Marwyn Value Investors reports that, over the six months ended 30 June 2016, its NAV decreased by 29.4p to GBP2.0978, a fall of 12.29%, representing a -9.95% total return assuming dividend reinvestment, compared with an increase in value of the FTSE All-Share of 2.07% over the same period. The reduction in NAV per ordinary share over the period is primarily attributable to a decline in the share prices of Zegona Communications plc and Marwyn Management Partners plc. The share prices of Zegona Communications plc, BCA Marketplace plc and Marwyn Management Partners plc were negatively affected by the market turbulence following the referendum result regarding the UK’s membership of the European Union on 23 June 2016.
The new distribution policy approved at the December 2015 EGM has been implemented, alongside a special dividend of 2p per share which was paid in January. Pursuant to the new distribution policy, a quarterly interim dividend of 2.064p per ordinary share was made in January, April and July 2016 and a minimum dividend payment will continue to be made quarterly in January, April, July and October of each year.
On 29 September 2016, Marwyn Asset Management Limited authorised a subscription for GBP10 million of new ordinary shares in Marwyn Specialty Chemicals Plc. The cost of this investment attributable to the Company represents approximately 5.8% of the Company’s NAV (measured as at 16 September 2016). Marwyn Speciality Chemicals is a private company focused on creating value through the acquisition and subsequent development of target businesses in the specialty chemical and industrial sectors. It intends to acquire and operate businesses initially with an enterprise value in the range of GBP250 million to GBP1.5 billion. This capital raise of GBP10 million will provide the company with due diligence and operating capital prior to an initial platform acquisition. Marwyn Speciality Chemicals intends to seek a public quotation or listing either before or at the time of completing its initial platform acquisition. James Corsellis and Mark Brangstrup Watts, the founders of the Marwyn Group, are both directors of Marwyn Speciality Chemicals. They have identified a Chief Executive Officer for the company with specific sector experience who will join at a future date.
In February 2016, an additional GBP4.4 million was invested in BCA Marketplace plc (“BCA”). On 28 June 2016 BCA released its preliminary results for the 15 months ended 3 April 2016. The business continues to perform strongly, reporting GBP1,153.1 million of revenue and GBP98.5 million of adjusted EBITDA. The Manager purchased a further 2.4 million shares for a value of GBP4.3 million after the period end. On 19 July 2016, BCA Marketplace plc, announced the acquisition of Paragon Automotive for an initial enterprise value of GBP105 million with potential earn-out payments of up to GBP30 million, subject to certain financial and market conditions. Paragon is a leading UK operator in the provision of outsourced vehicle services for automotive manufacturers and major fleet operators, including rental, leasing and corporate fleets. The acquisition will enable BCA Marketplace plc to provide a one-stop-shop for the handling of vehicles throughout their life-cycle, with the enlarged group providing services to over 1.5 million cars per annum in the UK alone. Paragon generated GBP158 million of revenue and GBP11 million of EBITDA in the year to March 2016.
On 20 June 2016, Gloo Networks plc announced the appointment of Bill Davis as CFO. Bill has over 20 years’ experience in corporate finance leadership positions in technology companies, having previously served as CFO of Blackboard Inc, the education technology provider, and prior to that as CFO of Allscripts Healthcare Solutions, where he participated in the transformation of the business achieving a compound annual growth in revenue of c.25% and executing $2.4 billion in M&A.
The financial results for the first half of 2016 for Zegona Communications plc’s Spanish telecommunications operator, Telecable De Asturias S.A. showed strong performance driven by progress in the business and mobile segments and a consumer price rise. Financial highlights included revenue of EUR69.2 million (+ 4.4%), EBITDA of EUR33.3 million (+1.9%) and cash flow (defined as EBITDA minus Capex) of EUR20.4 million (+10.6%). , A further 3.9 million shares in Zegona Communications plc were bought after the period end for GBP4.5 million.
A further 23.8 million shares in Marwyn Management Partners plc were bought after the period end for GBP0.5 million.
MVI : Marwyn invests in Marwyn Speciality Chemicals