Northern Investors Share Discussion Threads

[jp69] 08/2/2014 12:57

just looking at final possible outcomes if you hold to final realisation

NAV 31.3.11 59M

estimated final outcome 130-165% so £76.7m to £97.3

after tender we would have had 77.3m (including the 36.7m net assets left)

so they are saying we might go -0.6m to +20m on the 36.7m left which in % terms is say 0% to 54% better

so basically in share price terms taking 420p as start range = 420p to 645p (subject to costs of future distributions and any dividends)

so taking midpoint - somewhere around 530p

is this roughly how everyone sees it ?

[jp69] 08/2/2014 12:40

if you intend to buy back , is the decision simply where you feel the offer price for shares post tender will be and stock availability (with a much smaller free float)

so at 400p now on offer if we run up another 10p in the next 4 weeks or post tender sit around 410p it might not be worth tendering (if it is harder to buy shares back post tender) ?

At the moment you are gaining 13p (after 2p stamp duty on rebuying)

I guess the other view is that they may drift down over next couple of months

[alanji] 07/2/2014 14:51

I broadly agree with the figures others have quoted. The decision to be made now is whether to buy, hold or sell. In the last two tenders the share price has risen post tender - almost certainly due to people buying back what they have tendered. And, in the current tender offer some of the directors have indicated they will buy back post tender. Others are not going to tender any.
So, the options, assuming 1000 shares currently held and you get 30% in the tender (current share price 385-400):
Sell now for £3845
hold - bid price, post tender has to be below 371p to be worse off
buy 428 shares now (leaving you with 1000, post tender) - bid price has to be below 380p to be worse off than selling now and above 398p to be better off than not buying.
I think my arithmetic is correct but would appreciate confirmation. I topped up this morning - wish I had finished doing the figures yesterday!

[stupidboypike] 07/2/2014 13:57

thanks Sky, so I could buy my 28% back today, interesting .

Best regards SBP

[skyship] 07/2/2014 12:51

SBP - Yes, see the timetable.

Langbarb - I may need to update my 17th Dec'13 Update:

[langbarb] 07/2/2014 12:31

ok thanks, misread the circular... so assuming purchase post tender at 400p I make it IRR to Q117 (3 years) as follows:

90% back by Q115 and 130% final in Q117 - IRR 2.8%
110% back by Q115 and 130% final in Q117 - IRR 3.8%
90% back by Q115 and 165% final in Q117 - IRR 27.2%
110% back by Q115 and 165% final in Q117 - IRR 33.2%

[papy02] 07/2/2014 11:51

Nil Desperandum
whoops. Many thanks. Will edit previous post.

[nil desperandum] 07/2/2014 11:45

Papy02
New estimates are 130-165% (up from your 125-160%)

[stupidboypike] 07/2/2014 11:39

I'm sure this is a silly question but can anyone confirm if shares bought today qualify for the tender?

Best regards

SBP

[papy02] 07/2/2014 11:21

I make the additional returns they estimate (after the current tender, and based on their figures of 90-110% by Mar 15, 130-165% by Mar 17 ):

Mid-point estimate of 218p additional to be returned per share by Mar 31 2015, +/- 31% (a range of 149p to 286p).

Mid-point estimate of 542p additional to be returned per share by Mar 31 2017, +/- 22% (a range of 423p to 662p). This includes the return to Mar 31 2015.

Calculation elements:

£59.6m NAV at start of process. £40.6m returned so far (incl current tender).
8.73m shares in issue after current tender.

Anyone got anything different?

(Post edited to reflect Nil Desperandum's comment)

[nil desperandum] 07/2/2014 09:44

The percentages are based off the £59.6m NAV at the start of the process. After this distribution we'll be up to £40.6m returned. So at the mid point of 100% to be returned by Mar-15 that would imply another £19m (including divis). And similar calcs for Mar-17 etc.

[langbarb] 07/2/2014 09:05

guys, I am a little confused by the 90% to 110% range. I always thought from previous announcements, that this first range quoted referred to the % of capital being returned by Q115, while the uplift would be included in the second range. How come we have 110%? shouldn't it be 100%? Could it be this includes dividends (so the extra 10% is made up of dividends).

Also, the 130/165% uplift range would give a huge IRR range (I estimate something between 10% and 40% for those buying post-tender, assuming a post-tender price of 400p, cash return between £18mm and £38mm as per latest circular and 90% returned by Q115). I note there is a £20mm future uplift range over the coming 2 years for an investment which will be worth £36.7mm after this coming tender. I guess this may reflect the high concentration of the portfolio and uncertain realisation price for the largest holdings.

Skyship could I cheekily ask you to share your post-tender return projections (I used a post-tender price of 400p, probably on the high side) just to try and gauge what the return could be for those buying back post-tender.

[damanko] 06/2/2014 19:46

Thanks Nil,

good news all round. Keep up the good work.

D.

[nil desperandum] 06/2/2014 18:04

tender offer details hxxp://www.nvm.co.uk/z_downloads/annualreports/nicgmcmar2014.pdf

[flyfisher] 06/2/2014 17:20

The tender document also gives an increase to the expected total return.

''It was estimated that by 31 March 2015 an amount equivalent to between 70% and 90% of the approximately £60 million net assets of the Company at the commencement of the realisation process could be returned to Shareholders in cash, and that the realisation of the portfolio would be substantially completed by 31 March 2017 with an ultimate cash return to Shareholders which could be in the range from 125% to 160% of the net assets at commencement, representing a value uplift in absolute terms of between £15 million and £35 million.
In the light of progress to date and following a further review of future prospects, the Directors now estimate that the cumulative amount of cash returned to Shareholders between July 2011 and 31 March 2015 will be in the range from 90% to 110%, and the ultimate cash return to Shareholders on full
realisation in the range from 130% to 165%, of the net assets at commencement. This would be approximately equivalent to an uplift in value of between £18 million and £38 million.''

[damanko] 06/2/2014 17:11

Sky, I understand your concerns, though the market downturn since December has probably made a few smaller companies with an IPO on the radar a little nervous.

In the meantime I guess the few of us on this thread who bought NRI 4 or so years ago when so called professional investors didn't, should feel quite happy with subsequent events.

Regards etc....

[skyship] 06/2/2014 16:59

NK - precisely.

For some the concern may be the further concentration of exposure to Kerridge and Control Risks.

I am at a loss as to why we haven't heard of an IPO for Kerridge; their business seems to be tailor-made for a fancy rating. Control Risks too for that matter - they are a much larger and well-established version of the recently listed FLX.

[nk104] 06/2/2014 15:46

Well this seems very good.

Presumably the strategy is to tender the lot and then either

a) bank the profit
b) seek to buy back at a lower price

For option b) it depends on the assets the company has left and the timetable for realisation.

[spectoacc] 06/2/2014 09:27

I'll sell you some for 415 Papy02 ;)

[papy02] 06/2/2014 09:03

I 've had a limit order in at 390 since before mkt open - but no fill (Selftrade)

Edit: executed now at 389

[spectoacc] 06/2/2014 08:45

Someone going for 10k at 380 on the book - which they look unlikely to get. NRI seem good at under promising/over delivering.

[westcountryboy] 06/2/2014 08:21

Excellent - in fact I have been topping up this morning. Presumably the big rise in NAV suggests that some of the companies still in the portfolio have had very good results in 2013.

[skyship] 06/2/2014 08:09

"The Company expects to publish a circular to shareholders today giving details of a tender offer to re-purchase up to 3,400,000 ordinary shares at a tender price of 415p per share..."

So that = a 28% tender at a 1.3% discount to the new 31/12/13 NAV figure of 420.5p.

Remember to tender 100% of your holding - then you could get 30%, 35%...even 40% redeemed at that 415p level - 19% up on yesterday's bid level.

[skyship] 06/2/2014 07:33

Yes NRI continues to deliver the goods:

"The Company expects to publish a circular to shareholders today giving details of a tender offer to re-purchase up to 3,400,000 ordinary shares at a tender price of 415p per share, returning up to a further GBP14.1 million of capital to shareholders. The ensuing re-purchase and cancellation of shares is due to be completed on 4 March 2014. A further announcement will be made once the circular has been published.

The unaudited net asset value per ordinary share as at 31 December 2013
was 420.5p (30 September 2013 375.3p)."

[stupidboypike] 06/2/2014 07:26

another fantastic rise in NAV.