TIDMCRS
RNS Number : 3688E
Crystal Amber Fund Limited
09 April 2014
09 April 2014
CRYSTAL AMBER FUND LIMITED
("Crystal Amber Fund" or the "Fund")
Monthly Net Asset Value
Crystal Amber Fund announces that its unaudited net asset value
("NAV") per share on 31 March 2014 was 162.21p (28 February:
164.36p per share).
The proportion of the Fund's NAV at 31 March 2014 represented by
the ten largest holdings, other investments and cash (including
accruals), was as follows:
Top ten holdings Pence per Percentage of investee
share equity held
------------------------- ---------- -----------------------
Thorntons plc 12.4 9.3%
Tribal Group plc 11.1 4.6%
AER Lingus Group
plc 10.7 1.1%
4imprint Group plc 10.2 4.3%
Sutton Harbour Holdings
plc 9.1 29.0%
Leaf Clean Energy
Company 8.8 10.1%
API Group plc 8.6 11.6%
TT electronics plc 8.0 1.8%
STV Group plc 6.5 3.5%
Norcros plc 6.2 4.0%
Total of ten largest
holdings 91.6
Other investments 61.9
Cash and accruals 8.7
------------------------- ----------
Total NAV 162.2
------------------------- ----------
Investment Adviser's quarterly commentary on the portfolio
Over the quarter to 31 March 2014, NAV per share increased by
3.9 per cent. The top three positive contributors to NAV growth
over the quarter to the end of March 2014 were Plus500 Limited (2.2
per cent contribution), Tribal Group plc (1.0 per cent) and
Thorntons plc (0.7 per cent). The three main detractors have been
Sutton Harbour
Holdings plc (-0.7 per cent), Smith News plc (-0.7 per cent) and Devro plc (-0.6 per cent).
Over the quarter to 31 March 2014, the Fund disclosed a new
holding in AER Lingus Group plc and a notifiable holding in Hayward
Tyler Group plc. During the period, following strong share price
gains, the Fund has taken some profits on Cenkos Securities plc,
Norcros plc, Plus500 Limited, Smith News plc and TT electronics
plc. Significant points to note regarding individual investments
are summarised below:-
Thorntons plc ("Thorntons")
During the quarter, the Fund increased its holding in Thorntons.
The Fund is now the largest shareholder in Thorntons, with the
average cost per share now 75p.
The Fund believes that operating margins at Thorntons have the
potential to increase very significantly and that current market
estimates fail to reflect this. Moreover, international sales can
provide an additional channel for top-line growth as the business
continues to benefit from its brand recognition. The Fund believes
that the profit trajectory will enable the company to make dividend
distributions as free cash flow generation increases.
Over the quarter, the share price of Thorntons rose by 11.7%
compared with a price of 67p at the December quarter end.
AER Lingus Group plc ("AER Lingus")
During March, the Fund disclosed a holding in the Irish carrier.
In our view, the company has a number of catalysts for realising
shareholder value on the horizon; namely the resolution of its
pension fund dispute, the return of surplus cash and the pressure
on Ryanair to dispose of its 29.8 per cent stake. AER Lingus has
net cash of $420 million. Pricing pressures on short distance
flights contrast with the tailwinds of economic recovery in Ireland
and AER Lingus' good position in long distance travel. Pressure on
Ryanair to dispose of its stake remains high and the carrier's
valuable landing slots at capacity constrained Heathrow suggest AER
Lingus could be an acquisition target. Since the Fund acquired its
holding, Etihad Airways has increased its shareholding.
The share price of AER Lingus rose by 17.9% during the
quarter.
Leaf Clean Energy Company ("Leaf")
On 6 March 2014 the Fund announced it was requisitioning an EGM
to replace Peter Tom and Bran Keogh as Chairman and Executive
director of Leaf's board. Since acquiring its holding in October
2013, and following constructive engagement with the company, the
Fund came to the view that board renewal was necessary to
accelerate the realisation of investments, reduce annual running
costs, and increase visibility of underlying values. In our view,
insufficient progress on these issues explained the wide discount
of the company's share price to reported net asset value, which
stood at 47 per cent on 5 March 2014.
On 26 March, Leaf announced the resignation of these directors
and the appointment of the Fund's nominees. The Fund welcomes this
development and is already engaging with the new board members.
Over the period, Leaf's share price increased by 9.3 per
cent.
STV Group plc ("STV")
STV continues its steady improvement and reinstated its dividend
alongside announcing its 2013 preliminary results. Highlights of
these results included a further 21% reduction of net debt to
GBP35.7m, a move from deficit to surplus at the pension fund,
renewal of the Channel 3 licences for a maximum term of ten years,
non-broadcast earnings rising from 11% to 19% of total earnings and
23% revenue growth from digital activities.
Over the period STV's share price increased by 22.6%.
Norcros plc ("Norcros")
On 25 March 2014 Norcros announced a conditional agreement to
dispose of its Australian subsidiary for a total consideration of
GBP 4.2m. Whilst small, this deal constitutes another step towards
focusing the group in fewer markets. It comes after closing its
Greek operations, undertaking a turnaround of its South African
division and acquiring Vado (a leading British bathroom brassware
manufacturer) to gain scale in its bathroom fittings market. This
follows the disappointing news that Morrisons has breached its
agreement to purchase Norcros's surplus land in Stoke: a deal that
would have delivered Norcros net proceeds of GBP 2.6m.
The recent trading statement provided a mixed picture of
progress in the second half. The improvement in UK house building
and housing transactions is to the benefit of the tiles and showers
that are sold through trade outlets, however, sales through retail
channels, particularly for tiles, are suffering from de-stocking
and weak volumes.
The company's share price declined 12.8 per cent over the
period.
Cash resources
Over the quarter, cash resources decreased from 23.5p per share
to 8.7p per share, as the Fund was able to build positions with
strong activist potential.
For further enquiries please contact:
Crystal Amber Fund Limited
William Collins (Chairman)
Tel: 01481 716 000
Sanlam Securities UK Limited - Nominated Adviser
David Worlidge/Simon Clements
Tel: 020 7628 2200
Numis Securities Limited - Broker
Nathan Brown/Hugh Jonathan
Tel: 020 7260 1426
Crystal Amber Advisers (UK) LLP - Investment Adviser
Richard Bernstein
Tel: 020 7478 9080
This information is provided by RNS
The company news service from the London Stock Exchange
END
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