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Follow link:-
https://www.lse.co.uk/rns/DSM/net-asset-values-2xg86agbd0r2hrz.html
Thank you for this ripley94.
Reads to me like utter incompetence; mostly failure of dsm to realise promised financial performance improvement, for fund investors, in those 'value' assets dsm selected to invest in. No real world delivery experience it's been down hill from the get go....£1. They seem now to seek a way out and half way out the door already.
Downing Strate 9th out of 21 small cap funds .
Rockwood Strategic Ord is number one and much more impressive.
How much of the drop accounts for the large special dividend
Other than shares controlled by Milkwood Capital, a new investor opposed to the managed wind-down of DSM, less than 0.28% of the votes cast voted against Resolution 1. Given that the votes cast in favour of Resolution 1 shows continued support from shareholders for the managed wind-down of the Company and the distribution of cash proceeds, the Board has decided today to declare a special dividend of 30p per share, equivalent to £13.98m, with a further special dividend of at least £3.7m (which would equate to 8 pence per share) expected to be made by 30 June 2024.
Chairman Hugh Aldous commented: "As a Board, we are committed to doing the right thing for all our shareholders. We believe that the B Share Scheme offered a tax-efficient and cost-effective way of giving effect to the wishes as overwhelmingly expressed by our shareholders on 28 February. However, given today's result and the fact that our preferred proposal has been blocked by a new shareholder with an agenda of its own, we believe that the correct thing to do is to press ahead with a dividend to shareholders which, while not our preferred route, has the merit of fulfilling the mandate we were given to wind-down the Company and return cash proceeds forthwith."
On 11 April, the shares of DSM went ex-dividend – for those shareholders on the register at that date they will receive a dividend of c.30p on or around 26 April 2024.
Top ten of there holdings.
Real Good Food 10% Loan Notes 8.32%
Flowtech Fluidpower plc Ordinary 50p 8.29%
Hargreaves Services plc Ord GBP0.01 8.28%
Centaur Media plc Ordinary 10p 7.47%
Fireangel Safety Technology Plc 6.35%
Volex Plc Ordinary 25p Shares 6.26%
Ramsdens Holdings Plc Ord GBP0.01 6.00%
Digitalbox Plc 5.83%
Synectics Plc 5.45%
Real Good Food 12% Loan Notes 4.64%
Price/book (mrq) 0.84 mrq = Most-recent quarter
From this site
Shares in Issue 46.61m
Market Cap. £14.45m
Market Size 3,000
PE Ratio -4.111406
Earnings -7.54
Dividend 0.00
Yield 0.00%
Bought these 15/11/17 for 98p
19/3/19 had fell all the way to 36p
10/10/21 5 year high 84p
Today 50% fall to 31p
News from last week.
After the news following the 3rd from the 4th April share went back to the steady 61p until today.
Downing Strategic wind down blocked by new shareholder Milkwood
Wed, 03rd Apr 2024 17:31 Alliance News
(Alliance News) - Downing Strategic Micro-Cap Investment Trust PLC on Wednesday said its proposed wind-down was voted down due to a new shareholder casting against it, while declaring a new dividend.
The London-based investment trust said its resolution 1 at the general meeting, regarding a managed wind down, received only about 57% votes in favour, falling short of the required 75%.
In March, Milkwood Capital Ltd, a long-term value-oriented fund manager based in Windsor, England, said it recently bought a near 17% stake in the company through the Milkwood Fund.
Milkwood back then said it believed that the UK equity market was materially undervalued, with this undervaluation even more pronounced in smaller-sized companies, which is where Downing's portfolio is invested. It believes that Downing provides an excellent vehicle to explore this opportunity.
"Other than shares controlled by Milkwood Capital Ltd, a new investor opposed to the managed wind-down of the company, less than 0.28% of the votes cast voted against resolution 1," Downing Strategic noted.
Meanwhile, Downing declared a special dividend of 30 pence per share, with a further special dividend of around 8p per share to be made by the end of June.
Downing Chair Hugh Aldous said: "Given today's result and the fact that our preferred proposal has been blocked by a new shareholder with an agenda of its own, we believe that the correct thing to do is to press ahead with a dividend to shareholders which, while not our preferred route, has the merit of fulfilling the mandate we were given to wind-down the trust and return cash proceeds forthwith."
Downing shares closed 0.9% lower at 57.50 pence each on Wednesday in London.
Why the sudden drop; is there an event that's caused this ?
At least that is 50% less stamp duty on a top up now. It may recover more, due to the offer on CAU.
Indeed! Another investment doing very well
Centaur are in takeover talks. The stock closed up 25%.
Milkwood voted down the B share scheme. DSM opted for dividends: of 30 pence per share, equivalent to £13.98 million, with a further special dividend of at least £3.7 million (which would equate to 8 pence per share) expected to be made by 30 June 2024. The First Special Dividend will be paid on 26 April 2024 to Shareholders on the Company's register of members at close of business on 12 April 2024. The Company's shares will go ex-dividend on 11 April 2024.
The bit that was interesting for me is this bit:
Following the payment of the Special Dividends, the Board intends to consult with as many Shareholders as possible in respect of the future of the Company.
I think Milkwood built this stake, after some of the holdings were already sold. So which of the remaining holdings might they be interested in. Assuming the dividend was expected, then where is the upside for them.
FLO Having another good day. What a nice set up FLO was. I missed that.
Flowtech Fluidpower had a good end to the week at 90-91p.
5.1M treasury shares cancelled (circa 10%) total share count now 46.6M.
This is good if the fund were to continue.
General meeting tomorrow...
I believe Fire Angel has valuable technology, but if the legal case succeeds it looks like some will have tjeopportunity to acquire it for a bargain price.
I believe the current buyer is getting it cheap so the current buyer may wait in the wings to acquire the company if the legal case fails or buy out from administration for an even cheaper price if it succeeds.
It's possible there will be a flurry of DSM sells on Tuesday by dismayed PI's.
yes the notice came out late last night. a 7.2m legal claim (assuming gbp as it is held in uk), which curiously dates to a period from 2011 to 2019. worst case, i would say the holding is toast. a loss of about £1.3m based on price had the sale gone through. therefore a reduction of about 4.3% of the funds nav.
had the secretary of state not stepped in, this sale would have long gone through by now. one wonders why the legal action has been bought at this point in time, nearly 5 months after an offer was agreed. why didnt the claimant wait for the sale to go through and sue the private entity? i would expect the buyer to walk away now. if the claim is successful, then the company will surly be would up (as they don't have the money), so who would stand to benefit from this claim being successful. is it a method to push this in to administration, then to buy it.
a final point, i am not clear on what bearing the 'acceptance condition' from the buyer would now have? i think they essentially got 6% of share holders to agree to a deal in advance (back in december). it is possible the purchase of these shares will have to be honoured by the buyer. so my question now is did downing agree to sell any of their shares in this offer, and what does it mean? (reading that fa. chat board, it seems those who agreed cannot now sell). i dont fully understand the mechanics of the sale over there.
one final point, the fa. share price dropped by 40%, but on £6000 worth of sells. it will be interesting to see the next nav announcement to see what damage has been done. the discount to nav here had already widened back to 10%, i expect mainly due to milkwood. therefore, if the fund continues, a loss of 4.3% might not be so catastrophic over time. however, no loss is ever a good thing. i very nearly added to my position here yesterday. glad i didn't now, but will watch for weakness and may add if the discount becomes significant. i think milkwood, makes this a more interesting options, though of co**** usually retail investors end up getting rinsed, so will bear that in mind. a decent offer for eqls could help rectify the situation.
snippet from relevant rns over at fa.:
in accordance with rule 17 of the code, ise announces that, as at 6.00 pm on 30 november 2023 (being the last business day prior to the date of this announcement), ise had received valid acceptances of the offer in respect of 18,647,361 fireangel shares, representing approximately 6.16 per cent. of the issued ordinary share capital of fireangel, which ise may count towards the satisfaction of the acceptance condition.
i have not really followed fire angle, (i am aware that broadly it has been a poor show). however, i am a little confused ab
Fire Angel legal claim :-
https://www.lse.co.uk/rns/FA./statement-re-legal-claim-vg3ziygsn478x6s.html
Norma Broadbent impresses with FY results, the stock up 30% (last known 2% of NAV here).
Richard Grithis is buying Centaur Media Plc, he is up to 4.4%.
Journeo plc have received another order.
The Works is delisting from MM and moving to AIM (which should save costs for the company).
SPEC looks the only bad stock currently, making new lows, though reaching strong support.
Now up to 28.02% an increase of 12% (all owned directly). Where has this stock come from?
This is the last snapshot I can find of the register, not sure how correct this might be (WRT downing themselves).
Have Milkwood cleared out Premier Miton?
Note the Foresight group acquired their stake when they acquired some downing VCT funds, they could possibly have offloaded, although their remit, would suggest they too would prefer the fund continues.
I would say, regards any vote, that it appears that Downing themselves have at least 11% of the vote, but Milkwood now have 27%. Very interesting.
Foresight Group LLP - 10,388,813 22.29 % 8 M p
Milkwood Capital Ltd - 7,780,412 16.69 % 6 M p
Premier Fund Managers Ltd. - 5,220,253 11.20 % 4 M p
Downing Strategic Micro-Cap Investment Trust Plc - 5,025,819 10.78 % 4 M p
Downing LLP - 4,291,022 9.207 % 3 M p
Asset Value Investors Ltd. - 3,300,000 7.080 % 3 M p
Rath Dhu Ltd. (Isle of Man) - 2,220,000 4.763 % 2 M p
First Equity Ltd. - 1,500,000 3.218 % 1 M p
Downing Ventures - 743,750 1.596 % 583 301 p
Wesleyan Unit Trust Managers Ltd. - 325,000 0.6973 % 254 888 p
So it seems that Milkwood capital are building a large stake here to vote against the resolution to return capital. (See news articles). Then it seems that Downing have tried to increase the amount of capital that will be returned, perhaps to sway some voters. "level of cash within the Company's portfolio against the Company's NAV as at 6 March 2024 (being the NAV referred to throughout the Circular) has increased to over 40%." Proposing return of 26p on 4th April.
Milkwood have declared with about 17% so far, I think they will need to buy a few more to get this over the line, unless they have found another party who wants to remain invested. Crazy that the SP did not increase during this time.
"The issue and redemption of B shares is subject to the passing of the resolutions to be moved at the General Meeting of the Company being held on 3 April 2024, which together seek to approve the implementation of B shares schemes by the Company."
If Milkwood manage to stop the return of capital, then this money will need to be re-invested presumably, but in to what? DSM could end up with even more cash if and when Fire angle sale goes through. I for one don't mind either scenario. I agree that funds like this are heavily discounted, the market is heavily discounted, and more so small caps. Therefore the potential return if this fund continues should be much more in 24 months. I was planning to purchase stocks in the fund, with the capital returned anyway, so don't mind holding on. Perhaps the last few months have allowed a re-think of the portfolio, and potentially a chance to start over on a few new positions. I for one, like these concentrated portfolios, of 10 or so holdings. Will Milkwood have any influence? That would be interesting. Milkwood were pressuring Foxtons to sell up last year.
Up 8% as another interested party appears.
The DSM portfolio was last reported as consisting of over 5% EQLS. Should boost the NAV.
https://news.sky.com/story/ex-chancellor-hammonds-fintech-railsr-eyes-merger-of-equals-13098444
The recent TR1 was good timing, how fortunate for the holder.
We have a notifiable stake of 8% in the trust now from Milkwood Capital.
We also have some action over at NBB, where downing have sold 6.65% of NBB, and it looks like Canaccord have picked it up. No change to share price so this serves as an exit at current NAV, bearing in mind how iliquid that one is...not bad.
The trade has printed today (From Friday) 4,000,000 at 7.5p , £300k.
SNX now up 8% this morning after being tipped in the Mail on Sunday. I Refuse to open the link but take City wires word for it. SNX is the largest holding of DSM, should bode well for tomorrows NAV declaration. All other holdings no major moves.
I should have said, the Kelso group is publicly traded:
https://www.lse.co.uk/SharePrice.html?shareprice=KLSO&share=Kelso-Grp-Hldg
From the daily mail.
“There was some love shown towards The Works after Kelso Group, which invests in small and mid-cap British companies such as THG (down 2.1 per cent, or 1.42p, to 67.28p) and Angling Direct (flat at 39p), bought shares in the arts and crafts firm on Valentine's Day.
Might be worth checking them out. Maybe another video lol.