierarchy for the underlying investments held by the associates.

 
                                                     31-Jul-19      31-Jan-19 
                                                   (unaudited)      (audited) 
------------------------------------------------  ------------  ------------- 
 Unlisted private equity investments (including            GBP            GBP 
  debt) 
------------------------------------------------  ------------  ------------- 
 Balance at 1 February                              16,726,876     26,232,427 
 Additional investments                                742,235      3,100,000 
 Disposal of investments                              (46,564)   (11,012,405) 
 Change in fair value through profit or loss       (1,263,093)    (1,593,146) 
------------------------------------------------  ------------  ------------- 
 Balance at 31 July / 31 January                    16,159,454     16,726,876 
------------------------------------------------  ------------  ------------- 
 

Significant unobservable inputs used in measuring fair value

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -7-

Investment roll forward schedule

 
                                            31 July 2019 
                                             (unaudited) 
                                                     GBP 
 Investments at 31 January 2019               34,793,620 
 Purchases                                       700,000 
 Buy out of accrued carried interest           9,846,284 
 Other movement                                  171,374 
 Fair value movement                          14,453,782 
--------------------------------------  ---------------- 
 Investments at 31 July 2019                  59,965,060 
--------------------------------------  ---------------- 
 

Investment in associates

Investments in associates comprise equity and debt investments in ESO Investments 1 LP, ESO Alternative Investments LP, ESO Investments 2 LP, ESO Investments (DP) Limited, ESO Investments (PC) LLP, ESO Investments 1 Limited and ESO Investments 2 Limited which are stated at fair value through profit and loss. The associates have also accounted for their equity and debt investments at fair value.

   8    Fair values of financial instruments 

The fair values of financial assets and financial liabilities that are traded in an active market are based on quoted market prices. For all other financial instruments, the Group determines fair values using other valuation techniques based on the IPEV guidelines.

For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgement depending on liquidity, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.

The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

-- Level 1: Inputs that are quoted market prices (unadjusted) in active markets for identical instruments;

-- Level 2: Inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using; quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques in which all significant inputs are directly or indirectly observable from market data;

-- Level 3: Inputs that are unobservable. This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments but for which significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

Various valuation techniques may be applied in determining the fair value of investments held as Level 3 in the fair value hierarchy. The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.

Valuation models that employ significant unobservable inputs require a higher degree of management judgement and estimation in the determination of fair value. Management judgement and estimation are usually required for the selection of the appropriate valuation model to be used. As discussed below, the Investment Advisor has elected to use the Sales and EBITDA multiple valuation models as a benchmark in arriving at the fair value of investments held as Level 3 in the fair value hierarchy.

Valuation framework

The Group has developed a valuation framework with respect to the measurement of fair values. The valuation of investments is performed by the Investment Advisor, who determines fair values using the IPEV guidelines. The following approach is used:

-- 'Fair value' is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance risk;

-- The Sales/EBITDA multiple valuation models is used as a benchmark and is based on budgeted Sales/EBITDA for the next financial year;

-- Loans made are valued at cost but impairment tested based on the enterprise value derived from the valuation.

Fair value hierarchy - Financial instruments measured at fair value

The table below analyses the underlying investments held by the associates measured at fair value at the reporting date by the level in the fair value hierarchy into which the fair value measurement is categorised. Debt securities are also included, as these are also stated at fair value with the Investment Advisor assessing the fair value of the total investment, which includes debt and equity. The amounts are based on the values recognised in the statement of financial position of the associates. All fair value measurements below are recurring. The value of ESO's share of other assets and liabilities carried at fair value in the statement of financial position of the associates detailed in the balance sheet and note 7, but not included in the table below, detailing the fair value of the portfolio investments only, amounted to GBP1,697,692 for the period ended 31 July 2019 (31 January 2019: GBP1,830,483).

 
                                                   Level 1                   Level 3                           Total 
 31 July 2019                                          GBP                       GBP                             GBP 
-------------------------------   ------------------------  ------------------------  ------------------------------ 
 Financial assets at fair value 
  through profit or loss 
 Unlisted private equity 
  investments                                            -                 3,076,144                       3,076,144 
 Listed private equity 
  investments                                   43,006,827                         -                      43,006,827 
 Debt securities, unlisted                               -                13,083,310                      13,083,310 
 Total investments                              43,006,827                16,159,454                      59,166,281 
--------------------------------  ------------------------  ------------------------  ------------------------------ 
 
 ESO Limited Share                              42,107,914                16,159,454                      58,267,368 
 Minority Interest Share                           898,913                         -                         898,913 
 Total investments                              43,006,827                16,159,454                      59,166,281 
--------------------------------  ------------------------  ------------------------  ------------------------------ 
 
                                                   Level 1                   Level 3                           Total 
 31 January 2019                                       GBP                       GBP                             GBP 
-------------------------------   ------------------------  ------------------------  ------------------------------ 
 Financial assets at fair value 
  through profit or loss 
 Unlisted private equity 
  investments                                            -                 3,130,983                       3,130,983 
 Listed private equity 
  investments                                   23,442,246                         -                      23,442,246 
 Debt securities, unlisted                               -                13,595,893                      13,595,893 
 Total investments                              23,442,246                16,726,876                      40,169,122 
--------------------------------  ------------------------  ------------------------  ------------------------------ 
 
 ESO Limited Share                              18,753,797                14,209,340                      32,963,137 
 Minority Interest Share                         4,688,449                 2,517,536                       7,205,985 
 Total investments                              23,442,246                16,726,876                      40,169,122 
--------------------------------  ------------------------  ------------------------  ------------------------------ 
 

The following table shows a reconciliation of the opening balances to the closing balances for fair value measurements in Leve1 3 of the fair value hierarchy for the underlying investments held by the associates.

 
                                                     31-Jul-19      31-Jan-19 
                                                   (unaudited)      (audited) 
------------------------------------------------  ------------  ------------- 
 Unlisted private equity investments (including            GBP            GBP 
  debt) 
------------------------------------------------  ------------  ------------- 
 Balance at 1 February                              16,726,876     26,232,427 
 Additional investments                                742,235      3,100,000 
 Disposal of investments                              (46,564)   (11,012,405) 
 Change in fair value through profit or loss       (1,263,093)    (1,593,146) 
------------------------------------------------  ------------  ------------- 
 Balance at 31 July / 31 January                    16,159,454     16,726,876 
------------------------------------------------  ------------  ------------- 
 

Significant unobservable inputs used in measuring fair value

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -7-

Investment roll forward schedule

 
                                            31 July 2019 
                                             (unaudited) 
                                                     GBP 
 Investments at 31 January 2019               34,793,620 
 Purchases                                       700,000 
 Buy out of accrued carried interest           9,846,284 
 Other movement                                  171,374 
 Fair value movement                          14,453,782 
--------------------------------------  ---------------- 
 Investments at 31 July 2019                  59,965,060 
--------------------------------------  ---------------- 
 

Investment in associates

Investments in associates comprise equity and debt investments in ESO Investments 1 LP, ESO Alternative Investments LP, ESO Investments 2 LP, ESO Investments (DP) Limited, ESO Investments (PC) LLP, ESO Investments 1 Limited and ESO Investments 2 Limited which are stated at fair value through profit and loss. The associates have also accounted for their equity and debt investments at fair value.

   8    Fair values of financial instruments 

The fair values of financial assets and financial liabilities that are traded in an active market are based on quoted market prices. For all other financial instruments, the Group determines fair values using other valuation techniques based on the IPEV guidelines.

For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgement depending on liquidity, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.

The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

-- Level 1: Inputs that are quoted market prices (unadjusted) in active markets for identical instruments;

-- Level 2: Inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using; quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques in which all significant inputs are directly or indirectly observable from market data;

-- Level 3: Inputs that are unobservable. This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments but for which significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

Various valuation techniques may be applied in determining the fair value of investments held as Level 3 in the fair value hierarchy. The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.

Valuation models that employ significant unobservable inputs require a higher degree of management judgement and estimation in the determination of fair value. Management judgement and estimation are usually required for the selection of the appropriate valuation model to be used. As discussed below, the Investment Advisor has elected to use the Sales and EBITDA multiple valuation models as a benchmark in arriving at the fair value of investments held as Level 3 in the fair value hierarchy.

Valuation framework

The Group has developed a valuation framework with respect to the measurement of fair values. The valuation of investments is performed by the Investment Advisor, who determines fair values using the IPEV guidelines. The following approach is used:

-- 'Fair value' is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance risk;

-- The Sales/EBITDA multiple valuation models is used as a benchmark and is based on budgeted Sales/EBITDA for the next financial year;

-- Loans made are valued at cost but impairment tested based on the enterprise value derived from the valuation.

Fair value hierarchy - Financial instruments measured at fair value

The table below analyses the underlying investments held by the associates measured at fair value at the reporting date by the level in the fair value hierarchy into which the fair value measurement is categorised. Debt securities are also included, as these are also stated at fair value with the Investment Advisor assessing the fair value of the total investment, which includes debt and equity. The amounts are based on the values recognised in the statement of financial position of the associates. All fair value measurements below are recurring. The value of ESO's share of other assets and liabilities carried at fair value in the statement of financial position of the associates detailed in the balance sheet and note 7, but not included in the table below, detailing the fair value of the portfolio investments only, amounted to GBP1,697,692 for the period ended 31 July 2019 (31 January 2019: GBP1,830,483).

 
                                                   Level 1                   Level 3                           Total 
 31 July 2019                                          GBP                       GBP                             GBP 
-------------------------------   ------------------------  ------------------------  ------------------------------ 
 Financial assets at fair value 
  through profit or loss 
 Unlisted private equity 
  investments                                            -                 3,076,144                       3,076,144 
 Listed private equity 
  investments                                   43,006,827                         -                      43,006,827 
 Debt securities, unlisted                               -                13,083,310                      13,083,310 
 Total investments                              43,006,827                16,159,454                      59,166,281 
--------------------------------  ------------------------  ------------------------  ------------------------------ 
 
 ESO Limited Share                              42,107,914                16,159,454                      58,267,368 
 Minority Interest Share                           898,913                         -                         898,913 
 Total investments                              43,006,827                16,159,454                      59,166,281 
--------------------------------  ------------------------  ------------------------  ------------------------------ 
 
                                                   Level 1                   Level 3                           Total 
 31 January 2019                                       GBP                       GBP                             GBP 
-------------------------------   ------------------------  ------------------------  ------------------------------ 
 Financial assets at fair value 
  through profit or loss 
 Unlisted private equity 
  investments                                            -                 3,130,983                       3,130,983 
 Listed private equity 
  investments                                   23,442,246                         -                      23,442,246 
 Debt securities, unlisted                               -                13,595,893                      13,595,893 
 Total investments                              23,442,246                16,726,876                      40,169,122 
--------------------------------  ------------------------  ------------------------  ------------------------------ 
 
 ESO Limited Share                              18,753,797                14,209,340                      32,963,137 
 Minority Interest Share                         4,688,449                 2,517,536                       7,205,985 
 Total investments                              23,442,246                16,726,876                      40,169,122 
--------------------------------  ------------------------  ------------------------  ------------------------------ 
 

The following table shows a reconciliation of the opening balances to the closing balances for fair value measurements in Leve1 3 of the fair value hierarchy for the underlying investments held by the associates.

 
                                                     31-Jul-19      31-Jan-19 
                                                   (unaudited)      (audited) 
------------------------------------------------  ------------  ------------- 
 Unlisted private equity investments (including            GBP            GBP 
  debt) 
------------------------------------------------  ------------  ------------- 
 Balance at 1 February                              16,726,876     26,232,427 
 Additional investments                                742,235      3,100,000 
 Disposal of investments                              (46,564)   (11,012,405) 
 Change in fair value through profit or loss       (1,263,093)    (1,593,146) 
------------------------------------------------  ------------  ------------- 
 Balance at 31 July / 31 January                    16,159,454     16,726,876 
------------------------------------------------  ------------  ------------- 
 

Significant unobservable inputs used in measuring fair value

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -8-

The table below sets out information about significant unobservable inputs used at 31 July 2019 in measuring financial instruments categorised as Level 3 in the fair value hierarchy.

 
 Description                Fair value at 31 July   Valuation technique 
                                             2019 
-------------------------                          ---------------------- 
                                              GBP 
-------------------------  ----------------------  ---------------------- 
 Unquoted private equity               14,170,990   Sales/EBITDA multiple 
  investments (including 
  debt) 
                           ----------------------  ---------------------- 
 Third party private debt               1,988,464   Reported net asset 
  fund investment                                    value 
                           ----------------------  ---------------------- 
 

Significant unobservable inputs are developed as follows:

-- Sales/EBITDA multiples: Represents amounts that market participants would use when pricing the investments. Sales/EBITDA multiples are selected from comparable public companies based on geographic location, industry, size, target markets and other factors that management considers to be reasonable. The traded multiples for the comparable companies are determined by dividing the enterprise value of the company by its Sales or EBITDA and further discounted for considerations such as the lack of marketability and other differences between the comparable peer group and specific company.

-- Net asset value: The Company has an investment in a third party private debt fund. The manager of the fund provides the Company with periodic valuations of the Company's investment. These valuations are prepared in line with IPEV guidelines. The Company agrees with the valuation provided by the manager of the fund and no adjustment is made in determining the fair value of the investment.

Although management believes that its estimates of fair value are appropriate, the use of different methodologies or assumptions could lead to different measurements of fair value. For fair value measurements in Level 3, changing one or more of the assumptions used to reasonably possible alternative assumptions would have the following effects on the Level 3 investment valuations.

The employment of favourable and unfavourable reasonably possible alternative assumptions in the preparation of the Level 3 investment valuations described above would imply a 10-25% premium and a 10-25% discount respectively to the fair value stated.

The favourable and unfavourable effects of using reasonably possible alternative assumptions for the valuation of unlisted private equity investments have been calculated by recalibrating the model value for each investment using unobservable inputs based on averages of the upper and lower quartiles respectively of the Company's ranges of possible estimates. The most significant unobservable inputs are EBITDA and Sales multiples. The weighted average EBITDA multiple used in the valuation models at 31 July 2019 was 6.9x (with reasonably possible alternative assumptions of 8.6x and 5.2x) (31 January 2019: 5.3x, 6.7x and 4.0x respectively). The weighted average sales multiple used in the valuation models at 31 July 2019 was 0.3x (with reasonable possible alternative assumptions of 0.4x and 0.2x) (31 January 2019: 0.2x, 0.3x and 0.2x respectively).

Financial instruments not measured at fair value

The carrying value of short-term financial assets and financial liabilities (cash, debtors and creditors) approximate their fair value. The carrying value of the convertible and the new loan note instruments are also considered to approximate fair value.

   9    Share capital 
 
                              31 July 2019            31 January 2019            31 July 2018 
                               (unaudited)               (audited)                (unaudited) 
                        ------------------------  -----------------------  ------------------------ 
                              Number         GBP       Number         GBP        Number         GBP 
---------------------   ------------  ----------  -----------  ----------  ------------  ---------- 
 Authorised share 
  capital 
 Ordinary shares 
  of 5p each              45,000,000   2,250,000   45,000,000   2,250,000    45,000,000   2,250,000 
----------------------  ------------  ----------  -----------  ----------  ------------  ---------- 
 Called up, allotted 
  and fully paid 
 Ordinary shares 
  of 5p each              34,539,061   1,726,953   30,065,714   1,503,286    30,065,714   1,503,286 
 Ordinary shares 
  of 5p each held 
  in treasury            (1,303,528)    (19,364)    (916,250)           -   (1,765,876)           - 
                          33,235,533   1,707,589   29,149,464   1,503,286    28,299,838   1,503,286 
                        ------------  ----------  -----------  ----------  ------------  ---------- 
 

During the six months ended 31 July 2019, 4,473,347 ordinary shares of 5 pence each were issued at a price of 220.11 pence each in consideration for the acquisition for the carried interest entitlement and outstanding accrual in ESO Investments 1 LP (see note 5). Therefore, the share capital of the Company increased by GBP204,303 (GBP1,503,286 as at 31 January 2019; GBP1,707,589 as at 31 July 2019) and the share premium increased by GBP9,622,617 (GBP3,867,209 as at 31 January 2019; GBP13,489,826 as at 31 July 2019).

10 Basic and diluted earnings per ordinary share

The basic earnings per share is calculated by dividing the profit of the Group for the period attributable to ordinary shareholders of GBP12,615,895 by the weighted average number of shares outstanding during the period of 31,149,678 (six-month period ended 31 July 2018: 28,299,838; year ended 31 January 2019: 28,420,881).

The diluted earnings per share is calculated by dividing the profit for the period attributable to ordinary shareholders by the weighted average number of shares outstanding during the period, as adjusted for the effects of all dilutive potential ordinary shares, of 31,149,678 (six-month period ended 31 July 2018: 28,299,838; year ended 31 January 2019: 28,420,881).

11 Net asset value per share (pence)

The net asset value per share is based on the net assets at the period end of GBP81,606,657 divided by 33,235,533 ordinary shares in issue at the end of the period (31 July 2018: GBP53,821,909 and 28,299,838 ordinary shares; 31 January 2019: GBP59,812,473 and 29,149,464 ordinary shares).

The diluted net asset value per share of 245.54 pence, is based on the net assets of the Group at the period-end of GBP81,606,657 divided by the shares in issue at the end of the period, as adjusted for the effects of dilutive potential ordinary shares, of 33,235,533, after excluding treasury shares (31 July 2018: GBP53,821,909 and 28,299,838 ordinary shares; 31 January 2019: GBP59,812,473 and 29,149,464 ordinary shares).

12 Loan note instruments

 
                                    31 July 2019   31 January 2019   31 July 2018 
                                     (unaudited)         (audited)    (unaudited) 
                                             GBP               GBP            GBP 
--------------------------------   -------------  ----------------  ------------- 
 Unsecured loan note instrument        3,925,914         3,915,612      3,905,309 
                                       3,925,914         3,915,612      3,905,309 
                                   -------------  ----------------  ------------- 
 

On 23 July 2015, the Company raised GBP4,500,000 via a placing of a Unsecured Loan Note ("ULN") instrument. Following the initial issuance of the ULNs, further notes were issued to investors such that on 31 January 2016 the Company had issued GBP7,975,459 in principal amount and the notes admitted to trading on the ISDX Growth Market on 29 January 2016. During the years ended 31 January 2017 and 31 January 2018 the Company issued no further notes such that on 31 January 2018 the Company had issued GBP7,975,459 in principal amount. On 31 July 2018, 50% of the outstanding ULNs in issue were redeemed such that GBP3,987,729 in principal amount was outstanding at the end of the period. The notes carry interest at 7.5% per annum. Issue costs totalling GBP144,236 have been offset against the value of the loan note instrument and are being amortised over the life of the instrument. The total amount expensed in the period ended 31 July 2019 was GBP10,303 (GBP20,605 in the year ended 31 January 2019, GBP10,302 in the period ended 31 July 2018). The carrying value of the ULNs in issue at the year-end was GBP3,925,914 (31 January 2019: GBP3,915,612). The total interest expense on the ULNs for the period is GBP159,842 (GBP469,225 in the year ended 31 January 2019, GBP309,382 in the period ended 31 July 2018). This includes the amortisation of the issue costs.

13 Subsequent events

The Company revised the investment advisory fee arrangements payable to EPE (see note 5).

14 Related party transactions

Four of the Directors have interests in the shares of the Company as at 31 July 2019 (2018: four). Nicholas Wilson holds 125,987 ordinary shares (2018: 105,743). Robert Quayle holds 107,201 ordinary shares (2018: 87,883). Clive Spears holds 126,493 ordinary shares (2018: 105,787). Heather Bestwick holds 13,888 ordinary shares (2018: nil).

Directors' fees expense during the period amounted to GBP77,000 (period ended 31 July 2018: GBP77,000; year ended 31 January 2019: GBP154,000) of which GBP12,834 is accrued as at 31 July 2019.

Certain Directors of the Company and other participants are incentivised in the form of equity settled share-based payment transactions, through a Joint Share Ownership Plan (see note 6).

Details of fees payable to key service providers are included in note 5 to the financial statements.

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -8-

The table below sets out information about significant unobservable inputs used at 31 July 2019 in measuring financial instruments categorised as Level 3 in the fair value hierarchy.

 
 Description                Fair value at 31 July   Valuation technique 
                                             2019 
-------------------------                          ---------------------- 
                                              GBP 
-------------------------  ----------------------  ---------------------- 
 Unquoted private equity               14,170,990   Sales/EBITDA multiple 
  investments (including 
  debt) 
                           ----------------------  ---------------------- 
 Third party private debt               1,988,464   Reported net asset 
  fund investment                                    value 
                           ----------------------  ---------------------- 
 

Significant unobservable inputs are developed as follows:

-- Sales/EBITDA multiples: Represents amounts that market participants would use when pricing the investments. Sales/EBITDA multiples are selected from comparable public companies based on geographic location, industry, size, target markets and other factors that management considers to be reasonable. The traded multiples for the comparable companies are determined by dividing the enterprise value of the company by its Sales or EBITDA and further discounted for considerations such as the lack of marketability and other differences between the comparable peer group and specific company.

-- Net asset value: The Company has an investment in a third party private debt fund. The manager of the fund provides the Company with periodic valuations of the Company's investment. These valuations are prepared in line with IPEV guidelines. The Company agrees with the valuation provided by the manager of the fund and no adjustment is made in determining the fair value of the investment.

Although management believes that its estimates of fair value are appropriate, the use of different methodologies or assumptions could lead to different measurements of fair value. For fair value measurements in Level 3, changing one or more of the assumptions used to reasonably possible alternative assumptions would have the following effects on the Level 3 investment valuations.

The employment of favourable and unfavourable reasonably possible alternative assumptions in the preparation of the Level 3 investment valuations described above would imply a 10-25% premium and a 10-25% discount respectively to the fair value stated.

The favourable and unfavourable effects of using reasonably possible alternative assumptions for the valuation of unlisted private equity investments have been calculated by recalibrating the model value for each investment using unobservable inputs based on averages of the upper and lower quartiles respectively of the Company's ranges of possible estimates. The most significant unobservable inputs are EBITDA and Sales multiples. The weighted average EBITDA multiple used in the valuation models at 31 July 2019 was 6.9x (with reasonably possible alternative assumptions of 8.6x and 5.2x) (31 January 2019: 5.3x, 6.7x and 4.0x respectively). The weighted average sales multiple used in the valuation models at 31 July 2019 was 0.3x (with reasonable possible alternative assumptions of 0.4x and 0.2x) (31 January 2019: 0.2x, 0.3x and 0.2x respectively).

Financial instruments not measured at fair value

The carrying value of short-term financial assets and financial liabilities (cash, debtors and creditors) approximate their fair value. The carrying value of the convertible and the new loan note instruments are also considered to approximate fair value.

   9    Share capital 
 
                              31 July 2019            31 January 2019            31 July 2018 
                               (unaudited)               (audited)                (unaudited) 
                        ------------------------  -----------------------  ------------------------ 
                              Number         GBP       Number         GBP        Number         GBP 
---------------------   ------------  ----------  -----------  ----------  ------------  ---------- 
 Authorised share 
  capital 
 Ordinary shares 
  of 5p each              45,000,000   2,250,000   45,000,000   2,250,000    45,000,000   2,250,000 
----------------------  ------------  ----------  -----------  ----------  ------------  ---------- 
 Called up, allotted 
  and fully paid 
 Ordinary shares 
  of 5p each              34,539,061   1,726,953   30,065,714   1,503,286    30,065,714   1,503,286 
 Ordinary shares 
  of 5p each held 
  in treasury            (1,303,528)    (19,364)    (916,250)           -   (1,765,876)           - 
                          33,235,533   1,707,589   29,149,464   1,503,286    28,299,838   1,503,286 
                        ------------  ----------  -----------  ----------  ------------  ---------- 
 

During the six months ended 31 July 2019, 4,473,347 ordinary shares of 5 pence each were issued at a price of 220.11 pence each in consideration for the acquisition for the carried interest entitlement and outstanding accrual in ESO Investments 1 LP (see note 5). Therefore, the share capital of the Company increased by GBP204,303 (GBP1,503,286 as at 31 January 2019; GBP1,707,589 as at 31 July 2019) and the share premium increased by GBP9,622,617 (GBP3,867,209 as at 31 January 2019; GBP13,489,826 as at 31 July 2019).

10 Basic and diluted earnings per ordinary share

The basic earnings per share is calculated by dividing the profit of the Group for the period attributable to ordinary shareholders of GBP12,615,895 by the weighted average number of shares outstanding during the period of 31,149,678 (six-month period ended 31 July 2018: 28,299,838; year ended 31 January 2019: 28,420,881).

The diluted earnings per share is calculated by dividing the profit for the period attributable to ordinary shareholders by the weighted average number of shares outstanding during the period, as adjusted for the effects of all dilutive potential ordinary shares, of 31,149,678 (six-month period ended 31 July 2018: 28,299,838; year ended 31 January 2019: 28,420,881).

11 Net asset value per share (pence)

The net asset value per share is based on the net assets at the period end of GBP81,606,657 divided by 33,235,533 ordinary shares in issue at the end of the period (31 July 2018: GBP53,821,909 and 28,299,838 ordinary shares; 31 January 2019: GBP59,812,473 and 29,149,464 ordinary shares).

The diluted net asset value per share of 245.54 pence, is based on the net assets of the Group at the period-end of GBP81,606,657 divided by the shares in issue at the end of the period, as adjusted for the effects of dilutive potential ordinary shares, of 33,235,533, after excluding treasury shares (31 July 2018: GBP53,821,909 and 28,299,838 ordinary shares; 31 January 2019: GBP59,812,473 and 29,149,464 ordinary shares).

12 Loan note instruments

 
                                    31 July 2019   31 January 2019   31 July 2018 
                                     (unaudited)         (audited)    (unaudited) 
                                             GBP               GBP            GBP 
--------------------------------   -------------  ----------------  ------------- 
 Unsecured loan note instrument        3,925,914         3,915,612      3,905,309 
                                       3,925,914         3,915,612      3,905,309 
                                   -------------  ----------------  ------------- 
 

On 23 July 2015, the Company raised GBP4,500,000 via a placing of a Unsecured Loan Note ("ULN") instrument. Following the initial issuance of the ULNs, further notes were issued to investors such that on 31 January 2016 the Company had issued GBP7,975,459 in principal amount and the notes admitted to trading on the ISDX Growth Market on 29 January 2016. During the years ended 31 January 2017 and 31 January 2018 the Company issued no further notes such that on 31 January 2018 the Company had issued GBP7,975,459 in principal amount. On 31 July 2018, 50% of the outstanding ULNs in issue were redeemed such that GBP3,987,729 in principal amount was outstanding at the end of the period. The notes carry interest at 7.5% per annum. Issue costs totalling GBP144,236 have been offset against the value of the loan note instrument and are being amortised over the life of the instrument. The total amount expensed in the period ended 31 July 2019 was GBP10,303 (GBP20,605 in the year ended 31 January 2019, GBP10,302 in the period ended 31 July 2018). The carrying value of the ULNs in issue at the year-end was GBP3,925,914 (31 January 2019: GBP3,915,612). The total interest expense on the ULNs for the period is GBP159,842 (GBP469,225 in the year ended 31 January 2019, GBP309,382 in the period ended 31 July 2018). This includes the amortisation of the issue costs.

13 Subsequent events

The Company revised the investment advisory fee arrangements payable to EPE (see note 5).

14 Related party transactions

Four of the Directors have interests in the shares of the Company as at 31 July 2019 (2018: four). Nicholas Wilson holds 125,987 ordinary shares (2018: 105,743). Robert Quayle holds 107,201 ordinary shares (2018: 87,883). Clive Spears holds 126,493 ordinary shares (2018: 105,787). Heather Bestwick holds 13,888 ordinary shares (2018: nil).

Directors' fees expense during the period amounted to GBP77,000 (period ended 31 July 2018: GBP77,000; year ended 31 January 2019: GBP154,000) of which GBP12,834 is accrued as at 31 July 2019.

Certain Directors of the Company and other participants are incentivised in the form of equity settled share-based payment transactions, through a Joint Share Ownership Plan (see note 6).

Details of fees payable to key service providers are included in note 5 to the financial statements.

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -8-

The table below sets out information about significant unobservable inputs used at 31 July 2019 in measuring financial instruments categorised as Level 3 in the fair value hierarchy.

 
 Description                Fair value at 31 July   Valuation technique 
                                             2019 
-------------------------                          ---------------------- 
                                              GBP 
-------------------------  ----------------------  ---------------------- 
 Unquoted private equity               14,170,990   Sales/EBITDA multiple 
  investments (including 
  debt) 
                           ----------------------  ---------------------- 
 Third party private debt               1,988,464   Reported net asset 
  fund investment                                    value 
                           ----------------------  ---------------------- 
 

Significant unobservable inputs are developed as follows:

-- Sales/EBITDA multiples: Represents amounts that market participants would use when pricing the investments. Sales/EBITDA multiples are selected from comparable public companies based on geographic location, industry, size, target markets and other factors that management considers to be reasonable. The traded multiples for the comparable companies are determined by dividing the enterprise value of the company by its Sales or EBITDA and further discounted for considerations such as the lack of marketability and other differences between the comparable peer group and specific company.

-- Net asset value: The Company has an investment in a third party private debt fund. The manager of the fund provides the Company with periodic valuations of the Company's investment. These valuations are prepared in line with IPEV guidelines. The Company agrees with the valuation provided by the manager of the fund and no adjustment is made in determining the fair value of the investment.

Although management believes that its estimates of fair value are appropriate, the use of different methodologies or assumptions could lead to different measurements of fair value. For fair value measurements in Level 3, changing one or more of the assumptions used to reasonably possible alternative assumptions would have the following effects on the Level 3 investment valuations.

The employment of favourable and unfavourable reasonably possible alternative assumptions in the preparation of the Level 3 investment valuations described above would imply a 10-25% premium and a 10-25% discount respectively to the fair value stated.

The favourable and unfavourable effects of using reasonably possible alternative assumptions for the valuation of unlisted private equity investments have been calculated by recalibrating the model value for each investment using unobservable inputs based on averages of the upper and lower quartiles respectively of the Company's ranges of possible estimates. The most significant unobservable inputs are EBITDA and Sales multiples. The weighted average EBITDA multiple used in the valuation models at 31 July 2019 was 6.9x (with reasonably possible alternative assumptions of 8.6x and 5.2x) (31 January 2019: 5.3x, 6.7x and 4.0x respectively). The weighted average sales multiple used in the valuation models at 31 July 2019 was 0.3x (with reasonable possible alternative assumptions of 0.4x and 0.2x) (31 January 2019: 0.2x, 0.3x and 0.2x respectively).

Financial instruments not measured at fair value

The carrying value of short-term financial assets and financial liabilities (cash, debtors and creditors) approximate their fair value. The carrying value of the convertible and the new loan note instruments are also considered to approximate fair value.

   9    Share capital 
 
                              31 July 2019            31 January 2019            31 July 2018 
                               (unaudited)               (audited)                (unaudited) 
                        ------------------------  -----------------------  ------------------------ 
                              Number         GBP       Number         GBP        Number         GBP 
---------------------   ------------  ----------  -----------  ----------  ------------  ---------- 
 Authorised share 
  capital 
 Ordinary shares 
  of 5p each              45,000,000   2,250,000   45,000,000   2,250,000    45,000,000   2,250,000 
----------------------  ------------  ----------  -----------  ----------  ------------  ---------- 
 Called up, allotted 
  and fully paid 
 Ordinary shares 
  of 5p each              34,539,061   1,726,953   30,065,714   1,503,286    30,065,714   1,503,286 
 Ordinary shares 
  of 5p each held 
  in treasury            (1,303,528)    (19,364)    (916,250)           -   (1,765,876)           - 
                          33,235,533   1,707,589   29,149,464   1,503,286    28,299,838   1,503,286 
                        ------------  ----------  -----------  ----------  ------------  ---------- 
 

During the six months ended 31 July 2019, 4,473,347 ordinary shares of 5 pence each were issued at a price of 220.11 pence each in consideration for the acquisition for the carried interest entitlement and outstanding accrual in ESO Investments 1 LP (see note 5). Therefore, the share capital of the Company increased by GBP204,303 (GBP1,503,286 as at 31 January 2019; GBP1,707,589 as at 31 July 2019) and the share premium increased by GBP9,622,617 (GBP3,867,209 as at 31 January 2019; GBP13,489,826 as at 31 July 2019).

10 Basic and diluted earnings per ordinary share

The basic earnings per share is calculated by dividing the profit of the Group for the period attributable to ordinary shareholders of GBP12,615,895 by the weighted average number of shares outstanding during the period of 31,149,678 (six-month period ended 31 July 2018: 28,299,838; year ended 31 January 2019: 28,420,881).

The diluted earnings per share is calculated by dividing the profit for the period attributable to ordinary shareholders by the weighted average number of shares outstanding during the period, as adjusted for the effects of all dilutive potential ordinary shares, of 31,149,678 (six-month period ended 31 July 2018: 28,299,838; year ended 31 January 2019: 28,420,881).

11 Net asset value per share (pence)

The net asset value per share is based on the net assets at the period end of GBP81,606,657 divided by 33,235,533 ordinary shares in issue at the end of the period (31 July 2018: GBP53,821,909 and 28,299,838 ordinary shares; 31 January 2019: GBP59,812,473 and 29,149,464 ordinary shares).

The diluted net asset value per share of 245.54 pence, is based on the net assets of the Group at the period-end of GBP81,606,657 divided by the shares in issue at the end of the period, as adjusted for the effects of dilutive potential ordinary shares, of 33,235,533, after excluding treasury shares (31 July 2018: GBP53,821,909 and 28,299,838 ordinary shares; 31 January 2019: GBP59,812,473 and 29,149,464 ordinary shares).

12 Loan note instruments

 
                                    31 July 2019   31 January 2019   31 July 2018 
                                     (unaudited)         (audited)    (unaudited) 
                                             GBP               GBP            GBP 
--------------------------------   -------------  ----------------  ------------- 
 Unsecured loan note instrument        3,925,914         3,915,612      3,905,309 
                                       3,925,914         3,915,612      3,905,309 
                                   -------------  ----------------  ------------- 
 

On 23 July 2015, the Company raised GBP4,500,000 via a placing of a Unsecured Loan Note ("ULN") instrument. Following the initial issuance of the ULNs, further notes were issued to investors such that on 31 January 2016 the Company had issued GBP7,975,459 in principal amount and the notes admitted to trading on the ISDX Growth Market on 29 January 2016. During the years ended 31 January 2017 and 31 January 2018 the Company issued no further notes such that on 31 January 2018 the Company had issued GBP7,975,459 in principal amount. On 31 July 2018, 50% of the outstanding ULNs in issue were redeemed such that GBP3,987,729 in principal amount was outstanding at the end of the period. The notes carry interest at 7.5% per annum. Issue costs totalling GBP144,236 have been offset against the value of the loan note instrument and are being amortised over the life of the instrument. The total amount expensed in the period ended 31 July 2019 was GBP10,303 (GBP20,605 in the year ended 31 January 2019, GBP10,302 in the period ended 31 July 2018). The carrying value of the ULNs in issue at the year-end was GBP3,925,914 (31 January 2019: GBP3,915,612). The total interest expense on the ULNs for the period is GBP159,842 (GBP469,225 in the year ended 31 January 2019, GBP309,382 in the period ended 31 July 2018). This includes the amortisation of the issue costs.

13 Subsequent events

The Company revised the investment advisory fee arrangements payable to EPE (see note 5).

14 Related party transactions

Four of the Directors have interests in the shares of the Company as at 31 July 2019 (2018: four). Nicholas Wilson holds 125,987 ordinary shares (2018: 105,743). Robert Quayle holds 107,201 ordinary shares (2018: 87,883). Clive Spears holds 126,493 ordinary shares (2018: 105,787). Heather Bestwick holds 13,888 ordinary shares (2018: nil).

Directors' fees expense during the period amounted to GBP77,000 (period ended 31 July 2018: GBP77,000; year ended 31 January 2019: GBP154,000) of which GBP12,834 is accrued as at 31 July 2019.

Certain Directors of the Company and other participants are incentivised in the form of equity settled share-based payment transactions, through a Joint Share Ownership Plan (see note 6).

Details of fees payable to key service providers are included in note 5 to the financial statements.

(MORE TO FOLLOW) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -9-

On 9 May 2019, the Company entered into an agreement to acquire the carried interest entitlement and outstanding accrual of ESO Investments 1 LP from the Investment Advisor (and related parties). The total consideration of GBP9,846,284 for the interest was paid by through the issuance of 4,473,347 ordinary shares in the Company, issued at 220.11 pence each.

Shareholder Enquiries

Should you have any queries regarding the Company, its portfolio or its performance, please contact the Investment Advisor using the following contact details, who will be happy to assist.

 
 E-mail       ir@epicpe.com 
 Telephone    0207 269 8860 
 

Group Information

 
 Directors                            Administrator and Company Address 
 C.L. Spears (Chairman)               R&H Fund Services (Jersey) 
                                       Limited 
 H. Bestwick                          Ordnance House 
 David Pirouet                        31 Pier Road, St Helier 
 R.B.M. Quayle                        Jersey JE4 8PW 
 N.V. Wilson 
 
 
 Investment Advisor                   Nominated Advisor and Broker 
 EPIC Private Equity LLP              Numis Securities Limited 
 Audrey House                         10 Paternoster Square 
 16-20 Ely Place                      London EC4M 7LT 
 London EC1N 6SN 
 
 
 Auditors and Reporting Accountants   Registered Agent (Bermuda) 
 KPMG Audit LLC                       Conyers Dill & Pearman 
 Heritage Court                       Clarendon House, 2 Church Street 
 41 Athol Street                      Hamilton HM 11 
 Douglas                              Bermuda 
 Isle of Man IM99 1HN 
 
 
 Bankers                              Registrar and CREST Providers 
 Barclays Bank Plc                    Computershare Investor Services 
                                       (Jersey) Limited 
 1 Churchill Place                    Queensway House 
 Canary Wharf                         Hilgrove Street 
 London E14 5HP                       St. Helier 
                                      Jersey JE1 1ES 
 HSBC Bank Plc 
 1st Floor 
 60 Queen Victoria Street             Investor Relations 
 London EC4N 4TR                      Richard Spiegelberg 
                                      Cardew Group 
                                      5 Chancery Lane 
                                      London EC4A 1BL 
 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

IR EAENNEAPNEAF

(END) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -9-

On 9 May 2019, the Company entered into an agreement to acquire the carried interest entitlement and outstanding accrual of ESO Investments 1 LP from the Investment Advisor (and related parties). The total consideration of GBP9,846,284 for the interest was paid by through the issuance of 4,473,347 ordinary shares in the Company, issued at 220.11 pence each.

Shareholder Enquiries

Should you have any queries regarding the Company, its portfolio or its performance, please contact the Investment Advisor using the following contact details, who will be happy to assist.

 
 E-mail       ir@epicpe.com 
 Telephone    0207 269 8860 
 

Group Information

 
 Directors                            Administrator and Company Address 
 C.L. Spears (Chairman)               R&H Fund Services (Jersey) 
                                       Limited 
 H. Bestwick                          Ordnance House 
 David Pirouet                        31 Pier Road, St Helier 
 R.B.M. Quayle                        Jersey JE4 8PW 
 N.V. Wilson 
 
 
 Investment Advisor                   Nominated Advisor and Broker 
 EPIC Private Equity LLP              Numis Securities Limited 
 Audrey House                         10 Paternoster Square 
 16-20 Ely Place                      London EC4M 7LT 
 London EC1N 6SN 
 
 
 Auditors and Reporting Accountants   Registered Agent (Bermuda) 
 KPMG Audit LLC                       Conyers Dill & Pearman 
 Heritage Court                       Clarendon House, 2 Church Street 
 41 Athol Street                      Hamilton HM 11 
 Douglas                              Bermuda 
 Isle of Man IM99 1HN 
 
 
 Bankers                              Registrar and CREST Providers 
 Barclays Bank Plc                    Computershare Investor Services 
                                       (Jersey) Limited 
 1 Churchill Place                    Queensway House 
 Canary Wharf                         Hilgrove Street 
 London E14 5HP                       St. Helier 
                                      Jersey JE1 1ES 
 HSBC Bank Plc 
 1st Floor 
 60 Queen Victoria Street             Investor Relations 
 London EC4N 4TR                      Richard Spiegelberg 
                                      Cardew Group 
                                      5 Chancery Lane 
                                      London EC4A 1BL 
 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

IR EAENNEAPNEAF

(END) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)

DJ EPE Special Opportunities Limited Interim Review -9-

On 9 May 2019, the Company entered into an agreement to acquire the carried interest entitlement and outstanding accrual of ESO Investments 1 LP from the Investment Advisor (and related parties). The total consideration of GBP9,846,284 for the interest was paid by through the issuance of 4,473,347 ordinary shares in the Company, issued at 220.11 pence each.

Shareholder Enquiries

Should you have any queries regarding the Company, its portfolio or its performance, please contact the Investment Advisor using the following contact details, who will be happy to assist.

 
 E-mail       ir@epicpe.com 
 Telephone    0207 269 8860 
 

Group Information

 
 Directors                            Administrator and Company Address 
 C.L. Spears (Chairman)               R&H Fund Services (Jersey) 
                                       Limited 
 H. Bestwick                          Ordnance House 
 David Pirouet                        31 Pier Road, St Helier 
 R.B.M. Quayle                        Jersey JE4 8PW 
 N.V. Wilson 
 
 
 Investment Advisor                   Nominated Advisor and Broker 
 EPIC Private Equity LLP              Numis Securities Limited 
 Audrey House                         10 Paternoster Square 
 16-20 Ely Place                      London EC4M 7LT 
 London EC1N 6SN 
 
 
 Auditors and Reporting Accountants   Registered Agent (Bermuda) 
 KPMG Audit LLC                       Conyers Dill & Pearman 
 Heritage Court                       Clarendon House, 2 Church Street 
 41 Athol Street                      Hamilton HM 11 
 Douglas                              Bermuda 
 Isle of Man IM99 1HN 
 
 
 Bankers                              Registrar and CREST Providers 
 Barclays Bank Plc                    Computershare Investor Services 
                                       (Jersey) Limited 
 1 Churchill Place                    Queensway House 
 Canary Wharf                         Hilgrove Street 
 London E14 5HP                       St. Helier 
                                      Jersey JE1 1ES 
 HSBC Bank Plc 
 1st Floor 
 60 Queen Victoria Street             Investor Relations 
 London EC4N 4TR                      Richard Spiegelberg 
                                      Cardew Group 
                                      5 Chancery Lane 
                                      London EC4A 1BL 
 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

IR EAENNEAPNEAF

(END) Dow Jones Newswires

September 10, 2019 02:01 ET (06:01 GMT)