Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
To generate long-term shareholders returns, mainly in the form of capital growth through a focused portfolio of UK micro-cap investments comprising of quoted and unquoted holdings.
Find out MoreLondon South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
I think there is value here and not simply the discount to current NAV.
But it will take time to play through and advisory and investment fees will eat away at shareholder value.
I can understand some people thinking there is better things to do with their money, but as a small part of an overall exposure, perhaps this has slightly different characteristics on the risk/return profile.
Real Good Food is not totally out of the woods but should be good for the Loan Notes owed, which is most of the DSM exposure. Equity value in Real Good Food looks flaky at best.
Just getting up to speed on this one - on the face of it a 50% return over the next 18-24 months seems attractive, but the portfolio seems a very mixed bag.
Is there really any value to their investments in Real Good Food for example? Have to say i'm a bit sceptical.
There's no doubt that UK small caps are as cheap as i can remember, but there do seem to be a fair few own goals here as you say.
Anyone any views as to how likely a 50% upside is in reality?
Thankfully.
I love the way they blame the macro conditions for the whole outcome.
Whilst undoubtedly difficult, there is no escaping that the highly lauded managers (who may well have great intentions) chose to invest in some very poor performers, e.g. Fire Angel, The Works (most recently), Real Good Food and others. There is little acknowledgement of the things they got wrong at micro level or that they have effectively been paid a handsome fee to lose other people's money since launch.
Hopefully this will not drag on too long, as their undeserved investment fees will act as a serious drag once the Trust starts shrinking itself. We cannot wait for The Works to turn itself around now (i.e. the latest poor choice to land itself into serious loss of value).
Simon Thompson of Investors chronicle will probably do an update.......given the recent great news......totally undervalued....bet to nothing....
Great news today puts a floor to the share price that means value will be realised shortly.....bet to nothing...in my opinion.....
Tactus has acquired BIST Group ie B2B IT hardware provider Business IT Support Team (BIST) :-
HTtps://www.thebusinessdesk.com/yorkshire/news/2081144-tactus-completes-third-acquisition-of-the-year-with-bist-group-purchase
Simon Thompson has published an update on his 2021 portfolio share tip of Downing Strategic Micro Cap @ 79.5p.
He doesn't give a target but believes the current 16% discount to NAV is too wide and should narrow.
The article gives brief overviews of
Hargreaves Services
Volex
Ramsdends
Duke Royalty
Real Good Food .
He's fairly positive about the prospects of each of the above mentioned.
I've taken the opportunity to add to my holding.
DSM came to the market in May 2017 at £1, they have still not returned to their issue price that has created some bad sentiment to DSM from investors.
Markets often tend to over value and undervalue things.
Personally I hold DSM because on the whole they seem to have a reasonable portfolio and they are at a 20% discount to NAV. Performance has been improving recently also.
However, I am biased I am a holder. DYOR. Success is not guaranteed.
Why so undervalued, especially as ST recommends as well?
Downing Strategic Micro-Cap Investment Trust plc is pleased to announce the publication of its new investor letter :-
Http://www.downing.co.uk/assets/dsmletter
Agreed. I've just added another 7133 shares @69.575
My best estimation is that as at 31/7/21 the NAV has grown to around 92p. So this is now on a 69/92 = 25% discount to NAV.
Duke, Hargreaves, Volex, Fire Angel are all doing really well in their own right so this looks attractive, which is why I've topped up today. I won't be surprised to see a ST article soon pointing out the unwarranted discount and value here.
https://assets-us-01.kc-usercontent.com/8c961317-6aee-00a7-e4b6-ae38cd847d2d/04701b91-a708-4cd3-a470-bce1b78a60fd/DSM3061_Downing%20Strategic%20Mico-Cap%20Investment%20Trust_Factsheet_Jul%20(Jun)%202021.pdf
In June, the Company’s NAV increased by 0.7% and the share price decreased by 2.3%. This performance
masked a reasonably active and positive month in terms of results and investing actively. We have several
ideas in WIP which we hope to convert over the coming months pending positive diligence, notwithstanding a
toehold added in June which was subsequently bid for (see below).
Volex (-0.1%) and Ramsdens (+2.6%) reported full year and interim results, respectively. Volex’s were
predictably strong and showed great progress on the strategic priority to achieve 10% operating margins.
Looking forward, we think that the business continues to guide conservatively, particularly around electric
vehicles and healthcare, where we calculate run rates which are well ahead of consensus. The latest acquisition,
DE-KA, is performing extraordinarily well and the 25% capacity expansion and new large customer contract
will be significantly accretive to earnings. We think that the business ought to continue its upgrade cycle
through this year on an organic basis, while expanded debt facilities and organic free cash flow provide ample
opportunity to continue inorganic growth. Ramsdens reported an encouraging set of interims in an otherwise
tricky period, navigating country wide lockdowns with what is a predominantly physical retail-based model.
We have previously mentioned that we expect the recovery here now to be in 2022, with the main catalyst
being a return of the FX business. We are also encouraged by the potential to generate significant rent savings
going forward, which ought to improve profitability.
Elsewhere, Hargreaves Services (-3.2%) reported a pre-close trading update which was in-line with previously
upgraded earnings per share (EPS) guidance for this year from 20p to over 50p, and upgraded price target to
530p. We see scope for further catalysts over the next 12 months through the Services and Land divisions.
Digitalbox (flat) announced the non-executive director appointment of Phil Machray who has worked for Reach
– the largest commercial, national and regional news publisher in the UK – since 2004. This is a strategically
important position as Phil brings significant M&A and digital experience, both highly relevant for Digitalbox’s
roll up, digital focused strategy.
In last month’s factsheet we reported that we were progressing through the initial stages of diligence of a new
investment. In the month, we took a toehold position in this company, having completed multiple rounds of calls
with management, the board, investors, industry experts and competitors. The company was subject to a bid
approach 15 days after we acquired our position and we fully exited based on risk weighted to the downside
should the bid not be su
Copy over of post on HSP by Carosa
Simon Thompson:
https://www.investorschronicle.co.uk/ideas/2021/06/03/targeting-companies-on-the-upgrade/
....Hargreaves’ earnings upgrade cycle has further to run and it’s reasonable to expect massive upgrades in due course.
In the circumstances, I am raising my target price to 450p. Buy.
Gordan Banham CEO gives a quick overview of business and opportunities (came out 25/5/21) :-
Https://www.brrmedia.co.uk/broadcasts-embed/60957580576c9638976d4b60/event/?popup=true
Opportunities Like :-
- Tungsten West
- Westfield + Brockwell Energy in Fife
"UK developer of consumer technology products Tactus Group is expanding into the U.S. market with investment in Pi-top, the coding and robotics firm that specialises in improving digital skills in education."
Https://www.roboticsandinnovation.co.uk/news/investments/tactus-group-invests-in-coding-and-robotics-firm-pi-top.html
DSM should hopefully do well over 2 years.
They seem to have a basket of companies with positive prospects.
I will be happier when/if they exit the RGD loan notes.
In April, the Company’s NAV returned 7.6% and the share price returned 5.5%. The discount widened slightly to 14.5% on the back of the strong NAV performance. The portfolio continues to benefit from improving sentiment with four holdings increasing by over 20% and only three detractors in the month. The company realised a significant portion of its Real Good Food investment in the month.
FireAngel Safety Technology Group (+46.0%) announced a significant partnership worth over €21 million to develop a next generation alarm. Subsequently, the company announced results which highlighted a challenging past year, but a much brighter future, aided by a fundraise to fund growth and efficiency investments. AdEPT Technology Group (+23.5%) announced the acquisition of Datrix, a supplier of cloud-based networking, communications and cyber security solutions. We think that Datrix fits nicely in AdEPT’s portfolio and believe that 2021 looks increasingly positive for the group, with a raft of strategic progress made in the previous 12 months. Flowtech Fluidpower (+20.9%) also announced pleasing results which highlighted management’s hard work through a challenging Covid year. We think that the business is in great position to, firstly, recover to pre-pandemic levels of profits, and secondly, grow, through exposure to a market with increasing tailwinds and through taking organic and inorganic market share. Our remaining toehold (+20.8%) also continues to perform well and is trading ahead of expectations post re-opening. It has generated over a 2x return since we began purchasing in January.
Detractors were mainly in the form of Duke Royalty (-5.9%) and Digitalbox (-6.6%). Duke Royalty announced the successful results of its placing which we talked about in the last factsheet. Digitalbox reported no new news in the period.
Arguably the most significant news in the period is the partial redemption of our investment in Real Good Food (RGD) loan notes. RGD sold Brighter Foods for £43 million, and RGD loan note holders will receive £23.1 million of these proceeds. DSM has received over £5.3 million and has now recovered more than the cost of its investment in the 10% loan notes while retaining £2.0 million in these notes, £1.2 million in 12% convertible notes, and a residual amount of RGD equity. As at 11 May, this reduces DSM exposure to RGD to below 10%. We think there is scope for the remaining RGD business, Renshaw, to recover and return value to RGD debt and equity holders.
Finally, DSM made a new investment in Tactus – a private business that provides multi-branded IT hardware to retailersandthepublicsector.
Tactus had a transformational year and DSM partially funded the acquisition of CCL Systems which provides Tactus an e-commerce platform and access to the fast-growing PC gaming space. Management’s ambition is to create the premier gaming e-commerce platform. DSM invested £1.5 million split 50/50 in 10% yielding loan notes and equity.
Hi all I’ve taken an opening position in this trust today with 12,919 units @77.4p. It looks to have a good spread of promising investments across UK microcaps and I’m looking to build a bigger position in time if performance holds up. I have a 2 year investment timeframe for this with a stop loss of 50p and an exit target of 150p+. Best of luck to all holders.
I guess PR. They appear to be very active in promoting the company. You might want to checkout Vimeo and see what they are saying to paraplanners etc. They are also covering off the broaders activity of Downing, Downing Crowd: Pulford Trading & Bagnall Energy.
Nat Rothchild bought 500k shares today in Volex. A positive sign for one of DSMs largest holdings.
Journalist appointed to the board. Can anyone explain the value?