Oakley Share Discussion Threads

[skyship] 08/8/2016 14:10

Simon Thompson has re-visited in the IC Online today. Won't paste the whole article; but this is the Summary para:
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Not only are they rated on a 41 per cent discount to spot net asset value of 217p, but with cash and interest receivables accounting for 58p a share of net asset value, then in effect the private equity portfolio and the interest in Time Out Group are being attributed a value of only 71p in the current share price, representing a 55 per cent discount to their combined book value of 159p a share. That's an incredibly harsh valuation for a company that produced a 33 per cent return on its investment portfolio last year, driven by strong increases in the cash profitability of the investee companies. On a bid-offer spread of 128p-129p, I rate Oakley's shares a strong buy.
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After a life time of investment, one guiding principle I apply, is: Always BUY on a 40% NAV discount!

[rambutan2] 07/8/2016 01:35

Yes, I struggle with TMO's valuation. Plenty of risk to the downside I would have thought.

[rambutan2] 07/8/2016 01:26

£100-£110m cash. But has outstanding commitment of approx £50m to Fund II. And has just made €250m commitment to a Fund III.

However, it also holds approx £75m in shortish term loans.

"From inception to 31 December 2015, the IRR generated by the Company’s investments in loans and cash has been in excess of 5.0% per annum."

[skyship] 06/8/2016 14:25

Enough! - agreed. Though, from your detailed investigations - how much cash does OCL now hold? Seems to be a goodly %age of the 212p NAV...

What we need is for some US operation to take a shine to TMO - take it out at a tempting premium; after all, they seem to like loss-making digital/tech/media companies!

[rambutan2] 06/8/2016 04:08

To conclude, the Fund 1 indirect stake appears to approx account for the 7p TMO loss. Although why the valuation was written down is unclear and gets a black mark in my book. The direct/co investment stake wasn't written down from what i can tell, and again, is as clear as mud. Whilst all the various debts were paid back at par. Enough!

[rambutan2] 06/8/2016 03:33

Also noted:

• each of the Oakley Shareholders and OCIL has agreed that, subject to certain exceptions, during the period from the date of the lock-up deed until seven calendar days following the date of publication of the Group’s audited results for the financial year ending 31 December 2016, it will not, without the prior written consent of Liberum, dispose of any Ordinary Shares retained by it at the time of Admission;

• each of the Founder Shareholders, the Oakley Shareholders, OCIL and OCPE has also agreed that, for a period of 365 days from the date of expiry of the lock-up arrangements described above, to comply with certain requirements designed to maintain an orderly market in the Ordinary Shares.

[rambutan2] 06/8/2016 03:24

So debt was repaid to OCL:

The Company expects to receive gross proceeds of approximately £90 million from the Issue, approximately £25 million of which is intended to be applied in repaying the Group’s outstanding shareholder debt, being the £6,200,000 Loan Notes, the £2,000,000 Loan Stock, the US Senior Facility Agreement, the US Mezzanine Facility Agreement and the OCIL Loan Agreement (see paragraph 16 of Part V (Additional Information)).

[rambutan2] 06/8/2016 02:52

The direct stake lost £7m post float to £40m at 30/06. But by my reckoning this isn't down on the 31/12 valuation. In fact it looks up to me, depending on how the debt held by OCL was treated ie left as was, or paid back at par, or converted into TMO shares???

[rambutan2] 06/8/2016 02:14

Hmm. So just realised that the TMO stake held in Fund 1 dropped in value from £82m (£53.7m of which was OCL's) to £68m (£44.5m OCL's) at 150p float price. And at 127p 30/06 price, is down a further 15% making OCL's share worth £37.8m. So £16m down since 31/12 valuation.

[rambutan2] 06/8/2016 01:26

Had another look at 31/12 portfolio valuations and still can't work out how they lost 7p of nav on newly floated TMO by 30/06 valuation.

As a result of the IPO OCIL has transferred its co-investments in Time Out Markets and Flypay to the Group and the OCIL investment in the Group has all been converted into ordinary shares. The result is that OCIL's direct exposure to the Group is entirely via an equity stake in the Group, which at the IPO price will be valued at GBP47.2 million and will represent 24.2% of the Group's issued share capital. In addition OCPE, in which the Company is a limited partner with a 65.5% interest, will at IPO hold an interest in the Group valued at GBP68.0 million, representing 34.9% of the Group's issued share capital.


See pgs 11, 14 and 22 for TMO valuations as at 31/12/15:


Also note that at close on 30/06, TMO bid price was 127p.

[its the oxman] 05/8/2016 16:25

Seems very cheap but I guess extra discount is possible now due to its history of poor corporate governance. That said almost tempted to buy given its exposure to Time Out.

[rambutan2] 04/8/2016 11:54

Yes, was right on € exposure, although no info in annual report notes, but am at a loss as to how TMO value fell compared to 31/12. Thought all bits added up to circa £25m, so my +£10m was being conservative. In any case, ignoring my maths, they were clearly giving it a rather aggresive pre float valuation at last Y/E. Another black mark for them in my book.

[rambutan2] 04/8/2016 01:43

SKY, by chance was looking at this earlier today. Including reading the last report and accounts. I really don't like how opaque it is. It breaks all my rules for PEIT investing. A good chunk of its money seems to be in €s, and the Time Out valuation has to be up by £10m+. Assuming (?!) everything else stays at 31/12 values in the 30/06 interim valuation, then approx 210-220p nav. But it remains too private investor unfriendly for me.

[skyship] 03/8/2016 16:57

I see Simon Thompson in the IC thought 202p in June for the Time Out listing. So far that has been a bit of a damp squib; but perhaps a target for many, inc Trinity Mirror here in the UK.

[skyship] 03/8/2016 16:28

Can anyone tell me what the current NAV here may be? All I can find is 200p as at Dec'15!

[888icb] 10/6/2016 07:57

The RNS yesterday regarding the listing of Time Out is good news for Oakley and one would hope that this would be reflected by an increase in the share price in the coming weeks.

[speedsgh] 31/5/2016 10:54

Time Out to IPO...

AIM Schedule 1: Time Out Group Plc -

Woodford set to buy Time Out stake -

Star fund manager set to back Time Out IPO -

[skyship] 01/5/2016 12:24

Once again Simon Thompson has returned to the fray to recommend one of his poorly performing past tips. Nothing wrong in that, except when he is misguided in the original recommendation.

IMO the tip inspired rise, supported by the potential asset upgrade should Time Out successfully float, provides holders with an opportunity to exit c6% higher than the recent lows @ 135p.

OCL is a very specialist PE trust, in that it is 85% owned by the institutional holders who were given preferential treatment in the Mar'15 placing.

Breaking the pre-emptive rights code was anathema as far as I'm concerned. So sold; remain out and doing far better in the other more honourable and better performing PE trusts.

[spob] 27/4/2016 11:57

Does their largest investment (Time Out) actually make any profits ?

[thomasthetank1] 19/4/2016 12:31

Read Liberum's note on OAKLEY CAPITAL INVESTMENTS, out this morning, by visiting hxxps://www.research-tree.com/company/BMG670131058
"Oakley’s share price has de-rated materially in recent months despite a strong NAV update for H2 2015 (10% increase). The shares currently trade on a 31% discount to NAV which is the widest it has been since mid-2012...."

[its the oxman] 08/4/2016 10:01

Cheers Skyship. Very informative.

[skyship] 04/4/2016 17:46

Sorry OXMAN - just where to start?

1. I would suggest this specialist PE Trust has few institutional friends other than those it managed to persuade to take stock in last year's placing. They are already holders and may be more inclined to sell rather than add. Some may have been verbally locked-in; and passing the placing date of one year just last week, some may have been released to sell. All conjecture.

2. Dropping through 140p was a serious chart sell

3. Potential new insti buyers mkay not be able to do so due to the AIM listing

4. Others may be put off by the poor corporate governance through making a placing on a non-pre-emptive basis; a move much frowned upon as it cheats existing holders

5. The PE sector as a whole has drifted quite markedly in Q1'16, falling on average by 9%. There are now many trusts on discounts in excess of 30%; and these don't have the limitations that OCL undoubtedly has. APEF @ 34.7%, BPM @ 32%, DNE @ 35.7%, SEP @ 32.1% - could all be considered preferable to OCL now at 33%.