8 April 2016
CRYSTAL AMBER FUND
LIMITED
(“Crystal Amber
Fund” or the “Fund”)
Monthly Net Asset
Value and Interim Dividend Declaration
Crystal Amber Fund announces that its unaudited net asset value
(“NAV”) per share on 31 March 2016
was 156.5p (29 February 2016: 151.2p
per share).
The proportion of the Fund’s NAV at 31
March 2016 represented by the ten largest holdings, other
investments and cash (including accruals), was as follows:
Top ten holdings |
Pence per share |
Percentage of investee
equity held |
Grainger Plc |
32.4 |
3.4% |
Pinewood Group
Plc |
20.7 |
6.4% |
Dart Group Plc |
14.6 |
1.5% |
Leaf Clean Energy
Co. |
12.5 |
29.9% |
STV Group Plc |
12.1 |
7.3% |
Hurricane Energy
Plc |
10.9 |
16.1% |
Coats Group Plc |
9.4 |
2.4% |
FairFX Group Plc |
7.8 |
24.8% |
Sutton Harbour
Holdings Plc |
6.9 |
29.3% |
Hansard Global
Plc |
4.8 |
3.3% |
Total of ten largest
holdings |
132.1 |
|
Other investments |
19.2 |
|
Cash and accruals |
5.2 |
|
Total NAV |
156.5 |
|
Investment Adviser’s commentary on the
portfolio
Over the quarter to 31 March 2016,
NAV per share grew by 0.4 per cent or 2.0 per cent after adjusting
for the 2.5p dividend paid in the period.
The top three positive contributors to NAV growth over the
quarter to 31 March 2016 were
Pinewood Group plc (3.3 per cent), FairFX Group plc (1.7 per cent)
and Dart Group plc (1.4 per cent). The three main detractors were
STV Group plc (-2.0 per cent), Sutton Harbour Holdings plc (-1.2
per cent) and Grainger plc (-0.5 per cent).
Dart Group plc
The company issued a trading update on 4
March 2016 indicating that current year profits would be
ahead of market expectations due to a better than anticipated
winter season. The company also stated that it “expects operating
performance for the year ending 31 March
2017 to be broadly in line with the current year” which led
to a substantial upgrade of consensus forecast for pre-tax
profit.
FairFX Group plc (“FairFX”)
On 7 March 2016, FairFX announced
a £5.0 million strategic investment by the Fund to finance its
marketing strategy. The investment was at 20p per share.
Furthermore, in exchange for strategic assistance from the Fund,
FairFX issued the Fund a three-year warrant over 7.5 million shares
at an exercise price of 27p per share.
Historically, the company had limited investment to execute its
“land grab” strategy to fully leverage its scalable platform. The
Fund’s investment, part of a £5.25m fundraising, is expected to
accelerate growth. In 2015, FairFX acquired 75,000 currency card
customers, up 54 per cent on 2014. This takes the total number of
customers to 508,000. The Fund notes that market forecasts for 2018
are for earnings per share of 3.8p, placing the shares on a
prospective PE multiple of 8.2.
Grainger plc (“Grainger”)
On 4 January 2016, Grainger
announced the exchange of contracts, subject to regulatory
approval, to sell its Equity Release division on or before
30 May 2016 for an estimated gross
consideration of £325 million, comprising £175 million cash and the
transfer to the buyer of £150 million of debt. Grainger said the
sale would significantly reduce its financial and operational
costs.
On 28 January 2016, Grainger
announced the outcome of its strategy review, which includes plans
to reduce overheads through a streamlined structure, exit non-core
development assets and reduce financing costs with a target of 4
per cent cost of debt. It also announced plans to invest over £850
million by 2020 into the private rented sector to drive the growth
of rental income and dividends.
The Fund welcomes and supports Grainger's actions to streamline
the business and cut costs; however, we remain concerned both with
the pace and scope of cost cutting. We continue to believe that
further significant value can be realised through either a spin-off
of the regulated tenancies division or a sale of Grainger.
Leaf Clean Energy Co. (“Leaf”)
In March 2016, Leaf announced a
NAV per share of 62.5p as at 31 December
2015, following the return of £6.4 million to shareholders
in October 2015. Over 90 per cent of
Leaf’s value is held in its investment in Invenergy. The process to
exit this investment is ongoing, yet the timing remains
uncertain.
The Fund is confident that the value of Invenergy will be
released and expects this to happen in 2016. The Fund believes that
the shares, trading at more than a 40 per cent discount to the
December NAV, remain deeply undervalued.
Pinewood Group Plc (“Pinewood”)
On 10 February 2016 Pinewood
announced that management's expectations of performance for the
year to 31 March were higher than at the time of the interim
results. Pinewood's board appointed Rothschild "to assist with a
strategic review of the overall capital base and structure, which
could include a sale of the company". The Fund believes that whilst
the strategic review may result in the release of value at Pinewood
through a possible sale, this would have been unnecessary had
management run the business more efficiently.
Transaction in shares
During the quarter to 31 March
2016, the Fund sold 6.1 million shares from Treasury at NAV,
or 155p per share to an institutional investor. The Fund
subsequently bought back 300,000 shares at an average cost of
147.5p per share. These shares are held in Treasury.
Dividend
The Board declared an interim dividend of 2.5p per share which
was paid on 19 February 2016 to
shareholders on record on the register on 22
January 2016. This interim dividend brings total dividends
paid since August 2015 to 5p per
share.
For further enquiries please contact:
Crystal Amber Fund Limited
William Collins (Chairman)
Tel: 01481 716 000
Allenby Capital Limited - Nominated Adviser
David Worlidge/James Thomas
Tel: 020 3328 5656
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