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Maybe Helge dropped an oar overboard...
Tick follows tock...
Is it Christmas yet
AssetCo owns both SVM and River & Mercantile.
Looks like SVMs 8.6% disposal on Friday were moved to River & Mercantile within the group who now hold the 8.6%.
A great vote of confidence.
Meanwhile o/topic UPL at 3.3p now £40m m/cap on the back of SK344 equivalent to 70p for LBE which has the benefit of $25-$30m of 3D on block 2A and a specified 9 TCF (1.5 bboe).
SVM asset management were one of the original funds who invested at the IPO in 2019 at a 100p placing price, most of these funds have sold up now including Black Rock, Fidelity. They have taken their tax losses and moved on according with their ever changing investment policies. I think it’s good they have mostly sold out as it was keeping a big downward pressure on the share price. Now we have more nimble investors like A. Bruce and the Swiss hedge fund who recognise the value & potential here at this level.
For all that helpful information.
( ´~`)
AssetCo: an undervalued asset manager rising to inflexion point
Like professional sport, asset management is a 'results orientated' game – that is currently polarising between low cost, index hugging trackers at one end vs specialist active fund managers at the other.
AssetCo (ASTO)
(Mrkcap £53.5m at 35p), led by accomplished industry veteran Martin Gilbert (Exec Chair and founder of Aberdeen Asset Mgt) falls squarely into the latter camp.
Indeed at the last count in Mar '23, its wholly owned Assets Under Management (AuM) had climbed to £3.2bn (£13.8bn incl. Parmenion’s £10.6bn) - after completing a series of acquisitions (e.g. River and Mercantile, Saracen, ReVera Capital, SVM Asset Management Limited and Ocean) since being created in Apr '21.
Sure this hard work hasn’t yet been reflected in the beaten-down share price. Albeit equally for canny risk tolerant investors, the undervaluation offers opportunity, especially as AssetCo appears to have reached an inflexion point.
In fact, despite being forecast by Panmure Gordon to be marginally loss making in FY '24 (y/e Sept) - ASTO is on track to become profitable (PBT £3.2m) and cash generative in FY '25 on sales of £18.8m. Plus, augmented by a bullet proof balance sheet (Mar '23 net cash of £20.6m, or 14p/share), the Board has ample firepower to pay a 1.3p dividend (£1.85m), whist similarly executing its 'Buy & Build' and organic growth strategies.
Ok, so putting all this together, how much is ASTO worth?
Well clearly it’s impossible to say precisely due to the rapidly expanding nature of the group. However, as an indication, Panmure Gordon & Singer Capital Markets both have BUY ratings on the stock with Target Prices of 97p and 130p respectively.
https://www.voxmarkets.co.uk/articles/assetco-an-undervalued-asset-manager-rising-to-inflexion-point-8a39c17/
SVM were bought over for around £11m last year by AssetCo. £9m in loan notes and under £2m in cash. It was founded and run by Colin McClean and Margaret Lawson. He became a director of AssetCo. They had about £550m under management last year and underwent a restructuring. Had a profit of under £150k to March 2022.
Margaret Lawson retired from SVM in Sptember 2023 and McClean i think stepping back earlier in the summer with Neil Veitch recently taking on the role at SVM as lead manager. Not sure what fund is which but one SVM fund was ranked at 184 out of 200 or therabouts not that long ago.
With a new manager in i'm not that surprised they'd restructure or put their own stamp on the fund holdings. The good thing is that someone has bought them and to me it's no reflection on the merits of LBE going forward given the 2 strategic deals with Japex and Topaz since May and September.
Looks like Kertang scared them off....bring it on 2024, I am expecting significant upside here
Nothing sinister in my caveat Deeko, Bob and I do have a small holding here. As a holder of Faroes Petroleum I followed the principle that this management team would concentrate on MC rather than share price and took a position at 50p
Hmm, didn't get that right and the last 3 drills we not up to much. Doubled up at 25p - timing is everything eh!!
Remember the Serica glide path very well Deeko and was fortunate to load up in single figures. I like the Longboat potential myself but can the management team change their spots and not do the same thing again re MC.
I did broker on the Serica board what a tasty morsel Longboat is for them from petty cash. 40p offer would be painful but after farming in to Buchan, Serica is consolidating methinks.
Its tempting to add here at present - but will wait and see and maybe pound cost average over the next quarter.
Sincerly hope it all comes good.
Seems about right volume wise. Lets see what happens now the big selling is done.
SVM held 8.6% (second largest shareholding).
Looks like they are out completely.
Interesting point Mommur but i cant see a fund raise as the share price is low enough right now, cant see the management discounting the price any further now. My hunch is asset disposals or farm-in for cash flow operations.
1Billion market cap who knows, but i can see 50 Million mcap short term and 250 mcap medium term as a realistic figure for now.
Sorry... last one.
Mommur, SQZ also dropped from close to 100p down to 3p before spring boarding up to 450p ;)
Mommur, used to enjoy your analysis back in 2015/16/17 on the SQZ board.
I called SQZ as a minimum 10 bagger back then and I stick to my previous statement that LBE will reach $1 billion. Happy to be wrong here and will adjust my holding accordingly but the Japex deal combined with a Reserve based lending facility will give LBE liquidity of up to $200 million to buy assets. That's a huge springboard for a company with a £10 million Mcap.
Did you watch the webcast from the 2023 results? This was spoken about in depth during the Q&A and is a technicality based on how the forecasting method. The board reiterated that they would not need to raise funds, and again during the previous webcast spoke about how they are heavily invested and have no intention of raising funds.
Think you can find these webcasts on YouTube.
Just a caveat from the interim results:
"Having undertaken careful enquiry, the Directors are of the view the Group will need to access additional funds during 2024 in order to fund on-going operations and pursue growth opportunities. This is in line with the Company's current activities of exploring, maturing its discoveries and seeking acquisitions. In the absence of such funding, the Group is forecasted to have limited or no liquidity by early 2025 and, in some reasonably possible downside scenarios during 2024. It is anticipated that these funds will be sourced through asset disposals / farm downs, issuing new equity or a combination of these actions.
Not a rosy comment when the sp has dropped from 100p to these dismal levels. Good Luck with £1 billion, Faroes never made it - the wage bill was horrendous!!
Absolutely Deeko. The Japex deal with funding ready for future deals is key here. Im sure they are working on more production and farm-in deals as we speak. Japex is a very shrwed multinational company part owned by gov of Japan and they would not have invested 150 million in financing and investment if they had any doubts with the management or LBE prospects.
Malaysia looks very promising esp with Menzies and Eliet expertise on board. They both set up Topaz as they believed in this., (Menzies being the CEO of Salamander back in the day) We need a farm out and it will happen especially with low overhead margins in Malaysia once any significant gas discovery is made. This Kertang prospect in Sarawak is renowned for exploration success in recent years. DYOR
Honestly i cant find any other better small cap growth prospects than this. Good luck to all LTHs.
Looking forward to see this play out in the future and contributing with you smart investors :)
Agreed Bob, based off the investor call a few days back, we're already looking at reasonable sized production deals in Norway with some shortlisted. Anything we get will be non-operated. Helge mentioned it would be appropriately sized which given they start the Statjford deal as a small deal (750-1000 bbls/d when all 5 wells are online). I'd be expecting the next production deal in the region of 2,500 - 5,000 STB/d.
What really pricked up my ears were, we can fund unto $200 million dollars of production deals - considering the Mcap of £10 million, this is a sleep giant. I know people usually like to wait for tangible evidence before diving in, but time and time again we've seen the multi-baggers are made when you're in early. Timing is everything but I'm happy to be early and ride it out.
The other thing that got my attention is obviously Kertang (or the MONSTER as they labeled it) - high PPM gas shows at surface drill cores, low CO2, 9 TRILLION CF and one of many, many prospects. If that block becomes derisked in 2025 drill on the Petronas rig schedule then Longboat is a buyout target for any major or National oil company.
We've then got Kvikja development as part of the Equinor troll development so lots to look forward to. I know it's not moving at the pace we'd all like but the stars are lining up slowly so I'll keep tucking away more shares each month.
Sound management and very low shares in issue. Plenty upside here with regular management RNS updates
All Management have purchased a lot shares at much higher prices than todays stock price..
Think Faroe Pet and we could be looking at £1.50 plus by end 2024 if they play there cards right and low or no dilution.
Strong buy IMO and very cheap now..
Looking at today’s late reported large volume trades, it looks like sells. Depending who’s been selling in the last couple of weeks we might see more or this may be it. (From the volume it looks like one of the top 3 holders).
Thanks, yes just manged to listen, glad it is has now been settled.
Current price looking cheap.
3 x 500k trades from 10.30am at 17.6p reported late out of just under 2 million total volume.
I went over todays Auctus analysis note with a 60p target - a mere m/cap of £34m compared to £10.5m now.
There's a range of per boe values for those in production to the existing discoveries and anything from the Norwegian exploration.
In total they have an unrisked price target of £1.09 which assumes a total of 11.9 mmboe net. Realistically including the production, they have roughly third+ of that now - and possibly more than half already subject to more verification of the numbers from the discoveries made.
The lowest price per boe used for Norway is $4.14 per boe.
There's nothing in the note for the blue sky potential of Kertang.
Kertang at 9 TCF estimated recoverable is about 1.5 billion boe of which they have 52.5% and an analog to Petronas 6 TCF Kaswari field coming on stream at 900 mmcf/d.
If they farm down to a minimum holding of 10% and carried, it would mean a target of 150 mmboe and at about $3/boe represents a value of about $450m/£350m to chase or £6/share if it came in on that methology/current shares in issue.
On a partial carry and say 15-20% retained and expanded to nearer 100m shares it could still be worth about £5 - £7/share again on that basis.
It's fully covered by 3D and threre are 2 adjacent prospects which are each about half the size and imo all 3 could be around 15 TCF recoverable so even much more value to play for.
All 3 prospects covered by £25m worth of 3D of 2900 km2 with over 6,000 km2 carried out across the 12,000 km2 block.
Compare that to UPL this am and at 3p last week = £35m m/cap and would be a starting value for LBE at 61p not to mention Norway or other upcoming deals.
Decent prize to play for and significantly underpinned and as ever dyor.
Over 51% of the shares held by Institutions (Axa 3.9%, Progressive Capital Partners 14.5%, Janus Henderson, 5.3%, Cannacord 3.8%, 2 others = HNWs etc) and directors.
In 5-10 years. Kertang coming in during 2025 drilling would absolutely skyrocket this but lots of other things to look forward too I.e M&A
We have 100 million available to finance assets that we’re currently short listing, this is subordinate debt so we can add actually finance an acquisition at up to £200 million :)