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#KR1 interims…yeah, it’s happening!

‘Following extensive & constructive engagement & dialogue with the FCA, we are pleased to report that the Co has made significant progress towards positioning the Co for a more senior public listing.’

https://investegate.co.uk/announcement/prn/kr1-plc--kr1/interim-report-for-the-half-year-ended-30-jun-/9141195

$KR1.L $KR1.AQ

#VLRM - Current NAV, mNAV & Financial Situation - II

But tht's NOT to say #insolvency means you'll see an administration/bankruptcy notice next wk. Ironically, the WORST #stonks almost never go bust - since, by definition, they're run by mgmt who'll sell MORE shares at ANY price, even via a death-spiral convert if necessary...AND alas, they're funded by punters who'll still keep buying any old junk at any old price.

So they obv have some cash on hand, they'll juggle their bills, they may even attempt to reval other bal sht inv'ts (again, not credible unless you see some cold hard cash), they'll tout their blue sky prospects...and keep limping on 'til their next fundraise.

And don't be fooled...#Valereum's ONLY revenue TO DATE was £19K in 2024, and I have no doubt any pot'l/future revenue increase will sport a NEGATIVE gross margin, and/or even more admin expense. Not that it really matters...

From day one - and it's absurd to even have to point this out - #VLRM's serial-failure/white-label/patchwork-quilt minority inv't 'strategy' was obv NEVER going to even remotely take on the likes of $HOOD or ANY other credible #crypto/#tech co's #tokenisation strategy...

So #VLRM prob won't go bust, but WILL keep grinding down to penny stk status & flirting with insolvency & its only 'real' value is as a listing/trading sardine...and I'd assume it shd dump/settle at something like £0.5M instd, ie (sub-) 0.2p/share, so that's another (90)%+ pot'l downside ahead.

They shdn't nd it, but now the #Valereum interims/usual rosy mgmt commentary dropped, it's shocking to see long-suffering punters still haven't figured out...#VLRM trades on a 118 mNAV today, even though it will likely go #insolvent within the next wk!?!

But but but, how cd this be...here's #VLRM's end-Jun interims, which boast a +£2M reval'n on inv'ts & a DOUBLING in bal sht assets to £10M+!?

https://www.aquis.eu/stock-exchange/announcements/5383766

Well, they inflated the bal sht before...three yrs ago, #VLRM literally booked an undrawn loan facility as a £6M bal sht ASSET!?!

https://www.aquis.eu/stock-exchange/announcements/3760850

Which was soooo ludicrous & egregious, I literally forced them to retract & restate their results:

https://www.aquis.eu/stock-exchange/announcements/3783294

And NOW they've made multiple new inv'ts (god knows the logic here), despite not having the cash to settle upfront...but regardless they booked full 'value' of these inv'ts on the bal sht (now £10M+), offset by liabilities to be settled via multiple/future payment tranches.

So if #VLRM can't follow through on these deals, at best those assets/liabilities disappear, or at worst their actual net (ie paid for) inv'ts are likely frozen or get wiped out (and/or they get sued). Regardless, as I've highlighted before, the ONLY bal sht inv't that has some obvious/verifiable value is its 27.3M share stake in London BTC Co (now $BTC.L, ex-Vinanz). NO credit to mgmt for this lone success:

When Dave Lenigas abandoned #VLRM to focus on #Vinanz, he engineered this exit deal & #BTC's net gains since are down to him/Hewie Rattray.

But anyway, mgmt sold 97% of this stake since - as usual, mgmt commentary vs. interim accts dsn't make sense, but piecing it together they sold 6.2M #BTC at 12.1p in Jun (£752K), 5.7M at 17.6p in Jul (£1.0M) & 14.6M at 4.7p in Sep (£0.7M), with the remainder worth £43K (at 5.1p).

But in classic #VLRM fashion, they still managed to snatch defeat from the jaws of victory...#BTC peaked at 65p in Jun & finished Jun at 26.4p, but mgmt managed to sell at an avg 9.2p/share!

So tht's #VLRM's ONE successful inv't basically gone, and a) I have NO confidence in their other inv'ts, unless they EVER sell anything for cold hard cash, and b) it dsn't matter anyway, as mgmt's getting paid/spending like drunken sailors, w/ a H1 £3.4M+ expense run-rate (NOT a one-off, H2-24 run-rate was £2.5M)......no biz can survive an 80% expense ratio!

So let's tot up #VLRM's NAV today:

£4.3M End-Jun Equity

0.0M Warrant Cash Recd

0.4M Fundraise (Net)

(5.6)M End-Jun Val'n of 21.1M #BTC

1.0M Sale of 5.7M #BTC

0.7M Sale of 14.6M #BTC

0.0M Remaining 0.8M #BTC

(0.8)M H2 Admin Expenses To Date

= £51K NAV, or 0.022p NAV/Shr

So yeah, tht's a (record!) 118 mNAV - ie 0.022p NAV vs. a 2.6p share price - and best estimate, #VLRM's remaining £51K NAV gets wiped out within the next wk.

https://www.aquis.eu/companies/V

New Investment Thesis: https://wexboy.wordpress.com/2017/05/28/applegreen-just-grab-go/ Cheers, Wexboy

New Investment Thesis A sub-10 P/E (ex-cash) for a business which boasts underlying long-term 30% pa revenue growth: Record plc (REC:LN) is the world’s largest independent currency manager. Based in Windsor, it was founded in 1983 by Neil Record, winning the world’s first stand-alone currency overlay mandate two years later. Record is still majority-owned by its directors/employees, with no proprietary business of its own – it focuses solely on being a ‘trusted advisor’ to an institutional client base (pension funds & foundations), providing (bespoke) passive & dynamic currency hedging and currency for return strategies, with AUME now at $58.2 billion (£46.6 billion). [Record only manages currency risk, so AUM is notional – i.e. it doesn’t manage underlying client assets – therefore, it uses the term Assets Under Management Equivalents]. This (old) video is still worth your time watching: But unfortunately, after listing at 160p a share (a £354 million market cap) in Nov-2007, its long-term chart is none too pretty... See the blog for full investment thesis/video/charts/data tables & analysis/links/etc: https://wexboy.wordpress.com/2017/04/28/love-that-record-give-it-a-spin/ Cheers, Wexboy

Tetragon Financial Group (TFG:NA, or TFG:LN) (5.5% of current portfolio): Share Price: USD 12.55 Market Cap: USD 1,172 Million Looking at the longer-term chart, one might presume TFG’s NAV discount has been closing steadily…but in reality, the shares have mostly been tracking NAV higher. After the recent $50 million tender offer, I estimate NAV’s increased to $20.12 per share (all else being equal)…leaving Tetragon trading on a 38% discount to NAV. And stripping out net cash, it actually trades on an ex-cash 50% discount to the value of its investments & asset management platform. Noting TFG’s balance sheet strength, its record of compounding NAV by 15% pa in the last 5 years (& 12% pa since the original 2007 IPO), a generous & progressive dividend policy (which now offers a 5.3% dividend yield), and a history of tender offers & buybacks ($250 million+ in the last 3 years), this valuation makes little sense. Two main objections are generally cited: The first being Tetragon’s portfolio, which is supposedly chock-full of CLO equity…whereas in reality, CLO equity now amounts to just 24% of NAV, a ratio that continues to fall. The second is management itself – certainly well deserved, based on past history – but TFG now has 24% insider ownership, and management has actually demonstrated consistent alignment with shareholders in the past few years. Quite obviously, growing the asset management business & increasing the share price/NAV has become a far more lucrative proposition now than attempting to gouge shareholders. Fortunately, technicals confirm this: After trading a tight $9.50-11.60 range for most of the last 4 years, the shares broke decisively higher in December – I wouldn’t be surprised to see a $14 price handle soon (& further progress in due course). Management is also placing increasing emphasis on the AUM growth & earnings of TFG’s alternative asset management platform, currently focused mainly on credit, real estate & infrastructure. AUM has grown (primarily organically) an astonishing 33% pa in the last 4 years, to reach almost $19 billion now – despite the growth focus, it already boasts 30-40% EBITDA margins. Management also dual-listed the shares in London, expanded research coverage, invested more time in dial-in & road-show presentations, and has now begun wooing the business press – the ultimate intention here is to IPO the alternative asset management business. But I’m also conscious another of my holdings here – Fortress Investment Group (FIG:US), also a cash-rich & under-valued alternative asset manager – is actually TFG’s largest shareholder (controlling a 14-15% stake). I’d actually rate the chances of a merger/takeover here just as likely as an IPO, noting FIG’s long & extensive experience with building investment platforms & spinning o

VinaCapital Vietnam Opportunity Fund (VOF:LN) (5.1% of current portfolio): Share Price: GBP 271p Market Cap: GBP 560 Million (USD 705 Million) Everything aligned for VOF in 2016 to deliver a blistering +70% return (in sterling terms): Its substantial capital markets (i.e. non/un-listed) portfolio allocation was a primary driver of a return that was nearly double that of the VN-Index, its NAV discount closed significantly, plus it enjoyed a dramatic boost from sterling’s post-Brexit depreciation (VOF shares are now listed in GBP). The portfolio out-performance is particularly gratifying, as I’d previously highlighted VOF’s more diversified portfolio as a better long-term bet (vs. its peer closed-end funds/ETFs, which focus on listed equities), in what’s still obviously a frontier market. [See blog comments here, for a comparison with the VanEck Vectors Vietnam ETF (VNM:US)…which, extraordinarily, managed to lose money for its shareholders last year!?] The underlying VN-Index return is also a reminder there has been little sign of over-heating in the market, which leads me to believe there’s plenty more gas in the tank here. 2017 GDP growth’s expected to surpass the current 6.2% rate, retail sales are humming along at +10.2% yoy, inflation remains sub-5%, the USD/VND remains stable, the banks & the property market appear to be heading in the right direction again, and 10-15% EPS growth is expected…yet Vietnam continues to trade at a 20-30% P/E discount to regional averages. As for VOF itself, it trades on a 0.81 Price/Book multiple, despite an aggressive & ongoing share buyback programme – I see plenty of gains ahead in terms of NAV growth & discount compression, as Vietnam continues to leverage & benefit from its labour/cost export advantage, and (just as importantly) its burgeoning domestic consumer economy. For this & other top picks for 2017, see here: https://wexboy.wordpress.com/2017/01/27/top-trumps-for-2017/

Zamano (ZMNO:ID, or ZMNO:LN) (3.3%): Share Price: EUR 0.055 Market Cap: EUR 5.5 Million Unfortunately, with special situation/activist stocks, things can sometimes get (much) worse before they finally get better…as with Zamano, it seems. Since the UK/Payforit trading update – where management basically threw its hands up in the air, aghast – investors have tagged the business itself as (less than) worthless. Which is understandable, but a wee bit overboard… While smaller investors may have been puzzled by the apparent laissez-faire approach here of large stake-holders- who were maybe focused more on an eventual exit, rather than the day-to-day vagaries of the share price – I think that’s clearly no longer the case. While it should have accompanied the original trading update, in the end (albeit, two months later) management was forced to deliver an actual restructuring plan. Annualised cost savings of almost €0.4 million were announced, with more to come, to ‘allow the Company to continue to operate profitably into the future…whilst also protecting the Company’s existing cash position & shareholder value’. Crucially, all M&A discussion/activity has ceased, with the focus ‘on maximising shareholder value whilst continuing to explore options for further value creation’. Presuming both, Zamano now trades on a 0.75 Price/Cash multiple (vs. €7.3 million net cash as of end-Nov), and a substantial portion of this cash should now be available (logically, with acquisitions off the table) for a return of capital. But let’s not write off the ex-cash value here – after all, ZMNO’s survived plenty of industry changes & setbacks for nigh on 20 years now, plus it also managed to generate €2.5-3.0 million EBITDA pa for the last 4 years. Which suggests it can rebuild a profitable business again…except that would take time, plus a full management bench. A bird in the hand may now be more compelling – in fact, hopes for a sale could explain the radio silence re a new CEO. [Even if the company’s intangible assets were sold off piece-meal, and/or it was touted as a potential listed vehicle for a business wishing to IPO, I suspect significant value could still be realised in terms of the current market cap]. All options to ‘explore’…but to actually realise value here, investors need some timely decisions & implementation from the board. And while it’s a small stake, Farringdon Capital must be frustrated with a significant mark-down already on its new 9.0% stake (purchased from Pageant Holdings, and with little chance to exit unless they find another deep-value block buyer at an even worse price) – we can hope they provide fresh support/activism here. For this & other top picks for 2017, see here: https://wexboy.wordpress.com/2017/01/27/top-trumps-for-2017/

Rasmala (RMA:LN) (3.0%): Share Price: GBP 110p Market Cap: GBP 33 Million Rasmala was a ghost in 2016…the business made no discernible progress, nor did the shares. Which is all the more frustrating, noting the oil price soared, the AIM Index clocked a 14%+ return, and even (some) deep-value micro-caps rallied significantly. Longer-term, the legacy private equity portfolio remains unsold, AUM is unchanged for over 3 years now, and after 5 years at the helm CEO Zak Hydari is still nowhere close to delivering a sustainable return on equity. Even successful activism – relinquishment of the banking licence, a £20 million tender offer, a share buyback approval (albeit management hasn’t acted on it since) – has been ignored by investors. But it’s priced accordingly: Eliminating the equity stake in Diamondcorp (DCP:LN), which looks touch & go here, RMA trades on a 0.35 Price/Book multiple. For a company which operates near break-even & has a relatively low-risk/un-levered/hedged balance sheet, that’s a dirt-cheap valuation. But alas, a valuation which may not change significantly ’til we see a significant corporate event – whether it’s another tender offer (we’d probably need to see management do the buyback first), or some kind of merger/takeover. Though the appearance of Somers Ltd., who have steadily built a 8.1% stake to date, may well prove a potential catalyst. While it’s still one of their smaller holdings, Somers has a history of constructive activism – we can expect them to push for value enhancement/realisation here too. Opportunities for a deal with another Somers portfolio holding might appear limited (though Bermuda Commercial Bank could perhaps approach Rasmala as a potential balance sheet transaction/expansion), so finding a buyer or initiating a formal sale seems a more likely bet. [And Somers wouldn’t have much trouble attracting support from other disgruntled investors!]. And noting another relationship that’s been developing recently (here & here), Ajman Bank (AJMANBAN:UH) is perhaps a candidate – though in a formal sale, other bidders could pop out of the woodwork (SHUAA Capital (SHUAA:UH), for example?). Like most special situations, earning a decent (annualised) return here will inevitably depend on how long it might take for value to be realised – and so, time is the enemy here… For this & other top picks, check/Google my latest 'Top Trumps For 2017...' post on the Wexboy investment blog.

Newmark Security (NWT:LN) (2.4% of current portfolio): Share Price: GBP 1.45p Market Cap: GBP 6.8 Million A special situation…which actually obscures an underlying growth story. While these trading updates (here & here) have crucified the share price, Newmark’s electronic division still looks like the real problem here. For almost a decade now, revenue’s unchanged, while divisional margins declined relentlessly – from 20-23%, to a £(0.5) million loss today. Poor return on capital was bad enough, but losses kill any argument for keeping the division. And after 4 years as CEO, shareholders presumably have little confidence Marie-Claire Dwek can still deliver a turnaround – and her hands are now full dealing with the larger asset protection division. Noting Chairman Maurice Dwek always ran a tight ship here, the situation appears untenable – something’s gotta give… Presuming an eventual sale, a larger competitor could easily wring 10-15%+ margins from this division – achieving a 0.5 Price/Sales multiple (i.e. £3.8 million) seems reasonable. [And noting net assets of £5.1 million, it also looks salvageable in a wind-down/piece-meal sale]. Who knows what the FY-2017 result will be, but let’s assume 50% of said consideration ends up incinerated, in terms of a once-off net loss (in reality, I suspect a working capital reversal will mitigate cash losses). Such a scenario would imply £6.2 million of cash, close to the current market cap…tagging NWT as a possible target. It also implies a negligible 0.04 Price/Sales multiple for an asset protection division that’s averaged £13.3 million revenue pa in the past 4 years & boasts average (pre-impairment) margins of 22%+ (nearer 14%, inc. un-allocated corporate expense). It also grew revenue 17% pa & 10% pa in the last 5 & 10 years, presenting a ridiculously cheap growth opportunity. [Plus, I believe this growth trajectory confirms management’s assertion a poor FY-2017 result will prove nothing more than a timing issue, in terms of an eventual sales payoff]. As for Newmark’s cash, using it to fund share buybacks & bolt-on acquisitions would also add substantial shareholder value. [It also justifies maintaining the dividend – a 6.9% yield offers compelling support]. Meanwhile, my marked-down position size looks about right…’til we finally see some kind of sensible/decisive capital allocation here from the CEO/board. For this & other top picks for 2017, see here: https://wexboy.wordpress.com/2017/01/27/top-trumps-for-2017/

2016 – The Great Irish Share Valuation Project (Part IV) Company: GAN (GAN:LN) Last TGISVP Post: Here Market Cap: GBP 25 Million Price: GBP 36p https://wexboy.wordpress.com/2016/12/22/2016-the-great-irish-share-valuation-project-part-iv/ Price Target: GBP 15.6p Upside/(Downside): (57)%

2016 – The Great Irish Share Valuation Project (Part IV) Company: UDG Healthcare (UDG:LN) Last TGISVP Post: Here Market Cap: GBP 1,653 Million Price: GBP 668p https://wexboy.wordpress.com/2016/12/22/2016-the-great-irish-share-valuation-project-part-iv/ Price Target: GBP 387p Upside/(Downside): (42)%

2016 – The Great Irish Share Valuation Project (Part IV) Company: Connemara Mining Company (CON:LN) Last TGISVP Post: Here Market Cap: GBP 1.1 Million Price: GBP 1.45p https://wexboy.wordpress.com/2016/12/22/2016-the-great-irish-share-valuation-project-part-iv/ Price Target: ZERO Upside/(Downside): (100)%

2016 – The Great Irish Share Valuation Project (Part IV) Company: Dalata Hotel Group (DHG:ID) Last TGISVP Post: Here Market Cap: EUR 821 Million Price: EUR 4.485 https://wexboy.wordpress.com/2016/12/22/2016-the-great-irish-share-valuation-project-part-iv/ Price Target: EUR 4.20 Upside/(Downside): (6)%

2016 – The Great Irish Share Valuation Project (Part IV) Company: Botswana Diamonds (BOD:LN) Last TGISVP Post: Here Market Cap: GBP 6.7 Million Price: GBP 1.975p https://wexboy.wordpress.com/2016/12/22/2016-the-great-irish-share-valuation-project-part-iv/ Price Target: ZERO Upside/(Downside): (100)%

2016 – The Great Irish Share Valuation Project (Part IV) Company: Mincon Group (MIO:ID) Last TGISVP Post: Here Market Cap: EUR 162 Million Price: EUR 0.77 https://wexboy.wordpress.com/2016/12/22/2016-the-great-irish-share-valuation-project-part-iv/ Price Target: EUR 0.80 Upside/(Downside): 4%

2016 – The Great Irish Share Valuation Project (Part IV) Company: Green REIT (GRN:ID) Last TGISVP Post: Here Market Cap: EUR 926 Million Price: EUR 1.341 https://wexboy.wordpress.com/2016/12/22/2016-the-great-irish-share-valuation-project-part-iv/ Price Target: EUR 1.47 Upside/(Downside): 10%

2016 – The Great Irish Share Valuation Project (Part II) Company: Total Produce (TOT:ID) Last TGISVP Post: Here (former holding, also see here & esp. here) Market Cap: EUR 538 M Price: EUR 1.69 https://wexboy.wordpress.com/2016/05/30/2016-the-great-irish-share-valuation-project-part-ii/ Price Target: EUR 1.77 Upside/(Downside): 4%

2016 – The Great Irish Share Valuation Project (Part II) Company: Galantas Gold Corp (GAL:LN) Last TGISVP Post: Here Market Cap: GBP 7.2 M (assuming the latest Placing/Debt Exchange) Price: GBP 5.25p [NB: Most shareholders will be happy with the London listing, but I should highlight GAL:CN may actually offer better liquidity.] https://wexboy.wordpress.com/2016/05/30/2016-the-great-irish-share-valuation-project-part-ii/ Price Target: GBP 2.6p Upside/(Downside): (50)%

2016 – The Great Irish Share Valuation Project (Part II): Company: Escher Group Holdings (ESCH:LN) Last TGISVP Post: Here Market Cap: GBP 31 M Price: GBP 167.5p https://wexboy.wordpress.com/2016/05/30/2016-the-great-irish-share-valuation-project-part-ii/ Price Target: GBP 121p Upside/(Downside): (28)%