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CANDOVER INVESTMENTS PLC - Final Results

Friday, March 1, 2013 2:00 AM


1st March 2013

Candover Investments plc

Preliminary unaudited results for the year ended 31st December 2012

* NAV - net assets per share of 608p at 31st December 2012, a 15.2% (109p)

decrease compared to the prior year (717p).

* Portfolio valuations down 10.7% over the year (89p) accounting for over 80%

    of the drop in NAV.
  * Of the 11 portfolio investments, on a constant currency basis, 4 were
    written up, 2 were unchanged and 5 were written down.
   

* Fall in value at Expro International due principally to the dilutive impact

of Candover1 not re-investing in Expro International alongside the Candover

2008 Fund. Trading at Expro is improving, with revenues and earnings ahead

of prior year.

* Net debt - decreased by £11.3m to £26.7m at 31st December 2012 (31st

December 2011: £38.0m) following the disposal of Capital Safety Group and

receipt of a deferred contingent payment from Wood Mackenzie, offset by a

follow-on investment in Stork. There was a corresponding improvement in the

    loan-to-value ratio which fell to 18.1% (31st December 2011: 20.6%).
  * Outstanding commitments - reduced to £5.9m at 31st December 2012 (31st
    December 2011: £14.9m). Commitments expire in August 2013.
   

* Continued focus on maintaining the company's financial stability. Operating

costs reduced and property liabilities mitigated.

Malcolm Fallen, Chief Executive Officer, said:

"We continue to track Arle's2 progress in meeting its objectives of maximising
the value of the portfolio and preparing the businesses for exit. We have not
seen as much progress in realising the portfolio as had been envisaged when
Arle acquired Candover Partners. However, our aim remains to optimise the long
term value of the portfolio by returning cash to shareholders as soon as is
practical."

Ends.

1 Candover means Candover Investments plc and/or one or more of its subsidiaries

2 Arle means Arle Capital Partners Limited

For further information, please contact:

Candover Investments plc
Malcolm Fallen, CEO       +44 20 7489 9848


Chairman's statement
Our results for 2012 have once again been impacted by the volatility seen in
the markets, particularly in respect of foreign currency. The portfolio managed
by Arle has in aggregate seen a further decline in value and this, combined
with the relative strength of Sterling against the Euro and the costs of
running the Company, has resulted in a decrease of 15.2% in our net asset
performance during the year.
Within Candover, we have continued to focus on maintaining the company's
financial stability by reducing our operating costs wherever possible. We have
also been able to achieve a further reduction in our net debt, following the
realisation of Capital Safety Group early in the year, which is essential to
executing our return of cash strategy.

The Board is not recommending a dividend payment, but the payment of dividends in the future will be reviewed in the context of our focus on delivering a progressive return of cash to shareholders over time as realisations are achieved by the investment manager.

There have been no changes to the Board during the year.

Although there are signs that the external environment is becoming more stable,
the currency markets continue to be volatile. The Euro has appreciated by
around 5% against Sterling since year end which, given 90% of our net assets
are in Euros, means our NAV has increased by approximately
£7 million. Our objective remains to optimise the long term value of the
portfolio by returning cash to shareholders as soon as is practical. Progress
in realising the portfolio has been slower than expected. We will continue to
track our manager's progress over the year ahead as it manages the portfolio
and prepares the businesses for exit.
Richard Stone
Chairman
1st March 2013


CEO's report

During 2012, our focus has been on continuing to ensure our underlying financial stability remains in place to support our strategy of a progressive return of cash to shareholders over time, whilst regularly reviewing the performance of Arle, our investment manager.

Net asset value

The Company's net assets per share of 608p at 31st December 2012 decreased by
15.2% over the full year from 31st December 2011 (717p), with the majority of
this reduction occurring in the first half of the year.
Our operating model means that there are two clear components to NAV
progression. These are the value of the portfolio assets and any changes
therein; and the costs incurred in running the business, which are principally
the fees we pay to Arle Capital Partners, our investment manager, and the net
interest costs associated with the US Private Placement loan notes. The impact
of these costs on NAV will either be offset by increases in the valuation of
the portfolio during any financial period or will exacerbate the impact of any
reductions in portfolio value. NAV growth, therefore, is solely dependent on
improvements in the valuation of the portfolio managed by Arle.
The portfolio continued to be affected by the economic volatility throughout
Europe and beyond. Write downs before currency movements were £21.9 million,
offset by uplifts of £5.9 million. The overall value of the portfolio reduced
by £19.6 million (89p per share) over the year, comprising net reductions in
valuations of 73p per share and adverse currency movements of 16p per share.
During 2012, recurring administrative expenses reduced by £1.2 million, a
reduction of 19%. We also completed the subletting of the leases on 20 Old
Bailey through to their expiry at the end of 2014. This enabled a write-back of
£2.0 million of the property liability that was provided for at the end of
2011. These recurring costs increased the decline in NAV resulting from the
fall in portfolio values. The movements are set out in Table 1 of the Financial
review.
Net debt
Net debt during the year fell from £38.0 million at 31st December 2011 to £26.7
million at 31st December 2012, with inflows from realisations offsetting the
combination of follow on investments and operating and financing costs.
Candover received total realisation proceeds of £32.0 million, £29.2 million
from the sale of Capital Safety Group, with the remainder being receipt of a
deferred contingent payment relating to the sale of Wood Mackenzie in 2009.
Follow-on investments of £8.3 million were made, with the majority of this
supporting the refinancing and separation of the Stork businesses. Our
loan-to-value ratio saw a corresponding improvement from 20.6% at 31st December
2011 to 18.1% at the year-end.
Some of the proceeds from the Capital Safety Group realisation were used to pay
down a further £7.5 million of our loan notes at par which helped to reduce our
financing costs during the second half of the year.
Repayment of the US Private Placement loan notes is not due to begin until
October 2014, at which point the US dollar denominated notes and Euro
denominated notes are repayable. We have recently switched a proportion of our
Sterling deposits to improve the matching of our US dollar liability. The Board
have considered the latest realisation projections provided by the investment
manager, which include the assumption, amongst others, that certain
realisations will be made prior to the US Private Placement loan notes falling
due. The Board have concluded that, based on those assumptions and reflecting
appropriate sensitivities, over the course of the next eighteen months
sufficient cash resources will be available to meet the repayments. There is an
underlying risk that if insufficient realisations are achieved by our
investment manager prior to January 2015, there would be a shortfall in the
cash required to meet the loan note repayments. The Board will continue to
monitor the outlook carefully and are already reviewing a range of options,
including refinancing existing facilities or obtaining new finance, to provide
additional liquidity should there be a material change in the assumptions.

Outstanding commitments

Outstanding commitments to the Candover 2005 Fund at 31st December 2012 were £
5.9 million, compared to £14.9 million at the end of 2011. These commitments
expire on 26th August 2013.

Termination of the Candover 2001 Fund

Following two extension periods to its eight year life, the Candover 2001 Fund
that has two investments remaining, Qioptiq and Innovia, will be terminated on
13th June 2013. It has been agreed with Candover and the Fund investors that
these investments, both of which have good prospects, will continue to be
managed by Arle until they can be realised at an appropriate price in an
orderly manner. We believe that this is preferable to a distribution in specie
to investors.
Outlook
It is disappointing that we have yet to witness a recovery in the value of the
portfolio. We will continue to keep a tight control on the costs of the
business to minimise erosion of NAV. For its part, Arle will continue with its
stewardship of the portfolio to enhance the portfolio companies' values prior
to their realisation.
Malcolm Fallen
Chief Executive Officer
1st March 2013


Financial review
Net asset value per share

Net asset value per share after exceptional non-recurring gains was 608p, a full year decrease of 15.2% since 31st December 2011 (717p) and a decrease of 5.3% since 30th June 2012 (642p). Exceptional non-recurring gains have increased net assets per share by 9p. See Table 1.

Table 1
                                                                 £m  p/share
Net asset value at 31stDecember 2011                          156.6      

717

Loss on financial instruments and other income1              (16.0)     

(73)

Recurring administrative expenses                             (5.3)     (24)
Finance costs                                                 (5.6)     (26)
Others (including tax)                                          1.6        7
Currency impact:
- Unrealised investments                                      (3.6)     (16)
- Restatement of cash and cash equivalents                    (1.5)      

(7)

- Translation of loan and fair value hedge adjustment           4.6       21
balances
                                                                            
Exceptional non-recurring gains: property                       2.0       
9
provision
Net asset value at 31stDecember 2012as reported               132.8      

608

1Stated before adverse currency impact of £3.6 million

Investments

The valuation of investments, including carried interest and accrued loan note
interest, was £163.5 million at 31st December 2012 (31st December 2011: £204.0
million). Valuations decreased for the year by £16.0 million before currency
effects and after disposal and acquisition of assets, representing a decrease
of 8.7% on the value of these investments over their 31st December 2011 value,
and a decrease of 5.3% since 30th June 2012. The reduction in the value of the
portfolio accounted for 82% of the overall reduction in net asset value. See
Table 2.
Table 2
                                                                           £m
Investments at 31stDecember 2011(including assets held for sale)        204.0
Disposals at valuation                                                 (29.2)
Additions at cost                                                         8.3
Investments adjusted for additions and disposals                        183.1
Revaluation of investments:
- Valuation movements before currency impact                           

(16.0)

- Currency impact on unrealised investments                             

(3.6)

Investments at 31st December 2012                                       

163.5

Net debt and loan-to-value covenant

Candover's net debt decreased from £38.0 million at 31st December 2011 to £26.7
million at 31stDecember 2012. This reflects net investment inflows of £14.8
million, offset by cash interest charges of £10.0 million and operating
expenses. A repayment at par of £7.5 million of the loan notes was completed
using some of the proceeds from the sale of Capital Safety Group. At this level
of net debt, the loan to value ratio of the Company's net debt was 18.1%
compared to 20.6% at 31st December 2011. See Table 3.
Table 3
                                               31st December   31st December
                                                        2012            2011
                                                          £m              £m
Loans and borrowings                                   151.0           167.1
Less fair value hedge adjustment                       (7.0)          (11.6)
Deferred costs                                           0.4             0.6
Value of bonds                                         144.4           156.1
Cash                                                 (117.7)         (118.1)
Net debt                                                26.7            38.0
Outstanding commitment to the Candover 2005 Fund fell to £5.9 million over the
period from £14.9 million at the previous year end, mainly due to a follow-on
investment in the portfolio and foreign currency movements.

Profit beforeand aftertax

Net revenue loss before tax and exceptional non-recurring gains from continuing
operations for the year was £12.6 million compared to a profit of £8.7 million
in the prior year following the reversal of previous accrued income as a result
of the write down of investments in Stork and Parques Reunidos.
Exceptional non-recurring gains of £2.0 million (2011: cost of £3.5 million)
comprise a write back of the provision against the ongoing property liability
following the subletting of the premises at 20 Old Bailey.

Reported net revenue loss after taxation was £13.1 million compared to a gain of £3.4 million in the prior year.

Manager's portfolio review

ARLE CAPITAL PARTNERS LIMITED

Introduction

Arle is an independent private equity partnership that acts as the General
Partner of the Candover 2001 Fund and Manager of the Candover 2005 Fund,
Candover 2008 Fund and the Preston Fund (together `the Funds'). Arle acts as
investment manager for Candover who is a co-investor alongside the Funds. At
31st December 2012, Candover and the Funds had a combined portfolio of 11
investments in the Energy and Natural Resources, Industrials and Services
sectors, valued at a total of €1.9 billion.

Active Ownership

In 2012, Arle's principal focus was to ensure that portfolio company balance
sheets, strategies and management teams were sufficiently robust to trade
through the continuing tough economic conditions. During the period, we
undertook a series of strategic reviews, completed four partial exits as well
as three value-enhancing acquisitions and we refinanced a large number of the
portfolio companies in order to strengthen their respective capital structures.
Within Arle, the investment team welcomed three prominent industrialists to the
partnership during the year. All three have successful track records of running
global businesses within our core sectors. The Operational Review Board
(`ORB'), which meets quarterly to review the operational and financial progress
of each portfolio company, now represents over 80 years of global industrial
CEO experience and 90 years of investment experience. The ORB now includes
Fredrik Arp, as ORB Chairman, Sir George Buckley as Chairman of Arle, Anders
Pettersson, former CEO of Thule and Capital Safety Group and Dr Peter Goode,
former CEO of Vetco, Aibel and Transfield Services Group.
Our industrial partners also participate on the boards of Arle's portfolio
companies where their deep sector knowledge, operational and strategic
expertise are applied for the benefit of all stakeholders. During the year, Sir
George Buckley was appointed to the boards of Expro International and
Technogym, Anders Pettersson was appointed CEO of Hilding Anders and Dr Peter
Goode remained a Non-Executive Director at Expro International. Fredrik Arp
took up the chair at Parques Reunidos and also performs the same role at both
Hilding Anders and Qioptiq.

Arle's blend of investment and industrial skills is helping us deliver our Active Ownership strategy - to retain and build value in the portfolio - as we prepare each of our portfolio companies for future exit.

Portfolio overview

Overall, the actively managed investments in the portfolio collectively reported a 6.8% increase in revenues and a 5.3% increase in EBITDA in the twelve months ended 31st December 2012.

Stork BV ended the year as two separate businesses, Stork Technical Services (`STS') and Fokker Technologies (`Fokker'), each with its own independent management team, growth and exit strategies.

In August 2012, the capital structures of STS and Fokker were separated through
a refinancing and new injection of shareholder capital. At the holding company
level, the long term non-cash interest bearing debt was also refinanced. The
financing package for STS, which consisted of €272.5 million senior secured
loan notes and a working capital facility of €100 million, facilitated the full
integration of RBG which had been separately financed at the time of its
acquisition in May 2011. STS is now strongly positioned for growth in the oil
and gas sector as a leading services and technology provider.

The financing package for Fokker consisted of a senior term loan of €150 million and a working capital facility of €50 million. The new capital structure allows the company to consolidate its position as a leading provider of technologies, components and systems for the aerospace and defence industries.

Parques Reunidos (`Parques') had a difficult trading year. This was mainly due
to the domestic economic challenges in Italy and Spain as well as poor weather
conditions on some peak trading days, which offset strong trading in the US.
During the first half of 2012, the group made two major park acquisitions
funded from existing cash reserves, buying Noah's Ark, the largest water park
in the US and Slagharen, a leading attractions park in the Netherlands. Parques
successfully amended its covenants and extended its credit facilities to align
the maturity of its European debt facilities with that of its US financing
arrangements which will expire in 2017. This resulted in an appropriate capital
structure that will permit Parques to execute its strategic growth plan through
until 2017.
The financial performance of Expro International (`Expro') improved throughout
2012 with revenues and earnings ahead of the prior year. Together with his team
Charles Woodburn, Expro's CEO, has significantly upgraded Expro's global
operations and they are now managing a much more efficient and streamlined
business. Expro has secured a number of valuable new contracts and is
benefiting from the growing momentum in the subsea market. As was reported at
the half year, Expro sold its Connectors & Measurements division to Siemens AG
at a valuation of US$630 million in May 2012.
Technogym had a strong year in 2012 boosted by its involvement in the London
2012 Olympics, strong growth in new market segments and successful expansion in
emerging markets such as the Middle East and Latin America. The group also
celebrated the opening of the new Technogym Village in Cesena, Italy which is
expected to receive 25,000 customers a year. The Technogym board has been
augmented by the appointment of Sir George Buckley as a Non-Executive Director.
DX Group acquired Nightfreight in March 2012, the UK market leader for larger
and heavier parcel traffic in the B2C and B2B markets. This acquisition was
financed from existing balance sheet resources. The enlarged group is now one
of the UK and Ireland's leading independent mail, courier and logistics
operators.
Management at Hilding Anders was strengthened by the arrival of Anders
Pettersson as CEO, Roland Schylit as Executive Vice President of Operations and
new management in Asia and France. The new team set out to implement both a
refreshed growth strategy and an organisational restructuring which had been
successfully started by the previous interim CEO, Gunnar Johannsson, who
remains on the board of directors. Trading in 2012 recorded positive top line
growth with a particularly strong performance in Russia.
Both Qioptiq and Innovia completed covenant resets during 2012 and have traded
in line with expectations. Qioptiq has undergone a reorganisation to focus on
its two core markets: Commercial and Defence. At Innovia, Malcolm Fallen, CEO
of Candover, was appointed to the board as Non-Executive Chairman and David
Tilston joined as CFO. After the 2012 year end, Innovia announced the
acquisition of Securency from its 50/50 joint venture partner, the Reserve Bank
of Australia. This acquisition was funded from Innovia's existing cash
reserves.

Since the arrival of new CEO Vincent Taupin at Alma Consulting (`Alma') in January 2012, significant progress has been made on a number of strategic actions. These include the disposals of non-core assets, a reduction in the cost base, a review of the organisational structure and a newly planned international strategy. However, the trading outlook for 2013 has significantly deteriorated and remains uncertain with no clarity on the revised French Government budget and regulatory changes.

At EurotaxGlass's (`ETG'), we were unable to reach agreement with the lenders
on both a satisfactory restructuring of the debt and an appropriate valuation
for the business. Consequently we chose not to invest further equity in ETG and
in August 2012 we agreed to the lenders taking control of the business.

Realisations

During 2012, Arle achieved realisation proceeds for Candover of £32.0 million.
In January 2012, Arle completed the sale of Capital Safety Group to KKR for
US$1.1 billion. The sale generated proceeds of €362.7 million for the Candover
2005 Fund (Candover's share £29.2 million), equating to a return of 2.7x the
original investment.

In July 2012, Wood Mackenzie, a former 2001 Fund Investment, was sold by Charterhouse to Hellman & Friedman, triggering a deferred consideration payment of €24.7 million (Candover's share £1.9 million). As a result, Candover received a further carried interest payment of £0.9 million.

The principal realisations are set out in the table below:

Table 1
                                Candover     Total                        Type
                                      £m  Proceeds
                                                €m
Portfolio
Capital Safety Group                29.2     362.7         Private equity sale
Wood Mackenzie                       1.9      24.7      Deferred consideration
Other
Candover 2001 Fund carried           0.9         -  Crystallisation of carried
interest                                                              interest
Total realisations - 2012           32.0     387.4
As reported earlier, Expro sold its Connectors & Measurements division to
Siemens AG in May 2012 at a valuation of US$630 million.  Following completion
of the sale, Expro announced a cash tender offer to pay down US$425 million of
its 8.5% senior secured loan notes due in 2016 (including accrued interest).
The net proceeds were retained by the group to finance the growth strategy of
its core business and to repay existing borrowings.
In December 2012, GET completed a recapitalisation, which led to a distribution
to shareholders. The Candover 2005 Fund received €12.5m of proceeds from its
holding in the Company's preference shares and convertible preference shares.
Candover's share is £1.0 million. Whilst the proceeds were received in December
2012, the underlying investments relating to the cash flows will be realised
post year-end.
Follow-on investments

During the year, Candover invested a total of £8.3 million in follow-on investments alongside the Candover 2005 Fund. These investments are summarised below:

* £0.4 million in Alma to fund the restructuring of the management of the

    group.
  * £0.1 million in Expro.
   

* £7.8 million in Stork as part of the refinancing and separation of STS and

Fokker.

Candover portfolio composition

The portfolio is largely based in Western Europe with a strong focus on the industrials sector. Whilst the UK represented 31.6% of the top ten investments by value during the year, the portfolio companies themselves are well diversified in the regions in which they trade. The portfolio was mostly exposed to the industrials sector (51.9%).

The portfolio will become increasingly concentrated on fewer assets with value
across such assets becoming more concentrated as realisations occur. As at 31st
December 2012 the four largest investments, Stork, Parques, Expro and Technogym
represented 78.4% of the portfolio.

Candover portfolio valuation review

The value of the Funds decreased by 3% in constant currency in the six months from June 2012 to December 2012, against a backdrop of the continuing weak economic environment in Europe.


The Funds reported a 6% valuation decline year-on-year compared to Candover's
co-investments in the portfolio which showed a decrease of 11% or £19.6 million
(89p per share). The differing level of performance is as a result of (i) the
foreign currency translation effect between the Euro, the Funds' base currency,
and Sterling, Candover's currency for reporting purposes and (ii) the
accumulative dilution effect of Candover not reinvesting alongside the Candover
2008 Fund in Expro, the valuation of which was held constant by Arle over the
period.

The valuation of Technogym was written up as a result of strong trading. Parques Reunidos and Qioptiq were marked down as a result of weaker trading in 2012 and Stork's valuation was affected by the costs associated with re-financing the business.

Table 2 shows the valuation movement by reference to each portfolio company.
Table 2
              Residualcost1 Valuation Additions Valuation    Valuation Valuation at Valuation
                              at 31st       and  movement     movement 31stDecember  movement
                             December disposals excluding attributable         2012
Portfolio                £m      2011                 FX2       to FX2           £m pence per
company                            £m        £m        £m           £m                 share2
Stork                  42.5      42.5       7.8     (3.8)        (0.5)         46.0      (20)
Parques                30.0      42.0       0.0     (6.4)        (0.8)         34.8      (33)
Reunidos
Expro                  92.1      37.8       0.1     (4.9)        (1.4)         31.6      (29)
International
Technogym              29.2      13.6       0.0       2.6        (0.2)         16.0        11
Qioptiq                 6.8      10.5       0.0     (2.1)        (0.2)          8.2      (11)
Innovia Films           2.7       4.6       0.0       2.1        (0.1)          6.6         9
Hilding                24.3       3.8       0.0       0.0          0.0          3.8         0
Anders
GET                     1.7       2.5       0.0       1.0          0.1          3.6         6
DX Group               21.4       2.7       0.0       0.0          0.0          2.7         0
Ono                     2.2       1.6       0.0       0.1          0.0          1.7         1

Ten largest           252.9     161.6       7.9    (11.4)        (3.1)        155.0      (66)
investments3
Candover 2001           0.0       8.0       0.0       0.1        (0.1)          8.0         0
Fund carried
interest
Other                  47.9      34.4    (28.8)     (4.7)        (0.4)          0.5      (23)
investments4
Total                 300.8     204.0    (20.9)    (16.0)        (3.6)        163.5      (89)

1 Residual cost is original cost less realisations to date

2 Compared to the valuation at 31st December 2011 or acquisition date, if later

3 Excluding Candover 2001 Fund carried interest

4 Represents assets held for resale in 2011 and other co-investments managed by
Arle

Ten largest investments
1 Stork
Industry sector:                                                 Industrials
Geography:                                                   The Netherlands
Date of investment:                                             January 2008
Residual cost of investment £m:                                         42.5
Directors' valuation £m:                                                46.0
Change over prior valuation £m:                                        

(4.3)

Effective equity interest (fully                                        4.6%
diluted):
% of Candover's net assets:                                            34.6%
Basis of valuation:                                     Multiple of earnings
Dividends received £m:                                                     -
Year end:                                                      December 2011
Sales:                                                               €1,636m
Earnings1:                                                             €111m
Stork, the Dutch engineering conglomerate, effectively separated its two
subsidiaries, Fokker Technologies (`Fokker') and Stork Technical Services
(`STS'), during 2012. In August 2012, both businesses raised capital
independently, allowing for the refinancing of the Stork group's debt. At the
holding company level, the long term non-cash interest bearing debt was also
refinanced.  In December 2012, Supervisory Boards were appointed for Fokker and
STS alongside the existing management teams which were previously in existence.
Going forward, Stork BV will limit its role to that of shareholder of both
companies.
Stork's valuation was £46.0 million at the end of 2012, down 20p per share. The
valuation was affected by the cost of re-financing the business and by negative
foreign exchange movements.

Stork Technical Services

STS is a global provider of knowledge-based asset integrity management services
for the oil & gas, power and chemical sectors. With around 14,300 employees
across the UK & Africa, Continental Europe, the Middle East, Asia Pacific and
the Americas, STS provides innovative solutions in the areas of asset
integrity, consultancy, maintenance concepts, repair, renovation, new
construction, relocations, subsea services and other related complex projects.
From August 2012, financing consisted of a new €272.5 million bond and a
working capital facility of €100 million. The refinancing allowed for the full
integration of RBG into the STS Group, which had been separately financed at
the time of its acquisition in May 2011.
2012 trading at STS was satisfactory and the business reported an increase in
profits and revenues, driven mainly by a strong performance at the former RBG
business and in the Americas.  However, this was partly offset by the
continuation of poor market conditions in the European power market.

In December 2012, Henk Rottinghuis was appointed Chairman of the Supervisory Board and Pim Oomens joined as Chief Financial Officer in February 2013.

The strategic focus for STS over the next twelve months will be to increase its
exposure to fast growing energy markets while continuing to improve operational
effectiveness.
Fokker Technologies
Fokker develops and produces over 7,000 advanced components and systems for the
global aerospace industry and has R&D and production facilities in the
Netherlands, Turkey, the Americas and Asia. The company also supplies
integrated maintenance services and products to aircraft owners and operators
worldwide.
The new capital structure put in place in August 2012 consisted of a senior
term loan of €150 million and a working capital facility of €50 million.  This
independent financing will enable the company to consolidate its position as a
leading operator in the aerospace and defence industries.
The business performed in line with expectations. Turnover increased with 11%
growth across all business units and operational EBITDA increased slightly year
on year.

Fokker's order book remains strong as customers continue to seek innovative solutions applying advanced materials. The company will continue to invest in the ramp-up of its Turkish and Mexican production facilities.

Company website

www.stork.com

www.storktechnicalservices.com

www.fokker.com

2 Parques Reunidos
Industry sector:                                                    Services
Geography:                                                             Spain
Date of investment:                                               March 2007
Residual cost of investment £m:                                         30.0
Directors' valuation £m:                                                34.8
Change over prior valuation £m:                                        

(7.2)

Effective equity interest (fully                                        3.9%
diluted):
% of Candover's net assets:                                            26.2%
Basis of valuation:                                     Multiple of earnings
Dividends received £m:                                                     -
Year end:                                                     September 2012
Sales:                                                                 €561m
Earnings1:                                                             €175m

Parques Reunidos (`Parques') is one of the world's leading operators of attraction parks. Parques enjoys strong positions in all its key markets and the majority of its parks are the leading family attractions in their respective surrounding areas. Parques operates 72 sites around the world, attracting around 26.2 million visitors each year. These include theme or amusement parks, nature and animal parks, water parks, family entertainment centres and cable cars.

Parques had a difficult trading year in 2012, reporting lower revenues and
EBITDA. This was mainly due to the economic disquiet in Italy and Spain where
consumers were spending less, and unusually severe weather conditions on some
peak trading days. Trading in the US, however, was much improved but failed to
offset the decline in Europe.
In 2012, the group made two major park acquisitions funded from existing cash
reserves, buying Noah's Ark, the largest water park in the US, as well as
acquiring Slagharen, a leading attractions park in the Netherlands. These parks
continue to trade well.
In H1 2012, the group received consent from its lenders to complete an
extension of its credit facilities to align the maturity of its European debt
facilities with that of its US financing arrangements which expire in 2017. A
covenant reset was also successfully completed. This has secured the capital
structure required for Parques to execute its strategic growth plan through
until 2017.
In H2 of last year, a strategic review was undertaken and management committed
to a new organic growth plan. As a first step to revive top line growth, a
global Chief Marketing Officer was appointed to deliver both a full on-line and
traditional marketing programme. The initial benefits of this programme are
already generating an increased footfall in the park portfolio. In parallel,
management has driven through operational improvements throughout the park
portfolio, particularly in those acquired in the past 12 to 18 months.

The economic outlook for 2013 remains similar to last year. The US economy should allow for strong growth, Spain and Italy will continue to be difficult, but the rest of Europe should trade well. New management contracts and selective acquisitions will provide additional upside.

In view of the uncertain outlook in Europe, the valuation has been marked down by 33p per share to £34.8 million, including adverse currency movements.

Company website
www.parquesreunidos.com

3 Expro International
Industry sector:                                                      Energy
Geography:                                                                UK
Date of investment:                                                July 2008
Residual cost of investment £m:                                         92.1
Directors' valuation £m:                                                31.6
Change over prior valuation £m:                                        

(6.3)

Effective equity interest (fully                                        4.7%
diluted):
% of Candover's net assets:                                            23.8%
Basis of valuation:                                     Multiple of earnings
Dividends received £m:                                                     -
Year end:                                                         March 2012
Sales:                                                             US$1,014m
Earnings1:                                                           US$211m

Expro International (`Expro') is one of the leading oilfield service providers specialising in well flow management, with a particular focus on the most technically challenging deep water environments. Expro's operations are critical to the development of oil and gas reservoirs and are utilised by multinational oil majors as well as state-owned national oil companies.

Expro's financial performance improved steadily throughout 2012 with December
YTD earnings well ahead of prior year and 7% ahead of budget. Expro secured a
number of valuable new contracts and has benefited from the positive growth
trends in the subsea market. Charles Woodburn, Expro's CEO and his team have
implemented a successful turnaround of global operations, and are now managing
a much more efficient and streamlined business.

Over the last twelve months, the management team has been considerably strengthened with the appointment of Sir George Buckley as Non-Executive Chairman and Jean Vernet as Chief Financial Officer. In late 2012, Jim Renfroe was appointed Non-Executive Director.

In May 2012, Expro sold its Connectors & Measurements division to Siemens AG at
a valuation of US$630 million.  The net proceeds were retained by the group to
finance the growth strategy of its core business and to repay existing
borrowings.  Following completion of the sale, Expro announced a cash tender
offer to pay down US$425 million of its 8.50% senior secured loan notes due in
2016 (including accrued interest).

Going forward, Arle expects to see a continuing improvement in Expro's performance as a result of strengthening demand for its services from the international oil & gas sector and increased capital expenditure on new equipment within the sector. The trading outlook for Expro therefore is positive and bid activity remains strong.

In the second half of the year, Expro's valuation remained unchanged. The fall
in valuation for Candover of £6.2 million (29p) was caused by adverse currency
movements of £1.4 million and a decrease of £4.9 million due to the
accumulative dilutive impact of Candover not re-investing in Expro alongside
the Candover 2008 Fund.
Company website
www.exprogroup.com

4 Technogym
Industry sector:                                                 Industrials
Geography:                                                             Italy
Date of investment:                                              August 2008
Residual cost of investment £m:                                         29.2
Directors' valuation £m:                                                16.0
Change over prior valuation £m:                                          

2.4

Effective equity interest (fully                                        3.2%
diluted):
% of Candover's net assets:                                            12.0%
Basis of valuation:                                     Multiple of earnings
Dividends received £m:                                                     -
Year end:                                                      December 2011
Sales:                                                                 €390m
Earnings1:                                                              €55m
Technogym is a global leader in the design and manufacture of premium branded
fitness equipment and wellness solutions and enjoys strong brand recognition
internationally. The Group serves major fitness club chains, as well as
professional customers in the hospitality, corporate, education, medical and
military markets.
Technogym had a strong year in 2012, boosted by its involvement in the London
2012 Olympics, strong growth in new market segments and successful expansion in
emerging markets. Sir George Buckley joined the Board as Non-Executive Director
during the year.
On 29th September 2012, the Group celebrated the opening of the new Technogym
Village and Company Headquarters in Cesena, Italy in the presence of its global
customer base, leading industrialists and political figures. The Technogym
Village, which combines a cultural centre, laboratory for innovation and
production centre, expects to welcome over 25,000 customers, suppliers and
guests from across the world each year.
During 2012, the Group made good progress towards consolidating its business in
the core European markets while growing in new market segments including `Home'
and `Health' and penetrating new geographies such as Latin America, Middle East
and Asia Pacific.
Technogym was appointed as the official supplier of fitness equipment for the
London 2012 Olympics and equipped 20 gyms for the 15,000 athletes taking part
in both the Olympic and Paralympic Games. This was Technogym's fourth
consecutive Olympics in this capacity.

In 2013, Technogym will continue to focus on growth through further investment in sales and increased exposure to high growth emerging markets.

The investment has been written up by £2.4 million (11p per share), after an adverse currency impact of £0.2 million.

Company website
www.technogym.com

5 Qioptiq
Industry sector:                                                 Industrials
Geography:                                                                UK
Date of investment:                                            December 2005
Residual cost of investment £m:                                          6.8
Directors' valuation £m:                                                 8.2
Change over prior valuation £m:                                        

(2.3)

Effective equity interest (fully                                        5.4%
diluted):
% of Candover's net assets:                                             6.2%
Basis of valuation:                                     Multiple of earnings
Dividends received £m:                                                     -
Year end:                                                      December 2011
Sales:                                                               US$392m
Earnings1:                                                            US$71m
Qioptiq is one of the world's leaders in the manufacture of high precision
optical components, modules and solutions for military and civil applications.
This involves the shaping, polishing and coating of glass to create high
precision lenses for sale as components or the design, assembly and integration
of these manufactured components into modules for use within a multitude of
systems.
Trading in 2012 was down on 2011 both in revenue and EBITDA, mainly due to the
gap between some large defence programmes and cuts by Governments in defence
spending.
Following an in-depth review of the market, Qioptiq's strategy for the business
was re-focused to be more closely aligned to its end markets: Commercial and
Defence.  Qioptiq's end markets are in industrial manufacturing, medical & life
sciences and defence.

The commercial division performed in line with expectations during the year and is expected to grow in the coming years with a pick-up in activity in 2013 resulting from a number of large programme wins.

Qioptiq's defence business has also managed to secure work on some significant
programmes, although the general environment around defence spending continues
to be difficult and 2013 should therefore be a year of consolidation.
The valuation has been adjusted downwards by £2.3 million (11p per share), £0.2
million of that decline being attributable to adverse foreign currency
movements.
Company website
www.qioptiq.com

6 Innovia Films
Industry sector:                                                 Industrials
Geography:                                                                UK
Date of investment:                                           September 2004
Residual cost of investment £m:                                          2.7
Directors' valuation £m:                                                 6.6
Change over prior valuation £m:                                          

2.0

Effective equity interest (fully                                        5.7%
diluted):
% of Candover's net assets:                                             5.0%
Basis of valuation:                                     Multiple of earnings
Dividends received £m:                                                     -
Year end:                                                      December 2011
Sales:                                                                 €454m
Earnings1:                                                              €58m
Innovia Films manufactures speciality films primarily for packaging and is an
established manufacturer of polymer bank note substrate in the world through a
joint venture (Securency) with the Reserve Bank of Australia. The business
enjoys strong positions in niche markets and focuses on higher value-added
applications.  The films are used primarily in the packaging sector, such as
tobacco overwrap, transparent self-adhesive bottle labels and technically
advanced food packaging applications. The films are also used as a substrate
for banknotes manufactured and supplied by Securency.
Innovia traded in line with expectations in 2012.  Securency performed
particularly strongly with a combination of existing and new customers ordering
in volume. The company now supplies over 20 countries with its Guardian
substrate banknotes. Canada is the first G8 country to switch to polymer
banknotes and the successful conversion will support Securency's credibility
for future growth.
In the core business, market dynamics have been changing with recent
consolidation amongst Innovia's competitors.  The business has successfully
managed to navigate the input price volatility seen in 2012 and continues to
invest in technology to help insulate the business from future swings. In 2013
Innovia will focus on growing underlying volumes though its R&D programme,
product launches and the expansion of its labels and polymer banknote business.

After the year end, Innovia announced the acquisition of Securency from its joint venture partner, the Reserve Bank of Australia. This acquisition was funded from existing cash reserves and completed at the end of February 2013.

The valuation has been increased by £2.0 million, an increase of 9p per share after adverse currency movements of £0.1 million.

Company website
www.innoviafilms.com

7 Hilding Anders
Industry sector:                                                 Industrials
Geography:                                                            Sweden
Date of investment:                                            December 2006
Residual cost of investment £m:                                         24.3
Directors' valuation £m:                                                 3.8
                                                                            
Change over prior valuation £m:                                            -
Effective equity interest (fully                                        4.3%
diluted):
% of Candover's net assets:                                             2.9%
Basis of valuation:                                     Multiple of earnings
Dividends received £m:                                                     -
Year end:                                                      December 2011
Sales:                                                            SEK 7,077m
Earnings1:                                                          SEK 966m

Hilding Anders is Europe's largest bed and mattress manufacturer and is headquartered in Sweden. It has leading market positions in more than 40 countries in Europe and Asia, has over 25 manufacturing facilities and circa 7,600 employees. Hilding Anders has an innovative and diverse portfolio of products sold as private label or branded products. It has grown both organically and through acquisitions and, in more recent years, has significantly reinforced its presence in emerging markets.

The arrival of Anders Pettersson as Chief Executive, Roland Schylit as
Executive Vice President of Operations, as well as new management in Asia and
France signalled further change. Together, the new executive team set out to
implement a refreshed growth strategy and an organisational restructuring which
had begun under the previous regime. Already, trading across almost all regions
has been better than anticipated. In 2012 the business recorded encouraging top
line growth, driven by a particularly strong performance in Russia.

The outlook for 2013 is similar to last year with a high expectation of continued growth in emerging markets. The team continues to drive through change, with a particular focus on operational efficiencies in a number of countries such as Holland.

The December 2011 valuation has been retained. There has been no foreign
exchange impact.
Company website
www.hildinganders.com

8 Get
Industry sector:                                                    Services
Geography:                                                            Norway
Date of investment:                                            December 2007
Residual cost of investment £m:                                          1.7
Directors' valuation £m:                                                 3.6
Change over prior valuation £m:                                          

1.1

Effective equity interest (fully                                        0.5%
diluted):
% of Candover's net assets:                                             2.8%
Basis of valuation:                                     Multiple of earnings
Dividends received £m:                                                     -
Year end:                                                      December 2012
Sales:                                                           NOK 1,927mX
Earnings1:                                                         NOK 809mX

GET, a cable network operator, operates in Oslo and the major cities of southern Norway, passing around 55% of households in Norway's metropolitan regions. It is the only cable operator within its franchise area and offers `triple play' services - TV, high speed broadband and telephony - to the residential market. GET was sold in December 2007, with Candover and the Candover 2005 Fund reinvesting some of the exit proceeds for a small minority stake.

In December 2012 GET completed a recapitalisation, which led to a distribution
to GET shareholders. As a result, Arle received €12.5m of proceeds from its
holding in the Company's preference shares and convertible preference shares.
The valuation of Candover's reinvestment has increased by £1.1 million (6p per
share).
Company website
www.GET.no

9 DX Group
Industry sector:                                                    Services
Geography:                                                                UK
Date of investment:                                           September 2006
Residual cost of investment £m:                                         21.4
Directors' valuation £m:                                                 2.7
                                                                            
Change over prior valuation £m:                                            -
Effective equity interest (fully                                        4.0%
diluted):
% of Candover's net assets:                                             2.0%
Basis of valuation:                                     Multiple of earnings
Dividends received £m:                                                     -
Year end:                                                          June 2012
Sales:                                                                 £207m
Earnings1:                                                              £32m
DX is the largest independent mail, courier and logistics operator in the UK
and Ireland. Servicing businesses, the public sector and consumers, DX delivers
and collects more than 1 million letters and parcels per day, reaching 99.7% of
the UK's residents.

DX specialises in the delivery of time sensitive, high value and business critical items, and delivers passports and visas for the UK Government and foreign embassies. Key customers include the legal sector, financial institutions, national and local government agencies, the health and pharmaceutical sector, high street retailers and e-retailers.

In 2012, DX has performed in line with expectation and outperformed market with
revenues growing by 3% and profits up 1% year on year. In the spring of 2012,
DX acquired Nightfreight, the market leader for larger and heavier parcel
traffic in the UK B2C and B2B markets with over 7 million deliveries per
annum.  This acquisition was financed by DX from existing balance sheet
reserves and through asset backed lending facilities.  The enlarged group is
now one of the UK and Ireland's leading independent mail, courier and logistics
operators.
In 2012, Nightfreight reported positive revenue growth, up 8%, but a slight
decline in EBITDA because of cost overruns and lower average prices from recent
contract wins. The turnaround of the business continues and will be
management's priority in 2013. Planning for an integration of the two networks
will then begin.

The outlook remains positive for the business with further deleveraging through cash flow generation.

The investment valuation is unchanged.

Company website
www.thedx.co.uk

10 Ono
Industry sector:                                                    Services
Geography:                                                             Spain
Date of investment:                                            November 2005
Residual cost of investment £m:                                          2.2
Directors' valuation £m:                                                 1.7
Change over prior valuation £m:                                          

0.1

Effective equity interest (fully                                        0.1%
diluted):
% of Candover's net assets:                                             1.3%
Basis of valuation:                                     Multiple of earnings
Dividends received £m:                                                     -
Year end:                                                      December 2011
Sales:                                                               €1,485m
Earnings1:                                                             €748m

Ono is the leading Spanish cable operator in which Candover and the Candover 2001 Fund have a small minority interest.

The investment has been written up by £0.1 million (1p per share).

Company website
www.ono.es
Notes:
1 Earnings figures are taken from the portfolio company's most recent audited
accounts or financial statements filed with regulatory bodies. The figures
shown are the total earnings on ordinary activities before exceptional items,
depreciation, goodwill amortisation, interest and tax for the period.

Other investments

1 Alma Consulting Group

Alma Consulting Group (`Alma') is one of the European leaders in cost reduction and optimisation, offering a wide range of consulting services.

In 2012, Alma reported a fall in both revenues and EBITDA due to trading softness in the Innovation division, a difficult regulatory environment and strong competition.

Since the arrival of new CEO Vincent Taupin, formerly CEO of Boursorama and
Credit du Nord who joined in January 2012, significant progress has been made
on a number of strategic actions. These include the disposals of non-core
assets, improved efficiency, a review of the organisational structure and a
newly planned international strategy. He is now completing the first year of a
three year plan to re-energise the business and recover growth.
The outlook for 2013, which was initially expected to see a return to growth,
has changed significantly following a deterioration in trading in the second
half of 2012. This decline could only be marginally offset by cost reduction
programmes.
In anticipation of these negative trading pressures continuing in 2013, coupled
with additional downside risk linked to regulatory issues, the valuation has
been marked down.

2 Candover 2001 Fund carried interestCandover's share of the Candover 2001 Fund carried interest was valued at £8.0 million, unchanged over the prior year.

Update on Fund terms

Following two extensions to the original eight year life of the Candover 2001
Fund, the Fund terminates on 12th June 2013. The Fund has two investments
remaining, Qioptiq and Innovia. It has been agreed with the Company and the
2001 Fund investors that these investments will continue to be actively managed
by Arle until they can be realised at an optimum time and value.
At the year end, outstanding commitments to the Candover 2005 Fund totalled €73
million of which Candover's share is €7.3 million (£5.9 million). The follow on
investment period for the Candover 2005 Fund terminates on 26th August 2013
following a two year extension. The ten year term of the Fund comes to an end
on 26th August 2015.
The investment period for the Candover 2008 Fund terminated on 12th January
2010. Follow on investments can be made until 12th January 2015 with €42m
available for follow on investment in Expro. In total, €69 million is available
to draw-down on Expro from the 2008 Fund and the maximum further drawdown that
can be funded pro rata to respective shareholdings from the 2005 Fund in
respect of Expro. Candover has no remaining commitment in respect of the 2008
Fund.
Outlook for 2013
Looking forward, warnings that the prevailing economic uncertainty will
continue have been sounded across many sectors of the economy. For the buyout
market, the credit headache of past excesses remains. There are, however, some
positive signs emerging, underlining a gradual return to health of the debt
market and the availability of undrawn funds which have yet to be invested.
We believe that there is reason for more optimism in 2013 and that there are
pockets of untapped value waiting to be unlocked in some sectors and
geographies. However systemic challenges still remain for the private equity
industry.

During 2013, Arle will continue to actively manage the portfolio companies to safeguard and secure value throughout this volatile period and continue to prepare the remaining businesses for sale in the coming years.

Arle Capital Partners Limited

1st March 2013
Ten largest investments
at 31st December 2012
                                                   Movement Effective
                              Residual               from    equity      % of
                   Date of    cost of   Directors' 31st Dec interest  Candover's Basis of
Investment        investment investment valuation    2011   (fully d  net assets valuation
                                 £m         £m               iluted)

Stork               Jan-08      42.5       46.0     (4.3)     4.6%      34.6%    Multiple
Engineering                                                                         of
conglomerate                                                                     earnings

Parques Reunidos    Mar-07      30.0       34.8     (7.2)     3.9%      26.2%    Multiple
Operator of                                                                         of
attraction parks                                                                 earnings

Expro               Jul-08      92.1       31.6     (6.3)     4.7%      23.8%    Multiple
International                                                                       of
Oilfield services                                                                earnings

Technogym           Aug-08      29.2       16.0      2.4      3.2%      12.0%    Multiple
Premium fitness                                                                     of
equipment and                                                                    earnings
wellness products

Qioptiq             Dec-05      6.8        8.2      (2.3)     5.4%       6.2%    Multiple
Optical                                                                             of
engineering                                                                      earnings

Innovia Films       Sep-04      2.7        6.6       2.0      5.7%       5.0%    Multiple
Transparent and                                                                     of
coated films and                                                                 earnings
polymer bank
notes

Hilding Anders      Dec-06      24.3       3.8        -       4.3%       2.9%    Multiple
Bed and mattress                                                                    of
manufacturer                                                                     earnings

GET                 Dec-07      1.7        3.6       1.1      0.5%       2.8%    Multiple
Norwegian cable                                                                     of
network operator                                                                 earnings

DX Group            Sep-06      21.4       2.7        -       4.0%       2.0%    Multiple
Mail services                                                                       of
                                                                                 earnings

ONO                 Nov-05      2.2        1.7       0.1      0.1%       1.3%    Multiple
Spanish cable                                                                       of
operator                                                                         earnings
Ten largest investments
Analysis by value at 31st December 2012 (representing 94.8% of the portfolio)
By valuation method                   By sector
1.  Multiple of earnings 100%         1.  Industrials 52%
                                      2.  Services 28%
                                      3.  Energy & Natural Resources 20%
By region                             By age
1.  United Kingdom 32%                1.  4 - 5 years 60%
2.  Benelux 30%                       2.  >5 years 40%
3.  Spain 23%
4.  Italy 10%
5.  Nordic 5%

Group statement of comprehensive income

for the year ended 31st December 2012

                                                  Unaudited                Audited
                                      Year to 31st December  Year to 31st December
                                                       2012                   2011
                               Notes Revenue Capital Total1 Revenue Capital Total1
                                          £m      £m     £m      £m      £m     £m
Gains/(losses) on financial
instruments at fair value
through profit and loss
Realised gains                             -     1.8    1.8       -       -      -
Unrealised losses                          -  (13.0) (13.0)       -  (20.0) (20.0)
Total                                      -  (11.2) (11.2)       -  (20.0) (20.0)
(Expense)/revenue
Investment and other income            (5.8)       -  (5.8)    15.3       -   15.3
Total                                  (5.8)       -  (5.8)    15.3       -   15.3
Recurring administrative               (4.0)   (1.3)  (5.3)   (4.5)   (2.0)  (6.5)
expenses
Exceptional non-recurring        2       2.0       -    2.0   (3.5)       -  (3.5)
gains/(losses)
(Loss)/profitbefore finance            (7.8)  (12.5) (20.3)     7.3  (22.0) (14.7)
costs and taxation
Finance costs                          (2.8)   (2.8)  (5.6)   (2.1)   (2.1)  (4.2)
                                                                                  
Movement in the fair value of        -       -       -            -   (0.3)
 (0.3)
derivatives
Exchange movements on                -           4.6    4.6       -   (0.1)  (0.1)
borrowings
(Loss)/profitbefore taxation          (10.6)  (10.7) (21.3)     5.2  (24.5) (19.3)
Analysed between:
(Loss)/profit before                  (12.6)  (10.7) (23.3)     8.7  (24.5) (15.8)
exceptional non-recurring
gains/(costs)
Exceptional non-recurring                2.0       -    2.0   (3.5)       -  (3.5)
gains/(costs)
Taxation                               (2.5)       -  (2.5)       -       -      -
                                                                                  
(Loss)/profitafter taxation           (13.1)  (10.7) (23.8)     5.2  (24.5)

(19.3)

from continuing operations                                                 

Loss from CPL disposal group 3 - - - (1.8) -

 (1.8)
(discontinued operations)
                                           -       - -        (1.8)       -  (1.8)
                                                                                  
(Loss)/profitafter taxation           (13.1)  (10.7) (23.8)     3.4  (24.5)

(21.1)

Other comprehensive income:                                                
Exchange differences on                    -       -      -   (0.2)       -  (0.2)
translation of foreign
operations
                                                                                  
Total comprehensive income            (13.1)  (10.7) (23.8)     3.2  (24.5)

(21.3)

Earnings per ordinary share:                                               

Continuing operations - basic (60p) (49p) (109p) 24p (112p)

 (88p)
and diluted
Discontinued operations -                  -       -      -    (8p)       -   (8p)
basic and diluted
Total earnings per share               (60p)   (49p) (109p)     16p  (112p)  (96p)
(continuing and discontinued                                               
operations) - basic and
diluted

1 The total column represents the Group statement of comprehensive income under IFRS

i All of the loss for the year and the total comprehensive income for the year are attributable to the owners of the Company

ii The supplementary revenue and capital columns are presented for information
purposes as recommended by the Statement of Recommended Practice issued by the
Association of Investment Companies

iii The CPL disposal group result reflects the trading activities of CPL, including costs recharged to CPL by other parts of the Group, which will not form part of the continuing operations

Group statement of changes in equity

for the year ended 31st December 2012

Unaudited               Called   Share    Other   Capital    Capital Revenue  Total
                            up premium reserves  reserves reserves - reserve Equity
                         share account          -realised unrealised
                       capital      £m       £m        £m         £m      £m     £m
                            £m
Balance at 1stJanuary      5.5     1.2    (0.1)     311.6    (163.0)     1.4  156.6
2012
Net revenue after tax        -       -        -         -          -  (13.1) (13.1)
Unrealised loss on           -       -        -         -     (13.0)       - (13.0)
financial instruments
Realised gain/(loss)         -       -        -      12.9     (11.1)       -    1.8
on financial
instruments
Exchange movements on        -       -        -         -        4.6       -    4.6
borrowing
Costs net of tax             -       -        -     (4.1)          -       -  (4.1)
Profit after tax             -       -        -       8.8     (19.5)  (13.1) (23.8)
Total comprehensive          -       -        -       8.8     (19.5)  (13.1) (23.8)
income
Balance at 31st            5.5     1.2    (0.1)     320.4    (182.5)  (11.7)  132.8
December2012
Audited                 Called   Share    Other   Capital    Capital Revenue  Total
                            up premium reserves  reserves reserves - reserve Equity
                         share account          -realised unrealised
                       capital      £m       £m        £m         £m      £m     £m
                            £m
Balance at 1stJanuary      5.5     1.2      0.1     360.5    (187.4)   (2.0)  177.9
2011
Net revenue after tax        -       -        -         -          -     3.4    3.4
Unrealised loss on           -       -        -         -     (20.0)       - (20.0)
financial instruments
Realised (loss)/gain         -       -        -    (44.8)       44.8       -      -
on financial
instruments
Movement in fair value
of derivatives
- continuing                 -       -        -         -      (0.3)       -  (0.3)
operations
Exchange movements on        -       -        -         -      (0.1)       -  (0.1)
borrowing
Costs net of tax             -       -        -     (4.1)          -       -  (4.1)
Profit after tax             -       -        -    (48.9)       24.4     3.4 (21.1)
Exchange differences         -       -    (0.2)         -          -       -  (0.2)
on translation of
foreign operations
Total comprehensive          -       -    (0.2)    (48.9)       24.4     3.4 (21.3)
income
Balance at 31st            5.5     1.2    (0.1)     311.6    (163.0)     1.4  156.6
December 2011

Group statement of financial position

at 31st December 2012
                                                 Unaudited             Audited
                                        31st December 2012  31st December 2011
                                            £m          £m         £m       £m
Non-current assets
                                                                              
Financial investments designated at
fair value through profit and loss                                         
Portfolio companies                      155.1                  166.4
Other financial investments                8.4                    8.4
                                                     163.5               174.8
Trade and other receivables                8.5                    8.1
Deferred tax asset                         1.0                    3.5
                                                     173.0               186.4
Current assets
Trade and other receivables                0.7                    0.1
Current tax asset                            -                    0.1
Cash and cash equivalents                117.7                  118.1
                                                     118.4               118.3
Financial investments held for sale                      -                29.2
                                                     118.4               147.5
Current liabilities
Other payables                           (5.0)                  (3.6)
Provisions                               (2.6)                  (6.6)
                                                     (7.6)              (10.2)
Net current assets                                   110.8               137.3
Total assets less current                            283.8               323.7
liabilities
Non-current liabilities
Loans and borrowings                               (151.0)             (167.1)
Net assets                                           132.8               156.6
                                                                              
Equity attributable to equity                                              
holders
Called up share capital                                5.5                 5.5
Share premium account                                  1.2                 1.2
Other reserves                                       (0.1)               (0.1)
Capital reserve - realised                           320.4               311.6
Capital reserve - unrealised                       (182.5)             (163.0)
Revenue reserve                                     (11.7)                 1.4
Total equity                                         132.8               156.6
Net asset value per share
Basic                                                 608p                717p
Diluted                                               608p                717p
Group cash flow statement

for the year ended 31st December 2012

                                                Unaudited             Audited
                                    Year to 31st December        Year to 31st
                                                     2012       December 2011
                                            £m         £m        £m        £m
Cash flows from operating
activities
Cash flow from operations                             3.8              (13.2)
Interest paid                                      (10.0)               (7.0)
Tax received                                            -                   -
Net cash outflow from operating                     (6.2)              (20.2)
activities
Cash flows from investing
activities
                                                                             
Purchase of financial investments        (8.3)               (20.3)
Sale of financial investments             23.1                 89.2
Net cash inflow from investing                       14.8                68.9
activities
Cash flows from financing
activities
Swap sale proceeds                           -                 12.8
Loan notes repayment                     (7.5)               (27.2)
Net cash outflow from financing                     (7.5)              (14.4)
activities
Increase in cash and cash                             1.1                34.3
equivalents
Opening cash and cash equivalents                   118.1                79.9
Effect of exchange rates and                        (1.5)                 3.9
revaluation on cash and cash
equivalents
Closing cash and cash equivalents                   117.7               

118.1

Notesto the financial statements

Note 1

The preliminary results for the year ended 31st December 2012 are unaudited.
The financial information included in this statement does not constitute the
Group's statutory accounts within the meaning of Section 434 of the Companies
Act 2006. Statutory accounts for the year ended 31st December 2012 will be
finalised on the basis of the financial information presented by the directors
in this preliminary announcement and will be delivered to the Registrar of
Companies in due course.
The information given as comparative figures for the year ended 31st December
2011 does not constitute the Company's statutory accounts for those financial
periods. Statutory accounts for the year ended 31st December 2011, prepared in
accordance with International Financial Reporting Standards as adopted by the
European Union, have been reported on by the Company's auditors and delivered
to the Registrar of Companies. The report of the auditors was unqualified and
did not contain a statement under Section 498 (2) or (3) of Companies Act 2006.

Note 2

Exceptional non-recurring gains/(losses)for the continuing group.

Exceptional non-recurring gains for the continuing group include the write back of a provision of £2.0m in respect of an onerous lease (2011: losses £3.5m).

Note 3

Loss from CPL disposal group ("discontinued operations")

                                                           2012        2011
                                                             £m          

£m

Management fees from third parties                            -         4.5
Management fees charged to continuing Group                   -         1.5
Total fee income                                              -         6.0
Payroll and administrative expenses                           -       (6.6)
Redundancy costs                                              -       (0.3)
Net operating deficit                                         -       (0.9)
                                                                           
Write-off on deferred tax asset                               -           -
Net loss before exceptional non-recurring                     -       (0.9)
administrative expenses
Exceptional non-recurring charges:
Discretionary contribution to EBT                             -           -
Payment of future deferred incentives                         -           -
Advisor costs                                                 -       (0.9)
Bond consent fee                                              -           -
                                                                           
Write-off of property, plant and equipment                    -           -
Accelerated write-off on deferred incentive                   -           -
arrangements
Placing agents                                                -           -
Loss from CPL disposal group ("discontinued                   -       (1.8)
operations")
The disposal of CPL to Arle, an entity formed by the executives of CPL, was
completed on 19th April 2011. Under the terms of the sale and purchase
agreement the disposal for nominal consideration was structured by reference to
the 31st December 2010 balance sheet of CPL at which point CPL retained net
assets equivalent to the minimum required level of regulatory capital of £
50,000. In addition, under the terms of the disposal, the right to the economic
interest in CPL, the discontinued business of Candover, passed to Arle
effective from 1st January 2011. Whilst final completion was subject to a
number of remaining conditions, notably regulatory clearances, restrictions
were agreed in the sale and purchase agreement to prevent the distribution of
dividends from CPL as well as requirements as to how CPL would be managed in
the ordinary course of business up to the point the transaction became
unconditional in all respects. As the disposal completed on the terms set out
in both the circular to shareholders dated 6th December 2010 and consistent
with the presentation of the results for the year ended 31st December 2010,
Arle assumed the risk and reward of the economic interest in CPL from the 1st
January 2011.

In the year ended 31st December 2011 additional costs relating to the discontinued Candover Group of £1.8 million were provided for, covering additional advisor costs of £0.9 million due to the extended timeline to complete the disposals, redundancy costs of £0.3 million and £0.6 million of administrative costs relating to the separation of the businesses.

(Source: PR Newswire )
(Source: Quotemedia)

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