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DSM Downing Strategic Micro-cap Investment Trust Plc

0.70 (2.19%)
24 Apr 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Stock Type
Downing Strategic Micro-cap Investment Trust Plc DSM London Ordinary Share
  Price Change Price Change % Share Price Last Trade
0.70 2.19% 32.70 08:00:00
Open Price Low Price High Price Close Price Previous Close
32.70 32.70 32.70 32.70 32.00
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Industry Sector

Downing Strategic Micro-... DSM Dividends History

Announcement Date Type Currency Dividend Amount Ex Date Record Date Payment Date

Top Dividend Posts

Top Posts
Posted at 11/4/2024 19:05 by weatherman
I've already invested the 30p per share back into DSM - if we get another 8p spec divi in June, it will be on twice as many shares. dyor.
Posted at 05/4/2024 16:55 by red ninja
Foresight acquired some Downing VCTs which where invested in DSM
Posted at 05/4/2024 16:46 by zombiestocks
Well the vote was on B shares, not on dividend s. The board won't offer a dividend vote because they will probably lose it. My question is, if the board is not interested in the fortunes of retail investors (dividend proves it), then who are they answering to? Shareholder registry still shows Foresight - so maybe they are the ones the directors are working for.
Posted at 05/4/2024 16:27 by red ninja
Well that generous in the sense that they would save us the management fees at least on the fund, but still they moved a bit late and had just above 43% of the vote.

Thus they were out voted.

There is a chance that Milkwood if the move fast can buy enough to go over 50% and turn the tables on DSM.
Posted at 03/4/2024 22:33 by weatherman
I see Norman B is rising after DSM has sold its stake down, now to 1% of portfolio.
Posted at 28/3/2024 20:26 by red ninja
DSM have been saying they expect the FA. sale to go through by June. Thus allowing the
50% of NAV return by end of June.
Posted at 28/3/2024 17:04 by weatherman
Fireangel is 6.5% of portfolio, or about 4p per DSM share - so far the loss to NAV is approx. less than half of that, less than 2p - it will show up on Tuesday's reported NAV.
Posted at 10/11/2023 09:00 by 888icb
The final part of the very detailed article and Buy recommendation:
“ Although Ramsdens continues to outperform analysts’ earnings expectations, prompting another round of upgrades post results last summer, the shares are only priced on a forward PE ratio of nine and offer an attractive prospective dividend yield of 4.9 per cent. A price-to-book value of 1.3 times is modest for a cash-rich company generating a post-tax return on equity of 17 per cent and one that is performing well during a cost-of-living crisis. Liberum’s target of 290p is more than a third higher than Ramsden’s current share price.

It’s worth noting, too, that DSM’s largest holding is a liquid £2.9mn (8.5 per cent of NAV) stake in cable manufacturer Volex (VLX:285p), a £511mn market capitalisation company. In other words, the investment trust’s cash. Proceeds from the two agreed takeovers and investments in the above five holdings account for 54 per cent of DSM’s NAV.

Scope for narrowing of share price discount to NAV
The point is that there should be scope for a narrowing of DSM’s share price discount to NAV as cash distributions are made. There is also the real possibility that other portfolio companies will succumb to takeovers or corporate events at share price premiums during DSM’s wind-down process given that their listed market valuations are well below the intrinsic value of the holdings.

Indeed, investment manager Judith MacKenzie has identified key catalysts within investee companies that point to an estimated intrinsic value of the portfolio, which if divestments are carefully managed, indicates an upside of at least 50 per cent to DSM’s current market capitalisation of £28mn (59p). True, a complete wind-down could take time given the nature of some of DSM’s investments and liquidity. However, this could work in shareholders' favour as small-caps have historically outperformed strongly after downturns.

The bottom line is that there is potential for capital returns to shareholders well above DSM’s current NAV of £34mn (71.5p), a factor not reflected in the 18 per cent share price discount to NAV. Buy.
Posted at 10/11/2023 08:57 by 888icb
More from the IC article where Simon Thompson has separately issued buy recommendations on a number of companies in DSM’s portfolio:
“ In recent weeks, portfolio companies OnTheMarket (OTM:110p), an online residential property portal, and FireAngel Safety Technology (FA.:6.73p), a home safety product supplier, have attracted recommended cash offers at bid premiums of 261 per cent and 56 per cent to their previous day’s closing prices. DSM will receive £2.7mn cash proceeds from each holding which, when combined with its cash holdings of £1.9mn, represents 21 per cent of DSM’s net asset value (NAV).

In addition, another investee company, Aim-traded fintech payments group Equals (EQLS:119.5p), has entered talks with potential bidders that could lead to a takeover of the fast-growing challenger brand in banking and international payments. DSM’s holding in Equals is worth £2.1mn, or 78 per cent higher than cost. It could have a 45 per cent further upside if analysts’ 175p fair valuations are hit (‘Equals offers opportunity for 50 per cent upside’, 8 November 2023).
Lowly rated portfolio offers material capital upside
DSM holds positions in three other companies I am particularly keen on: Hargreaves Services (HSP:418p), an industrial group and land developer; Journeo (JNEO:205p), a transport systems provider; and Middlesbrough-based financial services group Ramsdens (RFX: 212p). Combined the holdings are worth £6mn, or 17.6 per cent of NAV. I have target prices materially higher than the current share price for all these holdings, highlighting the value opportunity on offer.

For instance, Hargreaves is being valued on a 33 per cent discount to NAV of £201mn (618p) even though the group’s renewable energy assets (three wind farms, six access agreements and two solar farm leases) have been valued between £27.2mn and £28.9mn (83p to 89p). These assets are in the books for only £6.6mn (20p). The shares are rated on a forward price/earnings (PE) ratio of 6.7 and offer a five per cent dividend yield, too. Sum-of-the-parts valuations are 84 per cent higher than the current share price.

Following two recent earnings upgrades, house broker Cavendish expects Journeo’s full-year pre-tax profit to almost quadruple to £3.7mn to produce earnings per share (EPS) of 19.7p, rising to £4.2mn and 22.7p, respectively, in 2024. On this basis, the cash-rich company’s shares are rated on a 2024 price/earnings (PE) ratio of 9.1, an unwarranted 32 per cent discount to peers. My 300p target price represents a premium of almost 50 per cent to Journeo’s current share price (‘Journeo is en route to quadrupling its profit’, 18 September 2023).
Posted at 10/11/2023 08:48 by 888icb
Buy recommendation from Simon Thompson of IC. This is the beginning of it:
“ Downing Strategic Micro-Cap Investment Trust (DSM: 59p) is planning an orderly wind-up of the company and to return capital to shareholders. The first distribution will be made early in 2024 and will be at least 20 per cent of DSM’s current net asset value of £34mn (71.5p).

DSM retains a portfolio of 17 well-run, niche businesses that continue to generally perform well even in a more challenging economic environment. The manager has been outperforming a falling stock market, too, reporting an 8.3 per cent decline in NAV since its last financial year-end (28 February 2023), or half the 17.1 per cent decline in the FTSE Aim All-Share Total Return (TR) index over the same period. Moreover, although the holding is 12.9 per cent below the entry-level in my 2021 Bargain Share Portfolio, the FTSE Aim All-Share TR index has shed 39 per cent of its value in the same 32-month holding period, highlighting DSM’s outperformance.
However, there is no avoiding the negative sentiment towards UK small and micro-cap companies that has led to some of the deepest investment trust’s discounts to NAV in the past 20 years, nor the fact that there is little interest in small specialist investment trusts like DSM. This explains the investment manager’s and the board’s decision to pursue an orderly wind-up of the company.

Initial distribution fully funded
Importantly, the board has the cash on hand to make the initial cash distribution. That’s because more than 20 per cent of the portfolio by value is under offer or in a strategic review process.

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