Northern Investors Share Discussion Threads

[westcountryboy] 20/7/2017 08:43

I accept the point, but it's a bit more complicated than that. It's 12.5% of all amounts capable of distribution to shareholders in excess of £58,988,000, based on the audited accounts for the relevant financial year, less any performance fees paid in respect of earlier years. The first year they qualified was 2016 when they took £2.81m. In 2017 a further £0.77m was earned. The provision is a further £1.75m. But I agree that one would expect most of that to be earned if the return is good.

[flyfisher] 19/7/2017 10:11

Comment, Performance fees are based on achieving book values, if you expect them not to be paid then you are tacitly expecting a below book outcome, not good when the stock trades at a premium.

[westcountryboy] 12/7/2017 22:06

New NAV figure of 222.8p per share post divi has led to further share price falls. As we are still 60p over the NAV it will be interesting if this falls further, or whether investors remain cooler and still quietly hope that in addition to the £5.57m net assets remaining after the divi payment they may get at least £0.96m in deferred sale proceeds and up to £1.74m for the performance fee provision, making £8m = 320p per share before any increase in value of the remaining companies is factored in.

[westcountryboy] 05/7/2017 20:16

I can see why the price has fallen: now the divi has been paid the market is confronted with the statement in the annual report that the final return from here is anticipated to be between 240p-400p, or £6m-£10m - so we are pretty much in the middle of that range. The current buy price of 315p equates to £7.9m NAV against a NAV of only £5.8m for the four remaining companies. The 400p/£10m upper range estimate depends on three things happening in my opinion:

1) an uplift in at least some of the remaining four companies before sale - the most promising being Axial - but none of them are laying golden eggs in the way that some of the previous holdings were

2) further payments for sold companies eg Optilan (up to £1.2m might be possible according to the report)

3) a lot of the money reserved on the balance sheet for performance fee not being needed. £1.75m is currently reserved in my estimation on top of (only) £771k used this year - difficult to see why much should be needed next year, but as I don't know the terms of the scheme I may be wrong!

Other views welcome!

WCB

[westcountryboy] 05/7/2017 11:17

Yes, just bought some more this morning in fact, for 311.25. Perhaps a mistake! 30p of the fall was dividend last Thursday - I hope the rest was just bored people ex-divi fed up with the long wait to come...

[ursus] 05/7/2017 10:54

Quite a price movement over recent days

[westcountryboy] 14/4/2017 16:56

I've been trying to assess the consequences of the two recent sales, of Optilan and Cawood. They have been sold for £8.14m and were on the books for £7.06m. There is now £6.42m of NAV left in the four remaining holdings.

Total NAV at 31 December was listed as £18.36m but this is after taking into account £2.51m of provisions mostly for the performance management fee, so £20.87m in total. I've only just realised that when they returned £6.2m in January they must have eaten into that provision as they only had £4.87m net cash. If I'm right then perhaps this means that they believe that the full provision is not necessary.

If _no_ provision is necessary then I calculate the NAV ps at 585p before the addition of the £1.08m uplift on the sales of Optilan and Cawood, and 628p if you include that uplift. But I'm sure there will need to be _some_ extra performance management fee paid. On the other hand, there are few things not included in the current NAV (extra payments, court judgment etc) that might increase the final NAV. And then of course there is the question of how much the final four holdings will go for.

So a lot of uncertainties yet. But I would guess that we will get another cash distribution soon for another 250p or so, and at the same time some updated valuations and info on the provision situation.

Apologies for any miscalculations!

[centipede] 23/1/2017 12:45

Well, the company said 'We currently project future cash distributions of between 720 pence and 920 pence'. This gives an average of 820 - take away the 250, and you are left with 570.
They have tended to under-promise and over deliver in the past, so the higher value of 920 would leave 670.
Like others here, I managed to sell half of my holdings at about 930, but am holding tightly onto the rest. It's a bit of a gamble, but who knows - some people appear to be buying at 585 (hopefully insiders who know how much the underlying companies are worth) !

[shorne05] 20/1/2017 12:45

Thanks for the tip Westcountryboy. I think I was just surprised by such a drop

[spectoacc] 20/1/2017 11:00

Still trading over NAV.

[westcountryboy] 20/1/2017 10:55

XD today but even so very strange response. It was possible to sell yesterday at 933.5, and the divi is 250p. Let's hope things sort themselves out in the near future!

[huttonr] 20/1/2017 10:50

shorne - look at company news dated 21/12/16

[skyship] 15/11/2016 15:02

NAV/share as at 30th Sept'16 = 728.6p

[forensic] 01/8/2016 10:55

Wow, a nice buy of £50k's worth of shares gone through at £7.59. Promising.

[westcountryboy] 20/5/2016 14:27

Hi SBP

Each to his own! On the more optimistic side:

- of net assets of £17m, £10m is cash

- there is a dividend of 24p in the offing

- 'It is still our objective that the return of cash to
shareholders should be substantially completed by December 2017; our
latest review indicates that the further amount to be returned could be
in the range from GBP18 million to GBP23 million, making an ultimate
total of between GBP95 million and GBP100 million. This is equivalent
to between 160% and 170% of the net assets at the start of the
realisation process, and implies future cash distributions of between
720 pence and 920 pence for each share now in issue.'

- there are only six remaining companies of note, all seemingly rather healthy, and only two of which (Weldex and CGI) are worth less than they cost :

Axial Systems Holdings 3,519
Optilan Group 2,747
Cawood Scientific 1,984
Weldex (International) Offshore Holdings 1,921
CGI Group Holdings 819
Lanner Group 730

- as discussed before on this thread, the £5m bonus set off against assets is very unlikely all to be needed

[stupidboypike] 20/5/2016 14:18

Sold out entirely because of this statement:-

"Our orderly realisation strategy has produced excellent results to date, but
we recognise that it may be necessary to take a pragmatic approach to
the realisable value of some of the remaining investments in order to
maintain progress towards the final outcome. "

I might have blinked too soon, but this has been a star performer for me and I'd rather exit with a great profit than keep risking for a bit more. Good luck all holders.

Best regards SBP

[ursus] 09/5/2016 10:36

Mildly pleased (at the moment) that I did not tender....

[topvest] 14/4/2016 21:12

Yes, I ended up selling all mine in the tender. It's been a profitable realisation for me. Looks like there could still be some upside for remaining holders. Not sure I'm tempted to buy in again though. Think that's it for me on this one.

[stupidboypike] 14/4/2016 09:35

Wonder if news is leaking, we seem to have suddenly burst into life. Offer is 650 this morning. Best regards SBP, Glad I didn't tender any!

[yieldsearch] 01/4/2016 13:28

From rns
The Tender Offer was therefore undersubscribed and in accordance with the terms and conditions of the Tender Offer, the Company has accepted in full all applications made by Eligible Shareholders.

49.05% shares offered in the tender
Company wanted to buy and cancel 64.29%

[ursus] 11/3/2016 09:22

To tender or not to tender?

My quick back of envelope calc below assumes that 64.29% of the shares are tendered (may well be wrong as some of the managers are only tendering 50% - will this and other shortfalls be taken up by those who tender up to 100%?)

At present the co estimates an end 2017 wind up at 155-170% of opening net assets (£59m) - so take mid point at £95.87m. Call it £95m. Less current nav (ex perf fee) of £81.4m - so £13.6m to come, spread between 1.75m shares is 777p per share. nb - that £13.6m shd be compared with the post tender nav of approx £11.5m (ie 31.5m less 20m tender amount).

777p per share equates over 21 months to a gry of 12.7% pa

[cockerhoop] 11/3/2016 08:58

WCB,

I'm also having problems correlating the level of the managers performance fees but my take on the situation is that the £4.85m is the current estimated (notional) total performance fees based on prior and the current shareholder returns and assuming the remaining companies are sold at their current NAV.

The £2.81m is the actual performance fee that will be due after the current return to shareholders and will be paid in May now that the shareholder returns have increased above the payment hurdle.

IMO there will be a further estimated £2.04m to be paid in performance fees using current assumptions (but subject to change if amounts returned or timing changes).

[westcountryboy] 10/3/2016 20:10

I believe there are eight investments left, but only six have value, the largest being Axial Systems, Optilan, Weldex and Cawood Scientific.

I have now read the offer document and I note that John Barnsley and the Managers are (almost) all tendering 50% of their holdings rather than the 64.29% they might tender.

I can't quite get the sums in the offer document to add up. The value of the eight investments is quoted at £10.9m whereas their previous value at 30 September was only £8.75m, and if that is all gain since September that bodes well - but I am not sure that this is a like-for-like comparison. There is £25.6m cash or near-cash. This makes £36.5m in total assets. However the company's quoted net asset value is £31.46m - but this is after taking off £4.85m for a managers' performance fee which will have to be paid. (That is presumably why the offer is for £20m rather than £25m.) However there is also mention of what seems to be a further £2.81m potential management fee and I am not sure whether this is all extra to the £4.85m and if so how it would be paid. On the other hand there is £1.44m potential deferred income due from investments already sold, presumably most of it from Kitwave.

All in all there seem too many imponderables to be able to predict the future of the rump company. It might be wise to follow the managers in tendering 50%. With only £11.1m of net asset value left after the tender offer, each extra £1.1m of value would mean a gain of 10%. However, bearing in mind their large performance fee they will be winners whatever happens!

[garbetklb] 07/3/2016 18:55

Rather odd that there's no mention as to where NRI holding has been sold - nothing on Control Risks web site or Twitter, so looks like it's a private sale of the NRI holding only.

Will be interested to see which holdings are left - and valuations.