Crystal Amber Fund Limited Monthly Net Asset Value

 
TIDMCRS 
 
10 April 2018 
 
 
                          CRYSTAL AMBER FUND LIMITED 
                     ("Crystal Amber Fund" or the "Fund") 
 
                            Monthly Net Asset Value 
 
 
Crystal Amber Fund announces that its unaudited net asset value ("NAV") per 
share at 31 March 2018 was 206.46 pence (28 February 2018: 202.98 pence per 
share). 
 
The proportion of the Fund's NAV at 31 March 2018 represented by the ten 
largest shareholdings, other investments and cash (including accruals), was as 
follows: 
 
Ten largest shareholdings      Pence per share Percentage of investee equity 
                                               held 
 
Hurricane Energy plc                52.2                     8.0% 
 
Northgate plc                       28.8                     6.3% 
 
FairFX Group plc                    26.2                     18.5% 
 
STV Group plc                       21.4                     16.6% 
 
NCC Group plc                       10.8                     2.0% 
 
Leaf Clean Energy Co.                9.0                     29.9% 
 
Ocado Group plc                      7.9                     0.2% 
 
De La Rue plc                        7.0                     1.3% 
 
Woodford PCT plc                     5.0                     0.7% 
 
GI Dynamics Inc                      4.3                     47.5% 
 
Total of ten largest                172.6 
shareholdings 
 
Other investments                   33.1 
 
Cash and accruals                    0.8 
 
Total NAV                           206.5 
 
Investment Adviser's commentary on the portfolio 
 
Over the quarter to 31 March 2018, NAV per share grew by 8.3%. 
 
On 18 January 2018, the Fund paid a 2.5p dividend declared in December 2017. 
 
Within the portfolio, the top contributors over the quarter were Ocado Group 
plc (+2.9%), FairFX Group plc (+1.8%) and Hurricane Energy (+1.1%). The main 
detractors were Northgate plc (-1.7%), NCC Group plc (-1.3%) and Leaf Clean 
Energy Co. (-0.6%). The Fund's put options contributed 6.5% to the NAV. 
 
Hurricane Energy plc ("Hurricane") 
 
Hurricane's share price rose by 4.3% over the quarter as it reported progress 
with its Early Production System (EPS), the new chairman recruitment and 
governance improvements. 
 
In February, the company announced the successful trial fit test of its 
production vessel Aoka Mizu with its newly manufactured buoy. A new buoy had to 
be constructed to withstand the West of Shetland weather conditions, and an 
incorrect fit with the vessel was a significant risk to delivering the EPS 
project on time and on budget. In March, Hurricane's contractor TechnipFMC 
completed the "Xmas trees" required for the two EPS wells together with the 
subsea control system that will be installed on the Aoka Mizu. Those long lead 
items were ordered by the company with the capital raised in October 2016. At 
the end of March, Hurricane confirmed that the seabed where the EPS 
infrastructure will be based had been satisfactorily cleared by TechnipFMC, and 
it is ready to commence installation operations. 
 
Over the period the Fund engaged with the board and key shareholders over the 
selection of the new chairman and corporate governance issues. The Fund looks 
forward to the announcement of the new chairman and seeing through the delivery 
of the Hurricane's EPS. 
 
The Fund has supported Hurricane's progress since 2013 and it is pleased to see 
that the company is on track for first oil in the first half of 2019. 
 
FairFX Group plc ("FairFX") 
 
Over the period, FairFX's share price increased by 13.2% on the back of 
positive trading updates and the acquisition of City Forex. 
 
In 2017, the company's turnover increased by 39% to GBP1.1 billion. Growth 
benefited from the acquisition of CardOne Banking completed in August 2017. 
Increased scale has brought additional capabilities that can be delivered to 
its growing customer base. Management depth will accelerate product innovation 
in 2018. Scale has also brought cost savings and the opportunity to improve 
supplier terms. Additional cost savings opportunities were unveiled in April 
with the announcement that FairFX will self-issue its Mastercard branded cards. 
 
In February, FairFX announced the acquisition of City Forex for GBP6 million. 
City Forex services the international payments and travel currency segments, 
both in retail and business markets. The company had been a partner of FairFX 
since 2007 in the Travel Currency segment. As with previous acquisitions, the 
combination brings revenue and cost synergies, and confirms FairFX as the key 
consolidator in the space. 
 
At 31 March, the business had a market value of GBP140.6m with net cash of GBP10m 
with consensus market forecasts placing the share price on a current year PE of 
18x and a 2019 PE of 10x. 
 
Northgate plc ("Northgate") 
 
Over the quarter, Northgate's share price declined by 11%. The Fund is 
currently the third largest shareholder in Northgate. 
 
 
Despite a favourable macroeconomic backdrop, Northgate's share price is trading 
at close to its five year low, a discount of approximately 15% to tangible net 
asset value. 
 
 
The Fund is deeply disappointed by the performance of the company. Despite 
operational improvements made by the new Chief Executive, the board has failed 
in two important respects: 
 
i) an alarming lack of strategic focus and a refusal to engage seriously with 
proposals made by the Fund and supported by other shareholders to unlock value 
and prompt a revaluation of the business by the market and 
 
ii) poor management of communications with the stock market, including apparent 
selective briefings, reneging on dividend commitments made on the investor call 
of 22 February 2018 and changing disclosure in recent financial statements 
resulting in reduced transparency. 
 
 
After multiple frustrating engagements with the Board, we have concluded that 
these failures should be laid primarily at the feet of the Chairman, Andrew 
Page, who has demonstrated to us an inflexibility and unwillingness to listen 
to the views of shareholders or lead the board in a manner conducive to good 
relationships with investors and the creation of value. 
 
The Fund notes last month's disclosure by The Restaurant Group PLC that, in the 
period 2006 to 2017, the dividends paid by the company were not in accordance 
with the Companies Act 2006. The Fund also notes that Andrew Page was Chief 
Executive of The Restaurant Group PLC from 2002 until 2014. 
 
Ocado Group plc ("Ocado") 
 
Ocado had another strong quarter with the share price increasing 33.7%. It 
signed a second major international partnership with Sobeys of Canada. Ocado 
also raised GBP143m in equity to have the financial firepower to sign multiple 
international deals. 
 
The Fund took profits on this position, realising a GBP5.5m gain, but continues 
to believe that additional international deals are likely this year. 
 
Transactions in Own Shares 
 
Over the quarter, the Fund bought back 361,500 of its own shares at an average 
price of 194.75p per share as part of its buyback programme.  These shares are 
held in Treasury. 
 
For further enquiries please contact: 
 
Crystal Amber Fund Limited 
Chris Waldron (Chairman) 
Tel: [phone] 
 
www.crystalamber.com 
 
Allenby Capital Limited - Nominated Adviser 
David Worlidge/Liz Kirchner 
Tel: [phone] 
 
Winterflood Investment Trusts - Broker 
Joe Winkley/Neil Langford 
Tel: [phone] 
 
Crystal Amber Advisers (UK) LLP - Investment Adviser 
Richard Bernstein 
Tel: [phone] 
 
 
 
END 
 

(END) Dow Jones Newswires

April 10, 2018 02:00 ET (06:00 GMT)