Victrex Share Discussion Threads

[rosylee] 16/2/2007 12:50

Nice rise today, any reason why? If it closes above 827.5 then it will be reaching a new closing high. Perhaps after peaking three/four times now its ready to break out.

[rosylee] 26/1/2007 16:44

I often wonder if market makers know that a share is going to rise and push it down to buy cheap. A lot of my indicators are set fair so I intend to hang in.

Will see what next week brings.

[pr0fithunter] 26/1/2007 16:23

I have no idea. All I can say for a company that is consistently growing profits at 25% plus and has a large cash balance, they don't appear to attract much interest. I have them down for £60m PBT this year and current market cap is c£630m giving a ratio of 10.5. This seems far too low to me. Am I missing something?

[rosylee] 26/1/2007 15:36

Why the big drop today? Divi next week (3lst Jan) is 10.20p

[spin doctor] 04/1/2007 19:41

FWIW my choices for this launch season are
Close Enterprise
Matrix
Foresight 2
Electra
Brit smllr cos
Proven
20% in each of the first 4; 10% in each of the last 2.

I won't be putting money in dedicated AIM funds, or in those with an especially focused investment brief, or in those that wish to return cash especially quickly or to protect downside.

Managers Baronsmead and Northern have no new (generalist) fund launches.
Baronsmead are on track with their current funds, but presumably feel that further new money would stretch their access to deals.
Northern imply they may be hard pressed to reach 70% with their current funds and state that the price of offered deals has in many cases been unacceptable. That is very strange, and has not been reported by any other group to the best of my knowledge. Suggests to me that their access to deals is not the best.

[spin doctor] 14/12/2006 21:43

TRustnet vs Bestinvest; suspect both have glitches. Tend to peek at both. Agree that most of their posted info derives from auto data feeds, so prone to "technical" imprecision/biases.

I think that some of the trusts marketed in 04/05 05/06 (the 40% years) will be very vulnerable to mass sales after the 3 year "curfew" ends. These will be largely those that have been mass marketed, were capital protected (and hence depended on tax perks for return), focused on AIM, and/or sold on the basis of maximising capital return. Of course maybe the trusts will just hoover them up at 10% discount, benefiting longer term holders. IMHo the usual quality suspects who focus on long term investment should not be so afflicted.

I have no confidence at all that discounts will narrow or liquidity improve for most trusts, at least not in the short/medium term. Baronsmead 2 will have mkt cap of over £70M when the C shares merge and a great divi stream, so maybe that'll be one of the first to become more liquid (what's the verb? Maybe liquefy! Not liquidate.)

For me tho', I care not, as I see them simply as a low risk dividend stream for the very long term.

Close Enterprise is launched. The usual plot. Attractive if 4-6% tax free from net 70p appeals.
Brit Smllr Cos top-up also launched- I have a few from ~6 years back. An OK performer. Small management group that have stuck with VCTs, not done anything especially flash. Current portfolio fairly mature and has some decent long-held AIM stocks, and one due to progress to main market. Oddly they are giving a 5% discount to existing holders PLUS of course potential 2.5-3% discount via discount brokers. Errrr, so a total 7.5-8% discount? And this is on an investment into the current portfolio - not "c" shares. So will dilute the NAV goven that initial launch costs are ~5%. I will top up there - investing into an existing portfolio with effectively no charges for year 1 is too good to miss.

EDIT Forgot to say that Ventus 1-3 appear to be on course to invest 70% b4 the 3 year curfew. They estimated 8% yield for a 20 year lifespan. Even at 7%, on a net 60p investment that's a low risk 11.5% tax free. Fingers crossed: one of my larger punts.

[hazelton] 09/12/2006 08:10

Spin doctor: Proven discount , indeed you are correct about the Trustnet site. I usually use the Bestinvest site and its been 15% recently on that. I shall have to compare the two sites. Do you have any idea which site is the most accurate or reliable ? I have assumed that these sites are all automatic and would have similar (probably not the same as the data feeds sometimes differ) numbers.

35% discount takes them into the junk category I think which I doubt that they deserve.

Secondary market , I got the impression on TMF board that some people think it possible that the discount could get high when people sell the 04/05 and 05/06 VCT shares. This was always on the cards but I had never realy thought about it too much. It would have the benefit that one would not have to wait a few years for the portfolio to start producing dividends (which I see as another negative like spread , charges , discount...) However I agree with you that only the highest quality VCT should be considered. Its not difficult to find a VCT trading on stupid discounts but there seems to me to only a poor case for purchase as the situation is unlikley to rectify itself. The highest quality VCTs should / do try to maintain the discount to something sane and so it should not happen. It will be very interesting.

There are so many negatives to VCT investment that all erode the case for it and a dwindling discount is another that turns the investment into just a return of capital. The new 30% relief rate does not help at all , it takes you so much further from the investment case.

Liquidity - true , I thought that the magic size could be about 50M which some of them may approach (especially if the C share issues are merged). Looked at from a pensions perspective if one could get a dividend return of 6% then thats about as good as an annuity for some at present. And if the discount does not erode the capital too much then then the whole package could look attractive to some , could be a good diversification. However the VCT market must be tiny compared to the annuity market - room for it to grow perhaps ?

[Abuse team] 09/12/2006 00:49

Post removed by ADVFN

[spin doctor] 09/12/2006 00:46

Just looked at the trustnet website, specifically at discounts.
Surprised to see the two Proven VCTs with quoted discounts of 35.5 and 39.8%.
I think this is because the NAVs are quoted cumdividend ( the massive recent one of ~30p and ~50p) whereas SPs are ex-div. Clearly misleading.
I'd expect therefore true discounts to be 10-20%. I could be more precise but would have to dig out the figures.

The only trusts I'd buy in the 2ndary market would be those of the highest quality with gains banked and a stated dividend policy (likely to be trading at modest discount) and those more speculative seed capital funds (eg Oxford tech) which are genuine VC funds for the very long term and whose share price languishes...., but which may well have a handful of stellar performers.
But one could die of boredom waiting.

You'd have hoped that the early Close/Bmead etc funds would be at least reasonably liquid by now, but no real sign of it. Give it a year or two though and I think it will happen - needs mainstream journos to switch onto the fact that some trusts are dull but worthy income streams rather than speculative tax avoidance funds.

[hazelton] 08/12/2006 08:11

I looked at some earlier Proven reports on their website and I am sure that they had a 10% discount buyback policy. I believe that the current C share offering has these words however the Bestinvest site suggests that the discount is a bit higher which concerns me. It must be difficult to maintain the discount on just the VCT itself buying and I hope that the secondary market does evolve. I believe that there is some interest in the industry in encouraging it.

When one looks at all of the things that conspire to reduce the viability of VCT investment they do seem to be pernicious , I think mainly because the investment performance in terms of what you actually get out of it is not tremendous.

I believe that there is a belief that some trusts will be trading at well below NAV in a year or two which will be a buying opportunity. It will be interesting to see if that happens.

[spin doctor] 08/12/2006 00:29

Dicsounts and liquidity clearly a major issue for all VCTs; some manage to keep discounts around 10%; others much more.

In some there does seem to be a small secondary market developing. But the key issue seems to be how aggressively the VCT itself will buy back shares. Baronsmead and some others buy back at ~10% discount. Proven mentions this as a policy for their C share launch. Not sure they've been doing it enough for their existing trusts.

I detect a shift among some trusts/management groups towards the high standards of communication, discount manageemnt and so on, of the market leaders. Combine that with Budget changes that should discourage Johnnycomelatelys, and I think the future for VCTs looks rather better than for some time.

Maybe rose coloured specs, a decade hence should tell us.

[hazelton] 05/12/2006 13:34

Yes , Baronsmead & AIM - I doubt that I will go there also but as you say its interesting. The Keydata AIM 2 should be managed by Giles Hargreaves. The last one seems to me to be doing OK (discount is small too).

Foresight C , I too am dubious about fashionable issues. It should be a tame performer and so the losses in charges may drag it into the mediocre.

The Proven offerings are tempting but I cannot understand why their current VCTs have such a discount.

[spin doctor] 04/12/2006 22:16

Interesting that Baronsmead are launching an AIM fund prior to generalist. That's either because they perceive greater value there cf. private equity, or else they think an AIM fund will take longer to fill. I am sure the latter applies, as their former generalist funds were "sold out" in a couple of weeks. If anyone can make an AIM fund perform (especially given the new gros assets test) then it is B'mead.

Foresight have launched a C share issue for their 2nd fund. Distinct from every other VCT C issue I've seen, there is no plan to merge ordinary and C share classes. This is because the investment brief will be different:
(1) post-budget, max gross assets £8M. Not much effect: Foresight claim this applied to more than 90% of their investments anyway
(2) a focus on "green"/sustainable investments. Hmmm, do I detect a VCT focusing on a fashionable investment sector that may be mid-bubble?
(3) greater loan stock cf equity investment, thus enhancing income, modestly reducing risk, and significantly reducing capital return. Not clear why they've done this.... It's a first for them. two quesses - (a) they anticipate a rocky road ahead (b) they're following the crowd - they were unusual in having a primarily equity load. I suspect (b) is the case.

Doubt I'll invest in B'mead AIM. Not sure whether to invest in Foresight. Will keep powder dry and wait to see what else is on offer - unlike previous years it is likely that most funds will stay open until March.

I've yet to look at the Matrix offering. Ibis, Octopus, Aberdeen and Sitka really do not appeal.

All my uneducated guesses ie IMHO.

[hazelton] 23/11/2006 13:52

Whats the thinking of the offerings that are emerging. I see believe that Keydata AIM are intending , Proven , Baronsmead AIM & the Foresight may be worth considering , I am not sure about others - reactions anyone ?

[hazelton] 23/11/2006 13:48

And what is the latest thinking on the emerging offers this year - anyone ?

[rochdae] 21/11/2006 17:32

Good luck shardoc. I was forced to sell on the sligtly negative trading statement. I'm sure though that results will be positive. This stock is just a bit too volative for me with quite impressive momentum both up and down.

[sharedoc] 21/11/2006 10:57

The share price is doing exactly what it did last time before the results, It it continues to follow the previous pattern then VCT will be >800p on results day, Also the company has strong fundementals and profit growth.

[spin doctor] 17/11/2006 01:26

Just received and read the Baronsmead VCT annual report. The best of any VCT report I've read in 10 years I reckon.
Good consistent performance since ~1997; gains in the bag that will sustain divis of maybe 6% tax free going fwd; ~70 investments; >60M mkt cap. Decent performance despite a mix of AIM and private equity held over a period that has hardly been plain sailing.
And they communicate well, are clearly committed, are strengthening their team, are unfazed by HMG's recent legislation changes....

Their consistent success emphasises to me just how poorly many competitors have done.

[hazelton] 06/11/2006 11:06

Spin doctor: Early days for me too. I have a Finspreads trading acedemy account which lets me trade small quantities. On a spreadsheet I do OK but there are practicalities doing it for real. Its a good way to learn. The tax side of it does make you wonder but its been going for some while now. Shouldnt talk too much about it on a VCT thread but I find the Spreadbetting thread offers a lot of insight.

Good luck.

[spin doctor] 05/11/2006 23:34

Ta.
Re: VCT--> IT conversion, I guess one benefit is breadth of possible investment; disadvantage is loss of some tax benefits - revenue and capital profits will be taxable. The VCT industry claims liquidity (and hence discounts to NAV I guess) will improve, but I doubt it.
On balance I'm uneasy with all these VCT-SIPP tax avoidance shenanigans; but I may dip my toe in the water with the VCT-SIPP combo if I can find a provider whose charges etc do not make things unattractive.

Early days with spreadbetting. I'm using it to avoid CGT; seeking to maintain rather than extend open positions.
Seems straightforward enough in practice. I am using quarterly controlled risk bets with Ig Index, setting pretty generous stop losses (usually 30% below current sp). I find the controlled risk reassuring - if a market or stock wipes out, my losses are absolutely limited to that 30%, even though those with a conventional stop loss may not have been able to close out at anything like their specified stoploss.
Costs are modest. Essentially spread + finance cost + controlled risk premium of 1%.
No tax to pay; seems bizarre; surely a loophole that will be closed at some point.

[hazelton] 03/11/2006 19:02

Spin Doctor: Interesting , I was going to ask the question (generally) why would somebody want to buy a VCT that was going to convert into an IT in 5 years. I could not see the benefit - could this be one ?

My enquiries regarding the 90% tax have generally yielded a sort of "its not cricket" response which I think is probably true. I feel that it would depend on situation but may be complicated to get going unless it was a largish transaction. (and someone would guarentee to get it done for you) The embedded costs could be highish and the liquidity / flexibility would suffer. But I bet some could get it done.

I have no immediate plans to go in for such a scheme.

How do you find spreadbetting , CGT is a nuisance.

[spin doctor] 03/11/2006 17:36

There is even more complexity/tax mitigation potential to the SIPP-VCT combination it seems.
If one invests as above (#197) in a VCT that converts after 5 years to an investment trust (eg Apollo, Octopus), then that investment trust can then be transferred into an existing SIPP. That then yields additional tax relief.
One IFA claims (have scanned the sums; they seem reasonable) that this entire process yields a return of 38% per annum if one assumes zero investment gain from the VCT! That is not that pessimistic an assumption, as those VCTs are structured with loans rather than equity, so return net of costs is likely to be less than 5% pa I would think.
God, even more of a headache for Gordon Brown.

Mitzis, don't forget all the downsides of VCTs that put most people off - illiquidity, very long time frame, limited investments, variable performance, etc....

[mitzis] 03/11/2006 10:23

Thanks for that spin and all tax free as well thats great.

[spin doctor] 03/11/2006 01:03

Proven are paying a capital dividend of ~50p, ie 30%, from accumulated profits - a couple of investments have been exited at substantial profit.
The company went ex-div last week, hence the fall in share price
This is a one-off. Unless they are extraordinarily lucky, this will not be repeated for a few years, if ever. However the fund does claim to have a few other good performers bubbling under the surface. I'm happy 'cos I hold a few from launch a decade back - that's how long these often take to come good.

Hazelton, I have seen the Times article re: combining SIPP investment, connected party transaction, and VCT. It's a good (if rather obvious) idea, esp for those who planned VCT and SIPP investments anyway. What i don't understand is why the Times article focuses on the "linked product" offered by Octopus. "Octopus is the first firm to offer such a scheme, which is available only through selected financial advisers, but other VCT and Sipp providers are expected to follow suit."
As I see it, one is free to open a SIPP and perform a connected party transaction with a suitable SIPP provider of one's choice. One then has cash in the bank with which to purchase a VCT of one's choice for the second stage. There's no need, in fact one would not wish, for the 2 products to be connected - they arev separate products and are entered separately on the tax return.
The difficulty seems to be that some SIPP providers don't permit connected party transactions of this type. Also be aware that the 22% tax rebate after SIPP subscription can take 8-12 weeks.

If it weren't for me discovering the CGT mitigation and flexibility of long-term spreadbets, then I'd be adopting this strategy bigtime. Maybe next year.

If you do go ahead, could you let me know which provider you use? Ta

[mitzis] 01/11/2006 18:01

Guess your right they are paying a 30p dividend and the share price has fallen 30p..