A leading UK manufacturer of products to improve the performance of residential heating and hot water systems

Investment valuations

As at Mar 2020
Sep 2019
Mar 2019
Sep 2018
Investment valuations 6 5* 4* 4


Portfolio company performance

For the year ended 31 March LTM**
Sales (£m) 20.7 19.0 19.7
Operating Profit (£m) 1.0 (0.5) 2.0
EBITDA (£m) 3.0 1.2 3.1
Return on capital employed (%) 24.6% (33.3)% 20.5%

**Based on last twelve months ("LTM") unaudited management accounts. 

Electra initially invested in Sentinel in 2011, but despite being the majority shareholder Electra did not have effective control until July 2019, when it bought out a minority shareholder with retained control rights. The business lacked focus and had become over complicated and Electra quickly implemented changes in the management team and structure. David Barrett, a highly experienced industry professional, has been appointed CEO and we have implemented other key changes to simplify the management structure and wider organisation and to develop a culture of accountability and delivery. Upon taking full control, unproductive cost has been taken out of the business and the focus that came from simplification has allowed improved sales, margin and profitability. 

The business operates in a mature UK market in which focus, agility and cost and operational efficiency are paramount, as well as in a number of international markets with the opportunity for growth, in which organisational structure and methodical planning and delivery are required. Recent changes have addressed both market groups and initial indications of progress are encouraging. 

In December 2019 Electra invested £1.5 million into Sentinel to fund restructuring costs to support future profitability and growth. This commitment was reflected in our valuation as at 30 September 2019. 

Whilst impacted by Covid-19 both through elements of its supply chain from China and Italy and through its key sales markets of UK, Italy and France, Sentinel has continued to trade at reduced levels throughout the Covid-19 disruption to date. In all markets sales have been focused on supplying engineers for repairs of key water systems. 

Whilst the timing of non-essential maintenance is flexible and constrained by the number of engineers operating, we anticipate a degree of catch-up on resumption of maintenance activity. In taking control of Sentinel and making further investment in 2019, we are conscious of the need to deliver value to shareholders through an exit co-ordinated with our other remaining investments. Despite the disruption of Covid-19, we remain confident that this can be achieved, with Sentinel well positioned for continued growth in its export markets and to gain share in the UK.  


David Barrett


Based on multiple of earnings



February 2011





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