Member Info for CJohnSpain

Black Sea Property AS is a real estate company with partial ownership to a real estate project on the Black sea coast named Aheloy Residence Resort. Aheloy Residence Resort is partially finished and will upon completion consist of more than 1050 holiday apartments and significant commercial areas. The company effectively owns 75% of the project. Black Sea Property AS aims to complete the project, in order to realize its potential value through sale of residential units and operation as a hotel.

Onebas seems to have the same business model as Magazinos: ie free to user, generate revenue by advertising. Like magazinos, it's also an entrant in a very competitive market.

I haven't been able to find what IZY Radio are doing currently.

These two companies have over-lapping businesses. Both sell Omega Oils. Is it a question of multiplying brands?

Yrro was originally going to be a web-site for arranging primary health care appointments. That seemed a pretty poor idea, financially, and has been dropped, I think.

Hi, iosbyios, Merry Christmas from northern Spain. Snow too on the mountains here, but not down in town.

I've just flown back from the UK, after a week with family and am now in self-imposed quarantine.

The valuation of Kahoot is completely crazy. Massively over-valued.

Let's hope investors lose their minds over Magazinos as well!!

I just can't see it as very attractive to advertisers; but perhaps, it's a question of getting better known.

Marketing of Magazinos is by word-of-mouth, I suppose? I've tried the site. And it works OK, though still a bit of a beta-feel to it.

Yes, Garimon listing would be a step forward.

So very hard to value.

Readly has subscriptions and so has income.

Magazinos has negligible income; it's very hard to value.

Could it be attractive to advertisers?

Hi, iosbyios,

as far as I can see, it's only income is from advertisements from other companies in the Craven stable of Scandinavian websites.

So it's currently very low income; but probably very low cost, insofar as it doesn't need a subscriptions department.

From a very quick look at BSP property's balance sheet, the company is trading at around half net tangible asset value.

There is 267 million krone of total assets; 255 million of that is property: ie the hotel.

Against that there is around 186 million krone of debt and other liabilities.

total tangible equity is 82 million krone which is £7m. CRV's share will be worth £1.78 million.

So this is a very good deal, IF the value of the hotel on the balance sheet is robust.

Another way of looking at it.

Prior to the deal: CRV owns 29.99% of Yrro LTd.

After the deal, CRV owns 25.49% of Yrro's various assets + 25.49% of a large hotel in Bulgaria.

Ultimately, this is a good deal if 25.49% of the hotel is worth more than 4.5% of Yrro ltd.

If the deal does go ahead, CRV would be able to liquidate its investment, if so desired.

It's worth noting that cannabis stocks have recently been uprated, given moves in various jurisdictions to facilitate the use of cannabis for medical ends.

So, on the face of it, this looks like a very good deal to me.

Black Sea Property pays 130m Norwegian Krone - around £11,180,000 - for the assets of YRRO ltd.

CRV owns 29.99% of YRRO. So CRV's stake is worth roughly £3,335,000. CRV payed $1.6m for its stake in YRRO ltd, or about £1.22m. So a considerable uplift on what CRV paid.

However, the payment is in BSP shares. BSP is a Norwegian Company which owns a large hotel in Bulgaria.

The RNS makes clear that if the purchase of YRRO goes ahead, BSP will divest the hotel into another corporate entity. So if the hotel is successfully divested, BSP will have cash from the divestment, plus YRRO's assets.

YRRO shareholders will own 85% of BSP. CRV will own 29.99% x 85%, which is just over 25.49% of BSP.

I assume once the hotel is divested, BSP will change its name.

A pretty surprising development!

It's a competitor to Magazinos, surely?

I don't think they own any, do they?

Hello, iosbyios, thanks for the link to Vitealab AS, a competitor to Rosedog.

Rosedog markets omega 3 and one or two other skincare products on behalf of another company. It's not a manufacturer. It doesn't benefit from the large mark up you talk about.

I'm guessing it never takes possession of the omega 3 and other products. Logistics is handled by the manufacturer. So the viability of the business depends on what percentage they are paid on sales through their website. Your own history and a quick scan suggests there is considerable competition to this model.

Certainly, if I do a google search in Spain, there are a legion of re-sellers of omega 3, vitamins etc. And, of course, they overlap in the products they are trying to sell. As far as I'm aware, Rosedog doesn't have an exclusivity agreement with the manufacturer. Most of these resellers won't sustain a high enough margin to stay in business. Barriers to entry are very low., as Rosedog itself demonstrates.

RE magazinos: We'll have to hope advertisers buy in to what they're doing. Thank you very much for the interesting background on the field of on-line multi- magazine portals. After reading your posts, I'm feeling less pessimistic regarding magazinos. I can see there is a small, but significant chance of viability.

I'd be interested to hear your thoughts about the other companies part-owned by Craven Capital.

PS I'm used to operating on a daily basis in foreign languages - Spanish, French, Basque. It's great to see you really flying in English.

Thanks iosbyios for another series of interesting posts, coming from a different point of view to mine.

In your reply about margins, you are talking about gross margins. I'm talking about profit margin.

Rosedog is retailing omega oils produced by another company. There are legions of resellers of omega oils. This is an intensely competitive market.

I'm delighted that the family behind the production of the omega oils has experience in the business! That's a sine qua non! I would be really interested if you could clarify the relationship between Rosedog and the production company, whose products it's trying to sell.

Do you know what the commercial relationship is between them? What is Rosedog's mark up, for example?

You talk of a family connection. Could you be more specific?

Regarding magazinos: the only advertiser currently is Rosedog. I understand the comparison with facebook, Google, but it just seems wildly far-fetched at the moment. You could make the same comparison about any online start up with no income, except through advertising.

Do you have any concrete indications of how the Magazinos business is going? How many "subscribers" are there, currently?

As for Peter Gyllenhammer, he took a significant stake in CRV before the split into Craven Capital and Craven industrial holdings, but has rapidly sold down his holding in Craven Capital. That is not a vote of confidence, coming from such an experienced and successful investor. He's nearly always right in my experience. Have to hope and prey that he's got it wrong this time.

Could I ask if you hold shares in Craven Industrial too? If you do, what is your thinking ?

Hi, iosbyios,

good to see new posters here. Thank you for the posting.

CRV paid $8m for just under 30% of the five Swedish companies. That values each one at around $5.3m.

What is there to justify that value? Scant net assets, scant turnover and expected losses. Far too much was paid for these companies.

As the Magazinos app is free to use; Magazinos must pay its way by advertising. As you point out yourself the advertising you receive from Magazinos is from Rosedog, another of the 5 companies. So there is no NET income to the group of companies, just moving tokens around between them.

How and when is Magazinos going to produce a return to shareholders?

Rosedog sells omega oils and skin care products. This is a very very competitive field with wafer-thin or non-existent margins. Such companies are two a penny. Again it's hard to see how Rosedog will make money, let alone the sort of profits to justify the price paid.

Peter Gyllenhammer is an extremely successful value investor; I'd be delighted if he DID have something to do with the Swedish companies. But he doesn't.

Hi Tully,

re fees, this is from the interim results, late Feb: "The Investment Manager has again confirmed that it has agreed to waive $1.66m in performance fees which are payable to them under the terms of the Management Services Agreement in place with the Company. Additionally, the Investment Manager has offered to permanently eliminate the performance fee from the management agreement. The Board welcomes this decision by the Investment Manager as it, once again, emphasises the Investment Manager's desire that their interests remain aligned with all other shareholders."

I take that to mean there are no management fees payable and there won't be in the future.

- I'm assuming the reason we haven't been informed about the matched bargain facility is that it doesn't exist.

I don't know what your investment stance is, but I'm a "full-time" investor; I don't have another job. I follow a classic asset-based value approach, which is a well-proven strategy, and one that CRV has always claimed to follow. This year has been golden for value investors throwing up numerous fantastic opportunities. Yet, Craven has shunned them all, in favour of paying massively over-the-odds for some start up web businesses.

Hi Tully,

although it's been de-listed, it is still a public company. Hence it has to meet minimum standards. We are due an update from CIH.

There are public statements about the matched bargain facility. This issue can be followed up with the NOMAD.

I note that Craven House Cap is worth 1.4m, giving a value of 4.67m to the five Swedish companies. That to me sounds optimistic still. Though, to be fair, a couple of listings of two subsidiaries has taken things forward somewhat.

I thought he'd waived all performance fees? Correct me, if I'm wrong.

I admit I'd put Craven to the back of my mind and given zero value to the shares; but that's too pessimistic. The various assets are worth something, if their potential can be realised.

I'll contact the company and try to find out what's going on!

Hello Tully,

For me, the company was going tolerably well, until the decision to pay grossly over the odds for the Swedish on-line concept companies.

That decision illustrates starkly the risks of not having strong non-execs on the board. You can make a serious error, if there's no one there to tell you that it's a mistake.

As for the matched bargain facility, I will contact the company and see what they have to say.

The reality is, in any case, matched bargain facilities always produce sell prices well below intrinsic value.

CIH is still a public entity and has to meet certain minimum requirements; so we are due an update shortly.

Thanks, Tully, for the information.

I'd have thought the only likely buyers of CIH stock are existing holders.

I imagine most existing small holders wouldn't want to buy more. So the likely buyers are the company itself and the other large holders.

Thanks, Grawostac.