Victrex Share Discussion Threads

[a0002577] 01/11/2006 15:29

Isn't it just because they have gone ex-div?

[mitzis] 01/11/2006 12:38

Proven funds down 30% today can someone explain..?

[mitzis] 30/10/2006 21:20

thanks Hazelton it lost a bit in the end but its still a good perfvormer on the day.

[hazelton] 30/10/2006 13:53

I believe that they have made a large distribution , wonderful for the following. Its probably that.

[mitzis] 30/10/2006 09:17

Whats happening to Proven vct today they are up 15% ..

[hazelton] 26/10/2006 23:56

Has anyone read this :-



90% Tax relief , interesting.

[hazelton] 26/10/2006 23:49

I go along with most of that. I thought the Bestinvest article realistic and there is a piece in the latest Close Ventures about the day of reckoning thats also realistic.There is competition out there for the funds and I have always thought that given the constraints put upon the VCT offering the tax perks etc turn it into a tenable divesification to ones investments. Without them its hard to see any of the VCT offerings to date as being interesting and the sector would wither.

I like the Bestinvest VCT performance tables. Sort by name and look on the right hand side for areas of blue. There are not many. Its a useful way of imagining that if you bought into that groups VCTs whats the chance that you would have a profit in a few years. The blue bits by Northern are not that high (but they are blue). Even so IRRs of about 5 to 6% are nearing where the tops are.

Have you seen :-



90% Tax relief , its an interesting idea , wonder if it works.

[spin doctor] 24/10/2006 23:12

Yep, it is a significant +ve event, and there've not been many of those. In my view this generally weak performance reflects both a number of duff funds (either groups without the skills or else who have launched funds knowing they'd attract cash on the tax perks alone) and the investment structure of many - in their quest to diminish risk they've loaded with debt rather than equity and failed in many cases to profit signigicantly from their winners.
Managing a VCT is not rocket science IMHO, and those that deliver simply have focus, commitment and a consistent strategy.

In terms of future investments, agree Proven starting to look good. And arguably British Smaller Cos (YFM stable) - invests in businesses I understand!

The usual suspects - Baronsmead, Close, Foresight - seem OK still.

Northern seem very very dull, I won't be putting more money there. Quester promised much but are still dire, can't believe they'll come to the market.

Matrix, Neptune, Electra - relatively early days - should do OK.

Oxford Technology - committed smaller player, high risk very early stage stuff. I'm not convinced yet, but will prob be 5-10 more years before we know....

AIM funds still marooned in the general (non-resource stock) AIM torpor. And are most affected by the new more limiting rules.

BestInvest this month focused on VCTs in their newsletter and were pretty scathing. I'm not so sure that their -ve assessment is correct, and noted that I hold 3 of 5 of their top 5 performers, and none of their 5 "dogs". In my view the future dogs can be anticipated.

[hazelton] 20/10/2006 07:27

I thought it rather good for the general VCT following. Its rather like the large Foresight gains a while ago. Indeed the performance has to be there. These last few years I think that Proven have become a contender , they have a few VCTs under their wing and I shall be watching them this time around. Any other contenders for managments groups neeing to be taken seriously ?

[spin doctor] 19/10/2006 23:21

Proven Growth and Income (I have a modest number) has announced a 50p divi payable later this year. 50p tax free on an initial (net of tax relief) 80p outlay. Proven is now one of the better performing VCTs.

This demonstrates clearly the potential of VCTs for delivering cash tax free on the way out, and with tax relief on the way in - better tax treatment than ISAs/PEPs or pensions. But pretty lumpy payouts from Proven - Baronsmead and Close for example indulge in a bit of "smoothing".

But of course the performance has to be there also, and with many it is not. AIM VCTs continue to languish, reflecting their market.

Ventus cash flow will prob be delayed by fierce competition for windmills, but looks good still for the medium term.

[rochdae] 27/9/2006 13:44

Picked up some of these today on the break through 800. Never too late in the day and a trading update coming next week.

Strange you don´t get many posts on this given its recent accent.

[a0002577] 10/8/2006 09:00

You are right, of course, Spin Doctor but it is worth having a look at Close Bros original VCT : CVC. This is now paying a 10 pence per year dividend from capital gains already made - and that is on an original investment of somewhat less than 40 pence per share. I am very happy with that one. They are gradually moving their other VCTs (including the merged Murray VCTs now called Crown Place) to a similar model. So I would expect to see even Close Income and Growth start to pay rising dividends.

Ventus is the only recent issue that I even contemplated subscribing to - but I think I have enough VCTs for balance in my portfolio.

[spin doctor] 09/8/2006 23:31

Proven Growth & Income (PGI) have announced a 30% NAV uplift, the product of a single company sale. That should feed taxfree divis for a while.

Overall, VCTs evolving as expected, ie slowly!
AIM funds remain hopeless IMHO; managers speak continually of the excellent value they're finding, but have yet to deliver.
The quality non-AIM funds continue to do well, but most are structured such that their performance will rarely excite. Close Income and Growth is an example, where a substantial minority of funds is heading towards pubs, and will help fund the 3.5p divi from income; plus further distributions from capital profits.

Ventus, a personal and sector-diversifying favourite of mine, is investing to plan (a recent planning applicn has gone in their favour), and looks on course for an ~ 8p divi for the long term, on a net 60p investment. Yum yum.

[chippy2] 06/6/2006 18:28

Nice busy thread !

[spin doctor] 23/5/2006 20:14

re: ventus.
Spoke to one of the team today. They seem a quality act - knowledgeable, experienced, committed, motivated. He made the point clearly that as a VCT it is often suggested to them by potential investees that the investment return could be slightly less generous, given the tax perks. This "kind offer" they kindly decline, and seek out true market cost investments. This does show how some lesser outfits, especially those struggling to meet the 70% 3 year investment deadline, may have been tempted by low quality deals.

He also contrasted Keydata (another windfarm VCT) and Ventus; the former arguably an example of where a less attractive investment (estimated only 5% yield and v.limited potential for cap growth) has been rendered adequately attractive only by the tax perks.

On the subject of the 70% "hurdle", this is the key risk for Ventus, and one they're well aware of. Talked sensibly of that, and various contingencies in case it looks, (say) 2 years in that they might not hit the target; eg non-wind technology, buying established wind farms, even AIM investments in the sector, tho' that is definitely not their wish.

In my view this is a transparent, low risk, highly tax efficient, income producing investment. Returns will correlate poorly with other investment sectors and therefore an excellent diversification for most.

Suggested return is ~8p per annum on a net 70p investment, ie ~11% p.a. when fully invested.
No guarantees at all of meaningful liquidity, but if it delivers, may well become tradeable, and potentially at a premium. Definitely one to buy and not sell for a decade however.

www.ventusvct.com closing date 31st May
cheapest broker: www.cavendishonline.co.uk (rebate 3%, £35 flat fee)

[stupidboypike] 08/5/2006 07:01

Spin Doctor. I share your view of long time frames for VCTs. I have a portfolio ( including Questor sadly! ) I view them as an alternative t Pension and never intend selling just collecting the tax free divis. I am also a fan of Ventus and own a few. If they pay 8p dividend tax free I expect them to trade well in the secondary market. ( I may even buy some in the secondary market ).

Best regards

SBP

[spin doctor] 07/5/2006 22:05

Yep, most VCTs utterly illiquid, effectively the only way out is for the Co. to repurchase at ~10% discount as in your case.
In my view no-one should buy a VCT unless they plan to hold for well over 10 yrs; probably 20-25; and should view the value of the investment as the future stream of dividends rather than a capital sum that can be cashed at shortish notice. Of course, in the case of your investment with Quester, sticking around for the next 20 years may not seem too atractive an option....

Ventus still open and seems atractive.
Reasonably low risk. On a net 70p investment, they claim an 8p dividend payable from ~year 3 --> a tax free ~11% per annum with some capital growth prospects. If that happens, it may even trade at a premium to NAV, but the market will probably be just as illiquid.

[david77] 04/5/2006 13:58

I tried to sell my 10333 Quester VCT4 recently. I was told no chance of selling on the open market 'cos there are no buyers - and I can understand why. The market maker offered 30p/share!! out of which I would have to pay the deferred CGT of 40p/share. I rang Quester, and they told me that my broker had to register my interest in selling with their broker Noble & Co. At the end of last month, the Quester fund paid 54.65p/share to buy in all of mine and those of a number of other holders. I understand that this was about 90% of NAV.

Not one of my better investments :-(

[spin doctor] 16/4/2006 22:25

The new restrictions apply only to new money raised, ie 06/07. The ordinary shares and 05/06 C shares are under the old rules.
The ord shares have a NAV ~120p, and broadly I'd expect all cap gains and income to be paid out as dividends, with an element of "smoothing", hence their expectation of 8p pa for the next few years.

High octane these are not! NAV will remain ~stable, just chunky divis.

Ever the optimist, I think we will now see the better, more committed and talented groups continue to focus on VCTs, and deliver the goods, whereas the lower quality offers (successful on the back of tax perks only) will dry up.

We'll see.

[rambutan2] 16/4/2006 20:14

spin doc, i see that they have just raised £35m in a C share raising. which is about 3x the mkt cap of the original fund. do the new investment restrictions count with this money, and indeed with any new investments the old/recycled money makes? or do they just kick in with any vct money raised after the close of the 05/06 tax year?

on the face of it, under the new rules, size is perhaps going to be a bit of a hindrance i would have thought?

certainly wouldn't want to touch an aim vct under the new rules.

i've never been keen on vcts because of the lack of flexibility and the v high management charges, which are nothing short of scandalous. artifical investment products are never a good idea. especially once which are open to the whim of the treasury every year.

that said, a few of the vct managers have now been at it for a few years and im interested to see whether the likes of baronsmead, close and foresight have now got a structure in place which means that they can replicate and indeed improve upon past performance.

hmmm.

[spin doctor] 16/4/2006 15:02

Close have done it again:
Close Tech/Gen total return for calendar year '05 was >18%. Dividends now pretty certain to be >8p per year for the foreseeable future.

Interesting how some just churn out the results time after time, and others the absolute opposite.

[spin doctor] 03/4/2006 22:30

Whether an imvestment returns capital growth or income is of no great consequence to the investor, who must be interested only in the likely sum of returns, discounted as appropriate (ie distant returns are less valuable than shorter term ones). Earlier paid divis can always be reinvested.
I am therefore utterly uninterested in the quoted share price of VCTs, ( illiquid and discounted as they are), but am very interested in the future sum of tax free divis over the next 15-25 or so years.

VCT investments are often structured with a substantial loan (cf share) element, both to reduce risk, and to front-load investment returns.
Distributed income is therefore a mix of income (from cash, quoted share divis and loans) and capital (from realised equity stakes).
Exiting from equity stakes in unquoted businesses is clearly difficult, and may take many years (if achieved at all).

Paradoxically the Budget changes may make the industry more competitive and offer better value and returns to the punter.

[hazelton] 01/4/2006 13:51

Regarding the budget I think that the 5 years holding is fine but I do feel that some sort of 40% tax advantage is important. Either in part against income / capital gains deferral. In earlier posts I have expressed the opinion that VCTs are not a brilliant investment if you look at all of them over the last 10 years there are few that have made startling return. The more I think about it we have a vehicle tailored to return dividends (which is unusual) that are derived from stocks that do not normally pay dividends (usual for fast growing companies) so VCT distributions must be made from sales of holdings but selling (or buying) is not easy as they are fairly illiquid. I too can immagine the industries annoyance at seeing about half of their current cultivations and prospects of little use with monies raised in the future. Oddly if future demand is 100M / 200M then I suppose they can weather it as demand will not be there to make the problem more urgent. It is however a great shame to stop the expansion of the sector in this way as it is not that big yet. If the chancellor wants to make it harder for the VCTs to make an investment return then he should have put tax relief up not down. If they were not happy about some of the more opportunistic schemes then there must have been other ways.