Shires Income Share Discussion Threads

[essentialinvestor] 20/12/2023 15:42

With today's UK inflation read and Shires' significant slug of UK preference shares and smaller company holdings, £2.40-£2.45 should be very achievable (with a fair wind) over the next 12 months, coupled with the 6% + dividend income on top.

IF we get a few weaker days (may not happen) intend to add further here.

[aleman] 19/12/2023 16:14

I think the aim of going for a US listing when the time was right was first mentioned 2 years and 2 months ago at DEC's Capital Markets Day. It's estate of wells has grown since then.

[essentialinvestor] 19/12/2023 14:31

DEC has been the largest owner of US wells for 2 years and only now do they have an OTC listing stateside.

To me that appears a tad unusual?.

In any case to paraphrase Mr Livermore - we can all hold opinions but the daily stock price is truth.

[aleman] 19/12/2023 14:07

DEC had $70m of assets and $43m debt as it arranged its AIM float to raise $60m at the start of 2017. It was a tiddler at the time so an AIM float would not seem unusual.

[essentialinvestor] 19/12/2023 13:18

On a very rough calculation, DEC, at the current price (time of post) is approx 1.75% of total portfolio assets, so not that significant fortunately. Their dividend will represent a higher % on the total income side, however with cash to invest they could buy a few more pref shares, if needs be.

[essentialinvestor] 19/12/2023 12:55

Spec, here is a question.. why would the largest owner (following the 2021 acquisition) of older gas and oil wells in the US, list their shares (firstly on AIM) In the UK...?.

That for me was a red flag. Others may see it differently.

Shires had a great opportunity to exit previously.

[spectoacc] 19/12/2023 12:39

Not sure why DEC has gone off a cliff, just the US listing?

[essentialinvestor] 19/12/2023 09:56

As mentioned about Diversified Energy (one of their larger holdings) last week ..I would not touch that with a..

Oh my.

[essentialinvestor] 15/12/2023 13:49

Ah, not sure about that!, UK macro may well disappoint in the new year - although listening to the November update from Iain Pyle, he considers the Trust to be fairly cautiously positioned.

I trimmed a couple of single stock positions this morning, including Serco. Will have a look back here on the FY announcement. Luck to holders.

[citytilidie] 15/12/2023 13:35

Good timing EI. 6p jump of NAV today to 249 from 243. Re-rating has to be due soon, especially as fixed income shares have risen a little again today.

[essentialinvestor] 15/12/2023 08:39

Added another few this morning, that's my lot now. Intended as a longer term holding. Hopefully it's a reasonable(ish) 2024, let's see.

[essentialinvestor] 14/12/2023 20:19

Yes, £2.186 for most.

Will e-mail about the discount, sometimes gets a scant response, but the lead Manger at BNKR today sent me a detailed reply and also offered a telephone call to discuss further, I hold a few of those tbf.


Would much prefer Diversified Energy was dumped, would not touch that with...and they also missed a great opportunity to exit.

There may be an overhang on some of those who rolled over in to Shires and have decided to now exit. Might be available lower down, as mentioned.

[citytilidie] 14/12/2023 19:23

I take it that those were your 5k’s just before the close EI. I thought it was just me that had a holding like that, which is why I was not happy with the reasons for the merger and the huge spike in the discount rate following the announcement. Infuriating when things happen out of your control. Happy to hold though, and hoping for a slight cut in interest rates sooner than later.

[essentialinvestor] 14/12/2023 17:07

I don't forsee major buy backs And ASCI a lack of liquidity issue, trust simply not big enough.

Yield at the current price is around 6.5%. Shires traded at the premium for some of Q1 - tbf before the spring/summer major gilt yield moves.

I added over 35,000 shares today, so there are plenty on offer - multiple trades, so a bit fiddly.

Might be an opportunity lower down, who knows etc


AEI trades near NAV, less than - 1.5% atm, arguably Shires 'should' be a lot closer to that % discount.

[aleman] 14/12/2023 16:46

Thanks. I looked there first but it turns out to be in an odd place which I missed - they put the bit about latest gearing and cash in the merger bit rather than the section entitled "gearing"!

Aren't buy-backs what got ASCI into trouble? It enhances EPS but then means overheads are covered by a smaller invested pool and so lower investment income, meaning costs eat into those said earnings. Trusts usually argue that issuing shares at a premium reduces unit overheads and benefits holders with marginally higher income per share. I don't think it can work both ways.

[essentialinvestor] 14/12/2023 14:39

Their gearing is also on fixed income
rather than equity holdings. A turn in the UK rates cycle should be supportive on those through next year - barring something left field.

[essentialinvestor] 14/12/2023 14:36

* From yesterday's H1 update:

"...Company's gearing ratio has fallen as a result of the combination, from 23.1% at 30 September 2023 to 13.5% at the time of writing, which includes GBP4.4 million of cash awaiting investment..."


There's little point looking at the October fact sheet.

[aleman] 14/12/2023 14:29

Where do you get £4m cash from? The latest factsheet shows £0.8m cash and £19.0m debt, which makes cash look a bit lowish, if anything.

[essentialinvestor] 14/12/2023 13:57

At a guess they will restart the buy back because of the £4 Million holding in cash.

They can currently buy back at an approx 10% plus NAV discount and save on the dividend payout while those shares are held in treasury. If the shares trade Above NAV in the future then reissue at a premium.

[essentialinvestor] 12/12/2023 20:04

Had some last week just over £2.20.

[citytilidie] 12/12/2023 13:27

Plus gearing is now at 13% rather than 23% in November. Time for the 10% discount to reduce in my eyes, back to 3-5% as it was before the “merger”

[essentialinvestor] 08/12/2023 15:45

NAV discount looking attractive again ?.

[essentialinvestor] 15/9/2023 13:43

% discount has been noticed.

[essentialinvestor] 15/9/2023 13:16

I doubt they are in a position to do that with gearing, which is over 20%.

Gearing is on the fixed income/preference shares side rather than ordinary equity holdings.

[citytilidie] 15/9/2023 11:59

Shires have been running a share buy back programme for a couple of weeks and have been buying a paltry 6k to 20k back a day. With the current discount at an all time high, they should be buying back hundreds of thousands if they are able by going into the market rather than buying small amounts electronically on SETs. I don’t think they will have this opportunity for long, and large purchases would help to reduce the discount.