• by  • July 8, 2014 • 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 2014 was 160.8p (31 May 2014:157.29p per share). The proportion of the Fund’s NAV at 30 June 2014 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
    Sutton Harbour Holdings plc 11.6 29.20%
    Tribal Group plc 10.2 4.60%
    4imprint Group plc 9.8 4.20%
    AER Lingus Group plc 9.8 1.20%
    Leaf Clean Energy Company 9.6 15.90%
    Thorntons plc 9.5 10%
    Juridica Investments Ltd 8.9 4.50%
    API Group plc 8.4 11.60%
    TT Electronics plc 8.1 1.90%
    NBNK Investments plc 8 25.40%
    Total of ten largest holdings 93.9
    Other investments 65.5
    Cash and accruals 1.4
    Total NAV 160.8

    Investment Adviser’s quarterly commentary on the portfolio

    Over the quarter to 30 June 2014, NAV per share declined by 0.88%. Over the

    2014 fiscal year, NAV per share rose by 20.8% or 21.11% including the dividend

    paid in August 2013. The Fund’s average cash position over the fiscal year has

    been 13.7%, implying a return on the investment portfolio of 25.72% per annum.

    The top three contributors to NAV growth over the quarter to 30 June 2014 were

    Hurricane Energy plc (+2%), NBNK Investments plc (+1.6%) and Sutton Harbour

    Holdings plc (+1.4%). The three main detractors have been Thorntons plc

    (-2.1%), Leaf Clean Energy Company (-1.6%) and Johnston Press plc (-1.4%).

    Over the quarter to 30 June 2014, the Fund disclosed holdings in NBNK

    Investments plc, Johnston Press plc and Juridica Investments Ltd.

    During the quarter, the Fund participated in Johnston Press plc’s refinancing

    exercise. Positions exited, included Connect Group plc (previously known as

    Smiths News plc) and Norcros plc, realising profits of £2.7m and £3.9m


    Sutton Harbour Holdings plc (“Sutton Harbour”)

    Durng the quarter, Sutton Harbour reported a 5.2% increase in NAV to 40p pe share.

    The Fund is confident in the leadership of the new Chairman, Graham Miller, who

    is addressing the key issue of asset efficiency.

    Over the quarter, Sutton Harbour’s share price increased by 24%.

    Thorntons plc (“Thorntons”)

    The Fund is now the largest shareholder in Thorntons and retains the view that

    the company’s operating margins have the potential to increase very

    significantly and that current market estimates fail to reflect this.

    Moreover, international sales can provide an additional channel for top-line

    growth as the business continues to benefit from its brand recognition. The

    Fund believes that the profit trajectory will enable the company to make

    dividend distributions as free cash flow generation increases.

    Over the quarter, Thorntons’ share price was hit by disappointing third quarter

    trading. However, the full year trading statement released on 3 July 2014

    reported fourth quarter double digit revenue growth in UK commercial. As a

    result, the share price recovered by 9 % following the announcement.

    Over the quarter, the share price of Thorntons declined by 28.3%.

    NBNK Investments plc (`NBNK’)

    Over the quarter, the Fund increased its stake in NBNK to 25.11%. The Fund has

    acquired more than 25% of the issued share capital of NBNK at 15% below the

    value of NBNK’s reported net cash.

    In 2011, NBNK competed against the Co-op to acquire 631 Lloyds TSB and

    Cheltenham & Gloucester branches, in earlier rounds. However, when the Co-op

    failed to complete, Lloyds went ahead with plans to float the business,

    culminating in the recent IPO. Since failing to buy the branches, or find

    another banking business to acquire, NBNK’s operations have been scaled back

    and costs reduced to a minimum.

    The Fund has engaged with the current board of NBNK and with founding director

    Lord Levene. The Fund is fully supportive of the board.

    Over the quarter, NBNK’s share price increased by 43.8%.

    AER Lingus Group plc (“AER Lingus”)

    The Expert Panel investigating a resolution of the industrial relations issues

    connected to the Irish Airlines pension fund put forward a proposal to address

    the fund’s deficit. This was subsequently accepted by the company.

    Over the quarter, trading has been negatively affected by the threat of strike

    action. Whilst the Expert Panel proposal implies a cost higher than

    anticipated, in our view it is a step forward towards a final resolution of

    this labour unrest.

    Resolution of the above, in addition to clarity surrounding pressure on Ryanair

    to dispose of its 29.8% stake, should prove near term catalysts for realising

    shareholder value.

    The company retains €420 million of net cash. Its market capitalisation is €

    775 million.

    The share price of AER Lingus declined by 11.8% over the quarter.

    API Group plc (“API”

    During the quarter, API announced its full year results, demonstrating further

    strengthening of the company’s financial position. API closed the fiscal year

    with year on year revenue growth of 2% and a net cash position for the first

    time in fifteen years (2013: net debt of £2.6m). The company proposed a final

    dividend of 1.3p per share, giving a total of 2p for the full year. Strong

    performances have been maintained from Laminates and Foils Europe and

    restructuring of UK foils has been successfully completed.


    The Fund remains supportive of management’s actions and is continuing its

    engagement with the board over its composition and over the quantum of the


    Over the quarter, API’s share price declined by 2%.

    Leaf Clean Energy Company (“Leaf”)

    Mark Lerdal, the Executive Chairman proposed by the Fund, has carried out his

    first review of Leaf Clean’s portfolio. As a result, in June, Leaf Clean

    announced that MaxWest would not receive additional funding and that its value

    would be written down to nil. Having met with the board of MaxWest as part of

    our due diligence, we were unsurprised at this outcome. However, we remain

    confident in the realisable value of several of Leaf’s assets, including

    Invenergy. Moreover, we note the new board’s decisiveness and are confident in

    its ability to realise Leaf’s investments in an orderly manner and return all

    proceeds to shareholders.

    Over the quarter, Leaf’s share price declined by 29.2%.

    Hurricane Energy plc (“Hurricane”)

    On 25 June 2014, Hurricane announced that it had successfully completed the

    testing phase of its key horizontal appraisal well in the Lancaster fractured basement oil discovery West of Shetland. The flow rate far exceeded expectations and should significantly de-risk the company’s acreage across this basin.

    Production tests achieved a sustainable oil flow rate of 9,800 stock tank

    barrels of oil per day, the established oil flow rate being constrained by the

    capacity of the surface test equipment. The Lancaster Field, which is 100%

    owned by Hurricane, has estimated 2C Contingent Resources of 207 million

    barrels of oil equivalent (MMboe).

    Hurricane’s share price increased by 131% over the quarter.

    Transactions in Shares

    Over the quarter, the Fund bought back 1,440,000 shares at an average price of

    149.09p as part of its previously announced buyback policy.

    On 5 June 2014, the Fund sold an aggregate of 1,151,656 Treasury shares at a

    price of 158p per share, which equated approximately to the then net asset

    value of the Fund per share, in consideration for the acquisition of 5,703,912

    ordinary shares in NBNK Investments PLC (“NBNK”), representing 10.61% of the

    issued share capital of NBNK.

    Cash Resources

    The Fund is currently almost fully invested as a result of additional

    investments in existing holdings and a number of new investments in positions

    with strong activist potential.


    The board has declared an interim dividend of 0.5p per ordinary share in

    respect of the year ended 30 June 2014. The dividend will be paid on 15 August

    2014 to shareholders on the register (the record date) on 18 July 2014. The

    shares will be quoted ex-dividend on 16 July 2014.