Gcp Asset Backed Income Share Discussion Threads

[chucko1] 14/3/2024 14:01

Skinnypope, that is very close to where I am with my IRR expectation.

There was scheduled to be a large degree of loan maturity in March (this month), with much occurring on March 1st. I would have expected a cash balance of £77mn (after repaying the RCF), rather than the £55mn cited, and even £95mn were even more recent maturities realised and factored in.

Either there has been some delay (not good) or it just takes time to process the cash balance and bring it to management reports. That said, I would have thought they could be current as of yesterday in preparation for the RNS of today.

It's probably nothing, and it may be that they wish to maintain a degree of liquidity that is kept separate from the healthy wind down pile!

As it happens, by the date of the EGM , the pile should have grown by a further £34mn.

[skinnypope] 14/3/2024 13:43

Well, this update is slightly more positive than I had expected. Although there is nothing that moves the NAV at all, the return profile has changed slightly for the better.

1. The cash handout is something I had tentatively thought about being done more gradually during the wind down procedure. This early and larger than expected return [12.9p per share] skews the IRR a bit higher.

2. Loan repayment being downstreamed to shareholders promptly. I assume the increase in cash from £30m at year end to £55m now is mostly from the £18m loan redemption announced on 1st Feb. So we can have full confidence in further capital returns given we know the maturity profile of the loans. I see ~£125m of loans left to runoff this year - that's another 29p of capital coming our way in short order. This was my base case, but now it's confirmed.

3. Dividend is maintained. I expected (hoped?) this would be the case - there is still plenty of interest accruing and being paid on loans to cover the dividend this year, although this does dip slightly into 2025 and 2026.

Keeping my other assumptions constant [no new credit provisions above current, and 25% discount on 2029+ loan sale] gives a new IRR of 18% [up from 17% a month ago]

[jam62] 14/3/2024 09:15

License to print money!

[cc2014] 14/3/2024 09:12

I too have added this morning.

I have nothing to add to Chucko's analysis

[chucko1] 14/3/2024 08:57

I topped up yesterday and added much more this morning. They cited a cash balance of some £55mn, and I calculate a net cash discount of 26% using such numbers. By the end of this year, according to the loan repayment schedule, this discount would rise to 30%.

This is far too generous given the nature of the assets - non-development infrastructure loans. If one considers a 10% discount to be a target, then that would imply a share price of just under 84p by year end.

[rimau1] 14/3/2024 07:58

I topped up yesterday this is a very low risk double digit CAGR return over what, 3 years prudently

[chucko1] 14/3/2024 07:54

No surprises there!

[rimau1] 12/3/2024 19:08

No, week commencing 11th March as per the RNS

[panshanger1] 12/3/2024 18:52

Do we know which day this week the outcome of the strategic review is due ?

[hpcg] 04/3/2024 12:43

I'm pondering whether to add more now. I'm actually very happy if the company just carries on but I think there may be others here just for the quick execution. As I still have similar plays I can rotate through if there is a large pull back I think I may as well act now.

[speedsgh] 04/3/2024 11:19

Outcome of strategic review to be announced next week...

Strategic Review Update -

On 29 January 2024, the Company announced that the board of GABI (the "Board") would be seeking shareholder feedback to inform its decision-making process in connection with the strategic review to consider how it may best deliver value to shareholders (the "Strategic Review").

The Board has today completed the shareholder consultation period in connection with the Strategic Review. Feedback has been provided to the Board by shareholders representing a majority of total voting rights in the Company. Views were canvassed on the future strategic direction of the Company, including in relation to: (i) a potential continuation of the Company in accordance with its current investment policy delivered by the Investment Manager, Gravis Capital Management Ltd; (ii) a suitable time horizon for the return of capital in a potential orderly wind-down of the Company; and (iii) acceptable pricing on a potential sale of the Company.

Shareholders have expressed a broad range of views throughout the consultation period. The Board is in the process of collating and reviewing the shareholder feedback and will announce the outcome of the Strategic Review in the week commencing 11 March 2024. The Board also expects to announce an update in relation to succession planning in respect of Board composition at that time.

The Board continues to consider a sale of the entire issued share capital of the Company as an option for the Company's future.

Alex Ohlsson, Chairman of GABI, commented:

"The Board is grateful to shareholders for their engagement in providing feedback in connection with the strategic review. This feedback will inform the Board's decision-making process for the future of the Company."

[neilyb675] 19/2/2024 14:59

71.00 - 72.00 (GBX) at 13:00:19
on Market (LSE)

[cc2014] 09/2/2024 10:46

Lumps now going through at 70p so hopefully we will keep bashing away at whoever is selling here and then we can move upwards.

[neilyb675] 08/2/2024 16:35

The Board of GCP Asset Backed, which invests in asset backed loans, is pleased to announce a quarterly dividend in respect of the period from 1 October 2023 to 31 December 2023 of 1.58125 pence per ordinary share (the "Q4 Dividend").

The ordinary shares will go ex-dividend on 15 February 2024 and will be paid on 15 March 2024 to holders of ordinary shares recorded on the register as at close of business on 16 February 2024.

[spectoacc] 05/2/2024 17:00

Too many idiots, not enough villages.

GCP holding well, being one of the few to have had a day of giant trades implying no more overhang. Fingers crossed.

[tag57] 05/2/2024 17:00

My money is on a village idiot with nothing better to do

[jam62] 05/2/2024 11:07

There’s either a village idiot voting down every posting or the ADVFN software has gone a bit wonky!

[tag57] 05/2/2024 00:44

Jam62 they are only a week late with their announcement vs last couple of years and still a month until the usual Payment date.

[jam62] 04/2/2024 22:54

The company is extremely late announcing the quarterly dividend. My guess is that talks are taking place regarding an agreed takeover. Expect news soon.

[cc2014] 02/2/2024 11:32

80p is what I would take if I could sell at that today as I can easily redeploy the money right now.

But it matters not really, I'm happy enough to collect the dividend and get a higher price if it takes time to wind-up the fund and they can't find a buyer at a suitable price.

[hpcg] 02/2/2024 11:04

80p cash is light IMO, and I speak as a very recent shareholder where everything goes immediately to my bottom line. 80p plus the current distribution would be ok.

[chucko1] 02/2/2024 09:52

CC, I would think that is about the price a deal can get done, perhaps slightly higher. That said, I see considerable trading opportunities during its continued existence, so that 81p or so would really only be a short term P&L boost. Over a fuller run-off period, I can see profits being perhaps double that.

[cc2014] 02/2/2024 09:41

I'll take 80p for cash.

The bid seems to be ever so slowly being walked up day by day.

[skinnypope] 01/2/2024 18:54

I tend to agree that there is a whiff of a takeover / buyout on the cards.

1. Delayed dividend – the cash pile is growing [and don’t forget the loan interest coming in every quarter ~£6m by end of Q1]

2. The RNS announcements re buybacks keep stressing “Any share buyback programme may be tempered by regulatory and commercial considerations in connection with any potential approaches for the Company at the relevant time.”

3. From the 29th Jan RNS, the shareholders being asked specifically “acceptable pricing on a potential sale of the Company”

4. The board being prepared to open the books for DD for a buyer at 72/78p [which seems a bit light]

5. Numis say the company is for sale – from Citywire “‘[The] announcement, alongside the relatively granular portfolio information provided on the company’s website, has the dual effect of providing shareholders with additional information to base their feedback and decisions upon, and puts a “for sale” sign up – making it clear to any potentially interested parties the options being considered by GABI’s board,’ said Jaffe.”

[spectoacc] 01/2/2024 15:08

Fingers crossed. There's going to be progress one way or other, bid or buy back or early return.