Member Info for Guitarsolo

Worth circa 250p (top of my head)

112.5p in cash

0.282 new AV. shares (at say 485p = 136p)

Looks like it is on:

https://www.investegate.co.uk/announcement/rns/aviva--av./possible-offer-for-direct-line-insurance-group-plc/8576688

Statement: "In response to press speculation, Aviva announces that on 19 November 2024, it submitted a non-binding proposal to the Board of Direct Line Insurance Group plc ("Direct Line") regarding a possible offer to acquire 100% of Direct Line (the "Proposal")."

I am slightly surprised to see the share price languish where it is, but equally quite grateful as it has come at a time of making some largish investments and I've been able to take advantage with multiple purchases between 124-127p. BBGI is a cornerstone investment for me to help cover family retirement costs because, in my view, it acts like a mini-pension fund. A 6.72% yield (8.4/125p) is substantial considering it is (a) largely covered by government/ local authority contracts, and (b) is mostly inflation linked.

News this week as well of BBGI's repositioning of its finances and fee structure, which looks to me like they are gearing up to be able to add assets when the right opportunity presents itself.

Thanks Rivaldo, looks like most of the trading updates from the last 12 years. Solid as a rock!

Net cash position at the end of the year was +£25m. Since then they have bought Full Circle for c£50m so if they follow their usual MO and repay borrowings quickly, they might be back to zero debt by about the half-year trading update. That paves the way for the acquisitions they have hinted at. Of course, nothing to stop them leveraging a great balance sheet, but that isn't really their style.

Well in recent years there has definitely been a feeling that a few in the City get the nod and wink ahead of results! That said, the results have usually been to outperform a previous [relatively conservative] promise. I expect and hope for the same tomorrow. I would be happy to see acquisition-related debt low and targeted to be paid off rapidly (the usual MO).

A very strong hold for me. I would buy more on an unwarranted drop, but this is my largest holding by value so I can't really justify buying more when it is fairly priced as it is now.

Dorfan: "GS did mention his main source of income came from the Bolivian charity, correct me if that isn’t right"

No I didn't! I didn't say I WORK for the charity......I said that I FUND a charity based on the professional fees that I earn. Since Bolivia has a special place in my heart and has been a huge source of work for me for 25 years, and hence fees/ income, I chose to set up a charity in Bolivia providing education to the poorest children whose families live on $2 a day or less.

There are NO overheads or costs to the charity. All the admin is done by myself and my colleagues for free in our own time. There is no website since we don't court public donations (but some of my clients make donations). There is a minor accounting charge to file accounts in Bolivia - but I cover that. I never insist that any of our employees get involved, but every single one of them does and loves it.

That's why I can say 100% of the money goes straight to the charity.

I was going to come on here this morning and apologise for some of my language yesterday, which was inappropriate.

What I find is a libellous statement from LTI regarding how I fund our Bolivian charity:

"fees paid by the drugs cartel to launder money through a 'charity' ?"

And Dorfan: "My understanding of charities is that only about 10% of donations etc actually end up at the sharp end where needed. So a nice little earner for those that run charities. Free holidays doing promo work around the world. ‘Run a charity, see the world for free’ . Big parties all at the expense of the charity. Large home to the entertain guests. Big cars to drive potential donors around."

I will have you know that 100% of the money goes straight to the charity. No one takes a single penny. When we visit it is because we are already travelling there or we do so on at our own cost. The charity doesn't pay for anything and it never will. Your attempt to undermine people doing good things in this world says it all about you.

Yes, I believe I do. I didn't vote for this government or the last. I didn't vote for destructive policies of the last decade. You did. I will call out what I think is wrong wherever I see it. I don't make up what I think someone else is saying, I let them say it. Simple really.

It is, Dorfan. But if you want any credibility you have to provide a balanced opinion. And you don't!

And yet you said nothing about the corruption of the previous government, Dorfan. Funny that.

Steinbecking, there is no point trying to point out to people like Dorfan that we should actually prefer EU countries to prosper because they are still our largest trading partners. If they prosper, we prosper. If we leave the EU, it is detrimental to them as well as us! Brexiteers will forever seek anything that convinces them that they haven't made a huge mistake. I mean, would you want that on your conscience? The decision will inevitably be overturned because an older generation can't vote against the preferences of the younger generation.

As for Bloomer, what an embarrassing day he's had! Asimpleinvestor, you've had the patience of a saint today.

CJ66/ Rylidan/ Damien,

I would add that the average lease (WAULT) is something like 12 years, so it would take a while for any change of strategy to take effect. And, as noted, if supermarkets tried to buy them (back) it only adds to the demand and therefore price. But Damien, you're point is fair that they basically have two or three major clients but that's a reflection of the supermarket-market.

Well, got to hope it's solid as I've taken up 35,000 shares at just under 70p!

GS

RNS with news of aquisition of an omni-channel Sainsbury's in Huddersfield. Interesting remark in the commentary that they're seeing more competition for acquisitions. That should support asset prices!

Dorfan,

(i) There is no IHT on a £200k pot of money.

(ii) There is no IHT passing to a spouse.

The total tax of leaving that to, say, their children would not be 65% it would be......£0!

Indeed Faramog! Slightly concerning as I got burned with other REITs (Covid-related) and have recently bought a few SUPR at just under 70p having thought the majority of the discount was priced in! But what did for those other REITS (mostly offices and retail) was falling asset values which led to surging LTVs, asset disposals, falling income, non-payment of rent etc (i.e. Covid), move to WFH (offices) etc. I don't see any of those problems with SUPR as there is 100% occupancy and 100% rent collection. This "should" support the asset valuations, but perhaps the shorters are seeing something different. The majority of SUPR's leases are long, c80% are inflation linked etc. They just have to keep debt under control, but with the last LTV on 31.12.2023 showing 33%, I think they have. Here's hoping anyway!

Good evening Kentio,

I can confirm that I received the last two dividends (3.965p and 4.2p) in full, inside an ISA, with no withholding tax deducted.

Guitarsolo

Hi Damien,

I take your point about lagging the comparable index, but I also accept that turning around an investment trust is like turning around the proverbial large boat. Previous positions need to be amended with minimal loss/ cost and new positions taken up on the best terms as well. For that reason I think much reduced capital losses, a supposedly covered dividend, and 18pps reserves (as I calculate it) are positives. For new money coming in, the dividend is very attractive combined with their obvious intention to prioritise growing it (albeit minimally).

GS

Fisherking,

Isn't the high yield just a reflection of the low share price?

NESF is set to be paying 8.4p dividends (4 x 2.1p) and it is forecast to be covered 1.1 - 1.3 times. In those circumstances the higher the yield the more of a bargain it presently is. Provided the dividend is covered (and growing say with inflation) I would be happy to take the income.

GS

Douvrey/ Fisherking,

Thanks for your comments. I am relatively new to NESF but am following it with some interest. Looking into their debt, their website (https://www.nextenergysolarfund.com/investor-relations/institutional-investors/shareholder-information/#:~:text=The%20Company's%20financial%20debt%20(excluding,31%20March%202024%3A%2029.3%25).)states:

"Of the Company’s total debt 1, 71% remains at a fixed rate of interest (including the preference shares) and 29% is a floating rate at attractive margins (SONIA + 1.20% to 1.50%)."

SONIA is currently 4.95% so NESF is paying 6.15-6.45%.

I haven't yet found details of their fixed rate debt, but assuming some is at least a few years old it might be from when interest rates were lower. Does anyone know the maturity dates and if any requires refinancing in the next two years?

Breaking down the debt (at 31.03.2024):

Preference shares = £198.3m

Long term debt (Apollo facility) = £121.5m

Long term debt (Radius facility) = £36.7m

NP III co-investments = £24.8m

RCF (Santander) = £10.5m

RCF (Natwest) = £133.3m

I'm not sure how much of the RCFs have been drawn down so can't total it up accurately.

I am sure there are several factors causing the discount to NAV to widen, not least the likelihood of higher-for-longer interest rates partly caused by the recent budget.

But as long as the board keep the debt front and centre of their thoughts it appears manageable.

Thanks Actuary.

If the dividend is covered (and it is) and there is a progressive dividend policy, that is welcome. The yield is just a reflection of the low share price.

I hold NCYF and have done for years. I do like reading Ian Francis' (Franco) updates. An old-school City man with mountains of experience.

GS