Not for distribution, directly or indirectly, in or into the United States or any jurisdiction in
which such distribution would be unlawful.
Symphony International Holdings Limited
5 August 2016
Symphony International Holdings Limited ("Symphony", "SIHL" or the "Company") (LSE: SIHL.L), a
leading investor in consumer-related businesses, primarily in the healthcare, hospitality, lifestyle, and lifestyle/real estate
sectors in the Asia-Pacific region, today issues the following Shareholder Update.
Highlights
· Symphony's unaudited Net Asset Value ("NAV") at
30 June 2016 was US$712,465,351 and NAV per share was US$1.3472. This compares to NAV and NAV per share at 31 March 2016 of
US$683,247,482 and US$1.2938, respectively
· The change in NAV and NAV per share was
predominantly due to a strengthening in the share price of Minor International Pcl ("MINT") during the quarter
· Symphony's share price increased by 4.2% during
the quarter to US$0.76 at 30 June 2016. The discount to NAV on the same date was 43.6%
· During the quarter, Symphony acquired, as part
of a consortium, Financier CL SAS, the holding company of the Christian Liaigre Group ("CLG"). The Liaigre brand is synonymous
with discreet luxury, and has become one of the most sought-after luxury furniture brands
· Temporary investments (which includes cash net
of working capital) and listed investments amounted to US$524.7 million, or US$0.99 per share. Symphony's share price on the same
date represents a discount of 23.4% to temporary and listed investments
Anil Thadani, Chairman of Symphony Asia Holdings Private Limited and a Director of Symphony,
said:
"With the 4.3% NAV growth during the quarter and excluding the impact of the US$40 million
dividend announced in March, Symphony's NAV during the first half of 2016 would have increased by 8.2% despite volatile
conditions. Aside from the solid growth in NAV, we are also pleased that Symphony completed the acquisition of the Christian
Liaigre Group with a co-investor during the second quarter. The Christian Liaigre Group is a strong business with a brand that is
synonymous with discreet luxury that complements Symphony's portfolio and core focus. We see strong opportunity to grow this
business."
For further information:
Anil Thadani
+65 6536 6177
Symphony Asia Holdings Pte. Ltd.
About Symphony
Symphony is a London listed strategic investment company that invests in consumer businesses in
the healthcare, hospitality and lifestyle ("HH&L") sectors (including branded real estate developments), which are
principally in Asia. It offers a way for investors to gain exposure to the rising disposable incomes and wealth in fast growing
economies. Symphony's objective is to provide superior capital growth by investing in high quality companies and forming
long-term business partnerships with talented entrepreneurs. Symphony is managed by Symphony Asia Holdings Private Limited, which
has a team of investment professionals with a broad range of expertise - many of them have been working in Asia for more than 25
years. For more information, please visit our website at www.symphonyasia.com
MARKET OVERVIEW
There were various geopolitical and economic events that caused renewed volatility in the
financial markets during the second quarter of 2016. In particular, the United Kingdom's ("UK") vote to withdraw from the
European Union ("EU"), a deterioration in the economic environments of China and Japan, and further developments in the
presidential election process in the US all affected investor sentiment. Overall and despite volatility during the quarter, the
MSCI AC Asia, World and MSCI Thailand and Singapore indices ended the quarter predominantly flat.
In June, Britain unexpectedly voted to leave the EU ("Brexit'), ending months of vacillation. The
Brexit vote caused a depreciation in the British pound against major currencies and stock market declines globally in its
immediate aftermath. There remains uncertainty around Britain invoking article 50 and negotiating an exit agreement with the EU,
which, depending on the outcome, could have a further negative impact on UK, EU and global economic growth.
Japan and China saw further economic deterioration during the second quarter. The weakness in
Japan is stoking fears of "quantitative failure" in which central banks easing efforts fail under the current negative interest
rate environment, which would effectively limit the tools available to steer economic conditions. In China, the central bank
devalued the Chinese yuan by the largest amount since August 2015 in reaction to volatile currency markets and weak
exports.
In the US, Hillary Clinton and Donald Trump passed the threshold required to become the
presidential nominees for the Democratic and Republican party, respectively. Both candidates have starkly different positions on
global trade with Trump seeking to re-negotiate trade pacts and Clinton looking to maintain the status quo. The protectionist
stance of the Trump campaign continues to cause concern should his presidential bid become successful. Despite the uncertainty,
financial markets in the US have been partially supported by the Federal Reserve's deferment of a rate increase in June due to
weaker than expected economic indicators and Brexit.
In July, the International Monetary Fund ("IMF") updated its economic forecasts. The IMF revised
down its forecast for global growth to 3.1% from 3.2% and 3.4% from 3.5% for 2016 and 2017, respectively, whereas for Emerging
and Developing Asia, it maintained its growth forecasts at 6.4% and 6.3% for 2016 and 2017, respectively, largely due to Brexit
and the effect of disappointing growth in advanced economies. The IMF's forecasts for China's 2016 growth increased to 6.6% from
6.5% and remained at 6.2% for 2017, and for India decreased to 7.4% from 7.5% for both years. Forecast for growth in the ASEAN-5
also remained stable at 4.8% and 4.5% for both years.
Symphony's listed investments that include MINT, IHH Healthcare Berhad ("IHH"), and Parkway Life
Real Estate Investment Trust ("PREIT") continued to build their respective portfolios during the second quarter of 2016. MINT
announced new acquisitions in Africa and hotel developments in the United Arab Emirates and India. In addition, IHH announced two
acquisitions which makes it the leading private operator in Bulgaria.
During the quarter, Symphony acquired, as part of a consortium, Financier CL SAS, the holding
company of the Christian Liaigre Group ("CLG"). The Liaigre brand is synonymous with discreet luxury, and has become one of the
most sought-after luxury furniture brands. CLG has a strong intellectual property portfolio and offers a range of bespoke
furniture, lighting, fabric & leather, and accessories through a network of 26 showrooms in 11 countries across Europe, the
US and Asia.
Symphony's other unlisted lifestyle investments that include the Wine Connection Group ("WCG") and
C Larsen continue to focus on building their operations. With respect to Symphony's land related investments, the Desaru
Amanresorts development is ongoing and we continue to explore strategic options for property investments in Thailand and
Japan.
Symphony continues to support the management teams of its portfolio companies and is currently
evaluating several opportunities to grow its portfolio.
COMPANY UPDATE
Symphony International Holdings Limited's ("Symphony" or the "Company") unaudited Net Asset Value
("NAV") at 30 June 2016 was US$712,465,351 and NAV per share was US$1.3472. This compares to NAV and NAV per share at 31 March
2016 of US$683,247,482 and US$1.2938, respectively. The change in NAV and NAV per share was predominantly due to a strengthening
in the share price of Minor International Pcl ("MINT") during the quarter. On a fully-diluted basis (adjusting for in-the-money
vested options), the NAV per share was US$1.3315 on the same date.
Symphony's change in NAV per share (up 4.1%) outperformed the MSCI Singapore (down 1.2%), MSCI AC
Asia (neutral 0.0%), MSCI AC World (up 0.3%), and MSCI Thailand (up 1.6%) indices during 2Q16.
Symphony's listed investments accounted for 73.1% of NAV at 30 June 2016 (or US$0.985 per share),
which is down from 73.4% of NAV at 31 March 2016. The marginal change is predominantly due to an increase in the share price of
Minor International Pcl ("MINT"), which was offset by the sale of 9.5 million MINT shares during the quarter and a new investment
in the Lifestyle sector. On a per share basis, the value of Symphony's unlisted investments (including property) comprised a
further 26.4% of Symphony's NAV (or US$0.355 per share), while the remaining 0.5% of NAV (or US$0.007 per share) represented
temporary investments.
Symphony's share price continued to trade at a discount to NAV in 2Q16. At 30 June 2016,
Symphony's share price was US$0.76, representing a discount to NAV per share of 43.6%.
As of 30 June 2016, the sum of Symphony's temporary investments (which includes cash net of
working capital) and listed investments amounted to US$524.7 million, or US$0.99 per share. Symphony's share price on the same
date represents a discount of 23.4% to temporary and listed investments.
PORTFOLIO DEVELOPMENTS
Minor International Pcl ("MINT") is one of the largest hospitality
and restaurant companies in the Asia Pacific region. MINT owns 67 hotels and manages 80 other hotels and serviced suites with
19,006 rooms. In addition to owning hotels under the Four Seasons, St. Regis and Marriott brands, MINT owns and manages hotels in
22 countries under its own brand names that include Anantara, Oaks, Elewana, AVANI, Per AQUUM and Tivoli. MINT also owns and
operates 1,859 restaurants (comprising 961 equity-owned outlets and 898 franchised outlets) under brands that include The Pizza
Company, Swensen's, Sizzler, Dairy Queen, Burger King, Beijing Riverside, Thai Express, The Coffee Club, Veneziano Coffee
Roasters, and Breadtalk.
MINT's operations also include contract manufacturing and an international lifestyle consumer
brand distribution business at 307 retail points focusing on fashion, cosmetics, wholesale and direct marketing channels under
brands that include GAP, Esprit, Bossini, Red Earth and Henckels amongst others.
Update: MINT continued to see growth on a consolidated basis in 1Q16
year-over-year. Revenue, EBITDA, and net profit (excluding fair value adjustments) increased by 21%, 23%, and 9%, respectively,
during the period. Growth was attributable to the outstanding performance of MINT's restaurant and hotel businesses, plus
incremental revenues from new investments.
MINT's hotel & mixed-use business grew revenues by 18% in 1Q16 year-over-year, driven by the
strong performance of Thailand hotels, additional revenues from recently-acquired hotels, and sales of The Residences by Anantara
Layan in Phuket. In April, MINT announced two new properties in Abu Dhabi- Anantara Jebel Dhanna and AVANI Jebel Dhanna, along
with Oaks Bodhgaya in Bihar, India. In May, MINT acquired eight hotels in Southern Africa. In June, MINT signed two management
agreements, one each in Thailand and the United Arab Emirates.
Mixed-use business, which includes property development operations and plaza and entertainment,
saw an overall increase in revenues in 1Q16. Property development revenue increased by 20% due to the sale of two villas in The
Residences by Anantara in Phuket, offset by a 4% decrease in plaza and entertainment revenue due to lower consumer spending
power.
In 1Q16, MINT's total number of restaurants reached 1,859, representing an increase of 8 outlets
during the quarter. 64% of the total restaurants are in Thailand with the remainder in other Asia-Pacific countries and the
Middle East. Total system sales in 1Q16 increased by 8.8% year-over-year primarily due to performance in Thailand and China and
outlet expansion of 8% year-over-year.
The fair value of Symphony's investment in MINT at 30 June 2016 was US$383.2 million, up from
US$362.2 million at 31 March 2016. The change was primarily due to the increase in the share price of MINT from THB36.75 to
THB40.00 during the quarter, which was offset by the sale of 9.5 million MINT shares that generated net proceeds of approximately
US$10.7 million.
Minuet Limited ("Minuet") is a joint venture between Symphony and an
established Thai partner. Symphony has a direct 49% interest in the venture and is considering several development and/or sale
options for the land owned by Minuet, which is located in close proximity to central Bangkok, Thailand.
Update: The Company's investment cost (net of shareholder loan
repayments) was approximately US$60.9 million at 30 June 2016.
The value of Symphony's interest in Minuet at 30 June 2016 was US$83.0 million based on an
independent third party valuation on 30 June 2016. The change in value from US$82.5 million at 31 March 2016 is predominantly due
to a marginal appreciation in the value of land during the quarter.
Parkway Life Real Estate Investment Trust ("PREIT") invests in
income generating healthcare-related properties in the Asia-Pacific region including three of Parkway's Singapore hospitals,
which are leased back to Parkway on long leases. Established by Parkway Holdings Limited, PREIT is the largest listed healthcare
REIT in Asia by asset size and generates an inflation-linked yield of around 4-5% based on current valuations and historic
distributions.
Update: PREIT reported an increase in gross revenue and net property
income by 6.8% and 6.4% to S$27.4 million and S$25.5 million, respectively, in 2Q16 year-over-year. The increase was due to full
quarter rental contribution from acquisitions completed in 1Q16, higher yielding properties from the asset recycling initiative
in 1Q15, higher rent from Singapore properties and appreciation of the Japanese yen.
Following the acquisition of a nursing home facility in March 2016 in Japan, PREIT's portfolio
increased to 48 properties. The portfolio includes 44 properties in Japan, three in Singapore and strata titled units/lots within
Gleneagles Medical Centre, Kuala Lumpur, Malaysia.
As at 30 June 2016, PREIT had a gearing ratio of 37.8%, which is well within the 60% limit allowed
under the Monetary Authority of Singapore Property Funds Guidelines and will allow for further yield accretive
acquisitions.
As at 30 June 2016, the fair value of Symphony's investment in PREIT was US$69.1 million, compared
to US$68.2 million at 31 March 2016. The change is predominantly due to a marginal increase in the unit price of
PREIT.
IHH Healthcare Berhad ("IHH") is one of
the largest healthcare providers in the world by market capitalisation. Its portfolio of healthcare assets includes Parkway
Holdings Limited, Pantai Holdings Berhad, International Medical University, Acibadem Saglik Yatirimlari Holding A.S. ("Acibadem")
and a minority shareholding in Apollo Hospitals Enterprises Limited. IHH has a broad footprint of assets in Asia as well as
Turkey, Abu Dhabi, Central and Eastern Europe that employ 30,000 people and operate close to 10,000 licensed beds in 49 hospitals
worldwide.
Update: IHH reported 1Q16 revenue and EBITDA growth of 24% and 22% to
MYR2.5 billion and MYR0.6 billion, respectively, compared to the same period a year earlier. The improvement in performance is
due to organic growth in IHH's existing hospitals and ramp up of its newer hospitals: Acibadem Atakent and Acibadem Taksim
Hospitals in Turkey and Pantai Manjung, Gleneagles Kota Kinabalu, and Gleneagles Medini in Malaysia. The consolidation of
Continental and Global Hospitals in India also contributed revenue in 1Q16.
Revenues at Parkway Pantai hospitals grew 30% in 1Q16 year-over-year to MYR1.5 billion, driven
partly by the continued ramp-up of Mount Elizabeth Novena Hospital in Singapore and contribution from newly opened hospitals in
Malaysia and new acquisitions in India. In June, the company entered into a land contract for a 450-bed hospital in
Shanghai.
Acibadem's revenues grew in 1Q16 by 14% due to an increase the continued ramp up of Acibadem
Atakent Hospital, contribution from Acibadem Taksim, and organic growth but was partially offset by a 1.1% decrease in the
Malaysian Ringgit against the Turkish Lira. In April, Acibadem announced an acquisition of Bulgaria-based Tokuda Hospital and a
merger with City Clinic.
IMU Health, the medical education arm of IHH, increased revenue by 2% during 1Q16, which was due
to higher tuition fees.
At 30 June 2016, the fair value of Symphony's investment in IHH was US$68.7 million down from
US$71.0 million at 31 March 2016. The change is primarily due to a weakening of the Malaysian ringgit by 3.3% during
2Q16.
Property Joint Venture in Malaysia: Symphony has a 49% interest in a property joint venture in Malaysia with an affiliate of Destination Resorts and Hotels Sdn
Bhd, a hotel and destination resort investment subsidiary of Khazanah Nasional Berhad, the investment arm of the Government of
Malaysia. The joint venture is developing a beachfront country club and private villas on the south-eastern coast of Malaysia
that will be branded and managed by Amanresorts.
Update: Symphony invested US$29.0 million in January 2012 for its
interest in the joint venture company. Symphony's interest in the joint venture at 30 June 2016 was US$24.1 million, which
compares to US$24.8 million at 31 March 2016. The change in value is predominantly due to a decrease of the Malaysian ringgit by
3.3% during the quarter. The project is ongoing, but there have been rectification delays that will postpone launch to
2Q17.
SG Land Co. Ltd ("SG Land") is a joint venture company that owns the
leasehold rights for two office buildings in downtown Bangkok - SG Tower and Millenia Tower. The two buildings in SG Land's
portfolio have high occupancy rates and offer attractive rental yields. Symphony holds 49.9% of the venture.
Update: SG Land continues to generate stable rental income on its two
office towers. The value of SG Land at 30 June 2016 was US$10.4 million based on an independent third party valuation at 30 June
2016. The change from US$13.4 million at 31 March 2016 is predominantly due to the reduced term of the lease, and lower forecast
occupancy rates that are used to determine fair value.
Christian Liaigre Group ("CLG"): Symphony
announced in May 2016 that it acquired, as part of a consortium, Financier CL SAS, the holding company of the Christian Liaigre
Group ("CLG"). The Liaigre brand is synonymous with discreet luxury, and has become one of the most sought-after luxury furniture
brands. CLG has a strong intellectual property portfolio and offers a range of bespoke furniture, lighting, fabric & leather,
and accessories through a network of 26 showrooms in 11 countries across Europe, the US and Asia. In addition, CLG also
undertakes exclusive interior architecture projects for select yachts, hotels, restaurants and private residences.
Update: The consortium is working closely with management to support
the business plan for CLG and also explore new opportunities for the business. CLG is valued at more than 5% of NAV but due to
strategic concerns, specific valuation information will not be disclosed.
Property Joint Venture in Japan: Symphony
invested in a property development venture that has acquired two hotels in Niseko, Hokkaido, Japan. Symphony has a 37.5% interest
in the property development venture.
Update: The property is located in the Hirafu area of Niseko which continues to gain traction as a
premium winter sports destination and for its popularity as an off-ski season activity destination. We expect the number of
visitors to increase year-over-year during the current summer period and 2016/2017 ski season, which should continue to drive
demand for regional vacation properties. The joint venture continues to evaluate options with respect to the property site in
order to maximize profits for its shareholders.
Wine Connection Group ("WCG"): At the end of April 2014, Symphony invested in the Wine Connection Group ("WCG"), Southeast
Asia's leading wine themed Food and Beverage chain with currently over 70 outlets in Singapore, Thailand and Malaysia.
Update: WCG continues to expand its business and increase efficiency. There have been strong
headwinds in the food and beverage sector in the markets that WCG operates, but we have seen improvement during the second
quarter of 2016. We expect stronger consumer sentiment to continue to benefit the overall market environment.
Structured Transaction: In February
2014, Symphony completed a structured transaction, which provides a minimum return of 15% per annum. The investment amount is
less than 2% of NAV.
C Larsen Singapore Pte Limited ("C Larsen") is a luxury hospitality
company which primarily sells several high-end U.S. and European furniture brands and is based in Thailand. The current portfolio
of furniture brands includes Christian Liaigre, Barbara Barry, Baker, Thomasville, Herman Miller, Minotti, Bulthaup kitchens,
Puiforcat, and St. Louis. It also provides FF&E solutions to drive additional furniture sales to various real estate and
hotel projects. Recently, a new F&B business was added to the company under the brand of Clinton Street Baking
Company.
Update: Continuing growth in the luxury real estate market in Thailand
supported C Larsen's furnishing and outlet businesses. The company has fine tuned the operations of the Clinton Street
Baking Company franchise in Singapore and expects to open an outlet in Bangkok later this year.
OUTLOOK
We remain confident that growing wealth in the region will continue to drive consumerism.
Symphony's portfolio is well positioned to benefit from these changes. The volatility in financial markets should provide
opportunities to further expand Symphony's portfolio.
IMPORTANT INFORMATION
A more detailed Shareholder Update is available on request from the Company and can be accessed
via www.symphonyasia.com.
This document is not for release, publication or distribution, in whole or in part, directly or
indirectly, in or into the United States or any other jurisdiction into which the publication or distribution would be unlawful.
These materials do not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities in the
United States or any other jurisdiction in which such offer or solicitation would be unlawful. THE securities referred to in this
document have not been and will not be registered under the securities laws of such jurisdictions and may not be sold, resold,
taken up, transferred, delivered or distributed, directly or indirectly, within such jurisdictions.
No representation or warranty is made by the Company or its Investment Manager as to the accuracy
or completeness of the information contained in this document and no liability will be accepted for any loss whatsoever arising
in connection with such information.
This Document contains (or may contain) certain forward-looking statements with respect to certain
of the Company's current expectations and projections about future events. These statements, which sometimes use words such as
"anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "potential", "should", "will" and "would" or the
negative of those terms or other comparable terminology, are based on the Company's beliefs, assumptions and expectations of its
future performance, taking into account all information currently available to it at the date of this document. These beliefs,
assumptions and expectations can change as a result of many possible events or factors, not all of which are known to the Company
at the date of this announcement or are within its control. If a change occurs, the Company's business, financial condition and
results of operations may vary materially from those expressed in its forward-looking statements. Neither the Company nor its
Investment Manager undertake to update any such forward looking statements
Statements contained in this DOCUMENT regarding past trends or activities should not be taken as a
representation that such trends or activities will continue in the future. The information contained in this document is subject
to change without notice and, except as required by applicable law, neither the Company nor THE INVESTMENT MANAGER assumes any
responsibility or obligation to update publicly or review any of the forward-looking statements contained herein. You should not
place undue reliance on forward-looking statements, which speak only as of the date of this announcement.
This document is for information purposes only and does not constitute an invitation or offer to
underwrite, subscribe for or otherwise acquire or dispose of any securities of the Company in any jurisdiction. All investments
are subject to risk. Past performance is no guarantee of future returns. Shareholders and prospective investors are advised to
seek expert legal, financial, tax and other professional advice before making any investment decisions.
This DOCUMENT is not an offer of securities for sale
into the United States. The Company's securities have not been, and will not be, registered under the United States Securities
Act of 1933 and may not be offered or sold in the United States absent registration or an exemption from registration. There will
be no public offer of securities in the United States.
Neither the content of the Company's website (or any other website) nor the content of any website
accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this
DOCUMENT.
The Company and the Investment Manager are not associated or affiliated with any other fund
managers whose names include "Symphony", including, without limitation, Symphony Financial Partners Co., Ltd.
End of Announcement