10 October
2017
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 at 30 September
2017 was 203.15 pence
(31 August 2017: 191.79 pence per share).
The proportion of the Fund’s NAV at 30
September 2017 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 |
Hurricane Energy
plc |
52.2 |
8.0% |
Northgate plc |
30.6 |
5.2% |
STV Group plc |
20.7 |
14.4% |
FairFX Group plc |
18.9 |
16.5% |
Leaf Clean Energy
Co. |
13.2 |
29.9% |
NCC Group plc |
12.9 |
2.1% |
Ocado Group plc |
9.7 |
0.5% |
Sutton Harbour
Holdings plc |
7.3 |
29.3% |
GI Dynamics Inc |
7.1 |
46.6% |
Johnston Press
plc |
3.0 |
21.2% |
Total of ten largest
holdings |
175.6 |
|
Other investments |
21.1 |
|
Cash and accruals |
6.4 |
|
Total NAV |
203.1 |
|
Investment Adviser’s commentary on the
portfolio
Over the quarter to 30 September
2017, NAV per share decreased by 0.6 per cent. Taking
into account the 2.5p dividend paid over the period, the Fund’s NAV
returned a positive 0.6 per cent. The top contributors to NAV
growth over the quarter to 30 September
2017 were FairFX Group plc (1.8 per cent) and NCC Group plc
(1.8 per cent). Top detractors were GI Dynamics Inc (-1.2 per cent)
and STV Group plc (-0.4 per cent).
Hurricane Energy plc (“Hurricane”)
During the quarter, Hurricane finalised a $530 million fundraising for its Early Production
System (“EPS”) at Lancaster. The company is now fully funded
and on track to achieve ‘first oil’ at Lancaster in the first half
of 2019.
In September 2017, Hurricane
announced that it had taken the final investment decision on its
EPS. The floating production, storage and offloading vessel,
which will form the basis of the development, arrived in
Dubai to be upgraded and Hurricane
received approval from the regulatory authorities for its field
development plan.
Despite operational progress, Hurricane’s share price was weak
over the period, which the Fund believes was due to the poor
handling of the fundraising. The Fund maintains the view that
the way the company has gone about the recent fundraisings has
created a significant disconnect between the share price and the
asset value. The Fund is engaging with the Hurricane Board to
improve the company’s governance and to release value.
Drilling results over the last 12 months indicate that Hurricane
holds a very large, quality asset, with a resource that the Fund
believes could be in excess of 1.6 billion barrels of oil.
FairFX Group plc (“FairFX”)
During the quarter, FairFX announced the acquisition of CardOne,
a digital business banking and current account group, for £15
million. The company completed a £25 million fundraising at
58p per share to fund the acquisition. CardOne’s functionality
will enable FairFX to improve its offering for small and mid-cap
businesses.
Following investment demand and a strong share price, the Fund
has trimmed its shareholding but remains excited by FairFX’s
prospects.
Over the quarter, FairFX’s share price increased by 22.2 per
cent.
NCC Group plc (“NCC”)
During the quarter, NCC presented the results of its strategic
review confirming its intention to continue ownership of the Escrow
and Assurance divisions and outlining plans to improve the
organisation’s effectiveness in serving its clients and delivering
for shareholders.
With legacy investments written-down, the Fund believes that the
company is well positioned to return to profitability. The
Fund believes NCC’s markets are high growth, reinforced by the fact
that in July 2017, the company
reported 17 per cent growth in group revenues over the year to
31 May 2017, to £244.5 million (2016:
£209.1 million).
In September 2017, NCC announced
that it had hired three of the Bank of England’s cyber specialists
to lead a newly established threat assurance unit. These
appointments prove NCC’s confidence in the outlook for its
consulting services.
The Fund believes NCC’s new management team has ‘steadied the
ship’ following a string of profit warnings and we remain engaged
with the management team to support it through the next phase of
restructuring.
NCC’s share price increased by 32.2 per cent over the
quarter.
Leaf Clean Energy Co. (“Leaf”)
During the quarter, the Fund completed an unsecured loan note
investment in Leaf of $1
million. This facility will support the company’s
ongoing litigation with Invenergy. The Delaware Court has scheduled a trial for
25-27 October 2017 to determine the
amount of Leaf’s damages. The company is seeking net $122.2m in damages from Invenergy, which compares
to Leaf’s market capitalisation at 30
September 2017 of £44.8m (c.$59.0m) and its latest available NAV at
30 June 2017, of $88.3m.
STV Group plc (“STV”)
During the quarter, STV commenced its buyback programme, which
was requested by the Fund. As the market continues to undervalue
STV’s shares, we are satisfied that by repurchasing its own stock,
STV is creating long term value for shareholders.
GI Dynamics Inc (“GID”)
During the quarter, the company continued to work with its
notified body, SGS, to address the issues that resulted in the
suspension of its CE Mark.
Additional clinical evidence was presented at the European
Association for the Study of Diabetes conference in Lisbon, which reported 12 months post explant
data from the NHS demonstrating the ongoing benefits of Endobarrier
post removal of the device.
The Fund continues to work closely with GI Dynamics’ management
and board to fully capitalise on what the Fund believes is a
world-class technology, addressing an unmet clinical need.
For further enquiries please contact:
Crystal Amber Fund Limited
William Collins (Chairman)
Tel: 01481 716 000
www.crystalamber.com
Allenby Capital Limited - Nominated
Adviser
David Worlidge/James Thomas
Tel: 020 3328 5656
Winterflood Investment Trusts -
Broker
Joe Winkley/Neil Langford
Tel: 020 3100 0160
Crystal Amber Advisers (UK) LLP –
Investment Adviser
Richard Bernstein
Tel: 020 7478 9080