16 Jun 2020 07:00
RM Secured Direct Lending Plc and RM ZDP PLC | |
("RMDL" or the "Company") | |
LEI: 213800RBRIYICC2QC958 | |
Net Asset Value | |
RMDL announces that its unaudited net asset value per ordinary share as at 30 June 2020, on a cum income basis, was 91.14 pence (30 April 2020: 89.10 pence). |
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RM ZDP PLC announces that the unaudited accrued capital entitlement per ZDP share as at 30 April 2020 was 107.67 pence (30 April 2020: 107.36 pence). |
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NAV & Dividend update The NAV total return for the month was 2.29%. This takes the one-year NAV total return to (1.5%) and the cumulative NAV total return since IPO in December 2016 to 11.9%. The Ordinary Share NAV as at 31st May 2020 was 91.14 pence per share, which is 2.04 pence higher than at 30th April 2020, comprising interest income net of expenses of 0.53 pence per share and an increase in portfolio valuations of 1.52 pence per share which includes all credit and currency movements. The Company declared a dividend of 1.625p per ordinary share with respect to the period Q1 2020. The dividend was covered by income by a ratio of 1 to 1.15 for the quarter with income currently on track to achieve the stated dividend objective for Q2 2020. The ex-dividend date is 5th June. During the month the Company purchased an additional 175,000 shares, bringing the total holdings held in treasury to 675,000 shares. RM and the Board continues to monitor the discount to NAV. RM notes that 34% of the Company's portfolio is marked to the market bid of external quotes and the remaining 66% of the portfolio marked by the Valuation Agent with an average mark of 92.52. The current share price also offers a running yield of 8% on the target dividend distribution which RM feels offers income investors compelling value.
Portfolio Activity As at 31st May, the Company's portfolio consisted of 33 debt investments with a running yield of 9.48%, diversified across 13 sectors, with the percentage split between fixed and floating rate of 56% to 44%. The portfolio structure is 60% in bilateral private loans; 38% in club or syndicated private loans; and 2% in more liquid corporate debt. Consequently, private debt investments represent 98% of the invested portfolio. During the month the £3.5m holding in Premier Foods was divested and capital used to largely repay the RCF. This was a strategic decision in order to give the Company the ability to capitalise on attractive opportunities. As lockdown restrictions start to ease our expectation is that portfolio companies within the hospitality and leisure sectors should start to see premises open during July. Update on Growth Financing investment (Trent Capital) In 2019, RMDL invested £4m in an asset backed corporate loan to Trent Capital ("Trent"). In May 2020, Trent completed stage 1 of the busines plan which was the reorganisation and simplification of its corporate structure with improved financial reporting and governance functions, as required by RM within its original financing terms. This is RMDL's second growth financing transaction. The first, to ICP Nurseries, was successfully exited during 2019 with a material NAV gain. The objective of growth financing transactions is to generate upside/NAV growth via equity or equity options should the business be successful in executing its growth strategy whilst protecting the downside (via secured lending over real assets) to RMDL. Such transactions attract a higher degree of resource and are therefore priced and structured accordingly Loan Amount: £4m. Tenor: 3 years. Rank: Senior. Coupon: 8%. Security: All asset debenture, including shares, fixed assets and stock, separate security over a mixed property portfolio, including 13 residential properties and 2 commercial land parcels. Covenants: Strong financial and reporting covenants. For providing the growth financing RM has negotiated, on behalf of RMDL, an ownership stake amounting to 46% of the new ordinary equity in Trent. RM has provided significant support to Trent's management team since the loan's inception in 2019 and this intensive management support is expected to continue as Trent enters its next phase of growth and therefore the initial value of the RMDL equity will be zero, as per the recent external valuation commissioned by Trent following the completion of the reorganisation. This will be revisited by the independent valuation agent on a regular basis and disclosed in line with previous monthly updates. In recognition of the continued support required and completed to date and in lieu of any work fees, RM Funds has agreed with the Board of RMDL that it will receive options of 15% over this equity in Trent. These options cannot be exercised until the RMDL loan has been repaid in whole by Trent which acts as a further alignment of RM's interests with those of RMDL shareholders. Trent owns and operates three businesses, each well positioned in attractive growth sectors, including: · Fusion Energy -Energy efficiency solutions to domestic households. Fusion Energy contracts with utility companies under the government Energy Company Obligation "Eco3" Scheme which targets energy efficiency measures in low income and vulnerable households. Energy suppliers with more than 200,000 customers are automatically required to deliver Eco3. The energy efficiency measures supplied by business are calculated by using the Home Heating Cost Reduction as measured by Lifetime Bill Savings of a measure / Fusion Energy estimates that during 2020 it will deliver c.£25m reduction in lifetime bill savings ("LBS") with forecasts to increase next year to in excess of £50m LBS. This business delivers a triple bottom line to RMDL shareholders, in creating an economic, social and environmental return. · Trianco - The manufacture and distribution of electric boilers. SAP ratings measure the carbon impact on the environment and measure the energy efficiency of a property. SAP10 is due to be released in 2020 which updates the carbon factor for electric heating and which reflects the greening of the grid. In addition, gas heating to new houses is being phased out as it will be banned by 2025. Therefore, Trianco's Aztec range of electric boilers and specifically the new Aztec Combi boiler are well positioned to capture market share within a growing market. · Grizzly Ovens - The design, manufacture and distribution of charcoal ovens under the "Grizzly" name. To date the product sold is a commercial oven supplied to restaurants and professional chefs. The "Grizzly Cub" oven has been designed for the consumer market and is in prototype stage for production to start later in 2020. The European domestic BBQ market is worth around £925m and the US market is valued at circa £1bn.
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The Company also announces that the Monthly Report for the period to 31 June 2020 is now available to be viewed on the Company website: | |
https://rmdl.co.uk/investor-centre/monthly-factsheets/ | |
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For further information, please contact: | |
RM Capital Markets Limited - Investment Manager | |
James Robson | |
Pietro Nicholls | |
Tel: 0131 603 7060 | |
International Fund Management - AIFM | |
Chris Hickling | |
Shaun Robert | |
Tel: 01481 737600 | |
Tulchan Group - Financial PR | |
James Macey White | |
Elizabeth Snow | |
Tel: 0207 353 4200 | |
PraxisIFM Fund Services (UK) Limited - Administrator and Company Secretary | |
Brian Smith | |
Ciara McKillop | |
Tel: 020 7653 9690 | |
Nplus1 Singer Advisory LLP - Financial Adviser and Broker | |
James Maxwell | |
Lauren Kettle | |
Tel: 020 7496 3000 | |
About RM Secured Direct Lending | |
RM Secured Direct Lending Plc ("RMDL" or the "Company") is a closed-ended investment trust established to invest in a portfolio of secured debt instruments. | |
The Company aims to generate attractive and regular dividends through loans sourced or originated by the Investment Manager with a degree of inflation protection through index-linked returns where appropriate. Loans in which the Company invests are predominantly secured against assets such as real estate or plant and machinery and/or income streams such as account receivables. | |
For more information, please see | |
https://rmdl.co.uk/investor-centre/monthly-factsheets/ | |