Vpc Specialty Lending In... Share Discussion Threads

[chucko1] 22/2/2024 10:28

Be that as it may, bought a few more. Decision as to whether to cover entirely at current rising level. Whatever the lunacy, as per aforementioned SLF/KKV/SSL, it can pay to look through it all and focus on the financial arithmetic, which is pretty strong.

It would take notable credit losses to derail this entirely, and the way the US economy is holding up implies a lower chance of this, as well as the credit loss history which is impressively slight.

This typo may just be a one-off (and happens elsewhere, occasionally), but helps to form an impression, amongst other events, they really do not give a damn anymore. It's difficult to see a route to them getting any performance benefits - the high water being way, way off, and so the fund is no more than a declining annuity from here. The reputational hit is mild and one they can explain away, I suppose.

[spectoacc] 22/2/2024 08:55

Amendment out 54 minutes after the market opened - surprised there's not even the most cursory of checks.

Edit - interesting how when you have to leave the safety of eg CGT, SGLN, ERNS, CSH2 to take a punt on something like VSL, now much more reluctant you are than if it was just cash.

[chucko1] 22/2/2024 08:32

This is getting SLF-esque!

Who would have thought?

[spectoacc] 22/2/2024 07:33

Perhaps not enough.

[grahamg8] 22/2/2024 07:31

OMG can't even get the RNS right. I take it the XD date is 29 February. How much are these guys being paid?

[tag57] 21/2/2024 00:08

I missed that wilwak. I don’t understand why the gross revenue has halved since 31st July next year. The loan repayments shouldn’t have had such an effect.

[chucko1] 20/2/2024 22:38

It may well not, but in terms of total return, it is a small part of the calculated IRRs that I have shown above.

In any event, to the extent that capital is returned, one would not expect a 2p on that part. (you can always buy more shares with the returned capital at the calculated IRR, which should be higher, anyway). But we still await how capital is actually going to be returned. Whatever, looking at this from a running yield point of view is only on yesterday's menu. It's in wind down - duh. Even if management said that the 2p would be paid until the end of 2024, or later, they also said that some capital would (or did they mean "could") be returned in Q4 2023. Right.

[wilwak] 20/2/2024 20:54

The last monthly factsheet shows the gross revenue declining now that investments and gearing are reducing.

The monthly fees are taking a good chunk of the gross revenue now. I’m not sure that 2p is still covered by income.

[tag57] 20/2/2024 18:07

Now on a 15%+ yield while the current 2p divi lasts

[waterloo01] 20/2/2024 17:15

I also sold some last year but am keeping a reasonable number, for the same reasons you have been discussing. Interesting that Capital one buying Discover financial. Not direct comparison but shows is interest in this end of the market

[chucko1] 20/2/2024 17:01

I only bought what I did having sold on the initial RNS. The later fuller description of what the heck December had been all about suggested they have been being almost ultra-conservative. But without explicit talking about the state of the eCommerce non-pure equity assets, and all comments being tangential at best, it's hard work gaining full confidence.

But hence the low, low price.

Remarkable that there was no explicit comment about how they have been repaying the credit facilities. It is as though they are thumbing their noses to the proletariat, or perhaps have grown to hate their investors. Dunno.

[octopus7] 20/2/2024 16:45

I hold a large amount (as proportion of my portfolio) of VSL and will probably buy more but not before either the next monthly update, or other announcement, in the hope of more clarity first.

[chucko1] 20/2/2024 16:39

I generally do not care who the seller is. Maybe the fellow(s) who bought the stuff I sold up above. Who knows?

Lot of opportunities, yes, and this is another one. GABI is better, but has yet to fully play out - and has better visibility. But this one will quite possibly have decent trading opportunities at some stage and the model awaits further data, and I await further instructions!

[spectoacc] 20/2/2024 16:14

If you're buying, who's the seller..

Not added here yet, but keeping an eye on it. I reckon few want to tie money up in this market on uncertain timescales, when there's so many ops around.

[chucko1] 20/2/2024 16:08

Slip sliding away!

But now, a breakeven if buying at 54.5p can tolerate a 100% investments write-off and a 12% per annum credit loss. Conversely, a 20% per annum write down and a 2% pa credit loss ends up with an IRR of circa 22%.

On that basis, I have been steadily buying back and have more to do. Likely I will end up with more than I sold the other day, although that depends on timing and how the next update or two pan out.

[neilyb675] 19/2/2024 15:00

54.80 - 55.60 (GBX) at 13:44:29
on Market (LSE)

[rogerrail] 08/2/2024 15:47

Yes you are right, had a mental block. I was looking at it from a capital gain angle which works out at 43.1% on top of which can be added any revenue distributions.

[cousinit] 08/2/2024 15:18

With the reported NAV now 83p I get the discount to be more like 30% at 58p share price

[rogerrail] 08/2/2024 14:50

Considering this is now on a discount to NAV of 41% at 58p this looks very attractive. The windup will be protracted for sure, but NAVs should also rise with interest rates falling over time. Unless there is another bombshell of bad news on NAV being held back for which the BOD would be lambasted, chances are you will get your money back fairly quickly with a surplus to look forward to from then on.

[solarno lopez] 08/2/2024 11:55

HMRC will have been approached to gain clearance on the distribution and whether it can be classed as capital or income in the hope of avoiding punitive tax

[redhill9] 08/2/2024 11:55

Brucie5,

VSL was plodding along paying a 2p per quarter dividend until one or two large shareholders became active in seeking to force a closing of the discount by distribution of the NAV. After a good deal of too-ing and fro-ing a liquidation was approved although (I think) many shareholders had mixed views on this and would have been happy for the status quo and the regular dividend payments to continue into the future.

[chucko1] 08/2/2024 11:55

Waterloo, indeed. At no stage have they firmly stated that they intend selling at these prices - which are automatic given the valuation methods agreed with their auditors. They explain how some of the key inputs have come to be in a world of little data. Frankly, this still cannot fully explain the drastic cut in valuation in December.

But on the other hand, they are talking about "liquidity" as though they will simply chuck out the equities at these low prices - to benefit, one must presume, the shoutier/larger shareholders?

[chucko1] 08/2/2024 11:49

It might pay to read and reread yesterday's full statement from VSL. Not the RNS with the brief details, but the delayed posting of the fuller announcement on their web site. Strangely, the link to it on the from page was not available for quite a few hours, but it could be found elsewhere within the site. Because I had no opportunity to scrutinise this, I was likely overly down on the share on my initial posting.

I suggested some possible IRRs at the new lower price of 60p. Given that I was able to buy some at 58p or lower this morning, I have bought a few back.

Just because this is a bit of a shambles, particularly from a communications point of view, does not mean that it is a basket case. In fact, it's fun.

Back to the first paragraph - why read and reread it? It seems to me that every clause was delivered with great care, essentially defending the whole eCommerce outcome but also trying to deliver a positive outlook. What they messed up on was explaining (they did not) how it came to pass that the eCommerce loss taken in December was so large. The reasons why are hinted at in the annual summary, which was not in the RNS that was out at the not normal 9.00am (not unique for their NAV, and although usually at 7.00am as expected, they have had a number of variations on this).

So they kicked out an appalling monthly statement without thinking what effect it might have. Maybe they simply could not give a damn.

[waterloo01] 08/2/2024 11:47

Smidge, look forward to the reply. As some have said earlier, my impression is that they are being prudent re NAV and are taking more mark to market prices, which are reflective on the realisable value.

[redhill9] 08/2/2024 11:47

Something I don't think they've explained unless I've completely missed it.

Last year they said (in a RNS announcement, I think?) that they expected the first capital distribution to be either late 2023 or Q1/2024. Then it was announced quite recently that any capital distribution had been delayed due to waiting on a response from HMRC.

I'd assumed they were holding cash for distribution pending this HMRC response but it now appears they've used all available cash to reduce debt earlier than required (although presumably having budgeted for paying the next 2p dividend).

It seems a contradiction to say they're waiting on HMRC for the go-ahead to distribute while having already spent the cash?