I put my hands up. Guilty as charged. Last week I bravely/foolishly suggested that it might be worth looking again at listed private equity fund EPE and it’s increasingly basket case top stock Luceco. I should have known better of course as this morning came yet more bad news from the lighting and power specialist. Profits at Luceco will be even lower now – see RNS below. As I write this the share price of Luceco is now down at 54p, a VERY long way from its IPO price. Yet again, another cracking ex-Private Equity blow up story – the business is now valued at just £85m, with a single digit PE. Clearly, the market doesn’t believe that we’ve heard the end of this sorry tale, with the line about profits warnings like buses coming in threes ringing in my head.

EPE’s shares are now down at 153p and we can only guess now what the NAV of the fund is. The RNS announcement below observes that as of “31 January 2018 [NAV] was estimated at approximately 239 pence per ordinary share, which incorporates a Luceco plc share price of 77.80 pence per ordinary share.” One must presume this number for NAV must be below 200p now – before too long we’ll probably be crusing near cash value !

Bizarrely I was actually thinking of EPE only yesterday, observing that it had backed an interesting business called Pharmacy4U which seems to have a great business story – this relatively new business is another portfolio company for EPE. Must make a mental note to see how my local Whittards store is trading – another EPE portfolio business.

Anyway long and short of it is that external EPE shareholders must be even more horrified today after these numbers. Clearly somethign fairly drastic needs to be done, probably starting with me not talking about it anymore as it’s all so depressing.  Anyway here’s the RNS below from EPE…

EPE Special Opportunities plc

Update Regarding Luceco plc and Share Buybacks

Luceco plc

The Directors of EPE Special Opportunities plc (“ESO plc”, or the “Company”) note the trading update made by Luceco plc this morning.

Whilst the further downgrade to expectations is disappointing, the Directors are encouraged by the increased level of clarity that the update has given to the market. The Directors are also pleased to note the recent arrival of a highly qualified and experienced Chief Financial Officer in Matt Webb.

Matt has joined Luceco plc from FTSE 100 listed multinational building materials distribution company Ferguson plc, where he spent five years as Finance Director for its market-leading US Blended Branches business. Prior to Ferguson plc, Matt was at BPB plc, the former FTSE 100 manufacturer of building interiors, which was acquired by Saint-Gobain during his tenure. He qualified as a Chartered Accountant with KPMG and holds a degree in Engineering Science from the University of Oxford.

The challenging trading conditions in the lower margin retail division (approximately 25% sales) represent some cause for concern, but in the Directors’ view this is outweighed by the continued strong growth in the higher margin trade, projects and international divisions. Overall revenue growth for 2018 is expected to be 5-10% from a base of GBP168.6 million in 2017, which in itself represents a healthy increase of 26% versus 2016. This positive momentum in trading is further enhanced by the reported success of the margin mitigating actions outlined in the December trading update, which are expected to deliver the projected margin improvement during H2 2018.

Overall, the Directors believe that the long term outlook for Luceco plc remains unchanged and note that ESO plc, as the largest shareholder via EPIC Investments LLP, remains fully supportive of Luceco plc.

31 January 2018 Net Asset Value Update

As previously disclosed on 15 December 2017 and in the ESO plc Report and Accounts for the year ending 31 January 2017, any change in the Luceco plc share price will impact the fully diluted Net Asset Value of the Company.

As at market close on 5 March 2018, the fully diluted Net Asset Value of ESO plc for 31 January 2018 was estimated at approximately 239 pence per ordinary share, which incorporates a Luceco plc share price of 77.80 pence per ordinary share.

The actual fully diluted Net Asset Value of the Company for 31 January 2018 will be confirmed in the ESO plc Report and Accounts for the year ending 31 January 2018 which will be released in due course.

Share Buybacks

Further to the announcement made by ESO plc on 4 January 2018, the Company announces that, ahead of moving into a closed period in respect of its results for the year ended 31 January 2018, it is no longer currently intending to undertake purchases of ordinary shares of the Company.

No ordinary shares have been purchased by the Company since the announcement made on 4 January 2018.

The Company will announce any further intention to commence purchases of ordinary shares, as applicable, in due course.