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To realise value through exiting the investments over time, the Company invests in early (but not seed) or later stage investments in unquoted fintech businesses.
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Entering the digital assets space seems to have been a disaster for AUG. Just noticed the writedown of the investment of Tesseract. Initial investment of £7.3m in June 2021 and written down by £6.3m - that is some quite fantastic value destruction for shareholders. Wonder if this is reflected in the “performance fee”. Lol.
Still very positive on the majority of AUG top 10 holdings. Hope to see some value creating events over the next 12 months. Can’t see valuation multiples compressing too much more from here so if invested can continue turnover growth we should see some very positive increases in carrying value.
I despair these days that offence is taken at the least opportunity. Please filter me as I am sure you will find that I am abrasive and cantankerous. As you have found my post patronising, I hope you will accept that it was not intended so to be. The inbalance in fee structure is, I suggest because performance is based on the NAV and comes in at 1.5% approx. I did not participate in the IPO and fee structure has not been a criteria of interest to me in my investment decisions.
The NAV has risen but for the same period, the share price has fallen. An advantage of this is to allow the manager to buy shares, hold them in treasury and sell them at better prices. This has been done with monotonous regularity.
Not really sure where this is going, but over the greater part of the last 50 years, when I am uncomfortable with a holding, it is best sold. You seem uncomfortable with the matter of fees and if that metric determines your decisions, then it has to be a factor in determining whether this is an investment for you. But, hey, I am not so patronising that I cannot accept that you were quite right to chide me and for that, I apologise.
There will be no further comment by me to this board.
A bit patronising and assumptive , whilst I understand you may have a holding in AUGM and then get defensive, there is no need to respond like that.
I have been holding investment trusts for over 10 years and understand how they work thanks.
A management fee usually ranges from 0.4% to 3%, whilst AUGM's fee has been over 6%, that is very high and a serious inhibitor on the share price.
Steeltrader9, with respect, you do not appear to understand how Investment Trusts (IT) work or the structure of IT’s. Probably best that you do sell though this is, of course, not advice.
There is an article in Todays Times on AUGM. Comments from the CEO and running through the highlights of yesterdays results. Good publicity.
It would have been an amazing result if it were not for the MASSIVE PERFORMANCE FEE! A whopping 16,217,000 worth 9,2p NAV per share and almost wiping out gains!
I am going to sell when the share price ticks up as for me this performance fee is far too big and will inhibit growth, it is also probably a major reason behind the massive discount to NAV.
I have dipped a toe in for elder son with a purchase that went through a few moments ago. Todays news should see the revival of interest in this IT.
Agricores comment that the share price is bonkers is spot on. A 53% discount to NAV of which £50 million is in cash is completely ridiculous. Investment trusts like this do tend to trade at fairly large discounts but it’s well overdone here particularly in the light of this comment from the Chairman:
“ Your Company has now successfully exited five portfolio investments, all of which have been at or above the last reported holding value. This should provide investors with comfort that our valuations process is rigorous and corroborates the discipline our Portfolio Manager has exercised when evaluating new investments and their reporting on the portfolio”
He is specifically addressing the discount point. Investors may apply a discount because they are sceptical about the values stated for unlisted investments. The fact that all five disposals have been at or higher than stated values demonstrates the large discount to NAV is unjustifiable as does £50 million cash.
From today’s RNS:
“ Neil England, Chairman of Augmentum Fintech plc commented:“Despite challenging markets, the bulk of your Company’s investments have performed well and I am pleased to report that they made a positive contribution to the Company’s NAV per share after performance fee, which increased by 3.7p to 158.9p.Your Company has now successfully exited five portfolio investments, all of which have been at or above the last reported holding value. This should provide investors with comfort that our valuations process is rigorous and corroborates the discipline our Portfolio Manager has exercised when evaluating new investments and their reporting on the portfolio.We maintained our investment discipline over the last year and, with our strong cash reserves (£38.5 million at 31 March 2023, £50.0 million at 30 June 2023) we are well placed both to take advantage of new opportunities and to reinforce our appeal as a supportive investor.Your Board believes that the Company will see a closing of the discount at which its shares trade over time and, with the underlying growth of the portfolio generally being very strong, expects that patient shareholders will be well rewarded.”
Tim Levene, CEO of Augmentum Fintech Management Limited commented:“Our 10 highest value holdings have seen revenue growth at an impressive average of 117% year-on-year and raised over US$300 million in capital during a challenging macroeconomic and fundraising environment. Despite an increased focus from venture investors on companies displaying a clear path to profitability and reducing cash burn, the growth in our portfolio through the cycle reflects the quality of many of our companies and the unabated advance of digital transformation in the financial services sector.We are seeing a material increase in the number of compelling investment opportunities at more pragmatic valuations and expect that to continue into 2024. Our fintech specialism and strong balance sheet position leave us well positioned to take advantage of more favourable investment conditions.”
A net asset growth of 2.4% when inflation is just under 9% is not a stellar performance, although the discount in the share price to the NAV clearly provides a good factor of safety.
NAV 158p of which 29.3p cash. Stripping that out leave 129.7p of assets which at a market price of 98p (less 29.3p cash) of 68.7p or a net 53% discount to NAV
+117% revenue growth in top 10 holdings.
Average cash runway 29 months in top 10 holdings.
Zero debt. £50m available to support holdings.
Current share price is bonkers.
“Augmentum Fintech plc
(the "Company")
Irrevocable Share Repurchase Programme
At the Company's last annual general meeting on 14 September 2022 (the "AGM"),
the Company's shareholders granted the Company a general buy back authority of
up to 14.99% of the Company's issued ordinary share capital.
The Company has appointed its joint brokers Peel Hunt LLP and Singer Capital
Markets Securities Limited to manage an irrevocable programme (the "Irrevocable
Buy Back Programme") to buy back ordinary shares within certain pre-set
parameters. Any ordinary shares purchased by the Company will be held in
treasury. The Irrevocable Buy Back Programme will commence today and will run
until publication of the Company's Annual Report and Accounts for the twelve
months ended 31 March 2023.
Any shares purchased in the Irrevocable Buy Back Programme will count towards
the Company's general buy back authority of 14.99% of the Company's issued
ordinary share capital, as approved at the Company's AGM. ‘
Let’s see if this can help to reduce the large discount to NAV.
https://www.lse.co.uk/news/in-brief-augmentum-fintech-notes-natwest-purchase-of-stake-in-cushon-dx6vqi0qpyg8pok.html
A little something to allow analysts to dust off their slide rules
Doubled my holding today in anticipation of a better year ahead
Looks like Habito are struggling. Looking to raise money and see existing valuation reduced to nominal single-digit million valuation. Don’t see much negative read through for AUG as prop-tech (including Wayhome) represents 1% of NAV. Wonder whether AUG should throw more money at this or walk away.
https://news.sky.com/story/mortgage-start-up-habito-in-talks-to-salvage-future-at-distressed-valuation-12666186
Well there you go then, re-rate time.
i was missing something - *up to* 15% repurchase.
not sure as no mention of further buy backs... though from my calculations they are way off the "15% irrevocable buyback" which commenced on 23/05 and is due to run until June 30th...
i may be missing something but seems they've only bought back 425k shares since 23/05.
Why the bounce yesterday?
Looks like the ii transaction has closed. Just had an email from ii that they’ve become part of abrdn. Looking forward to results in a few weeks.
hmmmmm.... not much blue today. Still, am not complaining.
Dispiriting as it is to see paper wealth evaporating, case of sweating things out.
I appreciate that some don't like it but nonetheless interesting to note that AUGM continues buying its own shares!
A rather muted response from the market to quite a substantial uplift in the value of Grover. Looking forward to the next trading update/results. The sale of ii means a significant proportion of the NAV is backed up by cash now.
Yes, I did not read carefully. on the go. it is IRR not rate of return... I was wrong.