Register Log-in Investor Type

News

Crystal Amber delivering progress on realisation

Crystal Amber (CRS) has announced its annual results for the year ended 30 June 2022. The year was a defining one for the fund in that it was not able to secure a 75% majority in favour of its continuation at its AGM on 1 November 2021. Following this, shareholders approved a new investment policy to maximise returns of capital at an EGM on 7 March 2022. During the year, CRS NAV total return per share (including dividends paid) increased by 7.3%. After dividends, the NAV declined by 1.2% to 145.03 pence (146.81 pence at 30 June 2021 and 143.19 pence at 31 December 2021). The manager says that CRS’s concentrated portfolio continues to deliver progress (from July 2021, the Hurricane Energy share price has almost tripled and the share price of Equals Group has doubled) and CRS is actively engaged with all investee companies to deliver on their potential.

CRS says that Hurricane Energy’s prospects have been transformed with the company now debt free and net cash accounting for around 50% of market capitalisation. It is now forecast to produce three million barrels over the next year. CRS has completed its exit from Leaf Clean Energy, having received its final (£1.6m) wind down distribution. The final distribution received was equivalent to £61.17 per Clean Leaf share against a £4.54 per share carrying value. CRS has also increased its cash returns to shareholders, with £10.4m distributed in two dividends and £0.5m in share buybacks. A further 10 pence dividend, amounting to £8.3m, was paid in August 2022.

CRS’s revised policy commits it to maximising capital returns through the timely disposal of its holdings. This was initially envisaged to be largely completed by the end of 2023, with the exception of GI Dynamics, which CRS highlighted in its February 2022 circular as being a longer-term project. However, after consultation with Shareholders, CRS says that it was clear that setting December 2023 as a fixed deadline could be counterproductive and so the Board has reiterated that it is focused on achieving the best outcomes for all shareholders.

CRS says that, as an activist fund, it needs to hold sufficiently large stakes to facilitate engagement as a significant shareholder. As at 30 June 2022, the weighted average market capitalisation of CRS’s listed investee companies was £129m (30 June 2021: £229m).

CRS’s key positions remained the same over the year. CRS received the final distribution from the wind down of Leaf Clean Energy Company, while a smaller position in Hansard Global was also sold. CRS increased its investment in GI Dynamics with a £3.2m convertible note instrument. A new position in an unlisted business, Sigma Broking Limited was opened in the first half of the period, following a commitment by CRS in its last financial year. CRS increased its stake in Hurricane Energy to 28.9% of Hurricane’s equity (2021: 22.6%), although the last new quoted investment purchase was made in April 2018. During the year, £10.9m was returned to Shareholders through share buybacks and dividends (2021: £9m).

CRS says that because of its intensive activism, the investment in GI Dynamics now has considerable strategic value. It says that this was recently evidenced by two approaches from US trade parties that have expressed an interest in making a significant investment in GI Dynamics.

Additional investments and shareholder returns were funded by reducing CRS’s shareholding in De La Rue and Equals Group. The holding in De la Rue decreased to 9.8% of De La Rue’s equity (2021: 12.3%). The position in Equals was reduced as shares re-rated to 10% of the company.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please review our cookie, privacy & data protection and terms and conditions policies and, if you accept, please select your place of residence and whether you are a private or professional investor.

You live in…

You are a…