Onex Corp

TSX:ONEX

Earnings Call Transcript 2019-Q1

[Operator]

Welcome to Onex's First Quarter 2019 Conference Call. My name is Liz, and I'll be your Operator today. [Operator Instructions] As a reminder, this conference is being recorded. I will now turn the conference over to Ms. Emilie Blouin, Director, Investor Relations at Onex. Please go ahead.

[Emilie Blouin]

Thank you, Liz. Good morning, everyone, and thanks for joining us. We're broadcasting this call on our website. With me today are Gerry Schwartz; Chris Govan; and a number of our managing directors.Earlier this morning we issued our first quarter 2019 press release, MD&A and consolidated financial statements, which are available on the Shareholders section of our website and have also been filed on SEDAR. Our supplemental information package is also available on our website.I'd like to draw your attention to our accounting change. As of the beginning of the year we determined Onex met the definition of an investment entity as defined by IFRS 10. This change in status has fundamentally changed how we prepare, present and discuss our financial results. It's important to note that prior periods have not been restated to reflect this change. Accordingly, readers of our first quarter materials should exercise significant caution in reviewing, considering and drawing conclusions from period-to-period comparisons and changes, as the direct comparisons between dates or across periods can be inappropriate or not meaningful if not carefully considered in this context. Chris will take you through these changes in more detail shortly.As a reminder, all references to dollar amounts on this call are in U.S., unless otherwise stated.I must also point everyone to our webcast presentation for our usual disclaimer and cautionary factors relating to any forward-looking statements contained in today's presentation and remarks.Lastly, I wanted to let you know we've moved this year's Investor Day to the fall. It will now take place on October 10 in Toronto. More details will be provided in the coming months.With that, I'll now turn the call over to Gerry to discuss our recent activity.

[Gerald Wilfred Schwartz, Founder, Chairman, President & CEO]

Thanks, Emilie. Good morning, everyone. I'm going to start by taking a look at what we're seeing in the markets. As I'm sure you're all aware, the market environment is much better than it was at the end of last year. The U.S. economy remains healthy, and we've seen a strong recovery over the past few months in both credit and equity markets.For PE transactions, the first quarter is typically slow and this year has been no exception. Global value of both investments and exits were down compared to the same period last year. But from what we're seeing, activity has begun to pick up in the second quarter and prices paid for businesses continue to be high. As always, our focus remains on identifying investments that will deliver long-term growth for our shareholders.Let's now turn to some of our highlights this year. It's been a very good start. We received more than $210 million from realizations and distributions from our private equity platform, which returned a total of $825 million to our limited partners. The largest driver was the sale of BrightSpring Health, which we spoke about last quarter. In total, Onex received a return of 5.7x its money on this particular investment.On the capital deployment front, we invested nearly $150 million in our private equity platform to date so far this year.Let's take a look at our most recent investment, Convex Group. It's a de novo specialty property and casualty insurance business focused exclusively on large, complex risks. The company is led by Steve Catlin and Paul Brand, 2 very seasoned executives in the insurance industry who have worked together for more than 3 decades.In 1984, Steven launched Catlin Group, which Paul joined 3 years later. Together they built it into one of the largest specialty insurance companies in the world. In 2015, they sold it to XL for $4.3 billion, and last year XL was, in turn, sold to AXA Group, the French large insurance conglomerate.These transactions are an example of the significant consolidation the specialty insurance market has undergone in recent years. As a result of that, we believe there's a gap in the marketplace for a focused, nimble specialty insurer providing high-quality customer service.Steven and Paul were keen to partner with us given our 20-plus years of experience successfully and consistently investing in the insurance industry. Our strong current relationships in this sector were helpful to us during diligence, not only to validate the opportunity but also served as reference for Steven and Paul, which led them to choose to work with us alone on a proprietary basis.Combining the industry expertise and strong track record of the Convex team, the compelling market opportunity, our own experience and relationships and a low-cost, technology-enabled operating model makes for a unique and exciting investment.In total, we raised $1.8 billion of committed capital to launch the business. This is the largest fund raise undertaken for a new insurance company. Capital came from Onex Partners V, a consortium of co-investors and the Convex management team. Onex Corp.'s share of this is an investment of $124 million as equity as a limited partner in OP V.Looking at other developments within our private equity portfolio, 3 Onex Partners businesses announced large strategic transactions which are expected to close later this year. We spoke about the Clarivate and SMG news on the last call. So let's take a look at the more recent ones.KidsFoundation's proposed acquisition of Partou Holdings. As a reminder, KidsFoundation is the leading provider of childcare services in the Netherlands. We acquired it last November. The planned acquisition of Partou, the second largest provider in the country, will create by far the largest childcare company in the Netherlands, with an estimated 8% share of a highly fragmented formal daycare, preschool and after-school care services business.Within the rest of our operating companies, our PE teams continue to work closely with company management teams to improve performance and successfully execute on our investment theses.Turning to our credit platform, we increased our assets under management by approximately $1 billion, or 9%, so far this year. That was driven by the issuance of 2 CLOs, including our third vehicle in Europe. We've also started warehousing for our next U.S. CLO.On the asset management front, we reached an agreement in March to acquire Gluskin Sheff, a preeminent Canadian wealth management firm serving high net worth private clients and certain institutional investors. The business has CAD 8.3 billion of AUM across its equity and credit fund alternatives.We can see significant strategic benefits to this transaction. With Gluskin Sheff and Onex combined, we will have an opportunity to introduce our alternative asset strategies to a clearly underserved market; namely, the high net worth client in Canada. It will also expand our distribution capability by adding more than 30 professionals to our sales team. Finally, the company's credit products are complementary to our credit strategies since Gluskin Sheff primarily invests in investment-grade securities, whereas we have focused at Onex Credit Partners on noninvestment-grade loans.Gluskin Sheff will continue to be led by its existing leadership team and operate under the Gluskin Sheff brand. As a well-capitalized owner we will provide more stability to the business and be willing to invest in its talent, technology and operations.We're pleased to report that the shareholders of Gluskin Sheff voted yesterday in favor of the transaction and we expect, therefore, we will be able to close this transaction later this quarter.Onex remains well positioned to grow in the years to come, with more than $7 billion of committed capital which is uncalled and available to deploy in new private equity investments and our growing asset management business.Finally, one of the key cultural facets of Onex is our team's alignment and personal investment in everything we do. Today the team has approximately $1.7 billion invested across our private equity platform, credit funds and Onex shares. We all share in the risks and rewards of our decisions.I'll now turn the call over to Chris.

[Christopher A. Govan, Chief Financial Officer]

Thanks, Gerry, and good morning, everyone. I'll start by reviewing the change to our financial reporting that Emilie alluded to earlier: the transition to investment entity accounting.Although there are lots of technical details, the fundamental change is this: Onex's financial statements no longer consolidate our investing platforms and the underlying private equity operating companies. As a result of this deconsolidation, there is a change in the nature of almost every line item in our financial statements and, generally, a significant reduction in the sheer size of the reported amounts.Most important is what's left behind after the deconsolidation: a fairly simple and transparent representation of Onex's 2 business activities, investing Onex's $6.6 billion of shareholder capital and managing capital on behalf of investors from around the world.The financials now consist of the consolidated operations of Onex Corporation and its asset managers and the mark-to-market results of Onex's corporate investments, which primarily consist of private equity and credit.As a result of these changes, Onex's financial results now largely align with what we previously presented in non-GAAP information in the How We Are Invested Schedule and the Schedule of Fees and Expenses.However, one thing I've learned over the years is that GAAP is never perfect. There always seems to be elements that don't line up with economic reality. And with that in mind, there are 2 nuances I need to draw your attention to.On transition, there is a one-time, noncash gain of $3.5 billion included in Q1 earnings. Practically, I think of this accounting gain as the difference between the fair value of Onex Corporation's interest in the underlying private equity investments and the net equity associated with these investments included in the December 31 consolidated financials. We've presented this one-time accounting gain separately in the statement of earnings and believe it should be ignored when assessing Onex's performance in the quarter.The second quirk in our new financials affects only the balance sheet and involves the treatment of intercompany loans between Onex and its unconsolidated investment holding companies. Over all, Onex has a net payable of just over $3.7 billion owing to the investment holding companies. Now, these intercompany loans aren't new, but in our historical balance sheet they all eliminated on consolidation.Beginning with Q1, the receivable, or asset side of these intercompany loans, is included as part of the fair value of the corporate investments, effectively grossing up what would otherwise be a $5.5 billion balance to about $9.2 billion. The payable side of the intercompany loans is reported as a separate liability in the balance sheet and completely offsets the amount included in corporate investments.While this accounting creates some noise and grosses up the balance sheet, it's important to note that the intercompany loans are all between entities within Onex's wholly owned group and they do not impact either our net assets or net earnings. We expect investors will ignore these loans, effectively netting the asset and liability side, when analyzing Onex's balance sheet and liquidity.The transition to investment entity reporting was a significant project for the Onex finance team and will likely require extra work for all of you this quarter. We've provided a significant amount of disclosure in the Q1 report dealing with all the matters I've discussed so far. However, if you have any questions after reviewing those materials, as always, feel free to reach out to Emilie and we'll happily walk through things with you.So with that let's turn to our financial results for this quarter. As you can see, we had net earnings in the quarter of a little over $3.7 billion, or $37.37 per share. However, this includes the very large one-time transitional gain I described earlier.In analyzing Onex's results, going forward, I'll focus on segment earnings, which exclude the one-time transitional gain and are also computed before deducting stock-based compensation and amortization of intangibles and most of our PP&E. We've defined segment earnings in this way since it provides a measure of earnings that is comparable to the basis on which many of our publicly traded peers report their results.Q1 segment earnings were $195 million, or $1.91 per share. This quarter, segment earnings are largely driven by our investing activities. In the past, I would review changes in the How We Are Invested Schedule and the growth in our hard NAV to explain our investing performance. Going forward, the financials include a clear and simple measure of the contribution from our invested capital: investment segment earnings.So let's break down the $183 million, or $1.79 per share, of earnings from our investment segment. As will often be the case, the performance in this segment was driven by our PE investments. In Q1, Onex's private equity portfolio generated a 4% return, resulting in $137 million of net gains.Now it's important to note that our investing segment is reduced by an allocation from the asset management segment. The allocation, which was $16 million in Q1, is equivalent to the management fees and carried interest that would apply if Onex's capital was subject to the same terms as our limited partners' capital. This allocation has no impact to total segment earnings but results in a more appropriate measure of profitability for each segment and aligns with how we manage.Onex's credit investments also made a meaningful contribution in Q1, with net gains of $51 million. Most of these gains are attributable to the mark-to-market recovery of our CLO investments, as the leveraged loan market recovered much of the ground lost in Q4.Although investment segment earnings will always be difficult to project, our asset mix is an important and tangible leading indicator. This next schedule, which is very similar to our old How We Are Invested Schedule, compares Onex's investing capital at March 31 and year-end 2018. Onex's overall exposure to private equity was almost unchanged in the quarter, with capital deployed in RSG and the mark-to-market income largely offset by distributions received from the BrightSpring sale.Onex's capital allocated to credit decreased slightly in the quarter, as the amounts returned on closing on a warehouse facility, together with the $20 million of regular CLO distributions, outpaced the capital invested in CLO-16 and the $51 million of mark-to-market income.All of this resulted in Onex being 75% invested at quarter-end. This increases to 77% pro forma for OP V investment in the Convex group at the end of April.As I said earlier, Onex's investing capital largely aligns with the hard NAV we previously reported via the How We Are Invested Schedule. However, there is one difference you should note and it involves the valuation of the underlying public companies. To align with our fund valuation methodology, a marketability discount is now applied to the quarter-end market prices. This discount reduced our investing capital by approximately $50 million relative to the methodology previously used in the How We Are Invested Schedule. We think you'll want to keep this $50 million reduction in mind when assessing the value of Onex's investing assets and when bridging back to our year-end hard NAV.The last component of our results to discuss is the asset management segment, which generated net earnings of $12 million, or $0.12 per share, in Q1. Asset management segment earnings are very similar to the contribution we historically reported via the Schedule of Fees and Expenses or, as we called it, the SOFE.But there are 2 key differences for me to point out. First, carried interest is reflected in segment earnings on an accrued or mark-to-market basis, consistent with the financial statements. We had previously reported carried interest on a cash basis in the SOFE. Second, as I discussed earlier, the asset management segment includes an allocation from the investing segment associated with the management of Onex's capital. Again, this allocation has no impact on total segment earnings but results in a measure of profitability for each segment that better aligns with how we manage.Turning to the asset management segment results this quarter, the most notable year-over-year change is the $20 million contribution from our PE managers. The improved results were largely attributable to an increase in management fees, with Q1 being the first full quarter since Onex Partners V began to accrue fees late last year.Now for those of you who prefer the historic method of measuring our asset manager with carried interest included on a cash basis, we provide adjusted asset management earnings in the supplemental materials available on our website. On this basis, the asset management segment contributed $0.55 per share in the quarter.That completes my comments. We'd now be happy to take questions.

[Operator]

[Operator Instructions] Our first question comes from the line of Geoff Kwan, with RBC Capital Markets.

[Geoffrey Kwan, Analyst]

I just wanted to go back to the OP IV $118 million net gain in Q1. Just wanted to see if you're able to provide some color on it, like how much, even ballpark, that Clarivate might have been of that because that's a potentially significant investment for you and how well it's turned out. But also, too, taking a look at some of the other investments in OP IV, there may have been some valuation declines in the quarter. So just wondering if you can help me understand the different puts and takes there.

[Christopher A. Govan, Chief Financial Officer]

Sure, Geoff. It's Chris Govan speaking. There is a little bit of color on that in the MD&A, and I can kind of repeat that here. The big driver was Clarivate, but it is important to note that given that that transaction had not closed, we did not mark Clarivate right up to the publicly traded price at March 31. So that, it was a driver of the value increase, but it's not marked at the public price at the end of Q1.And then there's lots of small puts and takes going in several directions, including some downs, one of which, as is stated in the MD&A, was Save-A-Lot in the quarter. But we're otherwise not going to go into dollar details or specifics on a company-by-company basis.

[Geoffrey Kwan, Analyst]

Well maybe to ask it another way is, on the Clarivate specifically, like on what would be the actual mark-to-market assuming the deal fully got closed, are you able to say, like, what percentage of that gain would have been reflected in the Q1 NAV?

[Christopher A. Govan, Chief Financial Officer]

No, I don't think we're going to go there, Geoff. It's at a discount to the publicly traded price, but we're not going to go into specifics.

[Geoffrey Kwan, Analyst]

Okay. Okay. On the, you were talking about there was looking at OP IV. So on Save-A-Lot, can you provide an update on what, I guess, has changed in the past quarter, obviously we've seen the numbers on the EBITDA, and if there's any covenant issues there? And then on the flip side, too, BBAM has been working out really well. If you could maybe give us an update as to what's been going on there.

[Matthew D. Ross, Managing Director]

It's Matt Ross speaking on Save-A-Lot. The company continues to execute its transformation plan, as we described in prior quarters, that requires a significant investment in the business, and that investment is ongoing. There's no covenant issues today. And we continue to work on progressing the transformation plan and position the business for growth over the long term.

[Geoffrey Kwan, Analyst]

Okay. And on BBAM.

[Seth Mitchell Mersky, Senior Managing Director]

This is Seth. I'll take a quick stab on BBAM. Nothing particularly unusual or specific to report in the quarter, and that's kind of the good news. What we're really happy about with BBAM is we've now pretty successfully diversified its capital pools so that it's less dependent on any one market for its success. So it can -- that allows it to buy a broader variety of aerospace platforms or airplanes and place them in a broader variety of capital pools. So our hope is that BBAM will be more consistent in the future.

[Geoffrey Kwan, Analyst]

Okay. And if I can sneak in one last question, and this is with the Gluskin deal now approved, I know, Gerry, you talked a little bit about what the strategy is with that. But maybe a little bit more in terms of the pace in terms of incorporating it into the Onex family in terms of on the cross-sell. And the reason I ask that was just Gluskin Sheff when they bought Blair Franklin a number of years ago they had talked about their strategy was to be very, very, very measured and very, kind of, surgical in terms of how they were going to go about doing the cross-sell with that type of customer base. And also, too, if there's been any initial customer feedback around the transaction.

[Gerald Wilfred Schwartz, Founder, Chairman, President & CEO]

It's Gerry. I'm going to turn that over to Seth, who led that transaction along with Anthony.

[Seth Mitchell Mersky, Senior Managing Director]

So I think we're going to take the Blair Franklin approach, as well, in that we want to be very careful how we cross-sell Onex's more illiquid products into the Gluskin Sheff client base. We've heard from their client base via the folks at Gluskin Sheff that there does exist a strong appetite for some of our private market products. But it being illiquid we have to make sure that everyone knows what they're doing and is going into it with a clear view. That said, the client base there we hope over time will come to appreciate the greater diversity that they'll have available to them through a combination with Onex.And just as importantly is something else Gerry mentioned in his initial comments. We didn't buy Gluskin just to get a dividend from it. We intend to reinvest in the business, both in capabilities as it relates to new products, people, technology platform. So we're really excited about all the possibilities in the combination of the 2 businesses.

[Operator]

Our next question comes from the line of Nick Priebe, with BMO Capital Markets.

[Nikolaus Priebe, Analyst]

I just wanted to start with a question going back to Save-A-Lot. I think in the remarks there, there was no covenant issues expected, but I'm just looking at the figures that were presented. Like, the net debt to EBITDA stands at a little over 11x based on the last reported numbers. So are you sort of sufficiently comfortable that those leverage ratios can be maintained as you work through a turnaround for that business? Or I guess put another way is, how much would EBITDA need to go down before you bump into covenant limitations?

[Matthew D. Ross, Managing Director]

Well the debt at Save-A-Lot is covenant-light. So there is no financial maintenance covenant to test in the term loan. There's no maturities until into the 2020s.

[Nikolaus Priebe, Analyst]

Got it. Got it. Okay. And then I was also wondering if perhaps you could shed a little light on Survitec, as well, which has seen a little bit of earnings pressure, as well, and just some of the trends there and what's going on, if you could provide a little bit of insight.

[Seth Mitchell Mersky, Senior Managing Director]

Sure. This is Seth again. Survitec has had a rough road. And what we've had to do there, frankly, is change out just about all of the senior management. Because the good news in Survitec is that it actually hasn't been buffeted about by negative market trends; but rather, it really struggled to effectively integrate both the Wilhelmsen acquisition and some of the prior acquisitions they had made.So we needed to really get a fresh perspective on the business. And some of you may know we brought in a new CEO, a new CFO and really actually changed management down a layer or so, as well. And we think that's going to hold the business in much better stead, going forward. And now we have to just go about fixing the issues that were created, and that's going to be a reasonably slow process. But we hope from here to start making steady progress. So no miracles, no magic bullets, but we hope that bit by bit you're going to start to see improvement.

[Nikolaus Priebe, Analyst]

Okay. Okay. Thanks for that. And then just one final one, and this just relates to the accounting change. Maybe this is one for Chris, but I was just hoping you could help clarify. If I'm looking at the investing segment investing capital schedule that closely mirrors the How We Are Invested Schedule that was previously reported, there's one $24 million charge on there related to other net liabilities. I was wondering if you could just help clarify what that relates to. The explanation in the notes wasn't all that clear to me. So I was just wondering if we should also be adjusting for that when we're bridging between the December 31 and the March 31 numbers.

[Christopher A. Govan, Chief Financial Officer]

Nick, thanks very much for the question, because I probably didn't do a great job in my comments on that bridge point. In terms of bridging, there's probably 3 things you should think about. One I mentioned, which is about a $50 million reduction for the now discount we put on all public companies in the portfolio for that purpose.Another piece is the $24 million you mentioned. Historically, as you know, our How We Are Invested Schedule was prepared on a cash basis. And so it didn't pick up various accruals. And at any given point in time in our investing segment we've got accruals. Generally speaking, about half that amount relates to fund expenses. So think of it as deal investigation expenses and other various fund expenses that have been incurred at the fund level but haven't been called from investors, including Onex. So that's about half that amount. The other half is a bunch of odds and sods relating to typically escrows and indemnities, small amounts for various businesses we've already exited.And then the last point I should make on the bridge, and this has been a point every year in Q1 and I should have mentioned it. Again, because the schedule historically was on a cash basis and all of our incentive compensation across our various platforms is paid in Q1, you have a significant one-time drawdown in terms of cash in Q1. And this year that amount was about $70 million. So when you add it all up, that's almost $150 million that you should really not include if you're thinking about the performance of our investment assets. I really think the investment segment earnings are a clear indication of the performance of the assets in Q1. But you need to think about those cash amounts when bridging between the How We Are Invested and the end of Q1 assets.

[Operator]

[Operator Instructions] Our next question comes from the line of Paul Holden, with CIBC.

[Paul David Holden]

I want to ask a couple of questions on the Convex investment, to start. And the reason for that is we don't see Onex make a lot of, let's call it, greenfield type investments. BBAM would have been one good example. But not many. So when you're doing greenfield investments, how do you think about things like hurdle rate and investment time horizon? At least my impression would be it's probably a longer-duration investment. So is that fair?

[Todd Clegg, Managing Director]

It's Todd Clegg, and I'll talk about our investment in Convex. Although we are starting a new insurance company, we really don't think about it like a typical de novo investment. I actually think about it more like a carve-out. We took a really experienced team that had been one of the leading teams in the specialty insurance market for the last 30 years and instead of doing what they used to do for one company we've moved them over to our company, supported them with new capital, and providing new functions and systems around them, but largely have asked them to continue doing the exact same thing they've been doing for the last 30 years.So we're not trying to create any new technology or break any new ground. And frankly, we think not having the legacy balance sheet issues that we expect some P&C competitors to have or the legacy systems of lots of investment in IT over many years and complicated by mergers will actually prove to be an advantage for these guys.And then the second piece is that when we're investing the $1.6 billion that we funded to launch the business, that $1.6 billion goes to the balance sheet and earns investment income starting on Day One. So unlike a lot of what you'd call a “startup” we expect this business to be cash flow positive and earnings positive on Day One because the earnings from the investment income, the investment portfolio, will more than offset the expenses utilized to get the business running.So we really don't think about it as having a lot of the risk characteristics of a typical startup. And therefore, I think we're comfortable underwriting the business like a more traditional private equity business and more traditional private equity return profile.

[Robert M. Le Blanc, Senior Managing Director]

And I just want to add one thing. This is Bobby. To answer your question, specifically, this will be, this should be a longer-term hold. You won't reach a normalized ROE in this business against the kind of capital that we raised for a couple of years. But once you do, the business should generate really attractive combined ratios.

[Paul David Holden]

Thanks. That's helpful. And then just a couple of more follow-ups on Convex. So is there opportunity to use some of your operating companies to help it grow faster, whether that's RSG and/or York? And also, is there an opportunity to invest some of that float using Gluskin Sheff mandates?

[Robert M. Le Blanc, Senior Managing Director]

We haven't gotten that far in the Gluskin Sheff piece of it, putting investments in it. This is more of a liability play than it is an asset play. In terms of Ryan Specialty, Ryan Specialty is one of the largest brokers in the specialty space. Pat Ryan and Steven Catlin have been friends for years, and I would expect us to be doing a lot of business with Ryan Specialty.

[Paul David Holden]

Got it. Okay. Thank you for that. So you're clearly back in the market with CLOs, which is a positive sign. Has anything changed with the dynamic with the investors in the CLOs given there's been so much noise around that product, particularly end of '18? Like, has pricing changed at all? Are they doing more due diligence? Requires more disclosure? Anything of that nature?

[Gerald Wilfred Schwartz, Founder, Chairman, President & CEO]

As you may know, the CLO market and the spreads on the various tranches of the liability structures change all the time. It is a true dynamic market. The market was difficult for issuance for much of the first quarter, which I think is a testament to the business that Mike Gelblat, Paul Travers and the team have built for us. We've got a great stable of liability investors, AAA on down, and that allows us to be a little more consistent through many difficult markets. And that will continue to be the case, going forward.I think Mike Gelblatt is on the line. I don't know if you want to add anything, Mike, on specific market movements that are of note.

[Michael Jay Gelblat]

No, I think the way you summed it up is correct. We have many repeat investors in this CLO plus some new ones. So that's what we're always trying to do, is increase the stable of investors. But I would say that in terms of diligence and those type of items, we regularly go through diligence with every one of the investors and we didn't see any change this time around.

[Paul David Holden]

Okay. Thank you. Final question for me, with respect to Gluskin Sheff, and hopefully you can answer it even though the deal hasn't closed. One of the key questions I think shareholders of Onex are going to be asking is what's the plan to deal with the redemption situation at Gluskin Sheff, particularly given that it was worse in the most recent quarter. And I know you've given us a lot of things to think about in terms of how you can boost gross sales, but anything you can comment on just in terms of the actual redemptions themselves?

[Seth Mitchell Mersky, Senior Managing Director]

We don't own the business yet. So it'd be a little premature and presumptuous of me to comment on their performance prior to our acquisition. But again as Gerry said in the beginning, we intend to invest a fair bit of money in people, process, platforms, the whole nine yards and with the specific intent to improving their appeal to both existing and new clients. So that, to us, is right in the bullseye of the opportunity.

[Operator]

Our next question comes from the line of Scott Chan, with Canaccord Genuity.

[Scott Chan]

I just wanted to start with U.K., Parkdean resorts. Just to kind of track the financials that you guys provide. The trend has been lower. Just wondering if you could provide an update on that company and kind of the strategy that is currently going on there.

[Robert M. Le Blanc, Senior Managing Director]

It's Bobby again. So we've recently hired a new CEO, Steve Richards, for Parkdean. The results so far year-to-date against both prior year and budget are doing well. It's early in the year. As you know, in that particular business we make most of our money during the holiday season, which really kicks off at Easter. We did have a strong Easter, but we just need to wait until the year goes on to make sure that holds for the rest of the year.But the places where we had problems last year in the controllable things like food and beverage, cleaning services, things that on the margin side that we should be able to control, we are controlling better so far this year. Steve starts next week, but he is already up to speed.

[Scott Chan]

Good. And maybe just lastly for Chris, do you show an updated holdings of Onex's shares on your publicly traded companies? I just haven't been able to kind of see it as of yet.

[Christopher A. Govan, Chief Financial Officer]

Scott, it's interesting. That was one thing that I thought of on the GO train ride in this morning. We are going to be providing that on our website. There's been no changes since Q4. That information will be available going forward on a continuous basis. It's just not up yet.

[Operator]

That concludes our question-and-answer session. I will now turn the conference back to Gerry Schwartz.

[Gerald Wilfred Schwartz, Founder, Chairman, President & CEO]

Thank you, everybody. We really appreciate your support and your participation in this call. If you have any questions that you'd like to ask additionally or that arise over the next coming days, please feel free to call Emilie at your convenience. We look forward to speaking with you all again next quarter. And that's it.

[Operator]

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program, and you may now disconnect. Everyone, have a great day.