Deutsche Beteiligungs (DE:DBANn) reported €19.3m net income for the first half of FY18, with a 4.5% dividend-adjusted NAV return. NAV per share declined slightly to €29.43 at end-March 2018, after payment of the €1.40 FY17 dividend. Management has lowered earnings guidance for FY18 due to a decline in market valuation multiples that also weighed on returns in the first half, while the underlying progress of portfolio companies remains broadly on track. The recent sharp decline in the share price premium to NAV to 19.6% suggests the market may now be applying an underlying discount to the NAV of the private equity investment portfolio.
Steady underlying progress in H118
DBAG reported a €20.3m overall net investment gain for H118, with valuation gains for the majority of its investments over the period. Higher expected earnings for portfolio companies in 2018 versus 2017 made the largest contribution to valuation gains, but this effect was offset to a large extent by a decline in market valuation multiples. Both DBAG’s private equity investments and fund investment services businesses reported positive earnings. New MBO investments were completed in Sjølund and netzkontor nord alongside the DBAG ECF fund, but the half year was characterised by a high level of transaction activity at the portfolio company level.
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