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Real-Time news about Active Capital (London Stock Exchange): 0 recent articles
|foster: Haven't been here for quite a while, so it's reassuring to see that things don't change...
Today manager Bill Brown announced another 7.5% of NAV destruction (so why did the share price drop by only 4.9%?).
Laxey Partners and the other arbs might be looking forward fondly to forcing a liquidation later this year to cash-in on the NAV, but at this rate there won't be much left by then.|
|foster: It looks as though AIT has indeed remained fully geared throughout the downturn. TrustNet today shows that AIT has destroyed more Net Asset Value than any other investment trust (of the 268 listed with data available) over 5-years (-54%), 3-years (-59.3%), and 1-year (-68.1%).
The stated objective of the trust is "to provide shareholders with medium to long term capital growth". However, NAV now is less than half the value at launch, seven years ago. The share price is at an all-time low. And, of course, there have been no dividends.
The management has failed before. It was given a second chance via the merger, and has now failed again. IMHO, if the board do not take immediate and positive action they could be regarded as negligent in their duty to shareholders.|
|foster: I came across something interesting today, on the AIC website: up-to-date data for AIT that shows gearing has reached 150. This looks like the level at which the managers have to take action to comply with the financial covenants of their loans. Total borrowings must not exceed 50% of NAV. If true, it could mean trouble ahead.
Remember that this is the team that decided, when running Aim Trust, to increase borrowing during year 2000, at the top of the last bull market. For the next two years, they kept gearing high as the market collapsed. They were up against their loan covenants so badly that by 2003 they needed to sell shares and hold more than 20% of assets in Gilts.
The solution was to merge Aim Trust with the ungeared 3PC trust, change the name, and forget about everything before 2003. Poor old investors in Aim Trust who bought at launch in 1996 (if there are still any left!) are today seeing no share price return and no dividend return over all that time. They must be hoping that history isn't about to repeat itself.|
|foster: This trust's aims are given as...
"To provide shareholders with medium to long term capital growth..."
By my reckoning, since launch in May 2001, shareholders are currently seeing a share price return of approximately...zero. And there are no dividends. In real terms they have lost money.
For this performance, the investment management fees over the past three years alone have cost shareholders more than £6m on net assets of under £100m.
It makes you wonder for whose benefit this trust is being run.|
|foster: Spin Doctor...
Sorry, haven't been here for a while.
Those are AIT's own numbers from their published factsheets:
There the benchmark is stated as "AIC UK Smaller Companies"
On Trustnet it is given as "Lipper - UK Sm Companies SA"
As many of their invetments are on the AIM market it is not clear to me why they do not use an AIM index benchmark.
Meanwhile the NAV and share price have been romping away. I see that on 23 February, near their peak, the Board announced that the Company purchased for cancellation 350,000 ordinary shares of 0.1p at a price of 145.50p per share.
They could buy some today at 135p.|
|foster: Manager's Comment on monthly Factsheet, September 2006:
"No commentary available this month."
Manager's Comment on monthly Factsheet, October 2006:
"No commentary available this month."
Share price cumulative performance:
Factsheet still shows underperformance relative to sector over every stated period:- 1 month, 1 year, 3 years, and since inception.|
|foster: The Manager's Comment in last month's Trust Factsheet, July 2006, was a market commentary only, and included nothing whatsoever about the activities of the Trust itself. In this month's, August 2006, it is the same. In fact it is word-for-word the same.
F&C and the board of directors should demand from its fund management company some comment every month about the performance of the Trust itelf. This month it might include, for example, some insight into...
o why the level of gearing is shown to have increased to 140.3, for a trust that F&C rates as being of only average risk.
o why the share price is shown to have underperformed relative to its sector over every stated period:- 1 month, 1 year, 3 years, and since inception.|
|foster: For the past six months...
NAV of Active Capital............minus 7%
FTSE Small Cap (ex IC) index.....minus 3%
AIM index .......................plus 5%
For the past five years, my estimate of the share price return for AIM Trust shareholders, who converted to AIT shares at a rate of 1.086:1, is as follows...
ATR/AIT share price..............minus 33%
FTSE Small Cap (ex IC) index.....minus 1%
AIM index .......................minus 18%|
|mangal: NAV steadily rising though the share price jumped some 5% today. Is there any specific reason for this?|
|baker man: Have looked in detail at this one over the weekend - on the 29th July the NAV of 82.5 with a share price of 66 mid as of friday the NAV was 90.5 (thursdays close) with a share price of 68
The merged entity now holds some of the best recovery plays in the fledling/small cap area.
Volume has been increasing over the past week or so.|
Active Capital share price data is direct from the London Stock Exchange