Member Info for Monkshood

I cannot see the Court list for this week. Amazing the decision can be delayed due to not having a shorthand writer on the day.

Maybe Tuesday now-

'The result of a judicial review of Canterbury City Council's decision to grant planning permission for a "winery" at Highland Court Farm near Bridge was unexpectedly delayed on Friday, for want of a shorthand writer to transcribe the judge's remarks.' !

This afternoon-

Before HER HONOUR JUDGE ALICE ROBINSON At 02:00 PM COURT 1 AC-2023-LON-003127 The King (on the application of Moakes) v Canterbury City Council.

Nice research, and it's definitely on the rise, but perhaps not from such a low base at purchase (Nov 2021)

RNS released at the time.

'Financially, despite Covid-related restrictions, WS executed approximately £0.95 million of sales and £0.25 million of profit before tax for the year-ended 30 June 2021'

Back in the days of covid I heard that AS had been told by II's to focus on the therapeutics rather than diagnostics. This does seem to have become be a recurring theme.

There is clearly an opportunity for antibody alternatives, it is a shame that Abcam was bought out, perhaps its parent company (Danaher) will be interested?

As far as I can see all as expected. I did wonder if there would be higher 'exceptional expenses' both associated with the move to aim and the planning application, but at £1.2M they were not too bad.

Margins look like they will be tighter this year , we have seen this in some of the pricing and offers - it means the profits are slightly smaller, but the wine I buy is cheaper.....

I think the planning appeal is next month. It will be interesting to hear what their views are on this later today.

If you have seen todays fact sheet you will have noted that MTM has fallen and the PY has increased (to 11.7%). Twentyfour have now clarified why there is a difference between these published factsheets and 'actual' yields.

-'fees will be taken from the published purchase yield and this is c. 1%. There has also been an income drag because we’ve had crystalised trading gains throughout the year (which has gone through the NAV). The total combination of these will make up the difference between the two figures'

Hope this helps. It will certainly allow us more insight into future dividends. In the past my holdings here were smaller and I never really probed into the divi payments (it gets more complex if the base rate changes throughout the year)

Compared to most other IT's I cannot fault the customer service at Twentyfour who have been very good at responding to my questions.

As always Twentyfour were excellent at responding (within hours). From one of the comments I think that they were expecting a slightly higher divi themselves!

I didn't get a reason for the difference between the purchase yield and the 'actual' yield so I will chase this up on another occasion.

The comment from the portfolio managers were that the yield last year was higher because of unexpected UKML crystallisation, also 'profits have been taken on deals pre maturity as part of usual trading in 23/24 and that was recognised as capital gains (and therefore in the NAV).'

Hopefully it will be clearer once the annual report is published.

Bond prices weakling a bit today (including AT1's ). I would expect to see a small pullback in the nav early next week.

They have been issuing at marginally over 1.5% (last was at 172.5, rather than 172.2) so there must be a good demand.

The price seems to be almost entirely governed by the price of their equity issuance.

No! I am really surprised.

I was expecting 5p and hoped it could be 5.5p As you say the purchase yield has been constantly at 11%+ so it would be interesting to hear their comments on this.

It puts it around a 9.5% yield on the current share price and 9.1% on the last nav - someway short of the last quoted purchase yield of 11.4% in the Feb factsheet (when the share price was 104p).

They have 0.96% exposure to Stonegate which has just put out a warning-

'The owner of Slug & Lettuce has warned it faces a “material uncertainty” over its ability to continue as a solvent business as it struggles to refinance a debt pile of £2.2 billion.'

Whilst it is a function of investing in HY bonds I am surprised that they have not offloaded more of the 'obvious' riskier ones over the past year. Stonegate, Signa and Thames were clearly going to have issues refinancing.

NCYF 's 4% exposure to Stonegate was my reason for dropping this fund a year ago.

An interesting question, this is very much my interpretation.

I was not invested in it 2015 (dip 1 ) - but I think that may have been due to the Euro crises. Dip 2 was Covid and dip 3 was the start of the interest rate hike. I think it is the fear of defaults which results in the fall in price, as this recedes then investors return.

The issue then is why does it not return to previous highs. Clearly there is the general malaise of the UK stock market post 2016 which capped its rise from that year, and then when it was heading back up post covid the fear of recession caused by interest rate hikes again stopped its accent .

The really interesting (and probably more important) question is what next? With the BoE and the ECB now having switched from QE to QT the cost of finance is very likely to be higher, this should enable a higher return from TFIF provided defaults do not increase significantly. The key to the latter is unemployment, if this stays low, which seems likely, as it is in part a function of the demographics of the countries TFIF invests in, then the returns going forward could remain higher than in the years pre covid (and the sp could potentially rise at least to its previous levels).

(note- There was the merger with another fund at the start of 2022 but I don't recall that having significant effect on the price.)

For the auditors to sign the accounts off they will need to show they have the funds to be a going concern for the next year. The inevitable fund raise will need to come quite soon.

Given how leaky news for SCE typically seems to be I am surprised that the share price had not fallen even further before this rns.

I am not bothered about new contracts at the moment: H1 was/is going to be tight for cash flow, given the purchases it does indicate that the Chairman thinks that they should manage it without need raise any more funds thus assuaging my main concern.

Clearly not a typo! It looks like they may have moved 0.69 from income into bonds as the increase in the ex-income value jumped more than would be expected for how bonds/AT1's were performing last week. The interesting bit then will be what happens to these numbers when it goes ex-div in 10 days as there is not enough in this pot atm to cover the next divi.

I have given up asking them, I have only ever once received a reply to email. On one hand they (allegedly) want to encourage to retail investors but then seem very poor at communicating with them compared to some of their peers.

They have also been creeping the gearing up over the past couple of weeks, possibly taking advantage of some slightly weaker bond prices?

Q1-

Given the purchase yield, previous divi's paid this year and the income stated in the half year report I am expecting a final divi of 5-5.5p.

Q2-

This is the only one from Twentyfour that I hold. I have Bips for income in the HY bond sector and adjust the proportions between the two according to price and macro considerations. They make a nice pair as TFIF is floating rate and Bips is fixed rate. Together they are similar(ish) to SMIF but I can choose on the relative balance between the sectors.

I do like that Twentyfour are responsive to any questions, they also provide a good regular sector by sector commentary to their funds (in complete contrast to Bips who are rather poor in these areas).

Something not quite right with the nav values today. Typo?

Date, without income, with income, income, 1.5% premium, min equity issue price.

4th 166.80 169.77 2.97 2.54655 172.32

3rd 165.96 169.62 3.66 2.5443 172.16

It may be 'Altice's' issues weighing on sentiments re- CLO's at the moment (nearly 40% of the assets are in this class). Evidently most CLO's will have some exposure to Altice although the capital structure of them should absorb this OK (If my understanding of how they work is correct!). There is more on this on their Insights web page.

'The majority of CLOs have some sort of exposure to Altice, and while we think unsecured bonds are at risk the ultimate recovery on senior secured loans should be manageable in our view'

Their Thames Kemble bonds are down another 50% today - now sits at 12.7. However, given the previous falls it is becoming an ever decreasing percentage of the portfolio!

It looks like Tristel have taken advantage of Byotrols financial woes to purchase the IP to one of their formulations they were licencing from them.

'We then agreed to sell to Tristel the underlying IP relating to one of the three previously licensed formulations, the proceeds of which are included in the 'cash-generated' figure above. These two transactions are positive in cash terms but will also result in an exceptional accounting charge to our P&L at year end of £550k, reflecting a write-off of future minimum guaranteed royalties'