Balance sheet in latest results RNS - https://www.londonstockexchange.com/news-article/ASTO/preliminary-results-announcement-for-2024/16927596Cash now £8.7m. NAV for A shares £26m. Those are the key items but I think you can also work out from the full balance sheet what the NAV of the A shares is made up of. |
Post 2660
....Its reasonable to expect the asset management operating business, which had net assets of £26.5mn (18.4p) including £11.2mn of cash in the 2024 interim accounts, could command a valuation close to book value as a standalone entity given the cash backing and progress being made to achieve run-rate profitability.
But it is 4/5.5p today. What am I missing? And how do I find a balance sheet for this business?
Confused! |
6 + 36 > 36.5Basically it was a 15% up in the first day. |
I've created a thread for each of RVRG and RVRB - let me know if you'd like to see anything else on there (links, graphs, etc...) |
It is definitely weird and seemingly no real price discovery yet. VERY conservatively if you value A shares on 0.5x NAV and B shares on Parmenion stake at £50m (well below range) that gives me 44p a share. Combined mid point of both shares seems to be 42p. So both seemingly pricing in pretty negative view of values. Up from yesterday pre split but thinking still cheap. |
It's been weird tbh, it was 30p/45p for the total co first thing, is now 39/48p, but the MMs have had little clue what to do with either - someone managed to sell 200k RVRG's at 10p for eg (now 6/8p). RVRB's could be bought at 28p (if the EPIC was set up - which it wasn't), now 33/40p. |
According the share count in the RNS yesterday (143,938,200) it looks like the A shares imply a c.£10m mcap (0.38x NAV) and the B shares imply c.£56m mcap. So far pre split holders are up £14m from yesterday's close? And arguably both are still cheap? Looks ok so far though |
So 30p bid equivalent first thing. MMs having a laugh - 45p offer. |
Hmm for what are very different co's, they might have wanted to go for some distinct EPICs.
The way to do a demerger is, you leave the original co & EPIC trading, and give out shares in the new, differentiated co (eg HLN). |
New Shares ?
River Global A (RVRG)
River Global B (RVRB) |
I see from the RNS (post the vote) that both the A shares and the B shares will be subject to the Disclosure Rules - so large shareholders (>3%) will be required to disclose changes to the shareholding at each 1% point increment/decrease. |
I read from the press release 99 pct voted in favor. Unless Griffiths didn’t participate it seems he voted for the reorganization…; Or if he didn’t attend maybe is it because he sold almost everything by now? |
Vote passed, tomorrow a new dawn. |
2m at 36.2p today, did Griffiths have some left? |
 Just repeating my post of the 13/2 .Lets see what happens on Friday ...!
Simon Thompson in I/C..
....Even if investors apply a harsh liquidity discount, its difficult not to see AssetCos stake in Parmenion commanding a market capitalisation of at least £60mn (41.6p) as a standalone entity. Thats because the platform is benefiting from the digital transformation in the asset and wealth management industry. Ongoing consolidation in the sector and a reducing number of available quality targets suggests that the independent valuation is well underpinned, too.
....Its reasonable to expect the asset management operating business, which had net assets of £26.5mn (18.4p) including £11.2mn of cash in the 2024 interim accounts, could command a valuation close to book value as a standalone entity given the cash backing and progress being made to achieve run-rate profitability.
.
Memo .From the Assetco Circular of 28/1/25..
In September 2023, we responded to speculation around the value of our structured 30% equity interest before dilution for management interests) in Parmenion,obtaining an independent valuation of that interest showing a value of between £75-90m.
Based on recent discussions with the Companys advisers, the Board believes that this continues to represent a fair assessment of the value of the Companys interest assuming an arms length sale of the company as a whole |
Yeah SpectoAcc, the price move now is suggesting a form of release here. They are still coming in nicely here to buy. The current buying is close to the offer of 35p presently, and the price is moving on alot less buying, so it could breakout.
If the price is threatening a break higher, you would think that the sellers who don't want to hold before the split might have sold now, or the price just sits down at 31.5p. We're now up at 34.5p with the offer of 35p probably going to get cleared the way these streams of buys are coming in.
Next week key dates:
Results: 5th March
Record date: 6th March
Expected new listing of split shares: 7th March
It looks like buyers here must at the very minimum get back this amount.
The bar is low because the market is garbage, but an encouraging price move, which might suggest some cause for optimism next week and the weeks after.
Ooerr...too much bullish?
Roll on next week!
All imo
DYOR |
Nice write up in the IC Simon Thompsons top shares for 2025 |
Feel you're right - good riddance to the Welsh Wizard, with his ability to make money disappear (don't know what he paid to acquire his stake in ASTO, but guessing there isn't a profit there).
Just Panmure on the offer now, bid up to 32.4p. |
Wondering if Griffiths is close to cleared here.
We saw prints of:
1m @ 31p
800k @31p
627k @ 31.5p
550k @ 31.5p
Then a further two hit last Friday:
400k @31p
200k @ 32p
Panmure who had the sell order have moved back up on the book. The price isn't being dragged downward now. One market maker has moved up to 31p on the bid today. You could buy hundreds of thousands with ease before, can't now.
They are paying full ask of 33p for 70k and 150k today.
That looks like the bottom is in as far as the pre-split move is concerned. Curious to see where the rest of the market is sat willing to sell and whether this can move from here.
All imo
DYOR |
I share your view @spooky and your argument regarding a possible link between the timing of a sale and cost of loan makes sense and it’s an interesting intuition.
However, if we want to reason about what could go wrong, key risk here is not related to the timing of Parmenion sale IMO: it’s a cash generative growing business with favorable structural trends - being it sold within one year rather then within three years makes little difference I believe… Nor the value of the sum of the parts in Assetco which clearly gives a good headroom on current market cap is concerning, I believe. I mean, we can stay here splitting hairs and it’s all fun and interesting, but you don’t have to be a rocket scientist to see that Assetco shares are mis-priced IMO…
The more I think about the situation the more I’m convinced key risks here relates to rights of minority shareholders after split - particularly in regards to B shares as @jane deer highlighted in a very well reasoned comment which was a bit of an eyes opener for me. |
I could say a lot of things here but i won't. Remember the cost of the loan is high, Parmenion will not want to continue paying this for long. There are reasons for a number of interested parties wishing to achieve an acceptable exit within a reasonable timeframe IMO. |
Thanks a lot to both of you, @jane deer and @Theaim1990, for your insightful comments.
@jane deer - you raised important points of concern which I admit I had probably overlooked.
I don’t see the timing of Parmenion sale as a significant risk since it seems they are doing well as a business and possibly this is not even the best time to exit given the current state of the market and valuations…
What you brought to my attention and I think it could be one of the main concerns for me personally is the risk of delisting. I hear you on that: being the B Shares’ minority holders not protected by Takeover Code, Harwood Capital - or any significant shareholder for that matter - could potentially accumulate enough votes to delist B Shares without having to launch a mandatory offer. And this is a risk that didn’t exist before reorganization as Assetco was and will continue to be subject to the Takeover Code and to the mandatory bid rule. To be fair, this is a risk that brings together all AIM shares with controlling shareholders above 50% as, if I understand correctly, controlling shareholders above 50% can increase their shareholding without being subject to any restriction and without having to launch a mandatory bid. Anyway, that doesn’t remove the risk in our specific case…
On one hand, I wonder why they didn’t carry on the plan to delist B shares already by making them trade on a matched bargain base as originally planned if that was their ultimate intention (maybe thy received some pressure from shareholders?)
Moreover, the behavior of insiders - which have decided to publish a valuation of Parmenion stake twice a year as @Theaim1990 points out - is not conducive to those that would like to accumulate shares on the cheap, but more to those who wish to highlight hidden value…
Nevertheless, I wonder what can minority holders do if the risk you highlighted materializes. I have never had the “pleasure̶1; of owning unlisted shares and have no idea what happens in that case and how one can dispose of his holding in such circumstances… I understand there is no withdrawal right for dissenter shareholders if a delisting is approved on AIM, but I’m no expert in this subject so if you know better please enlighten me. At this point in time, this is the only risk that could truly make me think twice about my position. I struggle to ponder such a risk as, having no experience with unlisted shareholdings, I have no idea what can happen and what’s the downside in that case… It’s a bit of a blind spot for me, I have to admit… If anyone has some experience in that regard and can provide any insight into that or any additional food for thoughts on delisting risk I would much appreciate - I think it’s one of the most interesting subject which was raised so far on this thread and one of the key differences with the pre-reorganization structure and therefore one possible explanation of why one would prefer to sell now while preferring to hold pre-reorganization.
All imo - DYOR. |
On Griffiths - has been selling since well before the split announcement IMO, the RNS was the crossing of a threshold. |
Yeah, the info are hidden since the entity is in Guernsey.
Two years ago it was paid in cash, so seems it is a flex PIK loan.
You cannot add the two, but that was to say at a sale/exit event the loan to Shillay gets payable and so c.100m go to Shillay (c.30m notes of the B shares), and the rest gets distributed to the diluted equity interest. That's my interpretation at least.
Jennings is an extremely long-term, value-creation oriented CEO and I'm very confident Parmenion will keep going from strength to strength under his guide.
ebi seems also on a spectacular trajectory (for reference it made more profits after tax than Fundment, with half the revs).
Not sure when a sell/exit will materialise, not expecting one in 2025 but who knows. |
TheAim1990
There are many points in your post I was not aware of - thanks very much for that.
My understanding of the PIK interest loan (but I feel a bit shaky as it is not clearly spelt out anywhere that I have looked) is that the PIK loan has been issued by Shillay Midco and is held by AssetCo plc (the parent company) and I assume also by Preservation Capital. AssetCo's share of the loan notes were valued at £21.5m on issuance in 2021 and they accrue Pay-in-Kind (PIK) interest at 10%. They do not pay cash interest but only PIK interest. They appear to have a maturity date of 2050 - but would presumably (this is just my supposition) be repaid on any sale of Parmenion.
The PIK interest is shown in the AssetCo Income Statmement as "Other Income" and the outstanding balance of the loan in the balance sheet (both in the consolidated and company accounts) as "Investment in Associates". There is more detail in notes 7 and 24 to the 2023 AssetCo Annual Account.
Therefore while it is true to say that the B shares are entitled to the value of the PIK loans AND the value of Parmenion, I don't think you can ADD the two values together. This is because the PIK loan is a debt of the Shillay Midco and the B shares do not really own 30% of Parmenion but 30% of Shillay Topco. Indeed note 24 to the 2023 Accounts says that the net assets of Shillay Topco at September 2023 were negative £7.6m, while the Parmenion accounts says Parmenion's net assets at December 2023 (a slightly different date) was £42.6m. Presumably the difference between the two is largely made up of the PIK loan.
I do not feel fully comfortable that all the analysis above is correct, as I seem to be clutching at bits of information given in different documents and trying to draw a coherent whole. In particular, I cannot explain why the £21.5m 10% PIK note in 2021
only had a value of £24.6m by Sept 2023. Nor can I understand the restatement of the PIK notes in 2022 given in note 7 of the 2023 Accounts. It seems there that some of the PIK interest was perhaps paid in cash in 2022??? |
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