Majedie Investments Share Discussion Threads

[orinocor] 24/1/2022 17:08

It's no secret what the top holdings are --

Royal Dutch Shell PLC 1.9%
AstraZeneca PLC 1.3%
Tesco PLC 1.2%
Electrocomponents PLC 1.2%
Natwest Group PLC 1.2%
Ascential PLC 1.2%
Microsoft Corporation 1.1%
Amazon Inc 1.1%
Relx PLC 1.1%
Anglo American PLC 1.1%
3i Group PLC 1.1%
NVIDIA Corporation 1.0%
Fevertree Drinks PLC 1.0%
Unilever PLC 1.0%
A.P. Moller Maersk 1.0%
Alphabet Inc 1.0%
Ashtead Group PLC 1.0%
Taiwan Semiconductor Manufacturing Co Ltd 0.9%
Compass Group PLC 0.9%

[orinocor] 24/1/2022 17:04

It is over a year since it was this low. It could go lower but you have to buy something on days like today.

[orinocor] 24/1/2022 17:02

Of course, it was 262p today and it will be down tomorrow for sure

[spectoacc] 24/1/2022 16:34

I fear a re-investment in MAJE is the triumph of hope over experience!

Difficult to judge NAVs with market falls this large, and far harder still with MAJE's opaque holdings. What's in the "UK Equity Segregated Portfolio", is it VOD, BATS, RKT, all of whom were up when FTSE was -200? Or is it housebuilders, banks, everything else, which tanked?

Likewise the rest of it - someone will know better than me. Maybe we should play guess the NAV for tomorrow's, but I'm confident it'll be well below 265p.

[orinocor] 24/1/2022 16:25

I'm buying this back now at the 210 - 212p range
Very very cheap again

[makinbuks] 27/12/2021 13:50

And what will mark them out from all the rest?

I think Topvest's assessment is spot on. And frankly whem you consider Javlin you could argue they got lucky with MAM

[andycapp1] 26/12/2021 18:45

Yes clearly struggling and I think it was probably right. Suspect Majedie had little say at end of the day. I’m just concerned about growth v maintaining that divi. Not sure they’ve enough capital? It’ll have to be heavily UK centric?

[cynicalsteve] 26/12/2021 13:55

MAM's assets under management fell from £8.1bn to £6.0bn during the year to 30 September. Now the takeover makes sense!

[andycapp1] 23/12/2021 21:53

Think Majedie is well out of it. Actually it’s done well since investing. But now they need to address the performance. It’s tight I think, between holding the div and actually plugging into growth. I’ll give them the benefit as the family has a lot riding on it,

[topvest] 23/12/2021 20:52

Disappointing. The one word that sums up Majedie Investments over the last decade. The poor investment performance. The disappointments of the failed Javelin investment management operation and such a disappointing end to MAM at the wrong point. MAM was worth over £60m at the top, so they are selling it for about 50% less. Then again, it could well lose further mandates as its a second quartile performer in my view. Above average, but only just!

[andycapp1] 23/12/2021 19:04

The MAM dividend is 15% on MAM valuation and so that’ll leave a big hole. They’ve £172m of assets to produce £6m of dividend plus, say, another £1.5m to cover Board, CEO, audit, cosec etc. So that’s £7m from £172m which is 4% on total assets. The investment mix will have to change pretty dramatically to produce that or anywhere near. Dividends, ex MAM were only £2.1m. Even if they capitalised 50% of the fees they are nowhere near. 4% yield is achievable but only if they have quite a yield bias so lots of UK with, say, 30% ex UK income. So hmm not sure they won’t be chasing income here. I’d rather they cut the divi and focussed more on total return.

[ctrader3] 14/12/2021 07:08

The net revenue return after tax increased from £4.8m in the year to 30 September 2020 to £5.0m in the year to 30 September 2021. The interim dividend was maintained at 4.4p and the Board is recommending a final dividend of 7.0p which is the same as in the prior year. The total paid in dividends to shareholders, and proposed for this year, is £6.0m and the Company holds £24.3m in revenue reserves. In view of the exceptional circumstances since March 2020, the Board believes it is appropriate to draw £1.0m from revenue reserves to maintain the level of the dividend.



The final dividend will be payable on 28 January 2022 to shareholders on the register at 14 January 2022 and the Company's shares go ex-dividend on 13 January 2022.

[ctrader3] 13/12/2021 09:59

the annual accounts were released around this time last year,
whilst mainly academic the dividend payout will be of interest.

Total Return Philosophy & Dividend Policy

The Board believes that investment returns will be maximised if a total return policy is followed. The policy aim is to increase dividends by more than inflation over the long term. Further details are under the Dividend Growth section below. The Company has a comparatively high level of revenue reserves for the investment trust sector and at £25.4m, revenue reserves represent over 4 times the current annual dividend distribution. The strength of these reserves will assist in underpinning the Company's progressive dividend policy in years when the income from investments is insufficient to completely cover the annual distribution.

Dec 2020

[makinbuks] 12/12/2021 12:44

Agreed, reset in a number of ways. I cant see a number of the MAM fund surviving where there are direct equivalents in the Liontrust range. There's no mention of synergies or job losses in the announcement and that would have been important for the founders. Its a very close team and all employees have shares. However, there must be some synergies and one or two noses out out of joint which will lead to departures and re-alignment. For Barlow the logical approach is to add flavour to the basic worldwide equity mandate with some PE. That's the classic family model. Problem is they don't have the in house capability

[andycapp1] 09/12/2021 18:01

My calculation of the MAM stake was about right and so the upfront on MAM hits the NAV by [4p odd] which was reflected in the daily NAV. The deferred would add back circa 3p, but you never get deferred!! So I suppose it’s a bit of a disappointment for the Trust but for me it’s an opportunity for a reset. The asset performance has been poor, no getting away from it, and I’d hope they take the pot of capital and do something a bit more exciting. Liontrust gives them that opportunity. Or they could merge it with a more interesting fund. Trouble is Barlow, I think, likes the control element and that is a bit of an overhang. Their costs are too high also. So I’d hope for a reset which in turn will close the discount. When MAM was growing fast it held a tight discount but ever since MAM hit the buffers the discount has, justifiably, grown. Let’s see!

[ladywormer] 08/12/2021 15:37

High volume for Maje the last two days

[ctrader3] 08/12/2021 14:21

I would guess someone might buy MAJE especially if the
discount remains around 19%.

[ctrader3] 08/12/2021 13:47

Net Asset Value (NAV)



The unaudited net asset value per share at the close of business on 7 December 2021 was as follows:


With debentures at par value: 285.93 per share


With debentures at fair value: 280.50 per share

-----------------

currently 237p to buy so a discount of around 19%.

[makinbuks] 08/12/2021 11:24

Andy, apologies I was offline yesterday after my initial posts. Clearly I am wrong, but my understanding was we owned 17.2% which of £120m is £20.64m. Do we also own some debt instrument in MAM or is it simply that the share element has increased in value? Surely not by 10%.

My point on the "noted" comment was that they haven't declared whether they are in favour or not. This looks a nice deal for the two remaining founders and as I have commented before something had to happen as De Upagh was not going to carry on forever. For MAJE however its underwhelming.

Big question is what does the family do next. With the lock in we've got a good while to wait for the answer

Might we see a reduction in fees given the scale of Liontrust vs MAM?

[andycapp1] 07/12/2021 18:11

Hope so. It’s been poor really. I’m sure div will be cut a bit although it’s important to family. Hopefully Liontrust can offer a better choice. If so maybe 10% discount? That be 255-260.

[edwardt] 07/12/2021 17:14

i would have thought £2.50 would have come today for sure on the back of that. i wonder what this vehicle will be used for in the future - hopefully something better than a fof product.

[ctrader3] 07/12/2021 14:02

Net Asset Value (NAV)



The unaudited net asset value per share at the close of business on 6 December 2021 was as follows:



With debentures at par value: 281.16 per share



With debentures at fair value: 275.73 per share



The net asset value published is on a cum-income basis and the net asset value is calculated on 52,998,795 ordinary shares, being the number of shares in issue.



On 7.12.21, Liontrust Asset Management PLC (Liontrust) announced that it had entered into a conditional sale and purchase agreement to acquire the entire share capital of Majedie Asset Management Limited (MAM), for cash and Liontrust shares, and therefore the carrying value of the Company's investment in MAM has been reduced to £22.370m from £24.756m. Future NAVs will reflect the relevant market price of the Liontrust shares. Additionally, both the MAM value and the NAV do not include the deferred consideration of up to £5.569m. The deferred consideration is contingent and is not due until 2025.



Lastly, the fair value of the March 2025 debenture is calculated by using the yield of UK Treasury Bonds of an equal duration plus a 2.5% risk premium. The Board sees this mechanism as transparent, market related and consistent with best practice.

[andycapp1] 07/12/2021 11:09

Can’t find it. But presume it’s regulatory capital?

[andycapp1] 07/12/2021 10:43

Don’t know what surplus capital was/is? Might be in Majedie R&A’s by way of valuation?