London, UK, 6 December 2023

Edison issues update on Princess Private Equity Holding (PEY): Offering an attractive dividend yield

Princess Private Equity Holding (PEY) posted a year-to-date NAV total return to end-October 2023 of 4.9%, 2.4% of which was from Q323. PEY’s performance continues to be assisted by portfolio earnings, with last-twelve-month revenue and EBITDA growth to end-September 2023 of 16% and 15%, respectively, and sustained healthy average EBITDA margin of 24%. PEY’s balance sheet remains firm with c €134m in undrawn credit facility and €3m in cash, further assisted by the Civica sale proceeds upon deal closure. Consequently, PEY will pay out two interim dividends of €0.73 in total in 2023, implying a yield of 6.9% at the current share price.

We believe that PEY’s maturing portfolio could provide attractive exit opportunities once activity in the global M&A markets rebounds. PEY recently agreed to sell Civica at a price in line with fair value one year prior, suggesting that a potential lengthening of holding periods and higher interest rates may somewhat limit uplifts upon exits. However, it is worth noting that, over the five years to end-June 2023, PEY achieved a 50% average uplift to fair value one year previously for its 11 fully realised direct holdings where it invested more than €5m each. Moreover, exit proceeds may now be recycled into attractively priced new opportunities.

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