Oakley Capital Investments has reported NAV and shareholder returns of 2% over 2024. The full-year dividend was 4.5p.

We covered the the trust’s 2024 returns here, but to recap, the trust invested £299m (including Steer Automotive Group, ProductLife Group, I-TRACING, Assured Data Protection, vitroconnect, Konzept & Marketing, Alerce, Horizons Optical, and new venture investments in Safely You, SafeBase, Daloopa, and Netradyne) and received £179m from realisations (including idealista, Ocean Technologies Group and Schülerhilfe).

The trust also converted $107m of its North Sails preferred equity position into ordinary equity. North Sails had a good year, helped by it being an America’s Cup year. Time Out is opening a second New York food market and is in ongoing commercial negotiations to open a London market.

At the year end, Oakley Capital Investments had cash and available credit of £225m and commitments to invest £646m over the next five years (so realisations are expected to cover the shortfall).

That £299m investment, and the strong period for investments that preceded it, means that about 40% of OCI’s NAV has been deployed over the past 24 months. The chairman points out that, whilst the prospects of these investments are significant, they have, as expected, made limited contribution to NAV growth at this stage in their ownership. Most recently, Oakley Capital Investments invested £25m in cybersecurity group Bridewell alongside co-investor Eurazeo. The business is being combined with another Oakley portfolio company I-TRACING to create an independent European leader in cyber security services.

The flat NAV and share price returns belie decent progress within the underlying porttfolio. On average, portfolio companies generated year-on-year EBITDA growth of 15%, ahead of the 14% growth achieved in 2023. It is this earnings growth that tends to drive the trust’s NAV growth over the long term.

Returns were held back by adverse foreign exchange movements. These took about 25p or 4% off the NAV. Otherwise, the key drivers of the trust’s NAV growth were:

• IU Group (+8 pence): revenue growth driven by increasing student numbers;
• Dexters (+7 pence): strong performance in rentals and accretive M&A; and
• Phenna Group (+7 pence): robust demand for TIC services across geographies and acquisitions deliver value growth.

Looking forward, the company says that “2025 is expected to deliver a stronger exit environment with more active M&A markets helping to increase realisations. Strengthening tailwinds in OCI’s target sectors are also anticipated to improve trading conditions and drive EBITDA growth in the period. Further valuation uplift is expected as OCI’s relatively young portfolio matures and earnings growth accelerates in underlying investments.

The board is pursuing initiatives to drive shareholder return by enhancing NAV per share, creating further liquidity, and increasing investors’ access to OCI’s shares. This includes OCI seeking promotion of its shares to the Main Market of the London Stock Exchange and exploring opportunities for further share buybacks when appropriate.”

[We continue to believe that a main market listing could eventually be transformative for the company’s rating as this would make it easier for retail investors to buy the shares. After an extraordinary run, the short-term slowdown in the pace of NAV growth reflects the immaturity of the portfolio and external market conditions. The long-term track record gives a better indication of the portfolio’s potential.]

OCI : Oakley Capital has been busy making new investments