Dci Advisors Share Discussion Threads

[brwo349] 07/2/2017 19:25

Yes I think you are making assumptions and adding 2 and 2 to get 5. I do not think they would value something in the circular at well above the price they must have had a good idea they were going to sell it for a few weeks later.

[tiltonboy] 07/2/2017 19:11

Perhaps I'm being thick, but to my simplistic way of looking at it, all of the assets were valued for the 30th June half year, which gave the range of potential returns. The company then sell an asset for 32% less than the 30th June valuation.

The bigger issue for me is the ability to sell all of the assets even taking a 50% haircut!

[brwo349] 07/2/2017 18:56

tiltonboy
You are making a schoolboy error. You cannot know at how much Pearl Island was valued at in the circular. In fact it's possible they have sold it at more than they expected and so the top of the range estimate has gone up.

[tiltonboy] 07/2/2017 18:39

brwo,

Perhaps you should have done a bit of research.

The Manager has estimated that over the Divestment Period, the Company may be capable of realizing gross cash proceeds ranging between approximately EUR190 million to EUR310 million based on asset sales prices ranging between 50 per cent. to 100 per cent. of "NAV as at 30 June 2016". After deduction of estimated annual management fees (of which variable management fee ranging from EUR11 million to EUR28 million depending on sale prices), operating and financing expenses, this would equate to approximately EUR135 million to EUR235 million being available for distribution to Shareholders.

The implied transaction enterprise value of EUR63 million represents a 32% discount to DCI's gross asset carrying value as at "30 June 2016" and will result in a loss on sale of EUR27 million.

The relevant bits are in inverted commas.

[brwo349] 07/2/2017 17:24

tiltonboy
I do not agree with your conclusion at all. The disposal of Pearl Island was announced just one month after the proposal for the orderly wind-up. These disposals aren't just worked out in a few days, months more like, so I think the price for Pearl Island has been accounted for in the range of estimates. The other thing is the range is so big it would be a massive fail if the end result is less than the low estimate. So I am sure they are working with a margin of error and expect considerably more than the low estimate. Then again if it is the low estimate I'm still happy and that is why this is a very good investment.

[spectoacc] 07/2/2017 14:17

IGC - like India, but find it hard to chase. Modi may be going great guns but the Hindu nationalism he stokes will unstick him eventually.

CGI - great discount, but looks like it's one to buy on the next tank/£ strength. Performance in 2008 is interesting.

ATS - love their esoteric portfolio! Will keep an eye on it.

[spectoacc] 07/2/2017 13:46

Ta, will take a look - no holding in any of those 3.

Have seen BTEM sell out of cheap stuff I'd have thought they should be buying before - but can understand it if it's not worth the management time.

[tiltonboy] 07/2/2017 13:37

I'm only factoring 12p over a three year view, which may be decent for new entrants, but will be a painful cut for me.

BTEM are happy for the portfolio to shrink by number, and to add to existing positions, but they are still finding pockets of value.

There is nothing that is compelling for me at the moment, although IGC, CGI, and ATS still trade on anomalous discounts. ATS have a wind-up vote next year, and performance has been improving.

[spectoacc] 07/2/2017 13:28

Thanks @tiltonboy.

That the assets will be hard to sell is surely a given - with knock-on effects on both price & timescale. But I'd be very surprised if someone buying at 8.8p today lost money.

Still a happy holder here - BTEM may have better homes for their money, but can't see much out there myself atm.

[tiltonboy] 07/2/2017 13:11

brwo,

the 12.8p to 22.3p was before the recent sale, so the top end is nearer 19p now.

I met with the manager of BTEM yesterday, and I quizzed him on their sale of 26m DCI. He is sceptical on the ability of the board of DCI to sell all of the assets, and the timeframe of any return of capital.

[brwo349] 07/2/2017 11:35

I've found the current 8.8p offer price just too good to resist.

According to the circular the range of possible returns to shareholders are from 12.8p to 22.3p in less than 3 years.

Also according to the circular I should get 1.25p of my 8.8p purchase price back in just 6 months from 50% of the disposal proceeds of the last asset sale.

Very attractive


;;;;;;;;;;;;;;;;

The Manager has estimated that over the Divestment Period, the Company may be capable of realizing gross cash proceeds ranging between approximately €190 million to €310 million based on asset sales prices ranging between 50 per cent. to 100 per cent. of NAV as at 30 June 2016. After deduction of estimated annual management fees (of which variable management fee ranging from €11 million to €28 million depending on sale prices), operating and financing expenses, this would equate to approximately €135 million to €235 million being available for distribution to Shareholders.



Distribution Policy

The Board expects to return the proceeds from asset sales to Shareholders as the orderly realisation of the Company's investment portfolio progresses. Although the exact quantum and timing of returns of capital to Shareholders will be at the discretion of the Board following receipt by the Company of the net proceeds from realisations of asset sales, the Board intends to distribute to Shareholders at least 50 per cent. of the net proceeds approximately three months after the completion of each disposal, subject to consideration of the Company's outstanding liabilities (including any borrowings) and general working capital requirements. The Board will not build up substantial cash reserves other than to meet such liabilities and working capital requirements and may make additional distributions depending on the Company's circumstances.

[rambutan2] 01/2/2017 02:30

Seems they're a specialist:

[tiltonboy] 31/1/2017 14:55

So, Progressive Capital Partners Ltd were the buyer of 25m shares for their Qualitium Fund.

Lets hope they know what they are doing!

[tiltonboy] 20/1/2017 19:49

26m shares have obviously found a new home, and it will be interesting to see if the recent buyer has an appetite for more. Agreed that it's a small holding for BTEM, but I'm sure they would like to have salvaged more if they thought they could get it.

I'm rapidly downgrading my expectations!

[spectoacc] 20/1/2017 19:36

Agreed @tilts, & that's a mammoth overhang remaining too.

Curious to read their latest report saying they were finding no shortage of good homes for any spare cash - everything I'm looking at seems a lot closer to fair value than cheap.

[jimcar] 20/1/2017 17:37

Their new policy is to concentrate on a smaller number of high conviction hodings. Their DCI holding will be worth about £3m now so they probably just want the embarrasment of it out of the way. They have been selling out of EGL after the restructuring there.

[tiltonboy] 20/1/2017 17:00

Well, there's your seller, and it is disappointing to see them reducing as I rate their analysis. I am seeing the manager of BTEM soon, so I will get their opinion.

[tiltonboy] 18/1/2017 18:13

Looks like they didn't bargain hard enough!

[epistrophy] 18/1/2017 15:14

For those not impressed with the Panama disposal - it's possible to take the other side of the trade, and buy Grivalia Properties (if you can access the Athens Stock Exchange).

Here's what their CEO had to say about the deal:

"As we are value investors we always look for the right price when entering a deal. The agreed price represents a deep discount to value and we feel confident that we will be in a position to extract extraordinary returns for our shareholders."

[qs99] 18/1/2017 08:47

am holding on for 12-13p minimum.....32% discount to last NAV if achieved across all the properties OK a big if, but with monies coming in these are not now fire sales, then that should get you to just under 20p, less management incentives, well as I say, I'll take a risked 12-13p which won't be a bad return for a year. Hopefully it will get there sooner than September time when I was first in tho! GLA

[tiltonboy] 18/1/2017 08:42

WINS still bidding for stock this morning.

[spectoacc] 18/1/2017 08:31

Good luck; can't go bust taking a profit, but I'm confident it's worth more than here. Been in a lot of "we're winding up & returning the cash" situations where 2 years later, you've barely seen a penny & the directors are quite happily taking salaries & expenses. DCI at least seem like they mean it.

(DNE a good example).

[smithie6] 18/1/2017 08:02

I've left...hopped on another bus...
(shame I didnt take the 10p price a few days ago)

So bound to rocket now !

GLA

[spectoacc] 18/1/2017 07:31

Lol @eezy - "and only six of us went there" :)

[eezymunny] 17/1/2017 19:47

Amazed they got anything for it.

I've been to the Islands off Panama. Stinky humid climate all year, a quadrillion mosquitoes, and a short trip across the water to Panama City, where one colleague was murdered, one stabbed, one held at gunpoint, dodgy food nearly killed me (and only six of us went there).

Good luck to the buyers!