Hardman & Co Research: 1H'21: 35% EBITDA growth drives 26% NAV return

OCI's results were strong, with i) an annual total NAV return of 26% (11% in six months), ii) average annual portfolio company EBITDA growth of 35% (20% FY'20), 12.3x EV/EBITDA (FY'20 11.8x) and 3.5x net debt/EBITDA (FY'20 3.9x), iii) £95m investment and £51m realisations in six months, and iv) year-end cash of £172m. This performance, and OCI's 17% five-year CAGR NAV total return, is driven by i) high-growth companies/sector champions with structural tailwinds and often digital disruption benefits, ii) repeatable and proprietary sourcing, and post-acquisition support from its unique entrepreneur network, iii) 75% recurring/subscription revenue streams, and iv) M&A-led value creation.

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