Marwyn Value Investors says that, for the year ended 31 December 2016, its NAV decreased by 11.91%, representing a negative 6.86% total return including distributions to shareholders, compared with a total return of 16.75% for the FTSE All-Share over the same period. They say that the reduction in NAV is primarily attributable to a decline in the share price of Zegona Communications and the fair value of Le Chameau Group (formerly Marwyn Management Partners) partially offset by a rise in the share price of BCA Marketplace.
Pursuant to the new distribution policy, quarterly interim dividends of 2.064p per ordinary share were made in January, April, July and October 2016. It is currently intended that a minimum dividend payment will continue to be made quarterly in January, April, July and October of each year.
Portfolio
In February and August 2016, an additional GBP4.4 million and GBP4.3 million respectively was invested in BCA. On 28 June 2016 BCA released its preliminary results for the 15 months ended 3 April 2016 (reflecting the 12 month trading period following the acquisition of the BCA Group), reporting GBP1,153.1 million of revenue and GBP98.5 million of adjusted EBITDA. On 19 July 2016, BCA announced the acquisition of Paragon Automotive. 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. In November 2016, BCA announced its half year results for the six months ending 2 October 2016. BCA reported that it continued to demonstrate strong performance, with significant growth in all key areas, underpinned by continued volume growth in core divisions and the development of long term customer relationships. Financial highlights included revenue of GBP909.8 million (+66.5%) as a result of acquisitions, vehicle buying and outsourced remarketing contracts and adjusted EBITDA of GBP64.5 million (+31.1%).
In August 2016, a further GBP4.5 million was invested in Zegona, taking the Company’s indirect beneficial ownership in Zegona to over 25%. The financial results for the full year of 2016 for Zegona were released on 6 April 2017. Telecable De Asturias S.A (“Telecable”), Zegona’s Spanish telecommunications operator, showed robust 2016 performance with continuing growth momentum. Financial highlights for Telecable included revenue of EUR138.5 million (+3.0%), EBITDA of EUR65.1 million (+0.2%) and cash flow of EUR39.6 million (+9.7%).
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.
During 2016, an additional GBP6.2 million was invested in Le Chameau comprised of GBP5.7 million in debt and GBP0.5 million in equity. On 14 July 2016, Le Chameau announced that it was seeking shareholder approval for it to delist from AIM. A general meeting held on 10 August 2016 duly approved the cancellation of its shares. The shares were delisted from AIM on 18 August 2016.
On 29 September 2016, the Company’s Manager, Marwyn Asset Managemen authorised a subscription for GBP10 million of new ordinary shares in Safe Harbour Holdings plc (initially established as Marwyn Specialty Chemicals plc) to provide due diligence and operating capital prior to a subsequent acquisition. Safe Harbour is an unquoted company focused on creating value through the acquisition and subsequent development of target businesses in the B2B distribution sector. Safe Harbour intends to acquire and operate businesses initially with an enterprise value in the range of GBP500 million to GBP2 billion.
On 22 March 2017, the Company announced the launch of Wilmcote Holdings, a new management platform established in partnership with Adrian Whitfield, who was appointed as Wilmcote’s CEO. Adrian is an experienced executive who recently spent nine years successfully implementing a turnaround and growth strategy at Synthomer plc, the UK listed (FTSE-250) specialty polymer operator. Over Adrian’s nine year tenure, he more than doubled operating profits and increased Synthomer’s market capitalisation from c.GBP300 million to over GBP800 million. Synthomer (formerly known as Yule Catto & Co.) is a global manufacturer of specialty polymers for the coatings, construction, textiles, paper and healthcare industries. Wilmcote is focused on creating value through the acquisition and subsequent development of target businesses in the downstream and specialty chemical sectors. Wilmcote intends to acquire and operate businesses initially with an enterprise value in the range of GBP500 million to GBP2.0 billion. Marwyn Asset Management authorised a subscription for GBP10 million of new ordinary shares in Wilmcote to provide due diligence and operating capital prior to a subsequent acquisition.
MVI : Marwyn’s poor 2016 down to Zegona and Le Chameau