Intention to float by Gemfields Group. No Capital Raise. Currently listed on JSE. (GML:JNB) at circa £122m. The Group's key producing assets, the Kagem emerald mine in Zambia (believed to be the world's single largest producing emerald mine) and the Montepuez ruby mine in Mozambique (one of the most significant recently discovered ruby deposits in the world), are both expected to have long mine-lives with potential for expansion. Also owns the Faberge brand. Due Valentines Day 2020. The Proof Of Trust has announced its intention to list on the Standard Market. The Blockchain based business, owns patents to a protocol which facilitates dispute resolution based upon smart contract disputes. Transaction details TBC.Ninety One –proposed demerger and public listing of Investec’s global asset management business on LSE and JSE. 30 Sep 2019 AUM £121bn. Sale of existing shares. Expected free float of >60%. Due 16 march. Cabot Square—Closed ended investment fund focussed on alternative assets and asset manager. Looking to raise £200m. Will target investment opportunities that are expected to generate an attractive risk adjusted return and that can also make a positive ESG impact by focusing on some of the biggest challenges facing societies and economies. Due 14 Feb. Calisen Group. Potential Intention to Float. Owner and manager of essential energy infrastructure assets through its subsidiaries Calvin Capital and Lowri Beck . Consolidated FY Dec 18 revenue £162.1m and operating profit £25.4m. Raising up to £300m in primary plus partial vendor sale. Expected Admission February 2020. The Global Sustainable Farmland Income Trust will invest in a diversified portfolio of operational farmland assets located in major agricultural markets including the United States, Europe, New Zealand, Australia and certain countries within Latin and South America. Raising up to $300m. Due 28 February. Investment firm Nippon Active Value fund is seeking to raise up to £200m at an issue price of 100p per share via an IPO. The company aims to invest in a portfolio of quoted Japanese stocks with market capitalisations of up to $1bn. First day of dealings expected early February.Zapp Scooters, a developer and manufacturer of electric two-wheeled vehicles announced its intention to IPO on the NEX Exchange Growth Market. The Company intends to raise up to £3.5m. Admission is expected to occur on NEX in February 2020.
Companies: SECG MTW UPR ZYT HZD JAY TRX GLIF BEM K3C
Shearwater Group—Schedule 1. Acquiring SecureEnvoy for £20m in cash and shares—a provider of multifactor authentication enterprise software solutions. RTO under the AIM rules.
ADES International— Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa, seeking raise up to $170m plus vendor sale under a Standard Listing of the Main Market. Admission due May 2017.
Global Ports Holding—Intention to float on Standard List of the Main Market. International cruise ports operator. Seeking $250m raise including $75m primary offer.
Dorcaster—Schedule One Update. Admission now expected on AIM 3 May. RTO of Escape Hunt raising £14m at 135p.
Verditek— Schedule 1 update. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Issue price 10p. Admission in May.
Tufton Oceanic Assets– Offer extended to 9 May on specialist funds segment of Main Market to enable investors to complete further due diligence.
Companies: ALSP SUMM EUSP GLIF RRL AST PPH PURE SSY ACC
GBGI—Schedule One update from integrated provider of international benefits insurance. Raising £32m at 150p. Admission expected tomorrow.
Anglo African Oil & Gas— Admission expected early March. Acquiring stake in producing near offshore field in the Republic of the Congo.
Saffron Energy—Schedule One update. Raising £2.5m, expected Mkt Cap £7.7m. Admission due 24 Feb. Italian Oil & Gas Play
Guinness Oil & Gas Exploration—Publication of prospectus. Seeking to raise £50m and invest in 15 exploration companies at launch, with plans to grow the portfolio to 30 positions during its lifetime. Issue closing 23 Feb.
Companies: DOTD ARTA IGE ARBB UTW AIEA GHE GLIF OTC
AQUATIC FOODS GROUP PLC (AFG LN) | FAROE PETROLEUM PLC (FPM LN) | GLI FINANCE LTD (GLIF LN) | HARGREAVES SERVICES (HSP LN) | HIGHLAND GOLD MINING (HGM LN) | MOTIF BIO PLC (MTFB LN) | OPTIBIOTIX HEALTH PLC (OPTI LN) | STM GROUP PLC (STM LN) | UTILITYWISE PLC (UTW LN)
Companies: OPTI HGM UTW STM AFG MTFB HSP GLIF FPM
TTR Agreement, 7DIG Contract, ALSP Director Change*, CLIN Agreement, CRX Launch, DEMG New Accounts, DSG Partnership, GLID Share Sale, HZD Agreements, LID Agreement, MDZ Placing*, SAR Board Changes*, SEE Term Sheet, SNTY Contract Win, TAL Trading Update, VRS MoU
Companies: TTR 7DIG ALSP CLIN CRX DEMG DSG GLIF HZD LID MDZ SAR SEE CALL ZIN VRS
GLI Finance (GLI) has new management, a new strategic investor and is undergoing a strategic review designed to maximise shareholder value
from its investments in 19 alternative finance platforms. It has effectively become an operating company rather than an investment company, which should give it greater control of its assets, and its destiny. The shares offer a high yield of 7.8%. This is not covered by current earnings or operational cash flow but can be paid from cash, selling assets or increased borrowing. In future the company plans to pay it from dividends remitted to it from its investment platforms.
Companies: GLI Finance
GLI Finance (GLI) has altered its proposed measures to strengthen its balance sheet following investor feedback on its original proposals. It has accepted a capital and cash injection from a strategic investor, Somerston Group, and it intends to work closely with the company in the future. GLI will undertake a strategic review of its alternative finance platforms and focus its resources on those it believes will generate incremental shareholder value; this may result in write-downs. The dividend has been halved to 2.5p and the CEO, Geoff Miller, has left the company. Subject to finalising negotiations and GLI shareholder approval, Somerston will provide additional support including a cash injection in return for GLI warrants and a 50% share of GLI’s asset manager. We have adjusted our forecasts for the December 2015 share issue, the cancelled zero issue and the new dividend policy, but not yet for the additional measures proposed and still subject to shareholder approval. The prospective yield for 2016 is 6.8%, slightly lower than the yield on alternative finance loan funds.
As expected, GLI Finance (GLI) has announced measures to improve its balance sheet and help it to continue paying a 5p per share annual ordinary dividend and possibly provide additional funds to grow its loan book. GLI will seek shareholder approval to issue £20-40m of new zero dividend preference shares maturing in 2020 (2020 ZDP shares) and a potential issue of convertible unsecured bonds (CULS) to replace an existing loan facility. The EGM will take place on 21 December 2015 and the listing of the 2020 zeros on 22 December 2015.
GLI Finance (GLI) has successfully altered its investment strategy to participate in the fast-evolving and expanding alternative finance market through investing in alternative finance platforms, alternative finance loans and the creation of an asset management company. Loan growth at its platform investments is accelerating and management expects most to be profitable within a year. GLI aims to continue paying the generous dividend it paid as a CLO investor. It offers investors a 10% yield with the prospect of capital gains from its platform investments. A likely £30m issue of additional zero dividend preference shares (zeros) in early 2016, and dividends remitted from its investments could enable GLI to cover this dividend with cash earnings in the next couple of years.
ALBA Placing, BOOM AUPEO Deal, BEM Placing, CLIN Agreement, FIPP Development, GLIF Invests, MDZ* Contract Extension, MSG* Letter of Intent and Business Solutions to be used by GSP, NIPT Collaboration, OPTI* Contract Signed, PEG* Final Results, RCN Trading Update, SVR Contract Signed, SRT Acquisition, UKOG Acquisition, WAND Joins Open Data Platform
Companies: ALBA BEM CLIN FIPP GLIF MDZ OPTI PEG YGEN RCN SVR SRT UKOG WAND BOOM CTEA
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A number of REITs have the ability to thrive in current market conditions and thereafter. Not only do they hold assets that will remain in strong demand, but they have focus and transparency. The leases and underlying rents are structured in a manner to provide long visibility, growth and security. Hardman & Co defined an investment universe of REITs that we considered provided security and “safer harbours”. We introduced this universe with our report published in March 2019: “Secure income” REITs – Safe Harbour Available. Here, we take forward the investment case and story. We point to six REITs, in particular, where we believe the risk/reward is the most attractive.
Companies: AGY ARBB ARIX BUR CMH CLIG DNL HAYD NSF PCA PIN PXC PHP RE/ RECI SCE SHED VTA
Accelerating activity in to FY21
Companies: Manolete Partners
With a new CEO, Amanda Blanc, Aviva’s shareholders could dream of a possible change in the group’s strategy, with a more focused insurance business. The new Chief has an opportunity to take painful decisions in a year where no one will require a high operating performance.
Companies: Aviva Plc
The Native Antigen Company (“NAC”) has been acquired by LGC for up to £18.0m – with the ongoing COVID pandemic highlighting the value of knowledge and execution in the infectious diseases space. Mercia invested in NAC via both its balance sheet and 3rd party funds. The exit represents a strong return for both sources of capital, validating complete connected capital to optimise value creation. For the balance sheet stake, the £5.2m proceeds represent a £2.5m gain on realisation (c.1.5% of our FY21e NAVps). Final Results will be announced next week, when we will review our forecasts. The shares are currently trading at a 45% discount to NAV (which is 20% cash). Today’s exit demonstrates justification for a much narrower discount, if not a premium, to conservative carrying values.
Companies: Mercia Technologies
Trading Well in Tough Market
Companies: Palace Capital
With the sale of The Native Antigen Company (NAC) for up to £18m in cash, Mercia expects to realise £5.2m (1.2p per share) for its 29.4% stake. This exit delivers another significant milestone in management’s strategy to achieve an evergreen funding model. Management has confirmed that the group is profitable on a day-to-day basis following the acquisition of the NVM VCT management contracts (NVM) in December 2019. NVM, together with additional allocations from the British Business Bank (BBB), has lifted AUM to c £800m. Management’s three-year strategy targets a sustainable, evergreen balance sheet with AUM of £1bn in FY22, with future investment commitments met through existing cash resources and realisations without the need for further recourse to the markets. Despite real progress, Mercia trades at 0.69x its September 2019 NAV, with the fee-earning funds business as further upside, not captured in an NAV-based calculation. FY20 results are due on 14 July 2020.
HgCapital Trust’s (HGT) 12-month NAV TR to end-March 2020 was a solid 13.8% despite the COVID-19 market downturn in March 2020 (ytd NAV performance since end-December 2019 was a 6.2% decline). The coverage ratio reached a historically low level (13% vs three-year average of 53%) after HGT notably increased its investment activity and commitments in Q120. However, a significant part of these new commitments will not be drawn in the near term. The board continues to review its future funding arrangements and may also opt out of a new investment without penalty across all funds. HGT’s portfolio focus is on the resilient software and technology sector and the manager expects a limited direct earnings impact on its portfolio from the COVID-19 pandemic.
Companies: Hgcapital Trust
Hot on the heels of the Architas acquisition – announced 1st July, Liontrust has issued in line final results (£38.1m adj. PBT vs £38.3m consensus, 24p second interim dividend). An accompanying trading update also confirms that AuM bounced back in Q1 as markets recovered and net inflows were sustained at a record £971m for the quarter. The Architas acquisition – once completed later this year – stands to drive Liontrust through the £25bn AuM mark and bolster the existing multi-asset product offering and wider appeal to the current client base. As joint corporate broker, we have withdrawn forecasts pending the approval of the acquisition at the forthcoming general meeting.
Companies: Liontrust Asset Management
Gfinity plc* (GFIN.L, 1.625p/£14.0m) | Blackbird plc* (BIRD.L, 16.5p/£55.4m) | Tern plc* (TERN.L, 11.5p/£31.1m) | The Panoply Holdings (TPX.L, 72.5p/£39.9m)
Companies: GFIN BIRD TERN TPX
Ground Rents Income Fund (GRIO) has today released its interim results for the period ending 31 March 2020. The fully diluted NAV is 110.1p down marginally from previous NAV of 111.3p as at 30 September 2019 year-end. This valuation included a material valuation uncertainty clause as a result of the COVID-19 pandemic, which has subsequently been removed since the period end for long dated ground rent valuations given the defensive nature of the income streams and continued market/transactional activity. The latest valuation represented a decrease on a like for like basis of £0.36 million or -0.3%. Two Interim dividends were paid during the six-month period ending 31 March totalling 1.98p, and a further dividend of 0.99p has been declared today (ex 16 July / payable 10 August). Dividend cover excluding the non-recurring litigation costs on Beetham Tower was 90%. Assuming a full year dividend of c4p this puts the shares on a flat yield of 4.9% and a discount of 26%.
Companies: Ground Rents Income Fund
Impressive FY19 results met expectations via a combination of record Legacy deals and growth in the scale, product range and geographical reach of Program Management income. The latter is key, as this builds a base for future growth in complementary, visible, and reproducible fee-based revenues and commissions.
Companies: Randall & Quilter Investment
Equals' FY19A results confirm another year of strong, double-digit revenue and adj EBITDA growth. The move to a B2B focused offering continues to progress and looks well timed in view of Covid-19's impact on overseas travel. While the pandemic impacted Q2/20E trading early on, we note June KPI's indicate a positive rebound. Given the continued uncertainty as to Covid's full impact upon FY20E trading, we refrain from reissuing forecasts and thus leave our recommendation under review.
Companies: Equals Group
ICGT, the 39-year listed private equity (PE) investor, has delivered a total NAV return of 178% over 10 years (comparable FTSE All Share return 61%). Since Intermediate Capital became the manager in 2016, ICGT has earned mid-teen p.a. underlying returns every year. This has been achieved by leveraging the attractive PE market with incremental manager synergies. It has a concentrated portfolio of “high-conviction” investments (19% p.a. average returns over five years, 42% of portfolio, defensive growth focus) and a diversified third-party PE funds book. ICGT manages over-commitment tightly. The 33% discount to NAV is above peers.
Companies: ICG Enterprise Trust
Numis’ update for Q320 was positive, reflecting both the need for equity funding in the market and the strength of the group’s franchise as well as its ability to deal with current operating constraints. Subject to the market background in its final quarter, we now expect Numis to achieve a full-year result in line with or ahead of the high end of our previous scenario range.
Companies: Numis Corporation
In parallel with its H120 interim results, Mercia has announced the acquisition of NVM’s VCT business for up to £25m in cash and equity, funded by a £30m placing at 25p per share (a 22% discount). Subject to shareholder approval, the acquisition increases AUM to £760m and moves Mercia towards being the UK’s number one regional investor. The deal expands Mercia’s shareholder register, further dilutes existing major shareholders and means Mercia should be profitable before fair value adjustments, closer to its target of an evergreen model (c £1bn AUM). In its H120 results, Mercia’s direct investment portfolio increased to £102.0m, with £11.1m of cash invested in 16 companies and a fair value uplift of £3.2m. Mercia has £17.8m of unrestricted balance sheet cash (pre-placing) and the shares continue to trade at a significant discount to NAV.