Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
*interest rate decreases….doh……SB
I expect a solid earnings report as well oldbut - slight increase to NAV; growing dividend; no debt; cash on balance sheet for buyback programme and future investments; and latent value in the portfolio which has not been reflected in the current NAV calculations - but the infra market remains a very much unloved sector, although at some point (no doubt linked to interest rate increases later in the year) funds will start to move back in...….lets hope. SB
More and more interesting as we get to further clarity on investors in the placing. In addition to Harwood, Sinai, Penwater and Polar - Lombard Odier took 1.7m shares and billionaire financier Nathanial Rothschilds investments holdings business picking up a similar amount - taking his total holding to 4.7%. Updated list of significant shareholders holding 3%+ is going to be very interesting. SB
In addition to Harwood picking up 4m shares in the placing and Sinai 9.3m; Polar picked up 9.7m and Penwater 4.7m (although they did initially note they had taken 2.6m). Not 100% sure how these shares are split over the 'first close' issue (19m shares) and the total placing of 46.8m shares (which might might explain Penwater's updates). Positive imo - can't imagine Polar and Penwater throwing in further cash without a strong internal case on likely return and challenging Renx on progress. Wonder if Jefferson picked up a slice. SB
Actually - Citadel went below 0.5% in Feb - it was Alvar who were most recently at 0.6% and have similarly moved below 0.5%. Apologies - but good to see short position reducing nonetheless. SB
Citadel appear to have moved below the 0.5% declaring threshold from their previous 0.6% short position. SB
In the absence of an offer (sale) looks like its an orderly wind down of the business. Assume this means the £7m buyback programme is now cancelled. First £55m cash distribution following the AGM in May 2024 equates to about 13p per share; and from previous guidance there is about another £170m loan payments due to repaid in next 12 months (£18m already received this year) - c.40p per share available for further capital distributions. If they can sustain the 2024 dividend at 6p - we could see in the region of 60p per share paid out this year - leaving the business valued at £175m year end (40p share) - although this assumes no bad debts. Dividends would obviously fall pro-rata fall as loan repayments are distributed and not reinvested. All imo etc. Sister company GCP still active but looking at £50m capital return this year. SB
If RENX was to go into administration - it would be a pre-pack deal and my money would be on Sinai and Harwood taking it private. They have sunk a lot of cash into the business and would not just walk away and let someone buy all their investment for a fraction of what they would value it. They both pumped further cash in today. So if there is a purchaser - they need to pay what Sinai and Harwood value the business imo. I took up some VRCI retail placing at 9p; and bought some more at 11p; hold a decent slug of EFK; and still hold some NIOX although have been selling at 60p+. Don't have any trellus. Not unsurprisingly I would like the bio tech sector to come back onto the radar for II's......SB
I'm the same oldbut - picking up some here and there - I have a long term target holding in mind and am about 65% of the way there. In the next six years the dividend should hit c.10p a share based on current growth - which they have stated is covered for the next 20 years. Had a quick look at Angel Trains - in 2008 INPP bought 5% for £25m; in 2021 they bought another 5% for £100m - 4x multiple. I believe there are many similar investments where the value of the equity is considerably higher now than the original purchase price (especially in the regulated asset, transport sectors). I do not believe these are reflected in the current NAV. A number of concessions will come to and end in the next 10 years - which will throw off cash. Its a good sized fund, but not beyond possibility one of the big asset managers cast an eye here. At some point value will return, but in the meantime - load up. SB
Morning oogle - I think there may be some contagion here with another of Harwoods stable - RENX - fund raising this morning at a steep discount. VRCI down as well. I don't think EKF needs to raise money.........but some clarity in next weeks results would be good. Its burned through its £20m cash pile at an alarming rate and there is no confirmation on any commercial fermentation deals of scale to date post investment. SB
ART123 - the company has a dual listing on AIM and Nasdaq via American Depositary Shares (ADS) representing two UK AIM shares. Given Nasdaq listing the company is bound by dual listing codes.SB
Sharebel - just a point of clarification - the placing is taking place on AIM. US participants can request shares - but not in the form of Nasdaq ADS shares.
MAJW - my point was to do with a closed placing as opposed to an open retail offering. We have a difference of opinion on the rationale but that's the nature of investing. In the short term the company needed cash and we shall see if this approach works and if there is an appetite to invest at 20p/share. SB
Unhooked - good observations - was thinking similar. That said - this placing does raise some interesting points - specifically around the existing primary shareholders (Sinai, Harwood, Jefferson) in terms of what they know about the unsolicited approach and whether any numbers have been discussed. If so - are they allowed to participate in the fund raise; and is this why the placing share are only being offered to a select number of participants? There was no mention of these three parties taking up the placing which was unusual in these circumstances. Wil be interested to see later today if this is clarified. Having a longer cash runway should help negotiations with potential purchasers - bearing in mind they are raising the maximum possible amount based on current nasdaq 20% rule - with the suggestion that a second placing could take place following the AGM. Also stops a low ball offer forced sale. All medicare, reimbursement, FDA, insurance objectives should be achieved by end of 2024. Interesting times. SB
On the other hand.....isa allowance is now £25k a year.....so its not all grim oogle! SB
Company updating II's today on current progress. One interesting point to note is the panel discussion which includes a review on both Cadent and Angel trains. Cadent is in the news as both Macquarie and Federated Hermes appear to be looking to sell a combined 9.6% from their current stakes (Macquarie hold 26% in total and looking to sell 5%; FH hold 13% and looking to sell 4.6%). The sale value is being touted in the region of £1.3B. INPP own 7.25% of cadent which was purchased for a total investment of £430m. The macquarie deal would imply cadent is now worth in the region of £13B - more than double its 2017 valuation. I am not sure what value INPP currently has for cadent on its balance sheet but its going to be a lot less than the numbers currently being discussed - this adds double digit numbers to its current NAV if the valuation and sale goes through at current levels. I assume INPP are going to brief II's on the underlying value of its investment in cadent - and similar for Angel Trains - in an effort to stimulate interest in its shares. SB
Not exactly sure what purpose todays RNS served. It only reiterated last months Medicare update - confirming it was on an agenda and we should hear later this year if payments have been approved for a company that won’t exist. I assume last nights nasdaq frenzy assumed funding news was on its way, not another bit of news which was issued last month on how much the company might get paid for all the sales it never makes. SB
Apologies oldbut….I should have realised given your previous postings here! I have been surprised at the recent decline here in the last couple of weeks - I expected us to move into the £1.40 territory after the buyback announcement not move towards £1.20. Especially given the repayment of the RCF and effectively sitting on £100m of cash waiting to be invested. It’s getting close to a 7% yield. If I can free up cash elsewhere I will be looking to pick up some at this price. ATB SB
Definitely Looks like there is something afoot given lack of dividend announcement. 93p NAV plus 6p in dividends due this year - c.£1 a share. What’s that worth to potential purchasers - and what would shareholders be prepared to accept. Got to be in the 80-85p range imo - gives purchasers a c.15%-20% profit and a decent exit for shareholders from recent lows. Or hold fast and take money over multi year wind down, SB
Not so sure it’s hiding its NAV - it produces a bi-annual NAV similar to most other funds of this nature. £1.55 as at June 2023- next update due in March covering period to Dec 2023. At some point discount rates will start to reduce which will increase NAV - and as most funds the valuation assumptions are generally quite conservative. Loads of shares traded in last 48 hours - reflecting flow of funds out of sector and negative view of UK - combined with funds no longer actively investing. Although unusual timing given the buyback intro. Still think this is a decent hold - and once interest rates reduce and inflation gets closer to 2% the annual 2.5% dividend increase will do well here - plus decent capital growth upside imo. SB
It was unusual that a dividend announcement was not made as part of the quarterly update on 25th January. Then no mention a few days later as part of the Strategic Review update. Could be they will update in the coming days - or there is something in the background (an offer) - the terms of which may impact distributions? SB