Member Info for Monkshood

This was always the risk for rsg. They have argued over the VAT/royalties with them for years. Having it come to a head like this should mean, that once they have reached an agreement it should be a smoother (although probably slightly less profitable) road ahead.

I am back in.

There is on one mention of Funky Pigeon in the results, with no mention of the full magnitude of the spend, so it does seem a stretch to ascribe any falls to this unless they have additional knowledge of the costs involved.

'Funkypigeon.com delivered total revenue of £32m (2023: £32m) and Headline EBITDA1 of £6m (2023: £5m). We continue to see opportunities to grow revenue and profit over the medium term. This year will be a year of investment with higher levels of spend on the platform and brand than in 2024.'

From Bloomberg-

'Goodbody analysts say it expects pretax profit consensus estimates to fall a little after today to reflect incremental investments in the Funky Pigeon business, which impact its High Street division.'

I flipped between both of these opinions after a couple of reads.

We know that they have been dumping unprofitable lines so there was (perhaps)an expectation that revenues would be lower but profit higher. Given that, I am going with positive take on it. We will find out what the market thinks quite soon!

TwentyFour Income Fund Limited wins Fund of the Year, Alternative Credit Awards 2024

Always reassuring to see some external validation.

Dowgate have upped forward EPS estimate by 9% today.

Well at least they will not have to worry about having too much to process this year.....

Given the hectarage planted in the area there is a need for a new or expanded winery somewhere close by. There is already a contract winery adjacent to the site they applied for planning on. This has expanded significantly in the past few years so maybe the capacity will go to that?

Many were expecting a fund raise on the back of the move to Aim, they should have done it then whilst it had some momentum. Now the dilution is going to be, unnecessarily, much greater than it would otherwise have been.

The purchase yield has crept back over 12% (up 0.54%) with little change to the MtM and at an identical share price, so it looks like they are handling the reinvestment risks well.

Note- this value is before charges which knocked about 1% of the return last year. Early days but we could be looking at a marginally higher divi than last year.

Have a look at Senior's trading update- production issues at Boeing and Airbus are having a knock on effect across the industry.

''Consequently, there appears to be an imbalance of supply into different parts of the aircraft, and we have recently been informed by one of our customers, an Airbus Tier 1 supplier, that they intend to significantly reduce scheduled deliveries from Senior in Q4 of this year before returning to normal during Q2 next year.''

I thought we had got through the tight cash flow stage but look like there is little room for error again. They managed to navigated it in H1 so hopefully they can do the same now, pushing back on some of the onboarding of raw material supplies and using their invoice discounting facility if needed. Can the staged covid loan payments be slowed?

They just need to be in a position to show they are a 'going concern' when the accounts need signing off at year end which they should be able to still (otherwise we get a fund raise which they seem as keen to avoid as we are!) .

Whilst not ideal, it is at least not the fault of the company themselves, which makes it less of a concern than if that were the case.

Has anyone seen what they say in the Canaccord research note?

Just because no MTD does not mean no non target issues.

I am not trying to be negative, the question was asked why not wave it through, this is one reason why caution would be needed.

Wyndrum. If you look at the penultimate paragraph 'level of FAP positivity in the tumor appears not to correlate with the level of released doxorubicin ' then you can see that even low levels of FAP can release dox. With increased plasma half life over dox then they will (in my opinion) need to convince the regulators that non target accumulation in other FAP expressing tissue is not an issue.

It depends on if you think that they will be bought out or if they will have to raise £30M with loans and a placing.

I thought it interesting that the CEO said at the end of the H1 results that ''I will be taking to you all again very shortly''.

This implies that we should find out soon which it is to be as there are no other results presentations expected for ages.

I am leaning towards a fund raise, otherwise, why not delay his announcement of standing down to coincide with a buyout (unless there were reasons to make it public at this stage?).

I have held rto on and off for quite a few years (note-not currently holding, but may again if I can free up some cash!).

I like the management but they overreached (and over paid) when they purchased Terminix . Until then was a good defensive/growth play for quite a few years.

The management did well during covid quickly expanding hygiene.

I do wonder if some of their past US growth had come from taking market share from Terminix (in addition to lots of smaller buyouts). Clearly this opportunity has now ended. Check Rollins results to get a feel for how they have performed over the past year as a comparator(I have not looked lately).

One of the concerns about Terminix was some outstanding legal issues over fraudulent termite practices. Last time I checked this was all in budget but I don't know if it has been an added distraction .

The company are clearly still getting to grips with the merger. It came at a bad time post covid with worker shortage and wage inflation , high fuel prices and other inflationary pressures will not have helped either.

I do think it is a good sector, with urbanisation they have a growing market. Some of their products are innovative, especially for rodent control which gives them an edge over the other companies in this space. A lot of the companies they contracted to (pre Terminix) require pest control as an essential service, think supermarkets, pharmaceutical companies anywhere else with clean rooms or food. I think Terminix may have increased the B2C part of the business which I am not sure is such a good thing (prior, B2B was the main stay).

I think that once the merger beds down it will go back to growing but not sure it will be at the pace it used to be at in the US. However, it's scale may mean that it is able to make up for this by stronger growth in its other market areas.

NCYF?

'' In the equity element of the portfolio, we sold out of Harbour Energy and downsized our holdings in Diversified Energy and Croma Security."

Before this update I had been considering whether to start building a holding here again, too much talk of H2 weighting now though for my liking.

I put a note in the calendar to check again in 6 months...

Cheers, I remembered something about shifts but then was not sure about how many and if I was getting it mixed up with Crl who were also talking about shift patterns.

I used to be able to remember this stuff, I need to start making better notes as it is getting harder to recall it all accurately!

Yes, it would be nice if they put out quarterly updates (otherwise we could be looking at next January) but now it is looking like we are through the tricky cash flow stage I am more relaxed about waiting for any news.

They have a few jobs advertised - they are running two shifts in the US - have they always done this?

The other interesting bit in a logistics job ad in the US 'More recently, Velocity Composites has developed their strategy to ensure security for the future by diversifying into other industries including automotive'

Whist I knew they were looking to do this, it implies that they already are (or am I reading too much into this?).

It is primarily invested in floating rate ABS (not fixed rate bonds) so a fall in interest rates will (in theory) result in a fall in the nav returns-but with provisos!

Falling interest rates will reduce the risk of defaults which should/may then reduce the current discount to nav (default risk with 'higher for longer' interest rates increases). We have already seen some of the Mark to Market valuation reduce and appear in the nav, there is a bit to go still but reinvestment risks will now increase, especially as spreads have tightened.

Falling interest rates will make the returns here look more favourable (note the share price when rates were near zero), however bond values will increase (to compensate for the falling yields) so capital appreciation of bond funds (and infrastructure) will likely be superior.

Personally, I think it is good trust to hold in a mix of income generating assets.