Gcp Asset Backed Income Share Discussion Threads

[frazboy] 19/4/2024 13:33

With respect to posts 241 and 242 I still can't fathom why the buyback never materialised. Anyone shed any further light?

[hpcg] 08/4/2024 18:41

Talk of winding up GABI as being at the bottom of the market is nonsense. It's a short term debt fund, it is always being wound up so to speak. Now I would be happy for it to continue, but the discount says there isn't demand for it to do so, so I'll also happily collect the discount along with the income.

[spectoacc] 08/4/2024 16:52

"I made my fortune selling too soon" - suspect the majority of us lose it by buying too soon!

Fair point re Mr Carthew, but him, Gavin Lumsden, David Stevenson, & Ian Cowie all cut from similar cloth. Churning out articles, often in desperate need of sub-editors.

Citywire's advertorial pieces are particularly annoying. They spent years cheerleading SMT for eg.

[speedsgh] 08/4/2024 16:40

Yes, though to be fair, the article was penned by James Carthew of QuotedData who is pretty clued up. Easy to make a mistake however. I specilaise in them, especially when it comes to investing!

[spectoacc] 08/4/2024 16:22

Citywire sometimes have some decent commentary, usually where they've spoken to a co and had a steer/inside line.

In general, there's a reason they're online journalists rather than successful traders/investors :)

The number of basic errors they make is large.

GABI, of course, may yet fall to a bid.

[speedsgh] 08/4/2024 16:13

James Carthew: Good funds like GABI shouldn’t wind up at a market low -

Don't quite understand the following statement. AFAICS the NAV has been shrinking since mid-2021.

"With all of this going on, it has been easy to forget that GABI was still growing net asset value each year and was still a decent size at more than £400m."

NAV
£396.7m as at 31/12/23
£397.4m as at 30/9/23
£399.9m as at 30/6/23
£407.0m as at 31/3/23
£412.0m as at 31/12/22
£423.0m as at 30/9/22
£433.0m as at 30/6/22
£437.0m as at 31/3/22
£436.7m as at 31/12/21
£435.2m as at 30/9/21
£451.7m as at 30/6/21

NAV per share
93.21p as at 31/12/23
93.36p as at 30/9/23
93.96p as at 30/6/23
95.13p as at 31/3/23
94.90p as at 31/12/22
96.18p as at 30/9/22
98.45p as at 30/6/22
99.36p as at 31/3/22
99.29p as at 31/12/21
98.94p as at 30/9/21
102.71p as at 30/6/21
102.18p as at 31/12/20
100.83p as at 30/6/20
102.33p as at 31/12/19
102.31p as at 30/6/19
101.74p as at 31/12/18
101.53p as at 30/6/18
100.85p as at 31/12/17
100.22p as at 30/6/17
100.01p as at 31/12/16
99.47p as at 30/6/16
98.38p as at 31/12/15

[loglorry1] 03/4/2024 12:45

They can just leave a mandate with a broker to buy back shares and the broker can execute that even if the directors were inside at that point. That's normal. The weakness is probably because rates are not coming down as fast as expected. The whole sector is the same.

[rimau1] 03/4/2024 12:33

So if we don't see a gbp7m buyback by the 30apr should we assume that they are in takeover discussions. We are sitting on gbp55m of net cash with another 53.7m falling due on or around 29 june. At 67.5 i would like an accretive buyback personally."The Board is in discussion with its advisers in connection with the initiation of a £7 million share buyback programme in the coming weeks that would enable the Company to make capital available for return to shareholders in the period to 30 April 2024. The Board continues to consider a sale of the Company as an option for its future. The timing and/or implementation of 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."

[rimau1] 21/3/2024 11:05

Nice to see the 70s again

[chucko1] 14/3/2024 16:49

Skinny - good point. I had forgotten about and did not update my model, possibly because I thought it made no difference. (unless they extend again!)

In any event, I am initially looking at this with a horizon of one to two years.

[frazboy] 14/3/2024 16:22

Can't speak for others but I've been working off the 29th Jan update

[stemis] 14/3/2024 15:39

In terms of loan repayment schedule, I presume you are working off the Oct 2023 GABI portfolio report wrt 30-6-23?

[theinquisitiveone] 14/3/2024 15:02

Jam62

FWIW the idiot down ticker is ALMOST ALWAYS Neilyb675. He won't ever justify himself as there IS no justification for it. HTH

[hpcg] 14/3/2024 14:55

Or, stop looking at the up and down thumbs. That "data" has never made a single penny difference to my portfolio, or I'd hazard anyone else's; it couldn't have less signal nor more noise.

[jam62] 14/3/2024 14:47

Will the idiot down ticker please reveal himself/herself. Please elucidate as to your apparent negativity.

[skinnypope] 14/3/2024 14:15

Thanks Chucko, good to validate my numbers with yours.

I suspect the March cash not being higher is the loan extensions announced on the 1st Feb RNS, where £53.7m of March maturities were extended out to June.

[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 ?