Downing Strategic Micro-... Share Discussion Threads

[red ninja] 20/8/2021 14:16

The trust may have been touch and go at one point as it is small and with RDG and Redhall not doing well it could have been heading for the exit. Now I think it looks like it has a future.

As an investor you can exit when you like and I have trimmed about 1/3 of my peak holding.

Well assuming the current portfolio succeeds to become an increasingly larger trust then I imagine Downing might like to make it larger still by options like :-
1) Raising new equity from existing/new investors
2) Taking over/Merging with other small trusts

[spectoacc] 20/8/2021 14:02

And you're getting to buy them at a discount.

But - where do you see the exit? Greater Fool, or might they wind up eventually? Can't recall continuation vote likelihood. DSM is very sub-scale.

[red ninja] 20/8/2021 13:19

M,
That's my feeling too that the portfolio may contain a good few winners.

Volex has already been a winner and looks like it will continue to do well.
Tactus seems to be starting very well.
Fireangel looks to me like it should do well with its alarm technology ahead of the game.
FluidFlow Tech/Synectics/Adept Tech look like they'll all bounce back now the lockdowns appear to be behind us.

I am a holder so am biased. DYOR.

[makinbuks] 20/8/2021 13:01

This is a really good discussion and all points are valid. I am invested here with a small stake. What I liked was the many of the companies invested in were ones I had on watch or at least had read up on and liked but never actually committed. So seemed a similar philosophy to me. I was not involved in the history

[spectoacc] 20/8/2021 06:48

Only 130k shares! That's ridiculous. Nick Hawthorn 64k shares, strewth. Lead Fund Manager and Fund Manager.

Be interested to know where they prefer to put their money. And what DSM has paid them over the past 5 years.

(Agree discount, but where's the endgame for DSM).

[spectoacc] 19/8/2021 16:52

RGD was a fiasco wasn't it - one they then had to bail out with the loan notes. To my mind, they just picked too many duffers. Claiming to have been lied to by management is what their DD should pick up on.

Not sure Brexit (nor Covid) played too much part, when other microcap funds have done mostly very well. RMMC has to keep returning cash to shareholders to keep it small enough! Compare their 5 years to DSM's:






If DSM have learnt their lessons - and granted, they may have done - they've done so with shareholder money.

[red ninja] 19/8/2021 16:43

Well it's fair to say the early years of the trust did not cover Downing with glory. It launched when small caps were relatively high and the next few years small caps performed badly partly attributed to Brexit.

Real Good Food has been a major concern, but now reduced exposure and it may make a profit on it in the end.

Redhall Group was a write off so that has done really badly.

Gama Aviation has not been a winner either.

However, the rest of the portfolio is shaping up and although I mention Venture Life Group as battering the group. Cenkos still think it is on track and ST has it as a buy with 130p price target.

Nav at launch was around 96p and it has paid over 2p in dividends so it is getting close to launch NAV.

With current holdings it should hopefully do a lot better in the future as exampled by the good result from Tactus so far.

[spectoacc] 19/8/2021 16:27

Long out of DSM but glad to see some progress here for long-suffering shareholders.

But worth remembering it floated in 2016 targeting 15% pa returns, has a NAV still 9p below issue price (and never been above it, tho did initially trade at a premium), and an share price in the early 70's despite buybacks.

£36m market cap going to keep it under the radar, where it probably belongs. Too many losers to go with the handful of winners.

If I were still a shareholder, I'd be asking for cash returns from realisations, at NAV, and to hell with the market cap. Is never going to be able to grow sufficiently, even Volex couldn't see to that.

[makinbuks] 19/8/2021 11:53

Simon Thomson has reiterated his buy tip[ on Venture Life. With something like 12% in cash here it will be interesting to see if Downing add to their holding. I trust they are somewhat closer to the management than ST and the rest of us. Personally I found the hand gel situation entirely understandable but the Chinese situation was more opaque and therefore disturbing. Seems they may have fallen for some distributor hype there

[red ninja] 19/8/2021 11:31

In the latest NAV portfolio update they already seem to be partially cashing in on Tactus investment :-

Portfolio Update: Tactus Holdings Limited The Manager is pleased to report that Tactus Holdings Limited, an unquoted investment in DSM, has received inward investment from the well-known technology investor, Chrysalis Investments Limited ("Chrysalis"). The Chrysalis announcement is available to view here. To help provide liquidity for this important strategic investment from Chrysalis, which provides future growth finance, DSM has partially exited a small proportion of its position in Tactus Holdings Limited. This includes the full early repayment of the Tactus Loan Notes and accrued interest. The partial exit plus valuation uplift have resulted in an increase in NAV of 2.07p per share (0.85p realised and 1.22p unrealised), the impact of which is reflected in the NAVs shown in this announcement. The directors have valued the remaining shares, cost £1 million, at £1.6 million which they believe to be fair value, reflecting a discount to this latest investment round reflecting that this investment is unquoted. The remaining position is DSM is material, at 3.5% of NAV, and the Manager looks forward to supporting the continued progress of this fast growing and successful UK company."

Latest NAV : 91.26p - (Share price at 22.75% to NAV)

Pretty good considering the battering of Venture Life Group.

[red ninja] 13/8/2021 10:45

It's a good job the discount of NAV is above 20% as Venture Life Group brought out disappointing interims today and the share price has tanked by around 25%.
Given the senior managers sold a lot of shares at the 90p placing last year it seems the normal story of the management being ahead of the game.



Note, aren't bad things supposed to happen on Friday the 13th.

[ohisay] 12/8/2021 11:43

Yes Indeed !

[red ninja] 11/8/2021 08:58

DSMs holding in Venture Life Group had a good boost of around 10% today when Simon Thomson from IC tipped it overnight.

[red ninja] 03/8/2021 09:29

Yes, it's a pretty good discount of 20.2% to NAV, but the market as a whole drifting.

Worries about the pandemic, inflation, elevated stock prices in the US, elevated crypto prices etc etc

Downing buyback might nudge the share price back up.

[weatherman] 02/8/2021 19:14

NAV is holding up near 89p, but price is slipping, now 20p lower.

[red ninja] 12/7/2021 13:27

Tactus won the 2021 Microsoft Device Partner of the Year for the outstanding growth seen at our Geo Computers :-

"OEM Device
Tactus Ltd.
United Kingdom
www.tactusgroup.com
As a Microsoft Gold Original Equipment Manufacturer partner, Tactus played a key role in getting affordable devices into the hands of students when they needed it most. Through its work with the Department of Education,
Tactus delivered its Geo Windows devices with Microsoft Azure Cloud Services including Microsoft 365, Minecraft, and Azure. With its passion for innovation and making technology affordable for all, Tactus has experienced 600% growth by specializing in entry-level Windows PCs for work, learning, and play. The company delivers on its mission of delivering the best cloud to edge experiences for key market segments including education and low-cost consumer PCs."

[red ninja] 03/6/2021 13:11

Gordan Banham CEO Hargreaves Services gives a quick overview of business and opportunities (came out 25/5/21) :-



Opportunities Like :-

- Tungsten West
- Westfield + Brockwell Energy in Fife

[red ninja] 03/6/2021 10:04

"UK developer of consumer technology products Tactus Group is expanding into the U.S. market with investment in Pi-top, the coding and robotics firm that specialises in improving digital skills in education."