Mercia Asset Management Share Discussion Threads

[aishah] 24/8/2018 11:06

It was on the 8th following the Oxford Genetics multi-million pound contract. Techinvest are also positive and added more to their portfolio in July.

[livewireplus] 24/8/2018 10:50

That was good timing then .... unusually I also had good timing with this - sold out in upper 30's earlier in year but then back in at upper 20's recently. Look forward to a rise in to the 40's again... unless Mr. Trump precipitates a World Wide recession...

[aishah] 24/8/2018 10:06

Doubled my holding earlier this month.

[wan] 16/8/2018 07:55

With the shares languishing at new lows, today's news is again welcome, but does it provide a catalyst for a change in share price direction? I note Mercia expect to announce further positive news from their direct investment portfolio.

I note a further recent investment by Mercia (and others).

Another recent successful fund raise also highlights the level of interest in AI in healthcare -

Intelligent healthcare company Rinicare announces completion of financing
Rinicare raises money to support the commercialisation of its digital healthcare portfolio

Manchester, UK, 15th August 2018 - Rinicare Limited, a leading intelligent healthcare company has announced the completion of its financing round by welcoming new investors Catapult Ventures and NPIF - Mercia Equity Finance, which is managed by Mercia Fund Managers and part of the Northern Powerhouse Investment Fund.

The funding will be used to support the commercialisation of Rinicare’s digital healthcare portfolio, which is designed to provide solutions that improve outcomes and reduce costs in a number of settings such as emergency, primary and community care as well as progress its AI-powered predictive algorithm for intensive care.

Healthcare providers around the world face the challenge of maintaining sustainable healthcare systems in light of an ageing population and continuously increasing costs. Rinicare’s approach to addressing these challenges is based on a collaborative effort with clinicians and end users to design advanced wireless communications, innovative prediction algorithms and enhanced software technology solutions that demonstrably improve outcomes and reduce healthcare costs.

The company markets its wireless physiological signs technology (PRIME) and its falls prevention system (SAFE) globally in a number of healthcare solutions, which are tailored to individual needs.

In addition to its expanding marketed solutions, Rinicare is developing its AI predictive system, Stability, which is initially focused at intensive care and addresses a global market for predictive healthcare analytics. This fast emerging area of healthcare is estimated to grow at a compound annual growth rate of over 25%, reaching an estimated global market value of $24.6billion by 2022.

Stuart Hendry, CEO of Rinicare, commented: “We are very pleased to welcome such high-quality investors in this financing round. We will be using proceeds to support the ongoing commercialisation of our PRIME and SAFE based healthcare solutions in the UK and abroad as well as continuing with the development of world-leading Stability AI intensive care programme that has already captured data from several thousand intensive care patients.”

Dr Vijay Barathan, Life Science Partner, Catapult Ventures said: “We are excited to work with Rinicare as they commercialise their intelligent health product portfolio in the UK and international healthcare markets. Each product represents an innovative solution and significant market opportunity.”

Dr Mark Wyatt, Investment Director at Mercia, said: “I am looking forward to working with the Rinicare team, and I am excited to see their technologies drive efficiency gains and patient benefits into the healthcare system.”

Sue Barnard, Senior Relationship Manager at British Business Bank, said: “The healthcare market is evolving rapidly, and is expected to grow significantly over the next few years. The North is home to many innovative businesses in this space, such as Rinicare, and NPIF is pleased to support those looking to enter the next phase of growth.”

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.
hxxp://www.rinicare.com/news/press-releases/item/48-intelligent-healthcare-company-rinicare-announces-completion-of-financing

[weatherman] 07/8/2018 10:18

This should lead to higher NAV in time. MERCs investment in OG is £9m, representing 40 percent of a £22m company - growing revenue rapidly 100% y-o-y according to last statement. OG is approx 7.5% of MERCs stated NAV, but currently trading at a big discount. I would suggest OGs prospects alone point to a rerating. The current discount is an anomaly to the real value.

[redartbmud] 07/8/2018 09:26

p1nk

The buyers of the last rights issue, who paid 46p/share, must echo your sentiments.

[p1nkfish] 07/8/2018 08:50

Yes, I may have been a little too negative.

[cheshire man] 07/8/2018 08:39

Market likes the news good to see the chart turning, as you pointed out p1nkfish seems we have a lot to look forward to,,,,,

[p1nkfish] 07/8/2018 08:23

Very good OG news.

Read last sentence below as hint of more to come from OG and OTHER direct investments.

It could still double by Dec 2019. Looks like a Buy if not already and a strong hold imho.

"Dr Mark Payton, Chief Executive Officer of Mercia Technologies and a non-executive director of Oxford Genetics, said: "OG is a good example of our promising direct investment portfolio of companies, many of which are now in revenue growth. The company has an extensive intellectual property estate coupled tightly with its global access to CRISPR technology. The growing quality and number of its clients is testament to the fact that the team is at the leading edge of synthetic biology innovation. I expect more positive developments from OG and a number of our OTHER direct investments in the near to medium term.""

 

[p1nkfish] 01/8/2018 12:20

It's looking a stretch and the share price is confirming that.
If the market thought it possible, a very decent CAGR between now and then, it would like not have such an awful slope on the chart.

I do hold but concerned I may have made a mistake. What catalyst to turn this round?

[p1nkfish] 01/8/2018 12:17

The management options target price by mid Dec 2019 is about 59.5p,
Approx a doubling from now. Fundamentally a low CAGR since admission at 50p Dec 2014.
Much better for purchases now IF THEY GET THERE.

If they reprice or shift again it's admission this is a basket case.
What will be the non-market catalysts MERC can control to achieve this price re-rating?

Any ideas anyone or is it purely down to sentiment and management have no control so don't deserve the options anyway?

Would like to see them get there and exhibit some creativity. Clock is ticking.

[p1nkfish] 28/7/2018 17:12

We have no idea how this will perform in a real economic downturn and what happens if portfolio companies come back for more cash when liquidity dries up.

Following a # of start-ups over a few years I've become very aware of the part liquidity and the ability to raise future rounds is and the part they and the economic backdrop play in exit valuations.

I hold some MERC but under no illusions. A 25-30% discount to NAV may be about right in case of failures in some of the portfolio and the need to hold inactive cash in case of future funding calls.

Whatever they hold is only worth what they can get for it.on exit irrespective of the NAV on the books. I hope they have some exit routes before the cold wind starts blowing again.

The revaluation of management options left a bad taste and if that happens again it's a sell.

The Sci Warehouse exit is not one to bask in the glory of giving the holding period.

GLA, I do hold.

[redartbmud] 28/7/2018 16:25

Yes, you can only get a return by selling shares - if they rise above the purchase price.

Share placing Jan 2017 £40m gross at 46p/share, which was then a discount to the prevailing mid-market share price of 50.5p
It has gone down steadily ever since.

[nocton] 28/7/2018 16:09

I have just read the Annual Report. It all looks encouraging to me. I also saw their presentation at Mello in Derby in May, when I was impressed with their methods and results.
The problem I see is that they are both a fund manager and an investment company. So the NAV is given as 40.7p. meaning a 25% discount - very large for an investment company/trust. However we have to add on some value for their fund management operation - currently £400m funds managed and a revenue of £10.2m. They've also got cash of £49m. Putting it all together, the business is worth much more than the current share price suggests. Clearly (hopefully?) the NAV will rise as the businesses they invest in develop and are eventually sold or floated on AIM. But also the revenue from funds management should generate for re-investment or a dividend. I have added more a the current price.

[redartbmud] 27/7/2018 18:44

Revenue:£10,197,000 (2017 £6,660,000)

Total other administrative expenses of £10,633,000 (2017: £9,143,000) consisted predominantly of all staff related and office, marketing and professional adviser costs.

The year end consolidated balance sheet includes goodwill of £10.3million (2017: £10.3million) and acquired intangible assets of £0.9million (2017: £1.2million). £7.9million (2016: £7.9million) of the goodwill and all of the intangible assets' value arose as a result of the Group's acquisition of Enterprise Ventures. The intangible assets are separately identifiable assets arising from Enterprise Ventures' fund management contracts with third-party limited partners and other similar investors. The fair value of the intangible assets is being amortised on a straight-line basis over the average duration of the remaining fund management contracts. The amortisation charge of £301,000 (2017: £301,000) in the consolidated statement of comprehensive income represents the amortisation for the year ended 31 March 2018.

It all goes to staff and advisers.

They do not have dividends in their financial model for a very long time.

red

[redartbmud] 27/7/2018 11:13

Not in MHO.
I do not see how they can return any value to shareholders on this model.
If I am wrong then perhaps someone will explain the error of my ways.

[weatherman] 23/7/2018 16:02

The company seems to have fallen in line with its quoted offshoots - Concepta and possibly Xeros. But this seems to me to be too harsh bearing in mind the small investment these actually make overall.

Some of the other unquoted companies look like very good and exciting investments.

They now have a large and growing fund management business, which generates sufficient revenue to reduce substantially net management fees.

[p1nkfish] 19/7/2018 09:58

Market is voting. Granted, it's fickle, but Merc not helping itself. My mind returns to the damp squib of the Sci Warehouse exit. They need to prove that was a rubbish one off and not the norm.

[turbocharge] 18/7/2018 21:58

If you haven' read the article, a link to which was posted by wan, this might be interesting:

"Mercia Technologies is an interesting option too. It focuses on investment opportunities in the Midlands, the North and Scotland and has links with 19 UK universities. It takes a broader approach, with university spin-outs accounting for about one quarter of its investments. It has the 20 significant direct portfolio investments on its balance sheet, some of which have been highlighted above, but it also operates a range of funds investing in promising start-ups. The ones that show promise and thrive are promoted to the portfolio of growth companies it invests in directly.

All of these started out as fund stakes that are now being scaled up. There are 170 businesses being nurtured within its venture funds. Mercia receives around 1,700 business propositions a year but only invests in 6% of them. Firms its funds have successfully nurtured include software groups Blue Prism and Allinea, spun out from Warwick University and sold to ARM in December 2016. Mercia has £0.5bn of assets under management."