Member Info for Agricore

Personally investing more into listed vehicles would be entirely the wrong strategy. The co-investment and AUM approach clearly is working well in reference to the NAV. The ability to benefit from portfolio company growth with a clear leveraged upside by using managed funds, thereby also limiting downside on any portfolio failures - and the need for capital.

Today's Dname up round is worth £0.7m gain to NSCI and WH Ireland have increased their TP to 186p (from 180p).

This is equivalent to about 5% of the current market cap (of £14m).

GLA

Canetoad, "10+%" is far too pessimistic a rate for secured lending on income-producing assets, even in the current environment. So your assumption of an extra £2.75m costs is based on a/ the whole £50m bond needing refinancing (hint: they had £50m cash at 31/12/22) b/ zero realistations in the next 14 months (hint: there have been realisations already in 2023) c/ You believe RGL will be paying 11% (5.5% additional to the 5.5% bond on £50m is £2.75m) ( Hint: Edison think 9% and RGL think they can get more favourable terms than 9%). So there are several reasons that negate your "serious risk" assumptions. Does this actually pose a risk, let alone a serious risk?

The decline in LTV has been largely due to falling valuations, yet realisations have been ahead of these falling valuations suggesting that the LTV is going to naturally revert back towards 40% without too much in the way of realisations and dividend cuts. RGL have been here before.

Nth - a cut to 5p (which I think is unlikely) would be a 10.6% yield at today's 47.15p ask. Cutting the dividend to 5p would free up £8.5m of additional FCF per annum. Inglis has said he has no plans to cut the dividend. If the LTV reverts back towards 40% RGL won't need to.

Considering Anthony spoke to AISCs of US$35,000/tonne we are doing "slightly" better at US$21,377/tonne.

The results show that we could have found our way without the Orion deal. There are advantages to be sure to be multi metal far faster. The ups and downs of tin have demonstrated this. The progress being made is fantastic, and the steadily rising share price reflects the growing confidence in ATM's future with up rating events ahead with the pilot plant and drilling campaign.

GLA

Or actually the logical way to value the income of the assets (at at 31/12/22) is to consider the potential (not actual) rent roll... which if 100% let would be £92m which is an 11.65% return on assets, would yield 22.8% on Net Assets (£92m/£402.9m), and 14.8% on EV (market cap plus gross debt), or due to the recent price falls at today's market price a whopping 40.48% yield of rent roll to market cap.

In other words every 44.35p share you buy, the assets - once fully let - can generate you 18p of rent per annum.

When you look from the point of view of what the assets can generate then the valuation is clearly disconnected and why Stephen Inglis can say he thinks the valuers have got it wrong.

GLA

CaneToad, you're right and getting a 5.5% rate on the refinance will be nigh on impossible. Pessimistically assuming a 9% refinance rate (the current yield to maturity) and perssimistically assuming that RGL will want to refinance the whole lot then that's an extra annual £1.4m hit to profits.

The 1st tranche matures In 14 months time so there's a nmber of things that could happen. Co-incidentally the 2022 year end cash was £50.1m. Will interest rates be as high next year? Personally I think they will be lower. Will there be some realisations on top?

So I agree it's a consideration but it's certainly not something which keeps me up at night.

GLA

I think there is such a deep negativity to the sector I think it will be a while before this could even be a possibility. The problem is the regions of the uk are getting tarred with the valuation challenges of both. the USA and china. Also the debt crisis of china and the emerging fears in the USA.

If you consider uk office valuations 12 months back “about right” relative to the market then you believe today’s NAV is still upwards of 97.3p/share giving you upwards of 54.4% discount

Remember an asset like this is valued according to demand and supply but also in reference to its yield which is about 15% based on the EPRA EPS.

Gla

Stan, I think you misunderstand the type of purchase an oxygen concentrator is. It’s true the rivals have deep pockets however consumers will carry out deep research because of the nature of their (debilitating) problem. This isn’t a trivial purchase. Also think how many people who are housebound due to lugging a heavy oxygen bottle around? Or even those with a competitor’s concentrator where the weight is double or more that of Discov-R or X-plor. What is the problem they will be trying to solve with their purchase and their research? They will be focused on two phrases - pounds (of weight assuming an American) and litres/minute (gallons a minute maybe?)

All the marketing in the world can’t put lipstick on a competitor’s pig.

Gla

If you read Note 22 the debt is 96% fixed. Just the Credit Facility ($58m at 31/12/22) is variable/floating. Yet another example of risk averse management.

https://d1io3yog0oux5.cloudfront.net/_5e79b19f4328b28e5db8cf81f0817cf3/dgoc/db/553/4653/file/DEC+2022+Annual+Report.pdf

Also EBITDA to Debt (at year end) is 2.2X. What that means is that it could stretch to buy something, especially through cash generation means 2.2X drops to around 1.9x by the end of 2023 so is at around 2X now (they are comfortable to go to 2.5X which gives around $400m-$500m firepower. And as has been pointed out because they engage in RBL the "EBITDA" part grows with every acquisition so the firepower is pro rata ratcheted higher.

Personally if DEC does nothing that's fine, but if a bargain presents itself that they buy, that's fine too. I think the mgt team, to give them their due, have proven they have a much better grasp of what's "comfortable" for DEC than any of us pontificators. I've liquidated some positions today and am considering a further top up into DEC. Because at 83.7p in my view it feels like a screaming buy. I have the weekend to ponder that.

GLA

Lucky you Mr Ozzy, but she might shoo you out any time

Oil, sure, the pair I ordered 2nd April arrived a couple of weeks later. I have a 1st and 2nd gen and the new ones are much better for audio quality and battery. If you’ve seen the video of the “influencer” in New York that’s how it’s been for me. Several people have bought their own pair after trying out mine. There’s an affiliate scheme lucyd run - worth signing up for too.

I thought it was a good, honest presentation and they made valid points to the questions/heckles raised. I came away feeling more positive. I do hope they address my questions raised via investormeet

I previously wrote about the perceived worries of VSL's "unlisted shares in Fintechs" conundrum.... looking at their latest presentation deck (https://vpcspecialtylending.com/wp-content/uploads/2022/09/VPC-Investor-Presentation_FINAL-2.pdf) the gross asset allocation is 5% ordinary shares, 7% convertible debt, 4% warrants, 11% prefs and 70% debt. The 5% ordinary appears to be largely a FinTech position called "WeFox" which is an InsurTech growing fast and had a $4.5bn valuation in its series D funding in July 2022 and that this will fund them through to IPO (per Chrysalis who hold these).

I said perhaps there was more room for optimism than the current share price suggests?

To evidence that (further), today, Augmentum Fintech (a bellweather for fintechs) has just achieved an £11.4m uplift on an upround with Fintech Volt (a ROIC of 3x). But it gets better. They had a gain on disposal earlier in June of £7.2m. That to my estimation puts AUGM on a ceteris paribus NAV of £295m, or £1.66/share, or an astonishing 40% discount to NAV. (Astonishing since it traded at a premium to NAV until quite recently).

Therefore for VSL to be on its current discount appears disconnected from reality for the reasons given above, but more so due to continuing evidence in the fintech space.

GLA

Damofarl, that's very kind of you. My perspective is that it's tough being a private investor, so if we can help each other and pool our perspective in a (as you put it) valuable, insightful and respectful way then it's a win-win. I've spent many years seeking to improve my investment acumen (probably to compensate for making catastrophic losses in my early years) and read extensively around the subject. Being an accountant certainly helps too.

Returning then to FAIR today's announcement is interesting. Alongside the buy backs is the capital redemption. I am a 2021 shares holder as I suppose you are. The lucky folks with Redemption shares get face value - i.e. 57.82 US cents per share on 3.59% of their holding. That actually depresses the NAV per share for you and I (since the absolute discount is shared among slightly fewer shares). They've redeemed around 6% of the remaining redemption shares..... I wonder who the Redemption holders are - is it the BOD or larger holders maybe?

Interesting too, that it is the 2021 shares which are being bought back day-by-day and not the redemption shares. I'd assumed (wrongly) that the redemption shares (being older) were the ones being bought back.

I feel like I may have found a loose thread which could be the start of some questions to FAIR's investor relations.

>> Anything could go wrong from here, vanadium pricing, exchange rates, new CEO doesn't work out etc

Welcome to the world of business Trevor Brooking

Reason 1: Impairment gave BMN an apparent 2022"loss":

> Impairment - $17.2m Vanchem - if you read the small print but to paraphrase for those who can't/won't: "because Kiln3 had operational issues and assuming those issues are permanent (hint: they aren't) using a 9.7% discounted rate IFRS9 forces us to impair." Will be see a $17.2m fair value gain, as this reverses in 2023? Yes in my opinion.

(Bear in mind at today's market price the market is "writing off" a further $56m of BMN's book value when the market cap is £38.6m and net assets as at 31/12/22 (net of liabilities) is $105.5m)

> Impairment - $5.1m Imaloto coal project - that's a one-off non-cash loss

> Impairment - $1.6m obsolete equipment - that's a one-off non-cash loss

Reason 2: Operating Loss: $20m

> Sounds bad.

> But as can be seen above we have 3 one off costs and $17.2m is a future gain as it unwinds.

> Idle plant costs $6.7m - Now that BMN have a power agreement, the mini grid etc - is this a one off too?

> If you take these (arguably) one-offs out the underlying Operating Profit is actually a healthy $10.5m. During a terrible year with brown outs, inflation and supply chain disruption. That's actually a great result.

Reason 3: Finance and Cash Flow

Orion refinance, Operating Free Cash Flow in 2022 of $14.6m is great to see.

Reason 4: Fortune's misfortunes

Erm, that's been sorted

Reason 5: I'm all ears.

To conclude, when I read today's accounts there's room for optimism and what's important is what 2022 tells us about what to expect in 2023. Especially when read in conjunction with the Q1 2023 report and the terms of the refinance. It's heading in the right direction.

GLA

HarC,

I think it also underlines the extreme pessimism of analysts towards BMN. BNP Paribas for example thought free cash flow for 2022 would be $5m, and ARC thought $4.2m - of course it was triple that at $14.5m.

For 2023, their analysis is for OpFCF to be $13m and $6m - based on the Q1 results which tell us $25.9/kg cash costs and $39.4/kg av. revenue - these already appear to be overly pessimistic in my estimates.

Pleased with the change. Fortune appeared out of his depth sometimes and today’s results are grim Reading - the final nail in his coffin as ceo

To finish my conclusion (LSE truncated my post):

But I know I can't get >30% compounded sitting in cash over the next 2 years. I know I can't get inflation-linked rent reviews on tangible assets. I know that track record is worth something so I'm collecting my dividends where there are CONTRACTUAL rents with built-in rent reviews, where debt is steadily eroding and is fixed for 5 years. While tangible assets are appreciating and where their supply is eroding due to government EPC legislation and inflationary replacement build costs mean that capital values must nearly triple to become more expensive than new builds. Where the macro of "levelling up" means regional offices should do well relative to London. Lots to like about RGL in my view.

GLA

Here's a fairly negative update from IC - https://www.investorschronicle.co.uk/news/2023/06/19/molten-ventures-still-hamstrung-by-dismal-trading-backdrop/

GROW's problem is summed up by the concluding phrase "Perhaps the main long-term challenge facing management is the general reduction in market liquidity."

The upside to the current situation? The low share price reflects a lack of participation in the market rather than the fundamentals of good businesses like GROW. Their recent presentation on investormeet reflects the quality of their portfolio and their management. So the upside is you can go and buy some more to average down.... because £2.66 is great value. The recent results simply confirm that in my view.

Good point. I ordered my 2nd generation v2 Lucyd's on April 2nd and I believe the SEC filing announcing them was March 26th. So actually Q1's results will comprise only 1st gen sales, and Q2 will be mainly 2nd gens plus selling off any v1, 1st generation stock.

The 2nd generation glasses are much better than my 1st Gen ones. The battery life is superb, audio much improved, and the Chat GPT thing is a bit of a quirky novelty but have used it in a pub quiz with some success! Very useful while in the car or on my bike. I don't actually tend to buy stuff like this but I must admit it's been a great purchase.

GLA