Universal Partners Limited (JSE:UPL) News - Summarised audited financial statements for the year ended 30 June 2021

UNIVERSAL PARTNERS LIMITED
(Incorporated in the Republic of Mauritius)
(Registration number: 138035 C1/GBL)
SEM share code: UPL.N0000
JSE share code: UPL
ISIN: MU0526N00007
("Universal Partners" or "the Company")


SUMMARISED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

                                                                  Year ended                Year ended
                                                                30 June 2021              30 June 2020
 Net asset value per share ("NAV")        GBP                          1.453                     1.095
 Profit / (loss) for the year             GBP                     25 897 867                (3 478 437)
 Earnings / (loss) per share              pence                        35.80                     (4.81)
 Headline earnings / (loss) per share     pence                        35.80                     (4.81)

Universal Partners has a primary listing on the Official Market of the Stock Exchange of Mauritius Ltd
("SEM") and a secondary listing on the Alternative Exchange of the JSE Limited ("JSE").

The principal activity of the Company is to hold investments in high quality, growth businesses across
Europe, with a particular focus on the United Kingdom ("UK"). The Company's investment mandate
also allows up to 20% of total funds at the time an investment is made to be invested outside of the
UK and Europe.

The Company's primary objective is to achieve strong capital appreciation in Pounds Sterling
("GBP") over the medium to long-term by investing in businesses that meet the investment criteria
set out in the Company's investment policy.

Since its listing on the SEM and the JSE, the Company has worked closely with its investment
manager, Argo Investment Managers ("Argo"), to identify potential investments that meet its
investment criteria.

The Company has made six investments since its listing and successfully concluded the first exit.

The sale of YASA Limited ("YASA") to Mercedes-Benz AG ("MBAG") was completed in August 2021
for a total consideration received by the Company of GBP 42.8 million. The deal resulted in gross
proceeds of 3.00 times money invested and an Internal Rate of Return, after allowing for transaction
fees and carried interest charges, of 27.6%. The UPL board ("the Board") is pleased with the
outcome of the transaction and the value it has created for shareholders in the period since the
first investment in YASA was made in in August 2017.

The Company's remaining investments have dealt successfully with the disruption caused by the
Covid-19 pandemic, adapting their operations as necessary while ensuring that the safety of their
staff and customers was not compromised.

Dentex Healthcare Group Limited ("Dentex")
www.dentexhealth.co.uk

Dentex continues to perform ahead of expectations, both in terms of the performance of the
existing estate of practices and in relation to the sourcing, acquisition and integration of high-quality
dental practices. Dentex currently owns 95 dental practices, having completed the acquisition of
a further 24 sites since it recommenced acquisition activity in November 2020. Dentex has signed
heads of terms with a further 16 practices that are currently in due diligence.

Demand for private dentistry remains strong and Dentex practices are delivering consistent growth
in profitability. The current funders are very supportive of the business, having increased their
facilities in July 2021 to fund Dentex’s ambitious acquisition strategy.

YASA Limited (“YASA”)
www.yasa.com

During the reporting period, YASA continued to deliver electric motors to its clients in accordance
with the committed production schedules. Management and the Board concluded a Letter of
Intent with MBAG in May 2021, in terms of which MBAG would acquire the automotive business of
YASA. The parties concluded a share purchase agreement during June, and the proposed
transaction was completed during August 2021. Prior to the completion of the transaction, the
company was restructured in order for the YASA Aerospace business to be sold to a new
consortium, given that MBAG was purely interested in buying the automotive activities.

MBAG is one of the premier engineering led, global automotive players, with a proud history of
innovation, quality, safety and performance. MBAG has made a number of public announcements
regarding their plans to electrify their full automotive range, and to withdraw internal combustion
powered vehicles from a large number of markets post 2030. MBAG has placed the YASA
technology at the heart of their future electrification strategy, and the Company is pleased to have
identified and supported YASA during the period of its investment, playing a role in maturing the
organisation to a point where MBAG is prepared to invest substantially in its future.

In terms of the disposal agreements, around 80% of the sale proceeds was received on completion
of the transaction. The balance due is deferred over a period of years, to be released according
to a pre-agreed schedule. The Company will remain actively involved in engagements with MBAG
in terms of this deferral, in order to ensure that the maximum value is released to shareholders over
the period.

SC Lowy Partners ("SC Lowy")
www.sclowy.com

SC Lowy Partners is a specialist financial group covering high yield and distressed debt market-
making and investment management, along with its Italian and Korean banking subsidiaries.

Solution Bank in Italy continued its unbroken record of increased profits every quarter since
acquisition in 2018, and now provides an excellent platform for SC Lowy to raise deposits and source
assets across Europe. Cheoun Savings Bank in Korea continues to deliver top quartile returns in its
sector.

Distressed debt and high yield opportunities in Asia and Europe currently offer excellent returns, and
SC Lowy's Primary Investments Fund continued to perform strongly over the 6 months from 1 January
to 30 June 2021, delivering net returns after fees in excess of 12.5%. Consequently, Assets Under
Management ("AUM") has grown resulting in increased management and performance fees, while
trading income substantially exceeded budget for the period. The Strategic Investment (special
situations) funds have likewise continued to show strong returns to investors, resulting in better than
expected management and performance fees. The Second Strategic Investments fund was
launched in the first quarter of 2021, with initial subscriptions exceeding expectations at the first
close in April 2021. As a result of the excellent performance over the first half of 2021, SC Lowy had
already exceeded their full year results for 2020.

SC Lowy management expects that the normalisation of financial markets post the unprecedented
financial support during the COVID crisis, will continue to offer selective, attractive opportunities to
those able to identify and manage balance sheet restructuring. This will bring benefits in terms of
profitability and the quantum of AUM.

JSA Services Limited ("JSA")
www.jsagroup.co.uk

As reported previously, the implementation of IR35 in the private sector of the UK contractor market
has had a meaningful impact on the industry. The large, compliant payroll service providers such
as JSA have experienced material growth in their umbrella customer bases, while seeing an
expected reduction in the number of PSC clients. The net effect on JSA has been positive, with its
contractor base expanding to around 25 000 people, a significantly broader range of employment
agency customer relationships and a marked shift towards higher paid customers who work in the
professional sectors of the UK economy.

With the implementation of IR35 completed, JSA has returned to its core strategy of being an
industry consolidator, while driving organic growth from its substantial customer base. As regards
acquisitions, the integration of the Workr Group that was acquired in April is well underway and the
performance of this acquisition to date is ahead of plan. JSA has agreed Heads of Terms with an
additional target company that, if acquired, will help to expand the range of services that it is able
to offer and help to boost operating margins. Additional acquisition opportunities are being pursued
and conversations with the vendors in each case are progressing.

With the twin disruptions of COVID-19 and IR35 largely behind it, JSA is well placed to capitalise on
the substantial opportunities that are available in the growing flexible worker sector of the UK
economy.

TechStream Group ("TSG")
www.techstreamgroup.com

The positive momentum that TSG showed during the first quarter to March 2021 has continued and
the company remains ahead of its financial plan for the seven months to July. The new
management team and operating model are performing well, resulting in a consistent
performance from month to month. Demand for the scarce skills and services that TSG provides to
its customers internationally remains robust, which bodes well for the remainder of the financial year
to December. In line with many of its competitors, TSG is finding it challenging to fill vacant sales
positions due to an industry wide shortage of suitably skilled candidates. One of the ways that TSG
is addressing this challenge is via their graduate recruitment and training programme.

TSG management remain focused on growing in specific, niche areas of the high-end technology
skills market, while improving efficiency across the business. All geographic areas are performing
well except for the German contractor market, where a remedial plan is being implemented.
Greater emphasis is being placed on increasing collaboration across the different divisions of TSG
and maximising the significant opportunities presented by its extensive customer base. The
management team is also evaluating various strategies to simplify the structure of the business.

Propelair
www.propelair.com

Propelair continued to be impacted adversely by COVID related disruption during the period, which
has lengthened the sales cycle between first engagement and a final decision to implement. Many
organisations have moved to remote working, and have accordingly put investment into their
facilities on hold, despite the proven hygiene and water saving benefits of Propelair's technology.
Management remains confident that as activity returns to normal, their sales pipeline will convert
into cash, particularly given the increased focus on the sustainable use of scarce resources such as
water.

Financial review

For the year under review, interest income of GBP 109,753 included interest earned from providing
short-term bridging loans to investee companies as well as interest earned from investing excess
cash in interest bearing fixed deposits.

Dividends received comprise an accrual raised on the preferred shares subscribed for by the
Company in TSG and amounted to GBP 574,540 for the year. These dividends are provided for
immediately as the Board is of the opinion that the valuation of Techstream should remain
unchanged compared to that previously reported.

Included in other income is a raising fee of GBP 30,000 earned by the Company in relation to
providing a short-term bridging loan to TSG.

Detailed valuations of the Company's investments are performed every six months. At 30 June 2021,
the valuations performed for Dentex and JSA indicated an increase in the fair values of these
investments based on improved and sustainable performance during the period. The Company
therefore increased the valuations of these two investments by GBP 8,934,478 and GBP 4,162,233
respectively. In addition to this, and as mentioned above, the Company completed the sale of
YASA to MBAG, subsequent to the year end. The valuation of YASA was accordingly increased to
reflect the total expected proceeds receivable. The total fair value gain on re-measurement of
financial assets at fair value through profit or loss, taking into account all of the above, was 
GBP33,953,487 for the year. The valuation of the investments in TSG and Propelair remain unchanged
from the prior year.

The Company’s investment in SC Lowy is reflected at its original cost and is denominated in US
Dollars (“USD”). During the year, the translation effect of exchange rate movements between the
USD and the GBP resulted in a foreign exchange loss of GBP 1,341,471.

Management fees paid during the year amounted to GBP 1,770,416, incurred in terms of the
investment management agreement between the Company and Argo. General and
administrative expenses amounting to GBP 337,137 were incurred. The accrual for performance
fees is calculated on the revaluation of the Company’s investments. These fees, which are
recalculated quarterly, only become payable to Argo if the Company realises the expected profit
on disposal of the investments. No performance fees are payable to Argo until a successful exit of
an investment has been achieved and proceeds have been received. The increase in the
valuations of the Company’s investments during the year resulted in an additional accrual of 
GBP 4,240,144.

The Company incurred interest of GBP 390,773 during the year on the RMB term loan facility. This
facility was repaid in full, in accordance with the facility agreements, post completion of the YASA
disposal.

The Board is pleased to announce that a cash distribution of GBP 15 million, equating to 20.7 GBP
pence per share, for the year ended 30 June 2021 was approved at the Board meeting held on
13 September 2021.

Further information regarding the proposed cash distribution will be announced by the Company
in due course.

Short-form announcement

This short-form announcement is the responsibility of the directors and is only a summary of the
information in the full announcement and accordingly does not contain full or complete details.
The full announcement was published on SENS on 14 September 2021, and can be found on the
Company's website www.universalpartners.mu and can be accessed using the following JSE link
https://senspdf.jse.co.za/documents/2021/jse/isse/UPLE/FY21Result.pdf.

Any investment decisions by shareholders and/or investors should be based on the full
announcement released on SENS and published on the Company's website.

Copies of this report are available to the public, free of charge, at the registered office of the
Company, c/o Intercontinental Trust Limited, Level 3 Alexander House, 35 Cybercity, Ebene 72201,
Mauritius.

Copies of the statement of direct or indirect interest of the Senior Officers of the Company pursuant
to rule 8(2)(m) of the Securities (Disclosure of Obligations of Reporting Issuers) Rules 2007 are
available to the public upon request to the Company Secretary at the Registered Office of the
Company at c/o Intercontinental Trust Limited, Level 3 Alexander House, 35 Cybercity, Ebene 72201,
Mauritius. The Board of Universal Partners accepts full responsibility for the accuracy of the
information in this communique.

The Board is pleased to announce that a cash distribution of GBP 15 million, equating to 20.7 GBP
pence per share, for the year ended 30 June 2021 was approved at the Board meeting held on 13
September 2021.

Further information regarding the proposed cash distribution will be announced by the Company
in due course.

The Board of Universal Partners accepts full responsibility for the accuracy of the information
contained in this announcement.

By order of the Board
Mauritius – 14 September 2021

Company Secretary
Intercontinental Trust Limited


For further information please contact:

                                   SEM authorised representative
    JSE sponsor                            and sponsor                    Company Secretary
   Java Capital                        Perigeum Capital               Intercontinental Trust Ltd
Tel: +27 11 722 3050                  Tel: +230 402 0890                 Tel: +230 403 0800
 
Date: 14-09-2021 02:53:00
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