• by  • July 4, 2013 • Crystal Amber

    CRYSTAL AMBER FUND LIMITED (“Crystal Amber Fund” or the “Fund”)

    Monthly Net Asset Value

    Crystal Amber Fund announces that its unaudited net asset value (“NAV”) per share on 30 June 2013 was 133.05p (31 May: 134.43p per share).

    The proportion of the Fund’s NAV at 30 June 2013 represented by the ten largest holdings, other investments and cash (including accruals), was as follows:

    Top ten holdings Pence per share Percentage of investee equity held
    TT Electronics plc 13.2 3.10%
    Tribal Group plc 12.9 4.40%
    Norcros plc 12.7 7.30%
    API Group plc 11.2 11.50%
    Sutton Harbour Holdings plc 11.2 28.60%
    Devro plc 8.4 1.00%
    4imprint Group plc 7.9 3.20%
    Smiths News plc 6.5 1.30%
    Northgate plc 5.5 0.70%
    Thorntons plc 4.7 4.30%
    Total of ten largest holdings 94.2
    Other investments 28.9
    Cash and accruals 10
    Total NAV 133.1

    Investment Adviser’s quarterly commentary on the portfolio

    Over the quarter to 30 June 2013, NAV per share increased by 3.8%. Over the last six months, NAV per share rose by 10.8% and over the last 12 months, NAV per share increased by 26%. Total returns over the year including dividends were 26.6%.

    The top three positive contributors to NAV performance over the last three months have been Tribal Group (1.7% contribution), API Group (1%) and Thorntons

    (0.8%). The top three detractors have been TT Electronics (-1.9%), Devro (-1.7%) and Smiths News (-1.1%).

    Tribal Group plc

    Tribal Group’s share price increased by 19% over the quarter.

    The company is gaining increased recognition from investors for its growth potential in international markets. A well-attended investors’ day highlighted Tribal’s deep knowledge of educational institutions’ needs and the products it has developed to meet them, as well as the on-going innovation at work.

    The company appears to be on track for its target to double earnings within the three year period to December 2014, and yet market estimates remain 24% below Tribal’s target.

    API Group plc

    API Group’s share price rose 19.4% over the quarter, partially recovering the negative 23% performance seen in the first three months of the year, triggered by the end of the sale process.

    The Fund supported the decision to terminate the process and has since engaged with the company over the initiation of a dividend payment, the need to set strategic targets for the business and the composition of the board. In May, the company reported good progress with earnings up 36% year on year, and announced its intention to pay a meaningful progressive dividend starting in its next interim results. In our view, the cash generative nature of the business should allow a generous pay-out rate. On market estimates, a twice covered dividend would put the shares at a 6.4% yield.

    Norcros plc

    Norcros is up 3.5% over the period. The Fund continued its engagement with the company over its strategic options with the view that some assets are not fullyreflected in the group’s valuation.

    At the time of the release of its preliminary results, Norcros announced new strategic targets to double revenues by 2018, to maintain overseas revenues at approximately 50%, and to sustain a RoCE over the cycle between 12% and 15%.

    Sutton Harbour Holdings plc

    Sutton Harbour’s share price has closed the three months period flat.

    At the time of the release of its preliminary results in June 2013, the company announced the renewal of its debt facilities and a small revaluation of its property holdings that left its NAV per share at 38p (from 38.3p at September 2012). Nevertheless, the shares trade at a 38% discount to its NAV.

    Operationally, the company is focusing on its harbour assets, as the university and the city council move their attention to the seafront, supporting the company’s “Destination Sutton Harbour” strategy. Putting to use the East Quays site, no longer reserved for the BBC, could be a near term catalyst to increase returns on assets. In the next year, the company will start seeing the income from berth rental in its new King Point Marina and from new large vessel berths in Sutton Harbour.

    Following discussions with the board, the Fund indicated its preference for board renewal. The company recently announced that it has started the search for a successor to the present Chairman.

    TT Electronics plc

    TT Electronics share price declined by 13% over the quarter with the continuing difficult outlook for auto and industrial production combining with a recent sell off in many cyclical stocks. It has a £242 million market capitalization and had £47 million of net cash at 31 December 2012.

    At its June investor day, TT announced a £30 million investment to improve productivity and growth, which is planned to deliver approximately £8 million annual savings. We support this initiative and have communicated the importance of internal restructuring and cost savings in advance of any higher risk expansion acquisitions, which could add complexity to TT’s production footprint. Our view is that, if successfully executed, it should be able to deliver in excess of the announced savings estimate, leaving TT’s 8-10% margin target well underpinned.

    Share buy-back

    Over the quarter, the Fund has purchased 1,787,000 of its own shares at an average price of 126.76p per share, which are held as treasury shares together with the 2,705,000 shares purchased previously. The buy-back has had the effect of reducing the share price discount to the Fund’s net asset value, which at 30 June 2013 was 0.8%.

    Cash resources

    Over the quarter, cash and accruals decreased from 20.3p per share to 10.0p per share, as the Fund took advantage of recent share price weakness in holdings in which it is currently accumulating positions.


    The board has declared an interim dividend of 0.5p per ordinary share in respect of the year ended 30 June 2013. The dividend will be paid on 20 August

    2013 to shareholders on the register (the record date) on 19 July 2013. The shares will be quoted ex-dividend on 17 July 2013.


    Further to the Fund’s announcement of 23 April 2013, the board confirms that a potential secondary issue of shares continues to be under consideration. A further announcement will be made in due course. For the avoidance of doubt, any new shares issued after the 30th June will not participate in the interim dividend.