eQ PLC STOCK EXCHANGE RELEASE
12 February 2015 at 12:00 noon
eQ PLC’S FINANCIAL STATEMENTS RELEASE 2014 – eQ DOUBLED ITS RESULT, A DISTRIBUTION OF EUR 0.50 PER SHARE IS PROPOSED FOR THE SHAREHOLDERS
January to December 2014 in brief
- During the period under review, the Group's net revenue totalled EUR 24.4 million (EUR 18.8 million from 1 Jan. to 31 Dec. 2013).
- The Group’s net fee and commission income totalled EUR 22.9 million (EUR 15.4 million).
- The Group’s net investment income from own investment operations was EUR 0.8 million (EUR 3.4 million).
- The Group’s non-recurring other income and expenses totalled EUR 0.6 million (EUR 0.0 million).
- The operating profit of client operations (Asset Management and Corporate Finance) was EUR 10.0 million (EUR 3.5 million).
- The Group’s operating profit was EUR 9.0 million (EUR 4.9 million).
- Earnings per share were EUR 0.20 (EUR 0.10).
- Dividend proposal is EUR 0.20 (EUR 0.15) and proposal for return of capital EUR 0.30 (EUR 0.00) per share.
- eQ Plc’s Board of Directors has updated the company’s dividend policy after the end of the financial period. eQ Plc’s target is to distribute the profit for the financial year as dividend. In addition to the dividend, eQ Plc may return capital to its shareholders from the net cash flows of capital returns and capital calls from private equity fund operations.
- The assets under management totalled EUR 7.5 billion at the end of the financial period (EUR 6.7 billion on 31 Dec. 2013).
- The net cash flow from own investment operations was EUR 8.0 million (EUR 10.4 million from 1 Jan. to 31 Dec. 2013) and the change in fair value was EUR 3.8 million (EUR -1.2 million).
October to December 2014 in brief
- In the fourth quarter, the Group’s net revenue totalled EUR 8.1 million (EUR 5.1 million from 1 Oct. to 31 Dec. 2013).
- The Group’s net fee and commission income totalled EUR 7.3 million (EUR 4.6 million).
- The Group’s net investment income from own investment operations was EUR 0.8 million (EUR 0.5 million).
- The operating profit of client operations (Asset Management and Corporate Finance) was EUR 3.1 million (EUR 1.1 million).
- The Group’s operating profit was EUR 3.4 million (EUR 1.1 million).
- Earnings per share were EUR 0.07 (EUR 0.02).
| Key ratios | 1-12/ 2014 | 1-12/ 2013 | Change, % | 10-12/ 2014 | 10-12/ 2013 | Change, % |
| Net revenue, Group, EUR million | 24.4 | 18.8 | 30% | 8.1 | 5.1 | 59% |
| Net revenue, Asset Management, EUR million | 17.6 | 13.6 | 29% | 4.6 | 3.7 | 24% |
| Net revenue, Corporate Finance, EUR million | 6.3 | 2.2 | 193% | 2.7 | 0.9 | 194% |
| Net revenue, Investments, EUR million | 0.5 | 3.0 | -82% | 0.7 | 0.4 | 73% |
| Net revenue, Group administration and | ||||||
| eliminations, EUR million | 0.0 | 0.0 | -71% | 0.0 | 0.0 | -81% |
| Operating profit, Group, EUR million | 9.0 | 4.9 | 83% | 3.4 | 1.1 | 206% |
| Operating profit, Asset Management, EUR million | 7.1 | 3.1 | 126% | 1.7 | 0.8 | 111% |
| Operating profit, Corporate Finance, EUR million | 2.9 | 0.4 | 655% | 1.4 | 0.3 | 355% |
| Operating profit, Investments, EUR million | 0.5 | 3.0 | -82 % | 0.7 | 0.4 | 73% |
| Operating profit, Group administration, EUR million | -1.5 | -1.6 | -6 % | -0.4 | -0.4 | 5% |
| Profit for the period, EUR million | 7.1 | 3.4 | 108 % | 2.7 | 0.8 | 222% |
| Earnings per share, EUR | 0.20 | 0.10 | 100% | 0.07 | 0.02 | 250% |
| Proposal for dividend and return of capital per share, EUR | 0.50 | 0.15 | 233% | |||
| Equity per share, EUR | 2.11 | 1.97 | 7% | 2.11 | 1.97 | 7% |
| Liquid assets and interest-bearing liabilities, EUR million | 21.3 | 11.3 | 89% | 21.3 | 11.3 | 89% |
| Private equity investments, EUR million | 27.3 | 30.6 | -11% | 27.3 | 30.6 | -11% |
| Interest-bearing liabilities, EUR million | 0.0 | 0.0 | 0% | 0.0 | 0.0 | 0% |
| Assets under management, EUR billion | 7.5 | 6.7 | 12% | 7.5 | 6.7 | 12% |
Janne Larma, CEO
The net revenue of eQ Asset Management increased by almost 30 per cent and the profit more than doubled
eQ Asset Management succeeded excellently in several different areas in 2014.The assets managed by eQ increased to EUR 7.5 billion by the year-end. Measured with assets under management, eQ is the largest asset manager in Finland that is independent of bank groups. Our market position in private equity asset management was further consolidated last year. We raised EUR 130 million to the eQ Private Equity VI North investment programme. In addition, four important investors, i.e. the Finnish Cultural Foundation, Central Church Fund of Finland, Jenny and Antti Wihuri Foundation and Emil Aaltonen Foundation, outsourced the management of their private equity investments to eQ. Our real estate asset management managed to raise about EUR 90 million of new capital last year. At the year end, the assets of the eQ Care Fund exceeded EUR 150 million, and we launched a new fund called eQ Finnish Real Estate with an initial capital of EUR 15 million. We strongly believe that both private equity and real estate asset management will grow in Finland during the next few years. eQ did also well in traditional asset management. Our clearly largest fund is the eQ Emerging Dividend Fund, which gathered net subscriptions of EUR 137 million during the year. We also succeeded well in yield comparisons. 60 per cent of our funds surpassed their benchmark indices in 2014.
Advium’s business operations grew considerably
eQ’s corporate finance unit Advium had an excellent year. Advium acted as advisor in 14 finalised transactions and almost tripled its net sales. Advium acted as advisor, e.g. as Ledil, which manufactures LED lighting components, was sold to Ratos AB, when the State of Finland sold Destia to Ahlström Capital, and when the State of Finland and Meyer became new owners of the STX Finland dockyard in Turku. In real estate business, Advium acted as advisor to the seller when Sanoma Plc sold the Sanomatalo and Sanomala properties and when Taaleritehdas sold its residential portfolio to Tapiola. Advium maintained its market leading position in large real estate transactions and consolidated its position in mergers and acquisitions.
The Group’s profit doubled
eQ’s result in 2014 was excellent. We managed to increase our net sales by 30 per cent to EUR 24.4 million and our operating profit to EUR 9.0 million. The Group’s profit for the financial period doubled to EUR 7.1 million, i.e. 20 cents per share. I am especially pleased with the fact that the operating profit of Client Operations increased almost threefold and totalled EUR 10.0 million. The operating profit of the Asset Management segment was EUR 7.1 million and that of Corporate Finance EUR 2.9 million. The operating profit of the Investments segment was EUR 0.7 million in the last quarter, which raised the segment’s operating profit for the year to EUR 0.5 million.
The Group’s strong balance sheet enables a large profit distribution
The market value of eQ’s own private equity investments totalled EUR 27.3 million and liquid assets amounted to EUR 21.3 million at the close of the year. According to our strategy, we only make new private equity investments in funds that the Group manages, and with regard to this, the Board has updated the company’s dividend policy. According to the new policy, our aim is to distribute the profit for the financial year as dividend and the capital returns from private equity investments deducted with capital calls as return of capital from the reserve for invested unrestricted equity. The Group’s strong balance sheet makes it possible to distribute the divided per share of 20 cents and the extra return of capital of 30 cents per share proposed by the Board.
Outlook
The asset management business grew well last year, which gives an excellent starting point for 2015. We expect that the yields and operating profit of the asset management segment will grow in 2015. Last year was especially good for the Corporate Finance segment. The number of assignments continues to be at a good level, but it may be challenging to reach last year's profit level in 2015. Based on this, we believe that the total income and operating profit of Client Operations will grow in 2015, as compared with 2014. The cash flow of the Investments segment is expected to continue to be strongly positive. The result of the business operations is, on the other hand, mainly dependent of factors that are independent of the company. Consequently, the operating profit of the Investments segment may vary considerably and is difficult to foresee.
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eQ’s financial statements release 1 January to 31 December 2014 is enclosed to this release and it will also be available in the company website at www.eQ.fi.
Additional information: Janne Larma, CEO, tel. +358 9 6817 8920
Distribution: NASDAQ Helsinki, www.eQ.fi, media
eQ Group is a Finnish group of companies specialising in asset management and corporate finance business. eQ Asset Management offers a wide range of asset management services (including private equity funds and real estate asset management) for institutions and individuals. The assets management by the Group total approximately EUR 7.5 billion. Advium Corporate Finance, which is part of the Group, offers services related to mergers and acquisitions, real estate transactions and equity capital markets.
More information about the Group is available on our website at www.eQ.fi.
