CONSOLIDATED AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2023 AND PROPOSED DIVIDEND

The Board of Reinet Investments Manager S.A. announces the results of Reinet Investments S.C.A. for the year ended 31 March 2023.

 Key financial data

• Reinet’s net asset value of € 5.7 billion reflects a compound growth rate of 8.8 per cent per annum in euro terms, since March 2009, including dividends paid

• The net asset value at 31 March 2023 reflects a decrease of € 170 million or 2.9 per cent from € 5 890 million at 31 March 2022 

• Net asset value per share at 31 March 2023: € 31.46 (31 March 2022: € 31.99) 

• Fifth share buyback programme completed with 2.5 million ordinary shares repurchased for a consideration of some € 49 million, plus transaction costs

• Commitments totalling € 332 million in respect of new and existing investments were made during the year including a new commitment of € 278 million in respect of Coatue funds 

• Commitments of € 171 million were funded during the year, including € 63 million in respect of TruArc Partners and € 50 million in respect of Coatue funds

• Dividends from British American Tobacco during the year amounted to € 122 million

• Reinet dividend of some € 51 million, or € 0.28 per share (excluding treasury shares), paid during the year

• Proposed Reinet dividend of € 0.30 per share payable after the 2023 annual general meeting

Reinet Investments S.C.A. (the ‘Company’) is a partnership limited by shares incorporated in the Grand Duchy of Luxembourg and having its registered office at 35, boulevard Prince Henri, L-1724 Luxembourg. It is governed by the Luxembourg law on securitisation and in this capacity allows its shareholders to participate indirectly in the portfolio of assets held by its wholly-owned subsidiary Reinet Fund S.C.A., F.I.S. (‘Reinet Fund’), a specialised investment fund also incorporated in Luxembourg. The Company’s ordinary shares are listed on the Luxembourg Stock Exchange, Euronext Amsterdam and the Johannesburg Stock Exchange; the listing on the Johannesburg Stock Exchange is a secondary listing. The Company’s ordinary shares are included in the ‘LuxX’ index of the principal shares traded on the Luxembourg Stock Exchange. The Company and Reinet Fund together with Reinet Fund’s subsidiaries are referred to as ‘Reinet’.

Cautionary statement regarding forward-looking statements

This document contains forward-looking statements which reflect the current views and beliefs of the Company, as well as assumptions made by the Company and information currently available. Words such as ‘may’, ‘should’, ‘estimate’, ‘project’, ‘plan’, ‘believe’, ‘expect’, ‘anticipate’, ‘intend’, ‘potential’, ‘goal’, ‘strategy’, ‘target’, ‘will’, ‘seek’ and similar expressions may identify forward-looking statements. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside Reinet’s control. The Company does not undertake to update, nor does it have any obligation to provide updates or to revise, any forward-looking statements. Certain information included in the Management Report is text attributed to the management of investee entities. While no facts have come to our attention that lead us to conclude that any such information is inaccurate, we have not independently verified such information and do not assume any responsibility for the accuracy or completeness of such information.

CHAIRMAN’S COMMENTARY

Dear Shareholder,

During the past year, the world has seen rapidly increasing interest rates and rising inflation followed by significant issues in the banking sector in both the United States and Europe. Combined with recessionary fears in some of the larger economies, and generally less capital available for investments, these events have resulted in creating further uncertainty in global financial markets, the extent and impact of which remains uncertain.

Overview

During the year, Reinet completed its fifth share buyback programme with 2 325 979 ordinary shares being repurchased for some € 45 million during April and May 2022. Since November 2018, a total of 14 151 395 ordinary shares have been repurchased under five share buyback programmes. The cost of the ordinary shares repurchased amounts to € 222 million, plus transaction costs; an average cost of € 15.69 per share. With a net asset value of € 31.46 per share, the share buyback programmes have immediately created value for shareholders. At the annual general meeting in August 2022, shareholders renewed their approval for Reinet to buy back its own shares; future programmes will be considered taking into account cash resources, other commitments and market conditions.

Reinet was pleased to commit $ 300 million to a new investment in tactical solutions funds managed by Coatue Management, a global investment firm focused on technology-related investment opportunities led by founder and portfolio manager Mr Philippe Laffont. Mr Laffont and Coatue have an outstanding reputation as investors in the technology space with Coatue managing some $ 42 billion in assets. I look forward to working with the team at Coatue in the years to come.

Capital invested during the year amounted to some € 171 million, which was mostly in respect of funds managed by Trilantic Capital Partners, TruArc Partners and Coatue. Capital allocated to private equity partners over the last few years has resulted in the fair value of these funds, as a whole, now comprising some 20 per cent of Reinet’s net asset value.

Reinet has cash resources of some € 288 million and access to the equivalent of £ 200 million in various currencies by way of additional borrowing facilities, to meet investment obligations and opportunities as they arise.

Since its inception in 2008, Reinet has invested some € 3.5 billion in new investments and generated an annual return of 7.7 per cent for its investors based on the Reinet share price, with the underlying net asset value reflecting an 8.8 per cent compounded increase since March 2009.

Results

At 31 March 2023, Reinet’s net asset value amounted to € 5.7 billion, a decrease of € 170 million or 2.9 per cent from 31 March 2022. This primarily reflects the decrease in value of certain underlying investments; in particular the decrease in the share price of British American Tobacco over the year and the weakening of sterling against the euro; this was offset by dividend income from British American Tobacco, together with increases in the value of the fund investments in Trilantic Capital Partners and TruArc Partners. 

Business developments

During the year, Reinet committed to invest an additional € 332 million, with € 324 million being in respect of new funds launched by Coatue, Asia Partners and Prescient, € 6 million in Pension Corporation and € 2 million in other smaller investments.

Pension Corporation’s adjusted own funds remained stable at £ 5.9 billion, premiums were lower than the previous year reflecting in part the impact of higher interest rates, however profits increased and the balance sheet and solvency position remained strong. In February 2023, Pension Corporation announced that it had concluded a buy-in with the Trustees of two schemes sponsored by RSA Group, insuring in total some £ 6.5 billion of liabilities and covering the pensions of 40 000 members. This is the largest ever UK bulk annuity transaction and paves the way for other large transactions.  The Board of Pension Corporation proposed an inaugural dividend of 7.5 pence per ordinary share which was paid to shareholders in May 2023. Reinet’s share of this dividend amounts to some £ 49.5 million.

The investment in British American Tobacco decreased in value in the year due to its share price decreasing from £ 31.94 at 31 March 2022 to £ 28.41 at 31 March 2023. At the British American Tobacco annual general meeting in April 2023, shareholders approved a dividend increase of 6 per cent to £ 2.31 per share, up from £ 2.18 per share in 2022. British American Tobacco delivered strong results in 2022 and continues to follow its strategic path to ‘A Better Tomorrow’. With the appointment of Mr Tadeu Marroco as the new CEO in May 2023, British American Tobacco continues to build on its commitment to deliver long-term sustainable value for its shareholders.

The value of investments in Reinet’s private equity partners increased by some 26 per cent in the year to € 1 138 million; capital invested amounted to some € 167 million, distributions to some € 56 million, realised gains to some € 25 million and fair value increases to some € 96 million. The underlying investments are mainly in the United States and Asia where financial markets have not performed well, however our partners have been successful at adding value in these challenging times.

Dividend

The Board of Directors of Reinet Investments Manager S.A. proposes a dividend of € 0.30 per share, payable in September 2023. This represents a 7 per cent increase from last year.

Board of Overseers

Mr Ian Whitecourt passed away in November 2022; Ian was a former Senior Partner at PricewaterhouseCoopers in Luxembourg and served on Reinet’s Board of Overseers from September 2009 to December 2014. Ian brought his considerable experience of the financial world to Reinet, in particular in the Luxembourg banking and investment fund areas.

Outlook

With continued high interest rates, elevated inflation, the ongoing Ukraine crisis, and instability in the global financial system the world economic growth forecast is on the decline with greater volatility expected. The additional financial sector stresses are already causing a noticeable slowdown in growth with inflation not expected to reach central bank target levels for some time to come.

The global banking sector has faced considerable disruption in recent months; while neither Reinet nor its underlying investments have been significantly impacted, ongoing vigilance and reviews of banking relationships are essential. Similarly, Reinet continues to monitor the situation in Russia and Ukraine; and whilst there is no direct exposure, it considers any potential impacts on investment values.

Overall, Reinet holds resilient investments and is well positioned to deal with these challenges.

Environmental, Social and Corporate Governance and Corporate Social Responsibility will play an ever increasing part in our lives in the future, with enhanced ESG reporting on our door step, it continues to be an integral factor when considering new investments. Reinet considers it imperative for businesses to work responsibly, recognising that the world’s resources are finite and that everyone has a role to play in their conservation.

As always, I am grateful to Reinet’s Directors, Overseers, management and employees for their continued commitment to Reinet over the past year and going forward.

Johann Rupert

Chairman

Reinet Investments Manager S.A.

Luxembourg, 25 May 2023

BUSINESS OVERVIEW

The Company has determined that it meets the definition of an investment entity in terms of International Financial Reporting Standards (‘IFRS’) 10. The net asset value, the income statement and the cash flow statement included in this business overview have however been presented in a more comprehensive format than required by IFRS in order to provide readers with detailed information relating to the underlying assets and liabilities.

 All investments are held, either directly or indirectly, by Reinet Fund.

Information relating to current key investments AT 31 MARCH 2023

Committed

amount(1)

in millions

Remaining

committed

amount(1)

in millions

Invested

amount(2)

in millions

Realised

amount(2)

in millions

Current fair

value(1)

in millions

Total realised and unrealised value(3)

in millions

Listed investments

British American Tobacco p.l.c.

EUR

-

-

1 739

3 285

1 561

4 846

GBP

-

-

1 418

2 754

1 372

4 126

Other listed investments

EUR

-

-

127

68

83

151

USD

-

-

146

78

91

169

Unlisted investments

Pension Insurance

Corporation Group

EUR

-

-

1 315

–

2 787

2 787

Limited

GBP

-

-

1 112

–

2 450

2 450

Trilantic Capital Partners

EUR

631

123

494

535

472

1 007

Euro investment

EUR

85

19

66

146

36

182

US dollar investment(4)

USD

591

112

489

460

474

934

TruArc Partners

EUR

443

148

284

224

301

525

USD

480

161

319

252

326

578

Coatue funds

EUR

USD

 276

300

228

247

50

53

-

-

50

54

50

54

Asian private equity companies and portfolio funds

Milestone China

Opportunities funds and

EUR

-

-

130

153

44

197

management company

USD

-

-

169

173

47

220

Prescient China funds

and management

EUR

-

-

79

4

143

147

company

USD

-

-

94

4

155

159

Asia Partners funds

EUR

56

32

24

-

32

32

USD

62

34

28

-

35

35

Specialised investment funds

NanoDimension funds and co-investment

opportunities

EUR

176

65

110

46

94

140

Euro investment

EUR

4

–

4

1

2

3

US dollar investment

USD

187

65

122

51

100

151

United States land

development and

EUR

197

5

160

64

26

90

mortgages

USD

214

5

209

71

28

99

1. Calculated using year-end foreign exchange rates.
2. Calculated using actual foreign exchange rates at transaction date.
3. Total of realised proceeds and current fair value.
4. The invested amount for Trilantic Capital Partners includes an initial payment of $ 10 million.

PERFORMANCE
NET ASSET VALUE

The NAV comprises total assets less total liabilities, and equates to total equity under International Financial Reporting Standards. The decrease in the NAV of € 170 million during the year reflects decreases in the fair value of British American Tobacco p.l.c. (‘BAT’), Pension Insurance Corporation Group Limited, and other listed investments, offset by dividends received from BAT together with realised gains and increases in the estimated fair value of certain investments including, Trilantic Capital Partners and TruArc Partners.

The Company funded the purchase of 2.3 million of its own ordinary shares through an approved buyback programme, the amount of which was already accrued at 31 March 2022. Details of the Company’s NAV and details of movements in key investments can be found on pages 4 and 5 of this report.

Reinet records its assets and liabilities in euro; the weakening of sterling against the euro, offset by the strengthening of the US dollar against the euro has resulted in an overall decrease in the value of certain assets and liabilities in euro terms. Applying current year-end exchange rates to the March 2022 assets and liabilities would have resulted in a decrease in the March 2022 NAV of some € 174 million.

SHARE BUYBACK PROGRAMME

The fifth share buyback programme commenced in March 2022 and concluded on 23 May 2022, with 2 500 000 ordinary shares repurchased for € 49 million, plus transaction costs.

During the year under review, 2 325 979 ordinary shares were repurchased for some € 45 million, plus transaction costs.

As at 31 March 2023, there was no share buyback programme in progress.

The Company repurchased 14 151 395 ordinary shares between November 2018 and May 2022 under five share buyback programmes. The cost of the ordinary shares repurchased amounted to € 222 million, plus transaction costs.

Details of each completed share buyback programme to date can be found in note 8 to the consolidated financial statements.

All ordinary shares repurchased are held as treasury shares.

NET ASSET VALUE PER SHARE

The NAV per share and the adjusted NAV per share of the Company are calculated by dividing the NAV and adjusted NAV by the number of shares outstanding (excluding treasury shares) of 181 790 891 (31 March 2022: 184 116 870). The adjusted NAV as at 31 March 2022 was calculated by reversing the liability in respect of future repurchases of shares of € 46 million. The adjusted NAV is considered relevant as it eliminates the timing difference between the additional liability recorded for future share repurchases and the actual number of shares repurchased as at 31 March 2022. No adjustment was made as at 31 March 2023 as there was no share buyback programme in progress at that date.

31 March 2023

31 March 2022

Shares in issue

195 942 286

195 942 286

Treasury shares

(14 151 395)

(11 825 416)

Net shares

181 790 891

184 116 870

€ m

€ m

NAV (see page 4)

5 720

5 890

Reversal of future share buyback liability

-

46

Adjusted NAV

5 720

5 936

€ per share

€ per share

NAV per share

31.46

31.99

Adjusted NAV per share

31.46

32.24

SHARE PRICE

The Company’s indicative share price as quoted on the Luxembourg Stock Exchange decreased by 6.0 per cent in the year from € 20.00 at 31 March 2022 to € 18.80 at 31 March 2023, with the highest trade being at € 19.80 during the year. The total shareholder return since inception (taking into account the initial price of € 7.1945 and including dividends paid) is 7.7 per cent per annum. The growth in NAV, including dividends paid, reflects an 8.8 per cent compounded increase since March 2009. The Company’s ordinary shares are listed on the Luxembourg Stock Exchange, Euronext Amsterdam and the Johannesburg Stock Exchange; the listing on the Johannesburg Stock Exchange is a secondary listing.

Share prices as at 31 March 2023 and 31 March 2022 were as follows:

31 March 2023

31 March 2022

ZAR

EUR

ZAR

EUR

Luxembourg

-

18.80

-

20.00

Amsterdam

-

19.00

-

20.00

Johannesburg

365.06

-

327.76

-

GLOBAL MARKETS BACKDROP

During the year, global markets continued to be impacted by the effects of the ongoing Ukraine crisis, increasing interest rates and rising inflation. Whilst the world has made significant progress in its recovery from the impacts of COVID-19, general economic and geopolitical concerns remain elevated. The first quarter of 2023 saw increased market volatility as the collapse of US lender Silicon Valley Bank triggered concerns over the strength of the global financial sector; this was followed by UBS stepping in to take over Credit Suisse to prevent its collapse and JPMorgan Chase acquiring a substantial majority of assets and assuming the deposits and certain liabilities of First Republic Bank. These events resulted in creating further uncertainty in global financial markets. Rising inflation has resulted in significant pressure on households and consumers as many central banks continue to increase interest rates to mitigate the inflation concerns. The extent and impact of these factors remain uncertain.

Reinet has no direct exposure to Russia or Ukraine through its underlying investments or banking relationships and has not experienced any significant direct impacts in respect of interest rate increases or rising inflation. Reinet has various banking relationships with highly rated institutions, and a well-diversified approach to cash and liquidity management.

Reinet continues to value its investments in line with the International Private Equity and Venture Capital Valuation (‘IPEV’) guidelines and its approved valuation procedures and methodologies. All investment valuations have been prepared using latest available data, including exchange rates and listed share prices as at 31 March 2023. Discussions have taken place with fund managers and investee companies to determine any significant changes in value and any impacts related to the Ukraine crisis, volatility in stock and currency markets, interest rates, inflation and exposure to certain financial institutions. Future valuations will take into account any new impacts of the above, which could affect the valuation of underlying investments.

INVESTMENTS

Reinet seeks, through a range of investment structures, to build partnerships with other investors, specialised fund managers and entrepreneurs to find and develop opportunities for long-term value creation for its shareholders.

Since its formation in 2008, Reinet has invested some € 3.5 billion and at 31 March 2023 committed to provide further funding of € 627 million to its current investments. Details of the funding commitments outstanding are given in the table on page 16 of this report. New commitments during the year under review amounted to € 332 million, and a total of € 171 million was funded during the year.

LISTED INVESTMENTS

BRITISH AMERICAN TOBACCO P.L.C.

The investment in BAT remains one of Reinet’s largest investments and is kept under constant review, considering the company’s performance, the industry outlook, cash flows from dividends, stock market performance, volatility and liquidity.

Luc Jobin, Chairman, and Jack Bowles, Chief Executive, writing in the BAT annual report for 2022 commented:

During the year under review, dividend income recorded from BAT amounted to € 122 million (£ 107 million), being BAT’s second, third and fourth 2022 quarterly dividends, together with the first 2023 quarterly dividend of some € 31 million (£ 28 million) with a record date of 24 March 2023. The first 2023 quarterly dividend was paid on 3 May 2023 and has been included as a receivable in the NAV as at 31 March 2023, due to the record date falling within the financial year.

Reinet holds 48.3 million shares in BAT (31 March 2022: 48.3 million), representing some 2.16 per cent of BAT’s issued share capital.

The value of Reinet’s investment in BAT amounted to € 1 561 million at 31 March 2023 (31 March 2022: € 1 832 million), being some 27.3 per cent of Reinet’s NAV. The decrease in value reflects the decrease in the BAT share price on the London Stock Exchange from £ 31.94 at 31 March 2022 to £ 28.41 at 31 March 2023 together with the weakening of sterling against the euro during the year.

Further information on BAT is available at www.bat.com/annualreport

OTHER LISTED INVESTMENTS

Other listed investments comprised:

31 March 2023

31 March 2022

€ m

€ m

Grab Holdings Limited

29

33

Selecta Biosciences, Inc.

2

2

Soho China Limited

7

8

SPDR Gold shares

39

37

Twist Bioscience Corporation

6

20

83

100

GRAB HOLDINGS LIMITED

Grab Holdings Limited (‘Grab’) is a leading superapp platform in Southeast Asia, providing everyday services that matter to consumers, including food deliveries, mobility and the e-wallet segment of financial services. Grab offers a wide range of on-demand services across 480 cities in eight countries.

Reinet holds 10 573 666 shares in Grab with a market value of € 29 million (31 March 2022: € 33 million). The decrease in value reflects the decrease in the share price during the year, offset by the strengthening of the US dollar against the euro during the year.

Further information on Grab is available at www.grab.com.

SELECTA BIOSCIENCES, INC.

Selecta Biosciences, Inc. (‘Selecta’), is a clinical-stage biopharmaceutical company using proprietary synthetic vaccine particle technology to discover and develop targeted therapies that are designed to modulate the immune system to effectively and safely treat rare and serious diseases.

Selecta is also a portfolio company of NanoDimension funds, pre and post the initial public offering.

Reinet holds 1 395 460 shares with a market value of € 2 million as at 31 March 2023 (31 March 2022: € 2 million).

Further information on Selecta is available at www.selectabio.com.

SOHO CHINA LIMITED

Soho China Limited (‘Soho’) is a Chinese office developer focused on developing and leasing properties in the central business districts of Beijing and Shanghai. Soho developments are known for their modern architecture, with designs from architects such as Zaha Hadid and Japanese architect Kengo Kuma.

Reinet holds 47 million shares with a market value of € 7 million as at 31 March 2023 (31 March 2022: € 8 million). The decrease in value reflects the decrease in the share price during the year, offset by the strengthening of the US dollar against the euro during the year.

Further information on Soho is available at www.sohochina.com.

SPDR GOLD SHARES

SPDR Gold shares (‘GLD’) is the largest physically backed gold exchange traded fund in the world. Over the long term, gold can provide a hedge against inflation and offer some protection against value changes in turbulent economic and political times.

Reinet holds 230 000 shares with a market value of € 39 million as at 31 March 2023 (31 March 2022: € 37 million). The increase in value reflects the increase in the value of gold together with the strengthening of the US dollar against the euro during the year.

Further information on GLD is available at www.spdrgoldshares.com/usa.

TWIST BIOSCIENCE CORPORATION

Twist Bioscience Corporation (‘Twist’) is involved in the fields of medicine, agriculture, industrial chemicals and data storage, by using synthetic DNA tools, and has created a revolutionary silicon-based DNA synthesis platform that offers precision at a scale otherwise unavailable.

Reinet holds 444 497 shares in Twist with a market value of € 6 million (31 March 2022: € 20 million). The decrease in value reflects the decrease in the share price during the year offset by the strengthening of the US dollar against the euro during the year.

Further information on Twist is available at www.twistbioscience.com.

UNLISTED INVESTMENTS

Unlisted investments are carried at their estimated fair value. In determining fair value, Reinet Fund Manager S.A. (the ‘Fund Manager’) relies on audited and unaudited financial statements of investee companies, management reports and valuations provided by third-party experts. Valuation methodologies applied include the NAV of investment funds, discounted cash flow models and comparable valuation multiples, as appropriate. The third-party valuation reports and key assumptions used within these reports are reviewed by the external auditors.

PENSION INSURANCE CORPORATION GROUP LIMITED

Pension Insurance Corporation Group Limited’s (‘Pension Corporation’) wholly-owned subsidiary, Pension Insurance Corporation plc (‘Pension Insurance Corporation’), is a leading provider in the UK pension risk transfer market.

During 2022, Pension Insurance Corporation concluded new business with premiums of £ 4.1 billion (2021: £ 4.7 billion) including for long-term clients IMI and British American Tobacco. The reduction in premium levels reflecting in part the impact of higher interest rates.

At 31 December 2022, Pension Insurance Corporation reported it held £ 41.0 billion in assets (31 December 2021: £ 51.1 billion). The decrease in value is due to rising yields which lead to lower asset values and also to lower liability values. As at 31 December 2022, insurance liabilities declined to £ 33.0 billion (FY2021: £47.0 billion). To date, Pension Insurance Corporation has insured 302 200 pension fund members (31 December 2021: 282 900). Clients include FTSE 100 companies, multinationals and the public sector.

Pension Insurance Corporation has a total of £ 1.6 billion Tier 2 subordinated notes and £ 450 million Tier 1 restricted notes outstanding. In March 2023, Fitch affirmed its Insurer Financial Strength rating at A+ (Strong) and Long-Term Issuer Default rating at A. The reported Solvency II capital ratio as at 31 December 2022 was 225 per cent (31 December 2021: 168 per cent).

The Board of Pension Corporation proposed an inaugural dividend for 2022 of 7.50 pence per ordinary share (2021: nil). The dividend w