Oryx International Growth reports a 5.9% decline in its NAV over the 12 months ended 31 March 2023. By comparison, benchmark indices fell by 19% on average. The second half of the period was better than the first, with a second half gain of 9.8% offsetting a first half fall of 14.6%. There is no dividend.
Extracts from the manager’s report
The 2022 financial year saw several of our core positions being subjected to takeover bids, with the offer for Sureserve Plc arriving after the March year end. Crestchic Plc received a bid from Aggreko, generating a 139% return on our initial investment and circa £12 million in cash returned to the fund. The Sureserve bid at 125p marks a 268% return on initial investment and 50.6% year on year, returning £12.5 million to the Fund. Curtis Banks Plc received an offer of 350p from Nucleus Financial group, while two of our smaller holdings Fulham Shore Plc and Seraphine Plc were also bid for. Lastly, Smoove Plc has received interest from Australia based PEXA for an unspecified amount, causing the shares to gain 39% upon announcement. Taken together, the above transactions will provide (pending completion) circa £40 million of cash to deploy in future investments.
Niox Group Plc and Kitwave Group Plc were standout performers in the year and have continued to outperform the market since our March year end. The position in Kitwave Group, a wholesale distribution business that engages in value accretive bolt on M&A, was built in the prior year so we are pleased with the good performance of the business thus far. The management team at Niox Group Plc have delivered on their cost reduction targets, with the process now complete and the focus now on growing sales in the US and Asia.
The underperformers among our significant holdings were Hargreaves Services Plc, EKF Diagnostics and Tribal Group. Hargreaves Services had previously enjoyed a year of ‘super profits’ from its German JV business as pig iron and zinc prices skyrocketed and while those have started to come down, the rest of the business has performed well. The net asset value of the business is, we believe, in excess of £6.05 per share, well above the current share price and we believe that this delta will narrow in the short to mid-term as investors better understand the true value of the business. EKF completed a write down of its Covid-19 related assets and the previous CEO, Julian Baines, has been reinstalled to consolidate the cost base and drive revenue growth in the core business. Tribal Plc lost a major contract with Singapore based NTU and the shares were punished accordingly. We have increased our holding in the business from 8.25 million shares to 20 million shares at the reduced price to right size our cost base. We believe the value of Tribal’s remaining business and IP offers material upside from the current valuation.
Over the course of the year we have increased our stake in Carr’s Group from 1.1 million shares to 5 million shares, making it a top ten holding in the portfolio. We added positions in Hostmore Plc, Pendragon Plc, Spire Healthcare Plc, Smoove Plc and OnTheMarket Plc, all of which are attractive assets for acquisition to a larger competitor (Smoove received an unspecified bid approach as earlier noted). Our holding in Kitwave Plc was reduced to 2.25 million shares from 4 million shares as the share price doubled over the period.
Unquoted equities:
Antler Holdco was sold during the year as a small part of the holding in Moxico. Two companies delisted, Source Bioscience and GYG, as the cost of remaining a public company was not consistent with the benefits.
OIG : Oryx International buoyed by takeovers