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 31 March 2015 was 148.27p (28 February 2015: 150.31p per share).
The proportion of the Fund’s NAV at 31 March 2015 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|
|AER Lingus Group plc||27||0.03|
|Leaf Clean Energy Company||11.2||0.30|
|STV Group plc||10.3||0.07|
|Sutton Harbour Holdings plc||9.2||0.29|
|Dart Group plc||7.1||0.01|
|4imprint Group plc||7||0.02|
|Hurricane Energy plc||6.2||0.07|
|NBNK Investments plc||4.6||0.28|
|Johnston Press plc||4.5||0.03|
|Total of ten largest holdings||94.1|
|Cash and accruals||14.4|
Investment Adviser’s quarterly commentary on the portfolio
Over the quarter to 31 March 2015, NAV per share was down 2.9 per cent. The top
three positive contributors to NAV growth over the quarter to 31 March 2015
were 4imprint Group plc (1.0 per cent contribution), API Group plc (0.9 per
cent) and Dart Group plc (0.4 per cent). The three main detractors have been
Hurricane Energy plc (-1.2 per cent), Thorntons plc (-1.1 per cent) and NBNK
Investments plc (-1.2 per cent).
Over the quarter to 31 March 2015, the Fund disclosed an increase in its
positions in Dart Group plc, Leaf Clean Energy Company and STV Group plc, and a
reduction in its holdings in Juridica Investments Ltd, Hayward Tyler Group plc
and Tribal Group plc.
Aer Lingus Group plc (“Aer Lingus”)
Over the period, negotiations continued between IAG and the Irish government
(25.1% shareholder), following IAG’s conditional bid offer of €2.55 per share.
We await a final decision. The Fund is minded to follow the Aer Lingus board’s
The conditional bid from IAG has reinforced the Fund’s initial view that Aer
Lingus is of clear strategic value to other airlines, in part due to its Dublin
and Shannon US border pre-clearance, driving growth in transatlantic revenues,
and its 23 pairs of Heathrow Airport landing slots.
API Group plc (“API”)
During the quarter, a 60p per share bid was made for API by its largest
shareholder, Steel Partners. Crystal Amber has supported API through
significant improvements to its business over recent years. In particular, the
Fund expressed its views about API’s board composition and how it might support
management most effectively. Following our engagement with the company, API
announced that Richard Wright, chairman of the board, would be stepping down.
On 17 March 2015, at the request of Steel Partners, API’s board applied to
cancel the company’s listing on AIM with effect from 17 April 2015. Sufficient
acceptances were received for the Steel Partners bid and the offer was formally
accepted on 19 March 2015. The Fund has therefore exited its position and
realised a profit of £0.9 million.
Thorntons plc (“Thorntons”)
During the period, Thorntons reported mixed results for 2H2014, with strong
retail sales but weaker Fast Moving Consumer Goods sales, as a result of
ongoing underperformance from two key supermarket accounts. The Fund believes
the need for operational improvements, together with enhanced customer
relationships, will be addressed and remains confident in Thorntons’ brand
value, growth prospects and strategic value and continues to engage with the
board of Thorntons on these matters.
Dart Group plc (“Dart”)
During the quarter, the Fund began to acquire a holding in Dart, a leisure
travel, distribution and logistics group, on the view that currency and
disposable income tailwinds would benefit Dart’s customer base in the North of
England. The Fund’s view of Dart as a quality company delivering impressive
growth was reinforced by an encouraging trading update in March, with 2015
already over 50% booked, and the holding was increased as a result. The
business has built up a solid cash position, now standing at c. £254 million
net cash, giving an EV of just £187 million at current levels. In the year to
March 2014, Dart reported pre-tax profits of £42.1 million.
Leaf Clean Energy Company (“Leaf”)
Over the period, the Fund took advantage of Leaf’s 43% share price discount to
NAV, and increased its holding to 29.9%. The share price ended the quarter at
27.5p per share (NAV at c. 52.6p), with net cash at 4p. Leaf’s largest
investment is in Invenergy, North America’s largest independently owned wind
power generation company. Invenergy continues to execute on its capacity
expansion plans and development initiatives across its core markets. Leaf is
currently evaluating options for monetising its investment in this
well-performing asset. Leaf’s investment in Invenergy represents more than half
of the value of the portfolio. The current share price values the remainder of
Leaf’s portfolio at a negligible amount, which we do not believe is justified.
Plus500 Ltd (“Plus500”)
During the quarter, Plus500 reported record high 4Q14 revenues. The Fund
believes the outlook for Plus500 remains positive and sees further upside from
continued organic growth in the business. The Fund remains engaged with the
Plus500 board on complementary product offerings.
STV Group plc (“STV”)
Over the period, the Fund increased its holding in STV following very
encouraging results, which included a quadrupling of the dividend and a public
commitment to grow EPS by at least 10% per annum over the next three years.
Placing of new ordinary shares and new dividend policy
On 23 January 2015, Crystal Amber announced it had received firm commitments
from certain shareholders and new investors to subscribe for new Ordinary
shares for a gross consideration of c. £32.3 million. This represents an
enlargement of approximately 28 per cent of the Company’s then issued share
capital. The Placing Shares commenced trading on AIM on 27 January 2015.
The Fund’s new dividend policy will aim to distribute income and realised gains
from investments. The Board announced that it intends to recommend a dividend
of 5p per share for the 2015 calendar year, which, on the basis of the NAV at
31 December 2014, would represent a dividend yield of approximately 3.3 per
Transactions in Shares
Over the period, the Fund bought back 3,027,524 Ordinary shares at an average
price of 150p per share as part of its previously announced buyback programme.