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QuotedData’s morning briefing 16 November 2022

In QuotedData’s morning briefing 16 November 2022:

  • ThomasLloyd Energy Impact (TLEI/TLEP) has announced the results of its placing that was announced on 8 November 2022. The ‘subsequent placing’ raised gross proceeds of US$35.3m and 34,277,228 new ordinary shares are being issued at a price of US$1.030 (£0.865 being the announced sterling equivalent price) per ordinary share. The net proceeds of the issue will be used to acquire and construct new projects in the trust’s pipeline. The trust has a near-term pipeline of potential investments totaling over US$750m, which includes approximately US$380m of exclusive acquisition and organic follow-on opportunities, with the remainder being new acquisition opportunities in various stages of due diligence. [That’s not a bad result in the current climate, but it probably helped that the company had already identified a number of European investors who were keen to make an investment.]
  • 3i Infrastructure (3IN) has signed an agreement to syndicate around a 27% stake in TCR to 3i Zephyr, a co-investment vehicle managed by 3i Investments that is funded by six institutional investors. Completion is expected to take place later this quarter. 3IN describes TCR as “the leading global provider of Ground Support Equipment”. TCR has a presence in over 160 airports (compared with 100 at acquisition), with more than 30,000 ground support equipment assets in its rental fleet (compared with 23,000 at acquisition). 3IN’s holding in TCR will decrease from around 96% to around 69%, for sale proceeds in the region of €220m. This is in line with the valuation of the stake acquired from funds managed by DWS on 31 October 2022. Following completion of the transaction, 3IN’s investment manager will continue to manage approximately 96% of TCR. The sale proceeds will be used to repay part of 3IN’s outstanding revolving credit facility balance.
  • Literacy Capital (BOOK) has announced its interim results for the six months ended 30 September 2022. During the period, BOOK’s net assets increased by 20.3%. BOOK says that its portfolio companies benefited from strong trading momentum and that the portfolio contains significant exposure to profitable, cash flow positive businesses delivering strong growth, with 70% revenue growth and 49% EBITDA growth on a weighted average basis amongst the buyout investments within Literacy Capital’s top 10 holdings. Since listing, BOOK has continued its focus and deployment of capital on these types of investments, with earlier stage, more risky growth capital investments declining to just 7.5% of gross assets on 30 September 2022 (from 15% a year earlier). It completed two new platform investments in the period, as well as several small bolt-on acquisitions on behalf of its portfolio companies. During the period, BOOK increased its charitable donations, helping disadvantaged children across the UK – £1,147k of charitable donations were provided for in the first half of the year, up 47% on the same period in the prior year, in line with growth in NAV. Total donations have now exceeded £5.0m since BOOK’s inception.
  • Marwyn Value Investors (MVI) has provided an update on the settlement of the historic VAT reclaims relating to Praesepe. MVI says that the amounts due to the Master Fund from the VAT reclaims agreed by HMRC earlier this month have now been finalised and that the total cash amount to be received by the Master Fund is £3.63 million. The amounts attributable to each share class is as follows:
    • Ordinary shares – £3.13m – 5.6p per share – equivalent to +2.7% impact on NAV
    • 2016 realisation shares – £0.38m – 41.0p per share – equivalent to +11.8% impact on NAV
    • 2021 realisation shares – £0.02m – 5.6p per share – equivalent to +2.6% impact on NAV

    These amounts will be reflected in the Company’s estimated net asset value calculations as at 11 November 2022 which will be released via RNS on or before 25 November 2022. MVI says that the cumulative agreed claims represent approximately 50% of the estimated total gross claims filed with HMRC, although there remains significant uncertainty regarding these potential future claims and so they are not being reflected in the NAV calculations for the various share classes at the current time.

  • Cordiant Digital Infrastructure’s (CORD’s) acquisition of Emitel S.A. has completed. Click here to read about the transaction.
  • Schroder REIT (SREI) posted a 1.3% fall in NAV to 74.8p for the six months to 30 September 2022, equating to a NAV total return for the period of 0.8% when dividends are included. EPRA earnings per share was 1.7p (in line with the previous period), covering the dividends declared in the period of 1.6p. The group’s LTV was 31.4%, with its debt having an average loan maturity of 11.2 years, with a low average total debt cost of 2.7%. The company says it is difficult to assess how far average UK real estate values will fall in response to rising interest rates but, assuming the ten-year gilt yield settles at approximately 3.5%, then, based on historical averages, investors may demand a yield from real estate of 5% to 5.5%. This would imply a decline in average market values of approximately 15% to 20%”.
  • AEW UK REIT’s (AEWU) NAV rose slightly by 1.0% to 121.88p in the six months to 30 September 2022, giving it a NAV total return of 4.35% when its dividends for the period of 4.0p are included. The dividend was just 64.5% covered by earnings in the period of 2.58p. The company said “the decrease in dividend has largely arisen due to the company completing a number of key sales, leaving it with a high cash weighting and a resulting loss of rental income in the short term. Earnings have been further depressed by one-off costs associated with refurbishment works being undertaken at Queen Square, Bristol and Mangham Road, Rotherham, which will both be accretive to the company’s earnings in the medium to long term.” It added that the large cash position (£38.9m) puts it in an advantageous position to buy assets at depressed values. The company has an LTV of 31.1%, with its cost of debt fixed at 2.959%.

We also have news of a large office letting by Great Portland Estates, interims from Biotech Growth and some news from HydrogenOne

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