Raven Russia Share Discussion Threads

[kenmitch] 30/3/2010 17:05

Apologies again for the off topic. I doubt the dividend is assured. I can't find the 10 year dividend record, but from memory they have managed to maintain it even during difficult times.Please post/correct if that is inaccurate. With an Investment Trust with no borrowings I don't look in to it as closely as a single share as the risks are less.

You're right that the reducing NAV is partly because of the 27p distribution in February - and it is also because of a fall in the value of some of their investments. The shares are trading at a discount to NAV and look fair value.

The ten year share price record suggests - assuming the past is at least some guide to the future - that there could well be some share price upside if markets continue to hold their own. Apart from a fall in 2004 when markets were doing OK, otherwise the shares have tended to bounce back strongly from bear market lows. i.e in addition to the divi there is also the potential for some capital gain.

The shares don't seem to be traded much.

Finally I could well be over influenced by having doubled my money before selling in 2008, on top of a dividend over 10%, and since I don't claim to understand the worldwide asset management industry/sector no-one should invest on the back of my opinion. Should have made that clearer in the previous post.

Probably better to get back on topic again - or start a new thread for AMN?

[kenmitch] 30/3/2010 16:57

Apologies again for the off topic. I doubt the dividend is assured. I can't find the 10 year dividend record, but from memory they have managed to maintain it even during difficult times. With an Investment Trust with no borrowings I don't look in to it as closely as a single share as the risks are less.

You're right that the reducing NAV is partly because of the 27p distribution in February - and it is also because of a fall in the value of some of their investments. The shares are trading at a discount to NAV and look fair value.

The shares don't seem to be traded much.

[envirovision] 30/3/2010 11:06

Well ken since we've gone well off topic, hectorp summed it up as i cant see any dividend cover over steady income, in otherwords the dividend is not assured right? to boot the navs all but dissapeared due to prevouse distribution or am i reading it all wrong?

[drdre] 30/3/2010 10:57

Hi Hect,

Will reply in MISC.

DR

[eeza] 30/3/2010 10:21

Thanks Ken.

[hectorp] 30/3/2010 10:20

Guys,
I'm not at all convinced the worst of the crisis is over ( see the results above for AMIC). Accordingly I sense that going for income, which implies quite a long term investment period, isn't my best strategy. ( EDITED I note that AMN is really a redistribution play than an income one).

[drdre] 30/3/2010 10:12

Cheers Ken

[kenmitch] 30/3/2010 10:01

Apologies for the off topic, and if this post causes any annoyance I'll edit all of it within 24 hours! But for any interested in AMN, first have a look at the 10 year chart - you'll see that the shares were once around £2 and bottomed out in bear markets around 40p.

They have been realising investments and returning cash to shareholders, and gearing is nil.

Their final results - to Sept 2009 were issued in December. Details here.

RNS Number : 5074D
Asset Management Investment Co.PLC
02 December 2009


For immediate release 3 December 2009


ASSET MANAGEMENT INVESTMENT COMPANY PLC


FINAL RESULTS FOR THE YEAR TO 30 SEPTEMBER 2009


Asset Management Investment Company PLC ('AMIC'), the specialist investor in the global asset management industry, announces its results for the year to 30 September 2009.


Highlights


*

Net assets £13.7 million (30 September 2008 £23.6 million)


*

Gearing Nil (30 September 2008 9%)


*

NAV per share 75.12p (30 September 2008 125.46p)


*

Pre-tax revenue profit £1.87 million (30 September 2008 £1.79 million)


*

Final dividend 4.5p net per share (2008 4.5p net per share)


*

Dividend for the year 7.0p net per share (2008 6.5p per share)


*

Capital distribution of 27p per share in February 2009



Chairman's statement


The dislocation in credit markets which commenced in August 2007 and to which I referred in my statement which accompanied the annual report for 2008 introduced a period of economic recession and great uncertainty and turbulence in all financial markets. Many well known names in the sector either disappeared or had to accept radical financial restructuring. These conditions to some extent are still present, but at the end of 2009 it is now possible to have some degree of optimism that the worst has passed and we are seeing the beginning of the hoped for economic recovery.


Your Company's investment portfolio inevitably was not immune from the general financial sector problems through the difficult period, during which the valuation of investments had to be lowered to reflect the reduced level of assets under management by investee companies. However, the period also reflected the improved conditions, particularly the strong performance of world stock markets, since March 2009. The markets through 2008 anticipated world recession and possible deflation and depression, but this has been replaced by the anticipation of recovery and better times ahead. However, despite the strong stock market recovery this year there are still many who believe in the real danger of a second dip into a further period of recession and there can be no room for complacency.


Investment portfolio


Your company holds two quoted investments, City of London Investment Group plc and Integrated Asset Management plc. City of London invests in emerging markets through the medium of international closed-end companies and the company and the price of its shares have benefitted greatly this year through good investment management performance and the general strength in emerging markets. The level of assets under management has seen a strong recovery, which is being reflected in revenue flows and it is expected in due course will benefit the dividends received by your Company. Integrated Asset Management in September completed a transaction by which the company sold the bulk of its funds under management to its largest shareholder, the German private bank Sal. Oppenheim, in exchange for a cash consideration and the cancellation of the 28% of the equity held by Sal. Oppenheim. The company now has healthy cash balances, the ownership of an institutional broker and modest residue of funds under management. The directors of Integrated Asset Management have under review a number of options for the future of the company.


Inevitably weakness in the Japanese stock markets in the course of the year had an impact on the valuation of your Company's investment in IFDC Group S.A. However, there has been a significant recovery in the level of assets under management and your Board remain confident in the future prospects for the business. International Foreign Exchange Concepts Holdings, Inc, an investment manager specialising in the foreign exchange markets, in October 2008 exercised its option to buy back the equity held by your Company and AMIC now holds a $5m note repayable in June 2011 which is a major contributor to revenue. Lombardia Capital Partners, located in California, who are managers of large cap, mid cap and small cap equity portfolios invested in the United States stock markets, have also seen their assets under management recover with better markets and a consistently excellent investment management performance to almost $2 billion, the highest level during the period of your company's investment.


Two exits from investments were completed in the course of the year. MMCM Holdings Inc. was sold back to its management for a nominal amount, and Columbus Financial Services Limited was dissolved. Both investments had been held at a nil valuation for a number of years. The second payment of $0.54 million due following the disposal of your Company's interest in Hillview Capital Advisors Inc., a private wealth management company located in New York City, which was sold to the management of Hillview in December 2007, was received earlier than anticipated in September 2009 and your company has a continuing participation in the revenues of Hillview in respect of the years 2009, 2010 and 2011.


Your Board continues to take a cautious and prudent approach to the valuation of the investments in the portfolio, notwithstanding the recovery both in equity markets generally and the assets under management in the companies in which AMIC is invested.


Corporate developments


In September 2008 your Company announced that it had received notification from FX Concepts, Inc. of its intention to exercise the call option which it held in respect of the ordinary shares of FX Concepts Inc held by AMIC. Following receipt of the sterling amount of the consideration of approximately £5.7 million in October 2008 your Board consulted with major shareholders and its advisers to determine the most appropriate method for returning the proceeds of this sale to Shareholders in accordance with the strategy approved by Shareholders in October 2006. On 21 November 2008 a circular was sent to Shareholders detailing the arrangements for the return of 27p per share in cash, which was duly completed on 15 February 2009.


Your Company will continue the programme of buying back ordinary shares for cancellation as and when reasonable lines of shares are available at levels of discount which make such buy-backs of advantage to shareholders. Between 1 October 2008 and 30 September 2009 642,500 ordinary shares were bought back and cancelled at a cost of £0.32 million, equal to 3.38 % of the ordinary share capital in issue at the start of the financial year.



Financial results


Revenue profit before tax and minority interests for the year was £1.87 million (2008: £1.79 million), an increase of 4.47%. Profit after taxation increased by 9.39% to £1.50 million (2008: £1.37 million) and revenue return per ordinary share increased by 15.66% to 8.05p (2008: 6.96p). Your Board is recommending payment of a final dividend of 4.5p net per share (2008: 4.5p net per share), which, together with the interim dividend of 2.5p net per share (2008: 2.0p net per share) paid on 14 August 2009, will make a total payment of 7.0p net per share (2008: 6.5p net per share). The final dividend will be proposed at the Annual General Meeting on 4 February 2010 for payment on 9 February 2010 to shareholders on the register at the close of business on 15 January 2010. At 30 September 2009 gearing (being the proportion of interest bearing debt to total assets) stood at Nil (30 September 2008: 9.54 %).


Outlook


The major economic and financial problems throughout the world still persist and the impact of the credit crunch is likely to be felt for a considerable time to come. However, there are signs that the worst of the crisis is over and hopefully 2010 will confirm this. Provided the current level of stock markets is maintained the current year should be an easier one for the asset management industry, with improved revenue flow and a more receptive marketing environment. Your Board believes that the companies in which AMIC is invested are all well positioned to benefit from better market conditions and able to continue to survive in the event that there is a further downturn.


Your Board have the future of the Company and its management under regular view, with particular regard to the continuing reduction in total assets as investments are realised and cash returned to shareholders.


Charles Wilkinson

Chairman


3 December 2009

[envirovision] 30/3/2010 09:45

AMN this is a company that has always confused me, i've never been able to put a value on it so have avoided myself

[eeza] 30/3/2010 09:26

Have you got the Ticker, Ken?

[drdre] 30/3/2010 09:26

Hi Ken,

What is the ticker for the Asset Management trust you mention in 236 above?

Many Thanks,

DR

[kenmitch] 30/3/2010 09:07

SKYSHIP.

Thanks. The supermarket queue example applied to me as I sold the Prefs to buy more warrants, since when the Prefs have gone up, and the warrants have stuck. I've got all I want in this Company bearing in mind recent posts here and from Ptolemy, though I agree Moscow residential is irrelevant.

I sold the Prefs because they were stuck at the same price for so long that I (stupidly when I think about it!) decided that that would stay the case and that 12% a year, though good, was unlikely to be as good as I would get from the warrants.

I've decided to go for Asset Management Investment Trust instead. That one yields around 11% with the share around 60p, with the obvious advantage of no single company risk. I held it years ago for the divi and the share price doubled too, and I sold, and only recently decided to have a look again - with the shares now around the buying price first time round. It's the only Investment Trust investing in Asset Management, a couple here and also in other Countries. Last year they increased the dividend slightly. It's worth a look as an alternative imo for any who also don't want to risk more on RUSP and are looking for a high income investment.

[bench2] 29/3/2010 13:20

I am continuing to dig deeper . Debt drawn down is U$ 435m all from European banks ...no Russian banks providing finance! I will check whether the rents are paid in U$ which would help , other wise the currency mismatch is worse than i thought . Assets / Rent all in roubles ..... Debt/Pref in dollars and sterling

[skyship] 29/3/2010 13:15

Hi KEN - Ptolemy and I exchanged another couple of Posts, I think on the TR32 thread. It transpired that most of the property valuation decline to which he referred was a writedown on Moscow residential - hardly relevant here IMO.

I agree with Enviro - perhaps rest with whatever position you have; though if underweight then add some RUSP rather than the ords or warrants.

[bench2] 29/3/2010 12:57

The burden of the pref seems very heavy unless you are a big bear of sterling and bullish on the rouble . Nearly all single country REITS listed in the UK try to match their borrowings and assets in the same currency . So why pay such a huge coupon on the prefs and offer a scrip alternative every quarter . Something is not quite right with the capital structure . My guess a year out is some very attractive offer for the prefs to switch into ords ( not good for the ords ) . The recent director pref deals would imply only a small chance of decent divs on the ords . Any views welcome .

[envirovision] 29/3/2010 12:15

Well hectorp I suspect the prefs will be looked back in disbelief in a few years time that they were available with yeilds of 12 and even 13 percent. However by the same token selling RUS to bu RUSP at this minute must be like being stuck in one of those long supermarket queues with a really slow OAP at the front, so after being patient for a few minutes you swap to the till next door only to watch the original till clear.

[kenmitch] 29/3/2010 11:42

SKYSHIP.

I agree the Director buying of the Prefs is a confidence booster. My switching to more warrants has so far proved to be wrong, especially as some of the recent share selling could also be investors switching to the Prefs, and that could continue. And the warrants aren't going to go up much until the share price does. The Director buying of the Prefs could be because short term they don't expect too much upside from the shares, or it could be that they too find 12% yield irresistible.

But is it a case of "why WOULDN'T you buy RUSP with a yield in excess of 12%!"

You posted negative information from Ptolemy, and he replied to you with more negatives.Those are also reasons why I'm hesitant. What do you make of his comments?

I've searched for negatives about the Directors but can't find any, nor any information on the obscure Russian Trust he referred to that has supposedly seen its NAV tumble. Did you find out anything more following his posts, or just decide not to take his comments seriously?

I'm very tempted to buy the Prefs again, but his posts have created niggling doubts. I know nothing about Ptolemy but reading some of his other posts he seems well informed.

[hectorp] 29/3/2010 10:00

Sell the ords and buy the prefs then.
Seems thats where the profits are to be made.

[skyship] 29/3/2010 09:30

Certainly a show of confidence in the prefs from the directors; but then it IS a case of why WOULDN'T you buy RUSP @ a yield in excess of 12%!

[jonwig] 26/3/2010 18:04

freddie - no, as they are just AIM-quoted. But ...

They intend moving to the main market as soon as certain technicalities concerning the warrants are sorted out.

Also, the budget has a clause saying that consultations are progressing which could enable AIM-quoted shares to be ISA-able.

I wouldn't expect quick solution to either.

[freddie ferret] 26/3/2010 17:52

Is this ISAable?

[zangdook] 21/3/2010 09:26

kenmitch 221

Thx, I missed that.

[energiser01] 20/3/2010 18:17

Good to see the directors purchasing at these levels, prefs and warrants. They are obviously best placed to see the state and growth prospects for the business.

dyoe etc...