Member Info for StarBright

Sometimes a little bit of issuance - for employee share plans, or old warrants, whatever - changes the denominator and anyone sitting spot on a notification threshold ends up having to issue a TR1 even though their holding hasn’t changed.

Interesting development.

Looks like Blackrock have deliberately targeted the 5% level which creates a disclosure obligation for them, hence this RNS. They could easily have stopped at 4.99% and stayed under the radar. That they didn’t suggests they are looking to make the wind blow, as someone once put it (in a film)…

It’s not possible to state with confidence whether the set of size trades reported this week were buys or sells, or a mixture. Individual trades could themselves be BOTH a buy and a sell at the same time (in the same way as ATs traded on the order book).

The SINT designation itself tells us only the nature of the venue where the trades were executed. It doesn’t tell us anything about who bought or sold, or whether these were positions being opened or closed.

If a short position has been built then the notification threshold is just above 25m shares, so perhaps we’ll see something there.

If it’s an existing holder reducing their position (Tribeca were allegedly interested sellers recently…) then they’d have to be starting at over 3% and shifting more than 50m shares before any disclosure was required. So perhaps less likely that we’ll see a TR1.

GGP does suffer from the attention flow desks because of the ETF holdings. They can/will transact in size, and will borrow if necessary. Very adept at not leaving clumsy footprints in the market, so I wouldn’t expect any confirmation.

TLDR - it’s not possible to say with any certainty what these trades are. We may get some more info via disclosures in the next few days, but probably not.

In offering up a local-rules definition of accretive, SD told us something interesting. He defined accretive as meaning that a GGP shareholder today owning X% of GGP effectively owns X% of GGP’s 30% of Havieron and would “effectively own” at least X% after any deal. This is a clever redefinition. It frees him up to issue new equity (/alongside any debt) at a discount whilst maintaining that such a deal is “accretive” for existing holders.

By way of illustration, the Five Diggers own 139m of the 5.1bn shares in issue, roughly 2.7%. So they own 2.7% of GGP’s 30% or 0.81% of Havieron. For any future equity issuance NOT to be dilutive under SD’s definition, 5D would need to end up owning at least 0.81% of GGP and therefore of Havieron. On this basis, the MAXIMUM number of shares issuable would (139m/0.81%)-5.1bn = 12bn new shares.

A switched-on analyst would argue that those 12bn shares would have to be issued for cash at NO discount to the prevailing share price for the conventional definition of accretive to be satisfied.

At today’s SP that would imply a limit-price for NEM’s 70% of 12bn * 6.55p or £800m. However, if the price for the 70% were to be agreed at say £400m (roughly USD500m) then the 12bn shares could be issued at 3.33p, a 50% discount to the prevailing SP. 5D would still own 139m of the 17.1bn shares in issue, representing 0.81% of GGP or 0.81% of Havieron. SD would - using his new definition - argue that they hadn’t been diluted. They might view that differently!

Of course there’s very little chance that a purchase of the 70% would be solely financed with equity. The more debt that is used, the more likely it is that SD would be able to paint such a purchase as accretive. Again to illustrate, this time using £400m at 50% equity 50% debt; 6bn new shares would be issued so 5D would own 139m of 11.1bn or 1.25%. SD would say they’ve gone from effective ownership of 0.81% to 1.25%

It all gets very complicated if there’s a package deal for the 70%+Telfer, especially if the “value” of Telfer was negative. The two components would have to be disaggregated to apply the definition that SD proposes.

So…. SD’s promise that any deal for the 70% would be undertaken only if it were accretive requires acceptance of his novel new definition of accretive. He’s phrased it in a clever way that makes it very easy for him to meet his promise, even whilst issuing more shares at a discount. Investors here need to keep their eyes wide open.

So….. Holders will receive a final dividend, albeit one reduced by 20% in line with the company calls “adjusted earnings”. Looks like a reasonable outcome to me, with the worst fears of some commentators not being realised.

I did point out yesterday that the TH materials are more likely be focussed on the interim results than they are on any grand unveiling. Q&A will be interesting, but he’s a pro at saying “Look…” and not answering direct questions. A core skill for listed company CEO’s!

He has been consistently attentive to comms with PIs, to his credit. I am watching with interest.

To get the Panel to agree to an extension generally requires the potential offeror to demonstrate they are seriously engaged and working hard…

Not commenting on SDRY, but dropped in for a read ahead of the big day tomorrow. “Thisrty Thursday” is THE going out night in the City though @Toffers…

https://www.cityam.com/we-cant-stop-london-changing-how-the-four-day-week-enables-thirsty-thursday/

Results due 6th March? Perhaps they'll release those on Tueday instead and that'll be the focus of the TH? Could even release them after close on Tuesday, although that would mean he'd need different materials for the VidCon and the TH itself so perhaps unlikely.

That there was “excess demand” for placing shares at 50p tells us that it was under-priced. The company has been absolutely turned over by its brokers here, who have likely been telling SirAl that they won’t get it filled at 60p so you’ll have to reduce to 50p etc. I wonder what price they started at…?

This is what happens when you put a scientist in charge of a quoted company. Expertise in one field doesn’t readily translate.

Much easier with foresight like SirAl…!

I wouldn’t worry about missing out. I expect there’ll be plenty of shares available on the open market.

@NYsize - your posts here are disgusting.

Not one for reading the room.

Or that holders are being brutally softened up for a takeover offer at (say) 70p.

That would go down well.

@tichtich - I have a controversial view: the NAVs reported by renewable energy companies applying the IFRS10 “investment entity” approach [where subsidiaries are recognised at fair value through profit and loss] are largely illusory and should be disregarded by investors. Consequently the NAV discounts that many (most?) of these companies are reporting presently are not particularly relevant or useful. In fact, the term “NAV” is somewhat misleading in this use case.

There are three different ways that investment companies calculate NAVs. They are VERY different to each other. In simple terms:

Method A - the NAV represents the sum total of liquid securities traded on the open market. This is how traditional investment trust NAVs are compiled. It is a largely objective measure, verifiable against third-party data.

Method B - the NAV represents the sum total of independent professional valuations of illiquid (not traded on an exchange) assets. This is how property funds work; they have to get periodic valuations of individual properties performed by qualified independent surveyors. This method is slightly less objective, because it relies upon the professional judgement of the appointed surveyors.

Method C - the NAV represents the sum total of the Director’s valuations of the assets (in this case typically unquoted companies) that make up the fund. The valuations are based upon cashflow projections for the underlying assets, to which a discount rate is applied. This is FAR from objective, because it combines together uncertain projections for future cashflows and arbitrary assumptions for discount rates, interest rates and inflation etc.

The renewable energy companies utilise Method C. Thus the “NAVs” they publish are subject to significant inaccuracy. In no way do they represent a dispassionate view of the “market value” of an underlying portfolio comparable to those of companies using methods A & B. The NAV’s they publish are hugely sensitive to input assumptions for discount/interest/inflation rates. That IFRS10 requires these companies to update their self-generated “NAVs” periodically and recognise the changes as operating income just compounds the mis-representation. If/when interest rates and inflation fall these companies will all adjust down their discount rates and report increased operating income as a result. Even if everything else stays the same; no more projects are made operational, no more wind/irradiation etc. the reported “NAVs” will increase. I think this is nonsensical.

The questionable NAVs however form the basis upon which the management companies “employed” by these funds charge for their services. It is the mechanism through which their operators are paid. Hence it is extremely important to them…

What matters more is the ability of the underlying portfolios to produce sufficient free cashflow to sustain their dividends. I may write a separate post on this another time

I may have found the answer. ChatGPT says….

"Date change and degradation" in solar power generation refers to two distinct aspects:

1. **Date Change**: This refers to the performance change in solar panels over time. Solar panels gradually lose efficiency as they age due to various factors such as exposure to weather elements, degradation of materials, and unavoidable wear and tear. The decrease in efficiency over time is commonly known as degradation.

2. **Degradation**: Degradation specifically refers to the reduction in the performance or efficiency of solar panels over time. It's a natural process that occurs as solar panels are exposed to sunlight and environmental conditions. Manufacturers typically specify the rate of degradation, which is the average annual decrease in efficiency that can be expected over the lifetime of the panels.

Monitoring and accounting for degradation is crucial for accurately estimating the long-term performance and output of solar power systems. It allows stakeholders to plan for maintenance, replacement, and anticipate changes in energy production over the lifespan of the solar panels.“

Yes, it depends on how you treat the debt amortisation when defining cover and I agree with your expectation. Not sure it is a mistake as such, more an outcome of the definitional chaos that funds operating in this sector are creating - in conjunction with IAS craziness…

Now who can help me better understand what is meant by “Date change and degradation” in the directors valuation waterfall. It represents the largest single component (-£62m) of the reported change, and doesn’t appear to be defined or explained anywhere as far as I can see. Perhaps I have missed something obvious? Thoughts / help welcomed!

A very strong statement from the Chairman, particularly with respect to dividend cover. As always with these co.’s the results themselves are hard to unpick and understand, but I will be taking a close look.

John Scott, Chair of Bluefield Solar, said:

"I am pleased to present another robust set of results which reflect continued operational progress across the Company's portfolio. I reiterate our full year guidance of dividend distributions for the financial year of not less than 8.8pps (2022/23: 8.6pps), which we expect to be covered approximately two times by earnings, net of debt amortisation and the EGL. Based on yesterday's closing share price, this provides shareholders with a yield of over 8.5%. The position of the Company today is further enhanced by its high levels of regulated indexed revenues, complemented by high fixed power sales contracts, a large development pipeline, a defensive capital structure and a robust NAV.

"In the meantime, the Company is delighted to have formed a Strategic Partnership with GLIL, providing a partner with whom we can co-invest for the long term, spreading our capital resources over a greater range of investors.

"Despite these compelling attributes, it has been disappointing to note the Company's share price discount to NAV widen, at times exceeding 25%. Meanwhile ample transactional evidence adds further weight to the credibility of the Company's valuation, which is in stark contrast to the share price. We remain entirely confident that Bluefield Solar is well placed to perform the task it has executed so well for over a decade, playing a significant role in the continuing development programme that is so clearly required to expand the UK's supplies of indigenously produced green electricity, while creating compelling growth and income for shareholders, with a total return of 110.14% since IPO."

Just confirmation of Giles Wilson’s joining date by the look of it. Interesting that he’s been buying shares ahead of joining.

Here’s a little background info courtesy of the Retail Gazette:

“Dr Martens has named Giles Wilson as its next chief financial officer.

Wilson will join the footwear retailer early next year and succeeds Jon Mortimore, who announced his retirement in April.

The incoming finance boss joins from global spirits company William Grant & Sons, which owns Glenfiddich Scotch Whisky, The Balvenie Whisky and Hendrick’s Gin.

His appointment comes as the company’s share price hit a record low after issuing several profit warnings this year.

Prior to this, Wilson was the CFO at aviation company John Menzies from 2016, until being promoted to chief executive in 2019.

Dr Martens chief executive Kenny Wilson said the new finance boss brings “a range of complementary skills and past experience that is highly relevant to our brand-first strategy” and the target of hitting £2bn in sales.

Chair Paul Mason said “Following a rigorous selection process, we are delighted to appoint Giles as CFO.

“He is a very capable finance leader with extensive experience in a number of sectors, and, most recently, his time in the branded spirits industry has given him a good grounding in global brands and wholesale distribution management.

“His knowledge of the public markets will be a valuable asset to the team as Dr Martens continues its growth in the listed environment.””

https://www.retailgazette.co.uk/blog/2023/11/dr-martens-new-cfo/