Our opinion on the current state of UPARTNERS(UPL)Universal Partners (UPL) is an investment holding company with a robust portfolio, primarily listed in Mauritius and secondarily on the Alt-X of the Johannesburg Stock Exchange (JSE). Since its inception in 2013, Universal Partners has strategically invested in diverse businesses across various sectors, demonstrating a keen eye for value and growth opportunities.
The company's investments include:
1. Dentex Healthcare Group - An entity that owns 56 dental practices in the UK, reflecting UPL's focus on the healthcare sector.
2. Yasa - Originally a distributor of controllers for high power density electric motors. Yasa was notably sold to Mercedes Benz for GBP 42.8 million, marking a significant exit for UPL.
3. SC Lowy - A firm specializing in market-making for distressed and high-yield debt, primarily in Asia, indicating UPL's inclination towards financial services with high-risk, high-reward potentials.
4. Propelair - A company that supplies water-efficient toilets in the UK, aligning with global trends towards sustainability and resource conservation.
5. JSA Services - A provider of personal service companies, payroll, and umbrella services to temporary workers in the UK, suggesting UPL's investment in essential business services.
In the financial results for the six months ending 31st December 2023, Universal Partners reported a net asset value (NAV) of GBP 1,267 and headline earnings per share (HEPS) of 0.09 pence, a significant improvement from a loss of 2.25 pence in the previous corresponding period. The company highlighted its successful track record with six investments made since listing and two successful exits, demonstrating its effective investment strategy and execution.
However, by the end of the three months to 31st March 2024, UPL reported a headline loss of 0.37 pence per share with an NAV of 1293 pence per share, indicating some fluctuations in performance. Such volatility is not uncommon in investment holding companies, especially those dealing in varied markets and sectors.
Despite its strategic diversification and active management, Universal Partners is described as too thinly traded to capture the interest of private investors, primarily due to the limited liquidity which might hinder buying and selling shares at desired times or prices. For investors who do not require high liquidity and are interested in a diversified investment holding company with exposure to international markets and sectors, UPL might still present a noteworthy opportunity. However, for those requiring more liquid investments, it may be less appealing.
