Dunedin Enterprise has reported a -0.4% total return on net assets for the year ended 31 December 2014. However the share price fell as the fund’s discount widened and the return to shareholders was -15.8%. The discount stood at 33% when they published these figures. They are paying a final dividend of 4.7p.
The fund made one new investment during the year. EV Offshore designs, manufactures and deploys cameras which are designed to diagnose and analyse problems in oil and gas wells. It offers a highly specialist service, providing skilled engineers to operate its cameras in the harshest of drilling conditions. The high quality video and still images produced by EV’s cameras allow oil and gas well operators to identify problems and design appropriate solutions. This rapid identification of problems provides operators with significant savings. EV is based in Aberdeen and Norwich, with R&D and manufacturing facilities in Norwich. It has a further presence in 17 worldwide locations across Northern Europe, Canada, USA, West Africa, the Middle East, Asia and Australasia. The business currently employs 100 staff. They paid £7.1m for the company – no comment was made on the likely impact of the falling oil price on the business which was acquired in June 2014.
The main hit to the net asset value during the period was the sale of, software business, Trustmarque at a loss of £2.7m. They say Trustmarque discovered it had accounting system issues which resulted in a material reduction in maintainable earnings. This led to a significant reduction in available bank funding and a trade sale of the business. Dunedin Enterprise also had to write down the value of their investment in Red, the IT staffing business, due to poor trading. They injected an extra £300k into the business to fund its working capital requirement.
On the plus side, they wrote up the values of CitySprint, the same day delivery business, and Weldex, the crawler crane hire company, both of which are trading well.
DNE : Dunedin Enterprise hit by discount widening