Starting on Tuesday we heard from managers running investment trusts across all of the world’s major equity regions and found a bullish but cautious outlook was prevalent as the tide begins to turn on COVID-19.
Companies: AAS JEO MNP MAJE BRLA BRWM JGC SLI SWEF BBH IBT EWI SHRS
Martin Currie Global Portfolio Trust (MNP), managed by Zehrid Osmani, offers investors a concentrated portfolio of global equities with a high active share of c. 97%, differentiating it from both its peers and its benchmark. MNP’s impressive track record is in large part thanks to Zehrid’s successful stock selection and three-part investment process, outlined in detail in the Portfolio section. Zehrid’s forward-looking approach to analysis has led him to create a robust portfolio which has been partly insulated from the impacts of COVID-19, having evaluated for just such a worst-case scenario prior to the outbreak. The team also make exhaustive use of proprietary ESG analysis, and MNP ranks in the top 2% for sustainability amongst over 6,700 global equity peers. Since taking over sole management of MNP in October 2018, Zehrid has generated an NAV total return of 42%, exceeding the MSCI ACWI benchmark’s 22.9% return over the same period. It is important to note that this performance was achieved with a substantial underweight to the large-cap technology stocks which have driven a significant proportion of global equity markets’ performance over the last two years. Despite its commendable performance, MNP has traded closely to NAV, helped by the board’s proactive policy of discount control, and currently the trust trades on a premium of 3.1%. Recently MNP has enacted a new gearing policy to better take advantage of the trust structure, whereby it has implemented £30m in gearing, equivalent to 9% of the current NAV. Alongside this the board has seen fit to implement a new charges structure, with the intention of simplifying the overall cost of the strategy.
Companies: Martin Currie Global Portfolio Trust
Europe, despite its intention to put past crises to rest, may end up being a major economic flashpoint in 2021. With sudden developments in Italian politics, battles over vaccinations and bonds that guarantee a loss, investors may be forgiven for expecting the once benign region to be the next big source of volatility. Yet there is an equal argument for a European renaissance with pan-European stimulus, attractively valued equities and increasing demand for sustainable investing; the argument is not quite as simple as it seems. In this note we aim to highlight key data-points and issues which are likely to determine near- and long-term returns from European equities. We hope to highlight the possibility that European stock markets may be full of opportunities, even if the macro outlook is cloudy.
Companies: JGC EAT JESC MNP BRGS JEO IEM
Martin Currie Global Portfolio Trust’s (MNP’s) manager Zehrid Osmani reports that his ongoing focus on long-term structural, sustainable business models was beneficial for the fund’s performance during the coronavirus-led market sell-off in Q120, with portfolio companies undertaking measures to protect their brand equity. He is encouraged by a general increase in investor awareness of environmental, social and governance (ESG) issues, an area of research that Martin Currie has focused on for several years, as he believes that ESG improvements can lead to higher total returns for shareholders. MNP’s performance has improved since the appointment of Osmani in October 2018, and its NAV is now ahead of its benchmark over the last one, three, five and 10 years.
Like childbirth, we think 2020 will be remembered for what it produced rather than the agony of the experience. Events have conspired that, rather than the sickly and unpopular child it once was, sustainability as an investment theme has become a thriving, healthy teenager which seems destined for great things (note the torturous lack of gender specifics in this sentence, another thing we can thank 2020 for). As with many trends that were already in progress at the start of 2020, the speed at which this particular infant has grown has accelerated this year. I for one didn’t begin the year thinking I’d be using a bamboo toothbrush by the end of 2020. The recent news that Keystone Investment Trust is (subject to shareholder approval) switching strategy to Baillie Gifford’s sustainable Positive Change strategy provides further evidence that this is a trend that is gaining momentum.
Companies: JGC MWY BERI MNP ATST MHN IEM PAC JFJ HNE
There is some evidence that, in recent years, the rise of passive funds has caused investment managers to become increasingly concentrated, endeavouring to be considered active managers as opposed to ‘closet trackers’. The most active trusts tend to generate the highest levels of alpha, as we have often noted, and on average managers have been decreasing their number of holdings in the hope of achieving this. Academic support for taking this approach has been provided by Martin Cremers and Antti Petajisto, who have shown evidence that portfolios with higher ‘active share’ tend to beat their benchmark net of fees whereas the least active tend to match their benchmark index performance before fees, and under-perform after fees. In this article we assess how the trusts that have been increasing their concentration have performed in the most recent market corrections. We then assess the performance of the most concentrated trusts, including investors in both small and largecaps, through the COVID-19 crash, and compare how they have done relative to the broader investment trust universe and their peers. Our research shows that more concentrated funds are not necessarily more susceptible to underperformance in a falling market.
Companies: MNP MNL BAF
Martin Currie Global Portfolio Trust (MNP) aims to offer investors a portfolio of some of the most exciting, high-growth companies across the globe. Zehrid Osmani has managed the portfolio since 2018, searching for undervalued, high-quality companies that can offer investors consistent returns. He is unconstrained in his approach and favours a highly concentrated portfolio. Currently MNP is made up of just 30 holdings, with the top ten making up more than 40% of the total NAV. The team at MNP go into great detail throughout the investment process, which is built around a proprietary toolkit, narrowing the universe of around 3000 companies down to 500. The portfolio has the second highest exposure to growth companies of any in the sector (73.4%), most of which are large cap companies (75.7%). Since taking over the portfolio, Zehrid has been able to generate returns in excess of the peer group and benchmark, as we discuss in the Performance section. Under his management the trust has achieved NAV total returns of 26.1%; which is considerably more than the previous benchmark FTSE World (13.2%) and almost quadruple the AIC peer group’s returns of 7.1%. Performance in 2020 has been strong, and the trust protected capital well through the February and March downturn, before rebounding in April and May. Typically the trust trades at around par, with the board enforcing a zerodiscount policy. Currently the discount is around 1.8%, in comparison to a sector average discount of 4.4%. [N.B. As of February 2020 performance has been measured relative to the MSCI ACWI, which includes emerging markets, unlike the FTSE World Index.]
Martin Currie Global Portfolio Trust’s (MNP’s) performance has improved considerably following the appointment of manager Zehrid Osmani on 1 October 2018, since when he has refined the trust’s investment process. MNP has now outperformed its benchmark over the last one, three, five and 10 years. The manager focuses on high-conviction positions and his long-term horizon helps navigate short-term market volatility. MNP has performed well despite a lack of exposure to the high-profile, large-cap US technology stocks that have led the market. Osmani has generated alpha by investing in some mid-cap stocks that are not particularly well followed, such as US company Masimo (non-invasive patient monitoring technologies), which is now the largest position in the portfolio.
Last year we published a number of studies showing that investment trust managers were counteracting the rise of passive vehicles by further concentrating their portfolios and using the advantages of the closed-end structure such as gearing and the ability to pay income from capital more aggressively. New analysis from the team at Kepler shows that that over the past five years, trusts which have seen the greatest reduction in number of stocks in portfolios have generated the highest levels of alpha. Similarly those trusts which reduced their turnover the most have generated a higher alpha compared with those which haven’t. This corroborates the academic literature on the subject. In our view this finding is a strong indicator of the future direction for investment trusts in combating the threat from passives. In this article we dive into the data, which shows that having more active portfolios has delivered strong benefits for shareholders. We also consider the reasons why the investment trust universe remains a place that active managers can outperform. Finally we highlight three trusts that have most recently taken decisive steps to become significantly more active.
Companies: MNP MNKS HNE MRC FSV JAM
Martin Currie Global Portfolio Trust (MNP) has been managed by Zehrid Osmani since 1 October 2018. He has refined the investment process, taking fundamental analysis deeper, aiming to enhance stock selection and the trust’s returns, and says that advanced risk analytics enable the portfolio to be managed in a more accurate way. The manager aims to build a high-conviction, but diversified fund of quality stocks in terms of superior top-line, profit and free cash flow growth, with high returns on capital, and room for further improvement. Whatever the market environment, Osmani is confident on MNP’s prospects versus the benchmark on a five-year view.
nvestors are increasingly turning to global funds. We suggest that concerns around Brexit are most likely leading investors to seek diversification overseas. In terms of retail sales the global sector has been comfortably the most popular among investors over the past few quarters. In 2018 global funds had close to twice the level of retail sales of any other sector, as can be seen in the chart below. A similar trend has emerged in the investment trust sphere, where the average discount within the 16-strong AIC Global sector sits at 4.7%. Only North America trades at a narrower average. While Brexit may be the cause of this increased appetite, diversifying overseas is a sensible strategy in all economic environments; although investors typically still overweight their own market, a tendency known as ‘home bias’. The AIC Global sector consists of a diverse collection of trusts, which are suitable for a range of different investment purposes. In this paper, we consider the diversification benefits of investing in overseas equities and the options available in the sector. As well as scrutinising each option, we aim to explore which trusts offer genuine diversification.
Companies: SMT MNP MNKS MWY
Whilst not everyone is yet declaring a “climate emergency”, most people now recognise that the global economy is not on a particularly sustainable trajectory. Recent news from Nestle – that they aim to be “net-zero” greenhouse gas emissions by 2050 - shows that what might have seemed a “fringe” idea a few years ago, is now mainstream. According to a 2018 YouGov survey, 62% of people believe Government are doing too little to prepare for and adapt to the impacts of climate change. 71% believe fossil fuel companies should help pay for damage caused by extreme weather events, and (perhaps of most immediate relevance to our readership) 62% of people are interested in a pension fund or financial institution that considers the environmental impact of the companies it invests in (Source: YouGov 2018). At the same time, consumers are increasingly aware of their buying power, and the influence it can have on companies’ corporate behaviour and supply chains. Allied to this, investors also recognise the effect their investing behaviour can have on companies they invest in. Increasingly, they look to the managers of the funds they invest in to engage with company management and see this as a mechanism by which positive change in investee companies can be brought to bear. Many established funds and ETFs offer “ethical”, “green” or another shade of socially responsible investment. However, these labels don’t in our view really reflect the full range of what is potentially on offer. We understand the broad concept as “ESG Investing” – environmental, social, governance. As a theme or concept it is clearly rising in popularity - Google searches for ‘ESG investing’ have risen rapidly over the past decade, with a compound annual growth rate of 73%, almost double that of ‘passive investing’ (42%). Many fund managers (or their marketing departments) have been jumping on the bandwagon, and ESG now features in many presentations where perhaps as recent ago as last year, there had never been any mention! Despite its apparent popularity, many investors do not have a fixed idea of what they really mean when they say they want funds with better ESG credentials. For example, some investors may mean that they want a very narrow focus in the types of companies they invest in – for example supporting renewable energy, and thereby generate strong returns but also help finance the shift to a less carbon intensive economy. Others may want to invest in companies which are leading the way in reducing (or actively addressing) the harmful effects of their business operations’ externalities, meaning that they are comfortable investing in companies and industries that pollute – but only if they are “getting their act together”, trying to reduce negative externalities, or are “best in class” in trying to minimise their negative effects. Others may want their fund managers to actively engage with company managements, and try to influence the strategic direction the company is taken on. Lastly, investors may only want to own companies with what they see as a correct gender-balance, or have policies which prevent child labour within their supply chains. There are many different ways of interpreting what ESG really means. The job of investors looking at ESG must be to find a fund or investment trust which is aligned with their own specific values, irrespective of the marketing document or industry sector it belongs to. We believe an increasing number of “mainstream” funds will be suitable for ESG investors, depending on what their requirements are. How, then, do investors find them?
Companies: IEM UKW MNP
Martin Currie Global Portfolio Trust (MNP) aims to achieve long-term outperformance of the FTSE World Index from a portfolio of 25-40 high-growth companies from around the world. Zehrid Osmani is at the helm of the portfolio, having joined the team in June 2018 and taking sole management of the portfolio in October 2018, and is constantly striving to identify undervalued, high-quality companies that can offer investors consistent returns. The process is built around a proprietary ‘toolkit’, where financial models, qualitative and thematic research are utilised to narrow the universe of around 3000 companies down to 500. After this, more detailed analysis is conducted, with Zehrid and his team identifying companies that generate high returns on their capital, have attractive growth profiles and have the potential to sustain or further improve it. Since his appointment, Zehrid has been given greater flexibility in his investment decisions, increasing his allocation to high-growth companies and the portfolio’s concentration. It now consists of 33 holdings, in comparison to the average trust in the AIC Global sector has 127 holdings. In performance terms, MNP has long been one of the stand out performers in the Global sector. Tom Walker was at the helm of the portfolio since the launch of the trust in 1999 and during his tenure delivered NAV total returns of 9.52% p.a., outperforming the FTSE World Index, which returned 8.9% p.a. over the same period. Zehrid has been able to do even better during his short time in charge of the portfolio: he has delivered 17.2% returns since July 2018, considerably more than the benchmark FTSE World (11%) and almost triple the AIC peer group which delivered 5.5% on average. Over this period, only Nick Train of Lindsell Train, has generated greater levels of alpha relative to their Morningstar best fit benchmarks, however MNP has done so at lower levels of volatility. In July 2013 a zero-discount policy was introduced by the board - allowing the trust to buy back shares in order to control its own discount - and since then the trust has predominantly traded at or around par. Throughout 2018 the average discount for the trust was 0.9%, however, 2019 has seen the trust move further towards trading at a premium and as of the 26 August 2019, the trust is trading at a premium of 0.4%. The weighted average discount within the AIC Global sector currently sits at 1.2%.
Anyone who takes a strong interest in financial markets sometimes feels the pull of market timing. It is seductive to imagine yourself a canny trader, buying or selling positions just before the market shifts, trading investments daily and beating the herd with superior analysis and instincts. We can add to the existing research suggesting this is a bad idea, and that taking a long-term view of your investments is the way to go. We looked at investment trusts that have outperformed over the past ten years and ran monthly NAV returns. We then calculated how many months were responsible for their outperformance. In other words, how many months did you need to miss to have ended up with market performance or less, negating any benefit of choosing an active fund over a passive fund? The results were surprisingly low, suggesting that switching in and out of investment trusts is fraught with danger and a potential recipe for underperformance, and underlining the case for a long term approach.
Companies: SDV CTY SMT FGT MNP JMG SDP
Martin Currie Global Portfolio Trust’s (MNP) investment performance has improved considerably following the appointment of Zehrid Osmani as lead manager on 1 October 2018. However, he remains vigilant, continuing to seek long-term, attractive investment opportunities. The trust’s more concentrated portfolio contains the manager’s highest-conviction ideas, and is constructed without reference to the FTSE World index benchmark. Part of the in-depth fundamental research process involves focusing on three long-term megatrends: the future of technology, demographic change and resource scarcity. MNP is a member of the large AIC Global sector; while the peers follow different mandates, the trust’s pure equity, fundamental investment approach has proved successful and MNP is ranked second out of 16 funds over the last 12 months.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Martin Currie Global Portfolio Trust. We currently have 26 research reports from 2 professional analysts.
Following a positive EGM statement on 16 March, today’s 1Q21 trading update highlights a record quarter for the number of active customers with a further 89k new customers at attractive ARPU and AUAC. This has resulted in revenues more than doubling QoQ to $203m, helped by lower customer trading losses, with EBITDA up six-fold to $121.7m. The performance is a testament to the strength of Plus500’s technology and has been achieved as the group continues to manage high platform volumes and further drives towards its goal to be a multi-asset fintech group from solely being focused on CFDs. We increase our FY21 and FY22 EPS by 7% to reflect the strong performance resulting in the shares trading on just 9.8x CY21 PE. We believe that the benefits of the group’s scalable proprietary technology and marketing algorithms are not reflected in the share price. Hence, we reiterate our BUY rating and increase our TP to 2090p from 1945p.
Companies: Plus500 Ltd.
Semper Fortis Esports* recently announced its intention to IPO onto the Access Segment of the Aquis Stock Exchange Growth Market. Semper is a multi-operational Esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures. The company plans to raise £2.5m to develop their three core areas of establishing an esports team, forming partnerships with brands for sponsorship and B2B consultancy services. The Board are highly experienced in sports and corporate deal making (Keith Harris, former Chairman of The Football League), technology and electronic gaming (Nolan Bushnell, founder of the pioneering company, Atari), esports and game tech (Kevin Soltani and Jassem Osseiran) and as FD Max Deeley. Target Admission Date of 26 April. Darktrace plc. Announcement of Intention to Publish a Registration Document and Potential IPO on the main market of the London Stock Exchange. Darktrace was founded in 2013 with a mission to fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threats. Darktrace is a world-leading provider of AI for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security Timing TBA musicMagpie is a leader in re-commerce in the UK and US in the circular economy of consumer technology (including smartphones, tablets, consoles and personal computers), books and disc media (including CDs, DVDs and video games). Expected 28 April. Offer details TBA Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Advance Energy to complete an RTO on AIM indirectly acquiring up to 50% of Carnarvon Petroleum Timor which holds a 100 per cent. working interest and is the contractor under the Buffalo PSC, offshore Timor-Leste. Carnarvon Petroleum Timor is a subsidiary of ASX listed company, Carnarvon Petroleum Limited. The net proceeds of the Placing of approximately £20.01m (approximately US$27.51m) will be used to fund the Acquisition. Due 19 April. NFT Investments plc is an investment company that specialises in non-fungible tokens (NFT). Has applied for admission to the Access segment of the AQSE Growth Market. No funds being raised. Due 16 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 21. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April. Proposed move to AIM from the main market (standard) by Emmerson (EML.L) to provide Emmerson with access to a market and environment which is more suited, in the Board's view, to the Company's current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work. Due 27 April.
Companies: KIBO ROCK VRCI K3C TOU ADT PCA ATYM IOM MJH
A strategic update from NewRiver shows intent to reshape the business, leaving it well capitalised and fit for the future of physical retail. Management is exploring the divestment of Hawthorn via an IPO, currently c.25% of the group asset base. Successful execution will help reduce LTV to within management’s target range, helping relieve any covenant concerns. Together with further non-core disposals, this will leave NewRiver with capital to transform ‘regen’ assets to create long-term value. Covid has proven NewRiver’s Retail resilience, which comes through again in its operating metrics. The shares now trade on an unadjusted +2yr fwd NAV of 33%, a wider discount than Hammerson, which to us looks wrong given the very different growth outlooks.
Companies: NewRiver REIT plc
Semper Fortis Esports* recently announced its intention to IPO onto the Access Segment of the Aquis Stock Exchange Growth Market. Semper is a multi-operational Esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures. The company plans to raise £2.5m to develop their three core areas of establishing an esports team, forming partnerships with brands for sponsorship and B2B consultancy services. The Board are highly experienced in sports and corporate deal making (Keith Harris, former Chairman of The Football League), technology and electronic gaming (Nolan Bushnell, founder of the pioneering company, Atari), esports and game tech (Kevin Soltani and Jassem Osseiran) and as FD Max Deeley. Target Admission Date of 26 April. Dispersion Holdings PLC, an investor in the high growth FinTech sector within the UK, the USA and Canada, has announced its intention to IPO on the Access Segment of the Aquis Stock Exchange Growth Market. The Board intends to deploy the majority of the Company’s cash resources in the acquisition of minority interests in a number of different, yet to be identified, companies in the broad FinTech sector, and to apply expertise to the business operations and strategic plans of these companies. Target Admission Date of 30 April. Darktrace plc. Intends to float on the main market of the London Stock Exchange (premium). Darktrace was founded in 2013 with a mission to fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threats. Darktrace is a world-leading provider of AI for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security Due early May, musicMagpie is a leader in re-commerce in the UK and US in the circular economy of consumer technology (including smartphones, tablets, consoles and personal computers), books and disc media (including CDs, DVDs and video games). Expected 28 April. Offer details TBA Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 21. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April. Proposed move to AIM from the main market (standard) by Emmerson (EML.L) to provide Emmerson with access to a market and environment which is more suited, in the Board's view, to the Company's current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work. Due 27 April.
Companies: KIBO MTW GWI MTR DUKE ITM GDR MSMN CMCL PTRO
Semper Fortis Esports* recently announced its intention to IPO onto the Access Segment of the Aquis Stock Exchange Growth Market. Semper is a multi-operational Esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures. The company plans to raise £2.5m to develop their three core areas of establishing an esports team, forming partnerships with brands for sponsorship and B2B consultancy services. The Board are highly experienced in sports and corporate deal making (Keith Harris, former Chairman of The Football League), technology and electronic gaming (Nolan Bushnell, founder of the pioneering company, Atari), esports and game tech (Kevin Soltani and Jassem Osseiran) and as FD Max Deeley. Target Admission Date of 26 April. Darktrace plc. Announcement of Intention to Publish a Registration Document and Potential IPO on the main market of the London Stock Exchange. Darktrace was founded in 2013 with a mission to fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threats. Darktrace is a world-leading provider of AI for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security Timing TBA musicMagpie is a leader in re-commerce in the UK and US in the circular economy of consumer technology (including smartphones, tablets, consoles and personal computers), books and disc media (including CDs, DVDs and video games). Expected 28 April. Offer details TBA Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Advance Energy to complete an RTO on AIM indirectly acquiring up to 50% of Carnarvon Petroleum Timor which holds a 100 per cent. working interest and is the contractor under the Buffalo PSC, offshore Timor-Leste. Carnarvon Petroleum Timor is a subsidiary of ASX listed company, Carnarvon Petroleum Limited. The net proceeds of the Placing of approximately £20.01m (approximately US$27.51m) will be used to fund the Acquisition. Due 19 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 21. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April. Proposed move to AIM from the main market (standard) by Emmerson (EML.L) to provide Emmerson with access to a market and environment which is more suited, in the Board's view, to the Company's current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work. Due 27 April.
Companies: GAL AXS IDH GWMO AGL YEW INFA HE1 PPC CASP
The UK market showed a continued recovery in the first quarter albeit the indices are still well short of their all-time peaks, unlike many of their international peers. The FTSE 100 has risen by 1,186 points (21.4%) since the end of October and the FTSE 250 by 4,304 points (25.0%). The comparable performance since the start of the year is less spectacular- the FTSE 100 has risen by 253 points (3.9%) and the FTSE 250 has risen by 1,070 points (5.0%). The factors behind the sustained rally are familiar. The belief that the roll-out of the vaccine and some relaxation of lockdown limitations will lead to a significant economic recovery, compared to the collapse seen in the first half of 2020, due to lockdowns. Indeed, the recent economic picture is becoming more optimistic than previous expectations. According to the ONS, the economy grew a little more than initially estimated in Q4 last year. This means GDP for 2020 as a whole contracted by 9.8%, revised up marginally but still the worst contraction on record. Markets, in general, have focused upon the potential scope and extent of the recovery. The sectors and stocks that have outperformed have been seen as ‘recovery’ plays with a rotation from stocks seen as ‘lockdown’ winners into those set to benefit from the ‘unlocking of society’ and/or exposed to the consumer. We expect 2021 will continue to be a “stock-picker’s” market. The sharp increase in the household savings ratio in Q4 highlights the scope for a recovery driven by expenditure. As further lockdown limitations are lifted, evidence of this growth will help to underpin the more optimistic outlook for Q2 and beyond.
Companies: AMYT ARBB BPC BAG BVC BEG BONH BLVN BRSD CML CWK CRPR EYE ECHO FDM FAR FA/ GPH GSF HUW INSE JDG KAPE KP2 MACF MPAC MNZS NESF NBI OTMP OBD PREM QFI RUA SCS SEN SOS SUR TON TOU TXP TGL TCN UEM VLS WYN
Augmentum Fintech has sold its stake in Dext (fka Receiptbank) to private equity firm Hg for £10.5m, delivering a £3m gain on sale equating to a 30% IRR. This is Augmentum’s first exit. An additional €2m investment has been made into existing portfolio company Grover to support the continued roll out. The current Series B round implies a £3.2m uplift for Augmentum’s stake. Together, these gains represent c.4p/share in NAV terms. We see further value creation opportunity in Augmentum’s curated portfolio, capturing the digitalisation and structural evolution trends in the Financial Services space.
Companies: Augmentum Fintech
The latest UK Power Market Outlook from Bloomberg New Energy Finance shows low UK wholesale electricity prices over the next ten years, falling below £20/MWh by 2030. However, we expect actual price outturns to be higher due the circular impact of lower prices on new capacity investment. While prices may weaken, we think they are unlikely to match the BNEF forecasts. NextEnergy Solar Fund benefits from its non-amortising debt which gives the company a cash cushion with which to maintain dividends even in the face of weaker prices.
Companies: Nextenergy Solar Fund
Q4 Trading Update
Companies: Palace Capital plc
Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Advance Energy to complete an RTO on AIM indirectly acquiring up to 50% of Carnarvon Petroleum Timor which holds a 100 per cent. working interest and is the contractor under the Buffalo PSC, offshore Timor-Leste. Carnarvon Petroleum Timor is a subsidiary of ASX listed company, Carnarvon Petroleum Limited. The net proceeds of the Placing of approximately £20.01m (approximately US$27.51mm) will be used to fund the Acquisition. Due 19 April. NFT Investments plc is an investment company that specialises in non-fungible tokens (NFT). Has applied for admission to the Access segment of the AQSE Growth Market. No funds being raised. Due 16 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 2021. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” MAST Energy Developments (MED) is to IPO on the Standard List on 14th April 2021 under the ticker MAST. The company has raised £5m giving a market capitalisation on listing of c. £23m. MED is currently a 100% subsidiary company of AIM quoted, Kibo Energy*. MED was established to acquire and develop a portfolio of flexible power plants in the UK and become a multi-asset operator in the rapidly growing Reserve Power market. PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration, in each case as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April 2021. Proposed move to AIM from the main market (standard) by Emmerson (EML.L) to provide Emmerson with access to a market and environment which is more suited, in the Board's view, to the Company's current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work. NextEnergy Renewables to launch an IPO on the Main Market. NREN is a differentiated renewables investment Company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally. Targeting a £300m raise. NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company's target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021. Digital 9 Infrastructure launch an initial public offering on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be published in March 2021. Fix Price announces its intention to float on the Main Market of the London Stock Exchange. Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has revenues of RUB 190.1bn, RUB 142.9bn and RUB 108.7bn for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8bn, RUB 27.2bn and RUB 14.2bn, respectively. The Offer would consist of an offering of GDRs by certain existing shareholders of the Company. Great Point Entertainment Income Trust PLC announced its prospectus has been approved by the FCA. Great Point Entertainment Income Trust PLC is a newly established, externally managed closed-ended investment company. The Company will provide project finance to content makers and commissioners in the global television and film production industry via senior loans secured against pre-sold intellectual property (IP) rights. GPEIT's investment objective is to provide Shareholders with dividend income and modest capital growth through exposure to media content finance.
Companies: GOOD FIH SRT NFC RFX ARCM ACRL EQLS ORPH VRS
PRSR added 427 completed homes to the portfolio in Q3, which now stands at 3,590 homes; reconfirming the positive update (19th March) provided at the Interims. In addition, contracted homes (1,536) supports full deployment on track for early cal’22, and a demand pipeline indicative of sustained demand. Rent collection remains strong. We make no change to our estimates – with this update in line with our assumptions. We see a sustained return profile from PRSR on rental growth driving capital values as well as dividend growth, in excess of the 5%+ yield which we forecast in FY23e – the first year of full stabilisation.
Companies: PRS REIT Plc
Since the FY2020 results announcement in December 2020, the UK has gone into a prolonged lockdown that has significantly reduced high street footfall, not to mention the international travel restrictions impacting Ramsdens FX business. Against this backdrop the group has delivered a resilient performance in 1H21. Despite most stores remaining open, the group expects to report only a small loss in the half helped by prudent cost control. Moreover, the group’s balance sheet remains strong with c.£15m of cash and an undrawn £10m credit facility. Given today’s update and continued uncertainty regarding international travel, we now expect FY2021E PBT of £1.0m (from £3.9m). We continue to believe in a strong recovery once restrictions are lifted and maintain our TP of 162p. However, given the recent share price performance we move to a HOLD rating.
Companies: Ramsdens Holdings PLC
Belvoir has reported a very strong set of results, ahead of pre-Covid expectations, driven by a resilient performance in the Property division and strong growth in Financial Services. The relatively low risk and capital light nature of the group’s franchise model and its ability to attract and motivate entrepreneurs in the sector continues to deliver strong returns. Cash flow remained strong, with net debt reducing to £3.7m from £6.9m, post a £2.1m acquisition and £1.9m dividend cost. With Government policies set to keep the housing sector moving until at least September 2021 and Belvoir’s long-term growth potential undiminished in a large, fragmented market, we have upgraded our FY 2021 EPS forecast by 11% and target price from 233p to 285p.
Companies: Belvoir Group PLC
Semper Fortis Esports* recently announced its intention to IPO onto the Access Segment of the Aquis Stock Exchange Growth Market. Semper is a multi-operational Esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures. The company plans to raise £2.5m to develop their three core areas of establishing an esports team, forming partnerships with brands for sponsorship and B2B consultancy services. The Board are highly experienced in sports and corporate deal making (Keith Harris, former Chairman of The Football League), technology and electronic gaming (Nolan Bushnell, founder of the pioneering company, Atari), esports and game tech (Kevin Soltani and Jassem Osseiran). Target Admission Date of 26 April 2021 Darktrace plc. Announcement of Intention to Publish a Registration Document and Potential IPO on the main market of the London Stock Exchange. Darktrace was founded in 2013 with a mission to fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threats. Darktrace is a world-leading provider of AI for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security Timing TBA musicMagpie is a leader in re-commerce in the UK and US in the circular economy of consumer technology (including smartphones, tablets, consoles and personal computers), books and disc media (including CDs, DVDs and video games). Expected 28 April.. Offer details TBA Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Advance Energy to complete an RTO on AIM indirectly acquiring up to 50% of Carnarvon Petroleum Timor which holds a 100 per cent. working interest and is the contractor under the Buffalo PSC, offshore Timor-Leste. Carnarvon Petroleum Timor is a subsidiary of ASX listed company, Carnarvon Petroleum Limited. The net proceeds of the Placing of approximately £20.01m (approximately US$27.51mm) will be used to fund the Acquisition. Due 19 April. NFT Investments plc is an investment company that specialises in non-fungible tokens (NFT). Has applied for admission to the Access segment of the AQSE Growth Market. No funds being raised. Due 16 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 2021. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” MAST Energy Developments (MED) is to IPO on the Standard List on 14th April 2021 under the ticker MAST. The company has raised £5m giving a market capitalisation on listing of c. £23m. MED is currently a 100% subsidiary company of AIM quoted, Kibo Energy*. MED was established to acquire and develop a portfolio of flexible power plants in the UK and become a multi-asset operator in the rapidly growing Reserve Power market. PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration, in each case as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April 2021. Proposed move to AIM from the main market (standard) by Emmerson (EML.L) to provide Emmerson with access to a market and environment which is more suited, in the Board's view, to the Company's current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work. NextEnergy Renewables to launch an IPO on the Main Market. NREN is a differentiated renewables investment Company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally. Targeting a £300m raise. NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company's target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021. Digital 9 Infrastructure launch an initial public offering on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be published in March 2021. Fix Price announces its intention to float on the Main Market of the London Stock Exchange. Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has revenues of RUB 190.1bn, RUB 142.9bn and RUB 108.7bn for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8bn, RUB 27.2bn and RUB 14.2bn, respectively. The Offer would consist of an offering of GDRs by certain existing shareholders of the Company. Great Point Entertainment Income Trust PLC announced its prospectus has been approved by the FCA. Great Point Entertainment Income Trust PLC is a newly established, externally managed closed-ended investment company. The Company will provide project finance to content makers and commissioners in the global television and film production industry via senior loans secured against pre-sold intellectual property (IP) rights. GPEIT's investment objective is to provide Shareholders with dividend income and modest capital growth through exposure to media content finance.
Companies: ADME ELIX DEV PPC TXP THR ATM FFWD C4XD IOG
AUM reached £30.0bn for the first time on 31 Mar 21 (six months into FY21), up 49% in H1 and 19% in Q2. Net inflows were particularly impressive for the quarter at £4.0bn (average quarterly inflows in FY20 were £0.9bn). This was on top of a solid market movement contribution to AUM of £0.8bn or 3.4% of opening AUM. Impax is now ahead of the AUM growth trajectory (£50-55bn by 2025) that underpins our fundamental valuation of 925p per share – which is 5% above the 880p closing price on 9 April 2021. We see no let up in capital flows towards sustainable investing and maintain a positive outlook for Impax.
Companies: Impax Asset Management Group plc
