The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Mentioned on other site about JPM but all I could find is the Barclays 50p target from 6th Feb this year nothing else recent.
Upgrade of DGI9? Link please ... I'm waiting for the extra £20 m to land .... should have landed already but 26th is the other deadline.
Has anyone seen the JPM upgrade today
I'm hoping for a lot more than this given there is £3.6BN so £2+/ DGi9 share of retained earnings in Arqiva?
Never mind the fact that Arqiva is a going concern that is throwing off £300M+ in cash per annum, on £800m of net assets!
Seizing effective control of Arqiva pre-float should be the no 1 priority of the board.
or have I misunderstood this?!
“ 51.76%? A majority shareholder” … No .. refers to Economic interest. DGI9 is a 48% shareholder.
As I wrote below, when the £20 million deferred payment lands in the bank account, expect another few pence rise.
I’m expecting a 50p a share return with Arqiva IPO, up to 20p a share from performance targets from sold assets, but not banking on it, and whatever cash is left over from asset sales having paid off debt and management fees.
We will see.
This is exactly the transparency I want to see. What Dgi9 needs now is - pretty obviously - more buyers. Buyers will come in when there is clear and evidenced upside potential through cash distributions - i.e income from the portfolio NOT any analysis over 'NAV'. Unlocking the value in Arqiva about the largest potential catalyst to shareholder value, we're hearing NOTHING about it - how exactly do they imagine the shareprice to react and the market price to NAV to narrow.
51.76%? A majority shareholder, so how are D9 using their power? Zero evidence to date! Just no transparency about this investment and how or when it can be realised! Need to be a patient investor. Meantime IM and other fees etc pile up at small shareholders ‘ expense. No wonder the big boys have sold out! I just wish I had confidence in the DG9 board, if there are still directors there! Wishful thinking methinks.
Your so called “managers” in the current market on average have around a 40-65% chance of beating their benchmarks and is why the sector is in decline … the managers in my view, would do better trading their benchmarks and not bothering with stock picking from the benchmarks…. While the advantage for folk like us, is picking up assets below NAV and hoping for a NAV sale of assets.
Outside of the above, with the time taken to find a good manager … might just as well take Buffet’s advice and pick an index on leverage.
"carefully chosen words"
Too true. And I've no doubt the scenario is more complex that I am aware of / perhaps can even comprehend.
Which is why I employ 'experts' as managers of my assets!
I would have thought that the alleged Macquarie situation would be an ideal time to force the issue - bizarre that the IPO price is a secondary issue to the IPO itself as a restructure....
On the plus side, £20 million should be landing in the DGI9 bank account next week adding a couple of pence to the DGI9 shareprice.
If Arqiva pays a dividend? Carefully chosen words … Arqiva doesn’t pay a dividend but rather shifts operating profits into reserves, via subsidiaries and as far as I can gather has always done so. I can see why you would plumb for a restructure but DGI9 are presumably correct in their response - again carefully worded. The question that should have been asked, is why Arqiva operating profits are historically moved to reserves, how those reserve assets are held, and how DGI9 can/could unlock those profits to pay DGI9 shareholders.
As I wrote below, I suspect DGI9 thought it could unlock those profits, then found out to shareholder costs that it couldn’t - hence the cash flow problem for the DGI9 company. Why at this point is immaterial but equally explains why Arqiva as an asset will take longer to realise.
That realisation, will probably be an IPO leading to your restructure. The dancing around wording is not a good look and my half glass empty scenario.
""Regarding your email received 28 March, if the VLN has been fully repaid and Arqiva pays a dividend, D9 will receive its pro rata portion of that dividend (51.76% based on D9’s current economic interest). Following your email dated 30 March, we would like to clarify the mechanics around the VLN and dividends. You state that D9 cannot receive dividends before a corporate restructuring or IPO, but this is not correct: until the VLN has been repaid, D9 still has limited rights to Arqiva’s dividends. Specifically, if Arqiva pays dividends before October 2026, D9’s pro rata share must first be used to repay any outstanding accrued VLN interest; once the accrued interest has been repaid, D9 retains the remainder. If Arqiva pays dividends after October 2026, D9’s pro rata share must first be used to repay the total outstanding VLN amount (principal + accrued interest); once the total amount has been repaid, D9 receives the remainder. For context, as of 30 June 2023, the VLN consisted of £163m principal + £7m accrued interest.""
I have put it to them that this is semantics, pure and simple. The board this the only one that can agree to distributions, irrespective of VLN capital paid off, interest etc. Bizarre strategy to he held hostage like this as a dividend focused trust but there you go. Ive put it to Charlotte in the strongest terms: the only reasonanle strategy to Triple point is to agree a positions with other shareholders, and force a restructure.
... and I picked up on exactly the same phrasiology from the reports. Nothing "pedantic" about it ... it's good detective work and attention to (mis) detail.
Good luck with your request duncyboy - the half glass full account is that DGI9 hoped to be able to access cash flows when buying Arqiva and subsequently found out that it could not. The alternative half glass empty account in respect of DGI9 reporting is probably best left unwritten until the assets are sold off. But I have pointed out the half glass empty interpretation to DGI9 as of a couple of weeks ago, but not my problem since I did not buy in until December 2023.
Im reading on other boards that Macquiarie want to sell their stake in Arqiva....if true why can't DGi9 and them assume effective control of the company with a combined 73% shareholding, insist on dividends, and push towards a float and a crystaliization of these supposed enomormous reserves to realise the value?!
I am no lawyer. But I am a pedant. And this 'sounds' very much to me that DGi9 is being sold as having the rights to Arquiva's cashflows. This is direct from the June 2023 update, and I have asked the chair for clarification on this: "Accrued interest must be repaid in full before distributions can be made to the Group. After the fourth anniversary of the VLN, the Group can only receive distributions if the entirety of the VLN principal and any rolled up interest has been repaid in full. The Company expects Arqiva’s future cashflows to cover D9’s VLN interest payments.""
On reflection, I'm thinking the Arqiva buy came up and it was just too good an offer to refuse. The Arqiva deal bust DGI9 in terms of cash flow going forwards - true - but the intrinsic value here is too good to miss IMO and now with Verne Global sold off I'm with Old Bloke in his valuations.
Yes wonderfully put! This has much better described what I mean, there is serious value even in half the business fire sale / liquidation scenario...
“ there must be some value in the masts positioning etc ‘ Well yes … these are all listed in Arqiva Global annual reports. Let them rust …. to get access to the reserves.
Broadcasting will give Arqiva ripe revenues for the next 10 years and more. Old Bloke wasn’t aware of the assets locked up in reserves …. when I chatted to him a couple of weeks ago … and the market still doesn’t understand as far as I can gather than the £163 million VLN bought a 50% economic interest in Arqiva shareholder loans, that themselves are for want of a better phrase secured on the assets tied to subsidiary reserves.
There is £3.6 billion of historical operating profits locked up in Arqiva reserves but none of this appears on balance sheets because Arqiva is a private company.
To be fair, and this is a total punt, there must be some value in the masts positioning etc for other forms of communications even if it's not what Acquiva might currently offer....
Just very frustrating looking a comparable metering businesses being taken private at x20 where (according to Oak bloke) Arquiva smart metering business has more market share etc - and it's value is trapped in this structure. I wonder if a build up and float could be on the cards, when the business is more established and the timing's right. One lives in hope etc.
As I stated below DB … so correct. Bear in mind Arqiva pulled it’s IPO in 2017, and sold off £2 bn of assets in 2019 or so to Cellnet to pay off shareholder loans etc.
Arqiva makes its money from broadcasting on decline but is growing its IoT business.
I’m very rusty on broadcasting, but I use broadcast to save IP bandwidth at home, while broadcast frequencies are relatively low hence large rooftop ariels from memory so I’m not sure if these frequencies will be able to switch over to streaming on hand held devices … someone more up to speed can fill in whether feasible … but either way I think broadcasting will stay up to 2040 at leadt.
To me this suggests these reserves are explicitly tied to equity, the issue is how they are realised into cash in any form - and into DGi9's share price. Conceivably, this requires an IPO if we cannot restructure the company from a largest shareholder but minority position and take distributions. Penny for any other Arquiva large shareholder's thoughts who might want an IPO to realise some cash...and when?!
Arqiva Limited June 2023 results:
"Dividends and transfers to reserves
The Directors’ of the Company have not recommended a dividend in the year (2022: nil).
The profit for the year of £342.0m (2022: profit of £246.8m) was transferred to reserves."
Retained earnings tied to equity in Arqiva Limited:
Retained earnings £3,180.8 Million.
for which an IOU as a shareholder loan note is issued to equity holders that DGI9 has around 50% of.