In QuotedData’s morning briefing 1 November 2021:
- Murray Income (MUT) has entered into a three-year multi-currency revolving credit facility of £50m with The Bank of Nova Scotia, London Branch, which replaces the Company’s £20m facility with Scotiabank Europe PLC. Under its terms, MUT has the option to increase the level of the commitment to £70m at any time, subject to the identification by the manager of suitable investment opportunities and the lender’s credit approval. The directors consider the increased facility to be appropriate to reflect the approximate doubling of the size of the company following the merger with Perpetual Income and Growth in November 2020. The equivalent of £6.3m has been drawn under the facility, in a combination of currencies.
- The Apax X fund – which which Apax Global Alpha (APAX) is a limited Partner – has signed a definitive agreement to acquire American Water Works Company’s Homeowner Services Group, a leading provider of various warranty protection programs and other home services. The transaction is expected to close in Q4 2021, subject to customary closing conditions. On a look through basis, AGA is expected to invest approximately €18m in the company, depending on final closing arrangements. The Apax funds, in partnership with HSG’s leadership team, will look to build on its success to date by driving both organic and inorganic growth, with a particular focus on digital acceleration opportunities.
- Downing Strategic Microcap (DSM) has published its half-year report for the six months to 31 August 2021. During the period, it returned 15.5% in NAV terms while its discount narrowed from 18.2% at the end of February to 11.3% at the end of August. The board notes this level is wider than it had hoped and will aim to ‘get the discount to single figures in a healthy market’. The manager said: ‘It has been another volatile six months in markets, as we emerged from another lockdown. However we have been proud of the way our investments have performed, typically having made themselves leaner and more efficient. Some have taken the opportunity to make timely and what look like well priced acquisitions. As we look ahead we note that we have some ‘Covid’ laggards, where share prices have not yet caught up with the improved earnings and operational efficiencies of the underlying businesses. We expect this will ultimately be reflected in valuations – perhaps as we go through the next set of earnings results. We are not complacent – our attention is firmly on the headwinds that face our investments – inflation, interest rates, and supply chains do vex our minds. A defensive place for investment, we believe, continues to be in small, inexpensive cash generative businesses of which this portfolio has plenty. We believe that there remains significant pent-up recovery in a number of our holdings, and these are complemented by core positions in well priced and strongly growing enterprises. Meanwhile, having 12% of the NAV in cash (at the time of writing) provides an opportunity to capitalise on market turbulence and any mispricing that tends to accompany market volatility.’
- Crystal Amber (CRS) has posted its final results for the year to 30 June 2021, during which time its NAV grew by 38.5%. The improvement in NAV from the 2020 lows of below 90p has continued in line with the broader economic recovery from the COVID-19 pandemic. The chairman said while infection rates in the UK remain relatively high, it is to be hoped that the ongoing vaccination programme will be sufficient to maintain growth into 2022. Meanwhile over the year under review, CRS bought back 8,249,567 of its own shares at an average price of 83.96 pence as part of its strategy to limit any substantial discount. Over the year, its shares traded at an average month-end discount to NAV of 24.7% while at the year end, the shares traded at a discount of 26.1%. CRS declared an interim dividend of 2.5 pence in December 2020 but did not declare an interim dividend in July 2020 due to the COVID-19 pandemic. CRS will hold a continuation vote at its next AGM, to be held at 10am on 22 November. It will require a 75% majority for continuation.
- Dunedin Enterprise (DNE) has proposed to return up to £26m to shareholders by way of a tender offer. The tender price and the basic entitlement of shareholders under the offer has been calculated on the basis of the 30 September 2021 net asset value, ex-dividend, and are 523.8376p per share and 27.42% respectively. The maximum number of shares that will be repurchased under the tender offer is 4,963,370 shares. It is conditional on the passing of the requisite resolution at the General Meeting to be held on 10 November 2021.
- LXi REIT (LXI) has announced the forward funding acquisitions of a Lidl foodstore and a Lok’n Store self-storage centre in Basildon, Essex, for a total cost of £19.5m, reflecting a 5.1% average net initial yield. The acquisitions will be funded using the company’s revolving credit facility and it will receive an income during the construction periods. The foodstore has been fully pre-let to Lidl on an unbroken 20-year lease, with five yearly RPI inflation-linked uplifts (collared at 1% pa and capped at 3% pa). The self-storage facility has been fully pre-let to Lok n’ Store on an unbroken 25-year lease, with five yearly rental uplifts at a fixed growth rate of 2.5% pa.
- Capital & Regional (CAL) has raised £30m from an open offer that will be used to restructure and reduce the group’s Mall Debt Facility, which in turn will reduce its loan to value ratio (LTV) to 50% from 61%. The company received valid acceptances from shareholders in respect of 39,252,570 Open Offer Shares. Under the terms of the underwriting agreement, Growthpoint, the company’s largest shareholder, has subscribed for the remaining 14,327,667 Open Offer Shares. Following admission, Growthpoint’s resultant holding in the company will be 60.76%. The capital raising remains conditional upon the passing of the resolutions at the General Meeting to be held today.
We also have a recommended cash offer by Land Securities for U and I Group, full-year results from Fidelity Emerging Markets and International Biotechnology while Alliance Trust concludes its dividend review.