London Finance & Investm... Share Discussion Threads

[markt] 16/11/2011 15:25

....interesting...

the income to LFI in 2010 was 175k from divis and 405k from management services... = 580k

Income to D.Marshall as result of directors positions from LFI/WSE (LFI effectively controls WSE and D.Marshall effectively controls LFI, hence WSE)
was approx 107k.
Income to L.Marshall (son was 75k). Was dir. at subsidiary. But not disclosed in any LFI accounts, so shareholders did not know....till mentioned in 2011 accounts)

Income from expenses....if unknown....are flights to/from S.Africa and hotel bills paid for D.Marshall ? (travel costs and hotel costs are normally valid directors' expenses I think, eg. FIF accounts and Lightbody Prospectus which contains FIF director terms)

Total = 107k + 75k approx. = 182k.

31% of the income going to the chairman and 1 son.

31% !!

(the dividend paid to shareholders in 2011 was 0.6p total, 186k. ie. the income in 2010 to the Marshalls was approx. the same as paid out in dividends to shareholders !)

(and 182K approx. paid to Marshalls, that we know about !, was higher than the divi income from all of LFI investments of 175k)


Any other family members employed at a subsidiary but not as a director.... we don't know.


Any opinions ?
My calc. looks correct ?

[markt] 14/11/2011 15:51

Inv. Mgmt cost in 1993 = 73k and in 2004 = 65k ....incl . auditor costs...

Inv. Mgmt Costs in 2011 = 314k !!

(a large 4.4% of the cap. value of LFI)

Investment Mgmt costs have multiplied by 4 since 1994....but NAV is the same...and dividend to shareholders is the same or less....and dividend is the same or less ....

Are shareholders being taken for a ride by the directors ?
What actually goes on inside the subsidiary ?
Is shareholder money being wasted or mis-spent ?


(noting a son was employed at 75k/year and LFI shareholders were not told, apartment rented to a company controled by the boss and biggest shareholder of LFI (and high chance that used by family memberes....perhaps son that works at Monteagle International....has LFI address as its address...and apartment is/was used by Monteagle employees....)

====

Service management costs (accounts and secretarial services etc for FIF, MWB, CRE and NBI) are roughly the same now as they were in 2011.

While inv. mgmt costs have multiplied by 4 !

How can 1 part of costs be roughly the same while the costs of other part have multiplied by 4 ??

Is the charge for inv. mgmt being unfairly calculated....to subsidise the service mgmt costs ?

[markt] 14/11/2011 15:38

Inv. Mgmt cost
= 314k versus 293k in 2010.

but total labour cost is down 69k, note 5....

if had not saved on labour then total cost would perhaps be up to 314k + 69k =
383k

an increase of 100k versus the year before !!

34 % increase versus 293k in 2010 !!

And no explanation !
Where has the money been spent on ??!!

We don't know since the accounts intentionally give no break down of how the money is spent.
Over at MWB there are shareholder complaints about the high operating cost of the HQ.

[markt] 14/11/2011 15:11

Topvest
...another interesting fact imo...
....despite having worked as a director of the main operator of WSE and LFI for at least 10 years....(last salary was 75k)....and coming from, one assumes, a rich family that is the major shareholder in LFI

the new director at LFI doesn't own 1 single LFI share !!

[markt] 14/11/2011 14:51

....they can't even get the resolutions right !!

although part of their day to day job is to produce company accounts...

the nominal share value is not the value stated in one of the AGM resolutions....
(if you use the value given to calculate the number of shares that could be issued....you get a number which is 8 times smaller than the true number !!)

and the date of the AGM stated in one of the resolutions (30th Sept) is not correct either !

Farce ?

[markt] 14/11/2011 14:41

Appears to me that WSE pays rent to LFI .46k...but WSE has no staff !!.
All day to day work is subcontracted to LFI and paid for , around 97k.

Very strange imo.

Is WSE being milked in order to subsidise other companies operating from the same address ...such as private cos. of directors ?
(Registered Offices Ltd of D.M., Registered Offices Investments Ltd of D.M. was registered there, London Finance Capital Ltd of P. Latilla-Campbell (the CEO of the land co)

Monteagle pays no rent but it DOES have staff at the LFI offices imo
(Monteagle International, with son no. 2)...ref. their website.
(rental and other income total is 94k, 40k for apartment rental, 44k from WSE, ie. 0 other rent)


Doesn't make sense imo.

[markt] 14/11/2011 14:33

RU in favour of the resolution to allow 9M new shares to be issued ?
I am against.
If co. wants to issue more than 5% of new shares then I think it should put the proposal to a vote at the time.
Increasing the number of shares can be expected to reduce the NAV/share and hence a reduction in the share price.....ie. negative for shareholders, depending on how many shares, if small then not much affect, but 9M on total of 31M now would be big effect.

Increasing the capital of the co. is good for the directors and the Marshalls imo since it lets them increase the costs of running the company....costs have rocketted over the last 15-20 years...from 70k to 300-400k for inv. mgmt.
And have to add approx. 60k ...since payment from MWB and FIF to D.M. related company overseas and not to LFI is a real cost imo, money lost. Should be paid to LFI imo.

[markt] 14/11/2011 14:19

FALSE LFI ACCOUNTS PERHAPS

1) The accounts say that there are no other investments in unlisted investments.

This is factually NOT true imo.

(LFI has shares in associate company of WSE..(land co.)..very strange, the co. accounts make no mention of LFI as a shareholder (by law it is required to, since non-beneficial ownership linked to D.M. who is a director at that co. and of LFI

but the RNS from Creston states that LFI PLC is the owner..approx. 1/2M shares....and the prospectus says the same...and that is signed off by auditors etc as being true, prospectus has tight regulations to comply with since raising cash from the public, so it must/should be true !)

Why do the directors produce accounts which are not true ?

In theory I could be wrong....but I have the prospectus and Creston RNS and I have seen in black and white that LFI PLC is stated.

[markt] 14/11/2011 14:13

I see your point....
....but....one concern I have is that we have been in the same situation so many times in the past....

====

BTW
companies that D.Marshall has been involved in that have gone bust or collapsed in value or been involved in any scandal

MWB (and many shareholders not happy with honesty of the board....operating own business from same offices....liquidation of assetts by 2005....and now by 2016 !...ie. their word means nothing imo...and they have spent money while supposed to be releasing it)

Clubhouse. Was there not some scandal there and legal cases ?. False accounts ? LFI or WSE was invested I recall. D.M. on the board or not ?

Graduate Appointments. What happened to that...1/2M invested by WSE or LFI

Doctors Direct. 800k-1M raised and smoked in 12-18 months I think....remains sold for peanuts, nothing left for shareholders. D.M. and E.B. sat on the board

Sanctuary. From having sizeable cap. value it ended up de-listing, nothing for shareholders. D.M. had been on the board for a few years. At least the shares were sold before it de-listed...good profit for LFI/WSE.

others ?

there have been some big profit makers for WSE/LFI ...but after 20 years the LFI NAV is the same as it was 20 years ago and well below 132p if it had produced 7.5% yearly return....
shows that a lot of money is being lost or spent !!

too many related party transactions imo...and hidden employment of son(s) on highish wages....and son(s) or family could have been enjoying a 2.6M pound apartment for years while not mentioned in the accounts for that company....(there is perhaps another son at the London LFI offices ...from Monteagle International....details on their website)

[topvest] 13/11/2011 21:07

Markt - your analysis has been helpful. It doesn't change what we all know though, so there is little point of endless posting. This continues to be an under-performing asset with some inherent value, which we would all like to see realised. LFI and WSE both have some good and seriously undervalued assets. We would like to see these investments realise a real return.

[markt] 12/11/2011 16:19

TOPVEST
my recent posts are only about dividends, compounding.....
no one else has bothered to do any such analysis....since everyone is too lazy !

imo ..I am actually helping you and other LFI shareholders....I am calculating performance and calculating compounding and inflation effects since 1990. All for free ! .....I don't understand why you complain that I print analysis results for you...

you agree or not that it is valid to consider past performance of an investment vehicle ? (the FSA recommends it and requires comparison to be included in yearly accounts...so you disagree with the FSA)

you agree or not that it is valid to compare performance with Black Rock Smllr Cos fund over last 20 years .....or you think investors should wear blinkers and ignore past performance data ?

you agree it is a valid point to make that the 20 year performance of LFI has been a disaster ?

[topvest] 12/11/2011 15:39

markt - you need to widen your interests. Too much interest on one person is unhealthy!

[markt] 12/11/2011 15:25

Inflation over the years.
29p averaged NAV over period 1990-1994 ...with 5% inflation that would now be worth 81p. ie. 29p in the money of 1990 would be 81p in the money of 2011.

If expect a total return (incl dividends) of say 7.5% (stk mkt = some risk so you expect a higher return than in the bank)
then 29p from 1990 would now be worth 132p.

Total divi paid = 17p
If assume that put each in the bank and receive 2.5% interest then = 21p
Value of divi if increase with inflation =

Initial NAV + gain/loss in NAV since 1990 (1990-1994 average) + dividends (compounded at 2.5%) = 29p +6 + 21p = 56p
Compare with value needed just for 7.5% yearly increase in value = 132p.

56p total return versus 132p if had seen 7.5% yearly increase.

ie. bad total return !!....less than inflation of 5% which would give 81p.

And most people would not accept or expect 5% total return on shares....you are taking a risk...you expect a total return between 5% and 15% depending on how good an investor you may be and how much assett backing you want for shares you buy.

The NAV is 35p....and would be 28p now if exclude the property gain, ie. that stock market investing under Marshall control has been a disaster over past 20 years.From 29p in 1990-1994 to 28p now 20 years later !!!!

[markt] 12/11/2011 14:52

Dividends
Has LFI under the control/guidance of the Marshall family been able to grow the dividend over the last 20 years ?

Let's take a look.

BUT...be aware that dividends are being paid by consuming the nett assetts....not paid from income received (running costs have always exceeded the income...so no income left over to pay dividends)

DIVI
1990 0.75p NAV = 33p
1991 0.75p NAV = 21p
1992 0.4p NAV = 20p
1993 0.5p NAV = 37p
1994 0.6p NAV = 34p
1995 0.7p est. NAV =
1996 0.8p NAV = 47p
1997 0.9p NAV = 45p

NOTE that subsequent NAVs till 2006 are less than the truth imo since do not include the true value of the LFI apartment (rented to company where D.Marshall is the MD/CEO)


1998 0.5p (6 months, change of year end) NAV = 47p
1999 1.0p NAV = 36p
2000 1.1p NAV = 50p
2001 1.2p NAV = 54p
2002 0.8p NAV = 37p
2003 0.85p NAV = 34p
2004 0.9p NAV = 37p
2005 1.0p NAV = 44p

Following NAV numbers are more accurate but perhaps 3p below reality since property valuation/estimation is less than reality.

2006 1.05 NAV = 52p
2007 1.1p NAV = 66p
2008 1.2p NAV = 39p
2009 0p NAV = 21p
No dividend ...prevented by law since nett assetts not high enough

2010 0.6p NAV = 23p
...dividend is back to 1990s level. Why ? Because 5-6M lost by not selling MWB, MWB share price has collapsed. Amount lost is 80-90% of cap. value of LFI !! MASSIVE.

2011 0.6p NAV = 35p
...dividend is back to 1990s level. Why ? Because 5-6M lost by not selling MWB, MWB share price has collapsed. Amount lost is 80-90% of cap. value of LFI !! MASSIVE.

If remove the gain due to the property then you get a NAV of 28p.
A NAV of 28p in 2011, versus a NAV average of 29p over the period 1990-1994 ( 5 NAV values).

RESULT ?
That if exclude the property then the NAV in 2011 is the same as it was in 1990-1994 !!!

And if take into account inflation..(dividends have never kept up with inflation)...that is in reality a big reduction in NAV..
ie. LFI under the control of the Marshall family has performed VERY BADLY badly from the 90s to now.

[markt] 12/11/2011 14:36

Topvest
Can we believe the accounts ?

States that always pays a dividend....
not true...in 2009....no dividend.

===

And if look at associate company under control of same family...WSE...it has had 4 to 5 years over the last 20 when it has been unable to pay a dividend...because the law prohibits it...nett assetts not higher than cash raised....visibly shows bad performance, ie. that can not get nett assetts to be higher than cash raised.
WSE nominal share value is 40p after X years of operation....and share price is 38-43p !!...ie. about same as nominal share value that goes back decades I think !

[markt] 12/11/2011 14:04

The NAV of the shares of LFI of Mr D.C.Marshall (Mr Marshall's family trusts being the biggest single shareholder) does not appear from what I can see to have performed over the longer term.

The LFI NAV in 1990-1994 was 33p, 21p, 20p, 37p, 34p.
1996= 47p, 1997=45p
The LFI NAV 2006-2011 was 52p, 66p, 39p, 25p, 27p, 35p


Share price performance over 10-20 years looks to be....random !.and down

If it had been invested in Black Rock or A.N.Other fund for small companies the 33p would now be 4-6 times greater, ie 130p-200p.
Whereas LFI share price is 22-24p. Very different.


..imho it does not show any up trend or demonstrate investing skill
(5-6M pounds lost by not selling MWB holding, with LFI cap. value around 7M now, that is a big amount of money lost....tiny or negligible chance that it will ever be recovered imo)


With inflation 33p in 1990 would now be worth around 50%-100% more, 49p - 66p. The dividends have not kept up with inflation.
Imo shareholders in LFI have lost money since 1990-1994.
====

I don't propose to sell shares...I propose that changes are made at LFI....change investment strategy (if has not worked), change control of the board, separation of the board from the investment manager (and replace them if performance is ever poor), avoid having anyone on the board of investee companies (that strategy has not worked)

possible new investment manager(s) ?
lots out there in small company sector with good records...

[markt] 12/11/2011 13:50

Topvest
I am also worried for LFI and WSE....that the Marshall family may do another rights issue similar to the past which will reduce the NAV/share...and be bad for shareholders such as you and me.

eg. large reduction in NAV caused by the share issues at WSE....which were forced share issues...and would have DOUBLED the number of shares if all warrants had been worth exercising...and not just 50%.

(note that many shareholders do not want to double their investment in 1 specific share....as a bale out process...investors want the NAV to go up ...not be forced to invest more and see the NAV go down...warrant units with 5 warrants/unit = forced investment imo)



...but which may serve their purposes by increasing the incoming by having more capital....and they perhaps milk the income via directors pay by sitting on boards where LFI invests...or income from LFI or its subsidiaries...as has happened over last 10 years....or perhaps there are possible benefits (various private investing cos. registered at same City Road address) by insider info at those companies (if say that buy/sell using info that is public in permitted times then it is legal)...or share tips from other dirs. that sit on those boards...

[markt] 12/11/2011 13:31

Topvest


To summarise performance of LFI since 1993 compared with other investment funds, eg. Blackrock smaller companies fund.

NAV in 2011 versus 1993, approximate. (the Blackrock number could 4 or 5 or 6, depends on exact start date in 1993....but you can see clear large growth in NAV....whereas at LFI you can see a clear reduction in NAV especially if included inflation and dividends (LFI dividends always well below inflation)

BRSC = x 6. LFI = < 1. !!!

(for other funds it is the same story, large real growth in NAV since 1993..Morningstar UK Smllr Cos. and HGSC AIM.which is what you would expect over such a long time frame...compare with nil growth at LFI !!)

Topvest, you see the point I try to make ?
Do you agree that the point is valid/true ?

While noting that the past is not a g'teed indicator for the future..approx. 20 years is a good timeframe to see if a company is able to perform...it does indicate that LFI under the control of the Marshall family has been completely UNABLE to perform....and has produced a return since 1993 of less than inflation. Hence I propose that changes are needed.
So, since 1993 LFI shareholders have LOST money. On the other hand the Marshall family have gained money imo and seen a good return on their investment imo via directors pay to David Marshall (paid to an un named overseas company...one assumes that has some link to D.Marshall, in name of wife perhaps ?) and one son at subsidiary (75k/year recently, now given up that role)...and perhaps other family members are also employed at subsidiary, we dont know....the employment of 1 son was hidden from LFI shareholders since at least 2001 imo.

[markt] 12/11/2011 13:09

I propose a review of performance of LFI over 20 years compared with an investing fund that invests in small companies.
The stated intention of the LFI board is to outperform over the medium/long term. By looking at these 2 graphs you can see that LFI (under the control of the Marshall family) has failed drastically over the last 20 years to meet those aims.....but yet the board makes no attempt to make any changes to its investment strategy to make the next 20 years better than the last 20 years ....my point ?...that the company may be being used for the personal benefit of the Marshall family (ie. regular income for them which pays back their investment cost) rather than meeting its claimed medium/long term goals.


1) LFI performance over 20 years.



=====
2) Blackrock Small Co. Inv. Fund Performance over 20 years. BRSC

(go to following web page...then...click on performance...and then in the part for the chart for selecting the number of years....click on max and and it will display from before 1990

1993 NAV 219.approx. . In Nov 2011 NAV = 1296....using this chart and this scaling.
Growth = x 6 approx.
Compare LFI growth with NAV in 2011 BELOW the NAV in 1993...earliest point on the LFI chart.
BRSC = x 6. LFI = < 1. !!!

[markt] 09/11/2011 19:13

....anyone wanting to use their vote/voice for the AGM....still have time to do it....

protest vote of NO on all items from me .....no surprise there I guess....
I think it is time that shareholders started making some noise...and demanding some results and changes at LFI and WSE....performance over 15-20 is a noticeable loss if include inflation.....perhaps one of the only investment vehicles that have made losses for shareholders over the last 15-20 years.

[markt] 08/11/2011 19:17

I believe that LFI annual report is required by the regulations to compare its performance with similar investment vehicles. It doesn't !!....because, imo, its performance is so bad that it would not want to highlight it !!

----

At BRSC fund the dividend has been increased or maintained over 15 years !! including in economic downturns....increased from 3.8p to 7p....and big growth in NAV

(could also look at Morningstar trust for UK smaller companies...similar story)

whereas at the 2 vehicles of David Marshall, WSE and LFI, there have been numerous years when no dividend has been paid ....because the law prohibited it because the nett assetts were not higher than the money originally raised by issuing shares ie. bad performance.

[markt] 08/11/2011 19:14

NAV from 184 to 1464 for BRSC according to website from 1993 til now.
(blackrock smaller companies investment trust)

Whereas LFI.....no change.

and Blackrock chart shows definite up trend....well obviously if goes from 184 to 1464 over almost 20 years !
ie. Blackrock can grow NAV whereas LFI under the control of David Marshall hasn't been able to !!

(and if you looked at many other trusts you would find the same story....since 1993 the value/price/NAV has grown....a lot....but not at LFI !!.

[markt] 08/11/2011 17:13

Topvest
BTW

If you compare the chart with LFI with say the Black Rock Smaller Companies chart, BRSC, (which you could say is useful to compare with LFI, both investing in UK smaller companies)....

Since 2005....the BRSC price has doubled whereas for LFI it is the same now as in 2005. Operating in the same sector...but different style, LFI takes a much higher risk (as witnessed by MWB price crash !) by having large chunks in specific companies rather than spread over many shares, BRSC. And despite taking a higher risk and having someone sitting on the boards of where they invest, LFI still produced a bad performance.

(let me repeat. An investment of say 10000 pounds in BRSC in 2005 would now be worth approx. double, 20000 pounds, while at LFI it would still be worth around 10000, no change). If BRSC then increased by say 10% in 1 year it would be 2k pounds. Relative to investment cost in 2005 of 10k pounds that would be a return of 20%. If it pays a dividend of 5% relative to the value of 20000 pounds then it is 10% relative to original cost of 10000 pounds. My point ? That increasing the value of an investment over years is vital to producing a high return in dividends (high relative to original cost X years before) and gains X years later.
----

My point wrt LFI ?
That LFI should review its performance over last 15-20 years (bad), its investing policy and consider to make changes to improve the performance for the next 15-20 years.
At LFI/WSE shareholders are always hoping that things will change soon, in next few months.....but....we need to step back imo....and look at the performance over 15-20 years....and compare LFI performance with performance of other investing funds/vehicles such as BRSC and see that it seems like something is wrong.