TIDMCRS
RNS Number : 6268H
Crystal Amber Fund Limited
05 August 2021
05 August 2021
CRYSTAL AMBER FUND LIMITED
("Crystal Amber Fund" or the "Fund")
Monthly Net Asset Value
Crystal Amber Fund announces that its unaudited net asset value
("NAV") per share at 30 June 2021 was 146.81 pence (31 May 2021:
129.02 pence per share).
The proportion of the Fund's NAV at 30 June 2021 represented by
the five largest shareholdings, other investments and cash
(including accruals), was as follows:
Five largest shareholdings Pence per share Percentage of investee equity
held
------------------------------------- ---------------- ------------------------------
De La Rue plc 53.2 12.3%
*GI Dynamics Inc. 23.9 *
Equals Group plc 22.4 22.4%
Hurricane Energy plc 19.3 22.6%
Allied Minds plc 11.4 19.0%
Total of five largest shareholdings 130.2
Other investments 15.1
Cash and accruals 1.5
------------------------------------- ----------------
Total NAV 146.8
------------------------------------- ----------------
* GI Dynamics Inc. is a private company and their shares are not
listed on a stock exchange. Therefore, the percentage held is not
disclosed. Its carrying value has been determined using DCF
valuation, applying a liquidity discount and on the assumption that
Crystal Amber continues to support future fundraises. The valuation
as at 30 June 2021 is unaudited and will be subject to auditor
review in the normal course as part of the completion of the annual
accounts for the year ended 30 June 2021.
Investment adviser's commentary on the portfolio
Over the quarter to 30 June 2021, NAV per share grew by 5.5%.
Over the year to 30 June 2021, adjusting for the dividends paid in
the period, NAV per share grew by 40.8%.
The top three positive contributors to the quarterly NAV
movement were GI Dynamics (3.1%), Equals Group (4.0%) and Hurricane
Energy (2.6%). The top two detractors were De La Rue (-4.8%) and
Allied Minds (-0.5%).
De La Rue PLC ("De La Rue")
During the quarter, De La Rue published full year results to 31
March 2021 and reported adjusted operating profits of GBP38.1
million. This compares with upgraded guidance of GBP36.5 million
and was after returning furlough payments. The Currency Division
achieved 100% banknote capacity utilisation and strong margin
progression. Its polymer growth plans also saw encouraging
progress. The Authentication Division secured GBP195 million of
expected multi-year contract value.
The essential management changes instigated by the Fund,
continue to bear fruit. Nevertheless, De La Rue's share price
trades on a multiple of just 0.83 of current year revenues and on a
PE multiple of 11.4 times earnings. On consensus estimates for the
following year, the revenue multiple is forecast at 0.76 and the PE
multiple at 8.4. De La Rue enjoys a market share of 30% of global
commercial banknote printing, whilst its Authentication Division is
expected to achieve current year revenues of GBP100 million,
delivering EBITDA margins of 22%. The Fund strongly believes that
De La Rue's equity valuation is significantly mispriced. Unless the
stock market is prepared to value De La Rue appropriately, Crystal
Amber anticipates that it is likely that a trade buyer or buyers
will intervene in order to acquire the business .
Over the period, shares in De La Rue were down by 9.6%.
Equals Group PLC ("Equals")
Equals is an e-banking and international payment services
provider serving both retail and business customers mainly in the
United Kingdom. After the period under review, Equals issued a
positive trading update. Revenues for the six months to 30 June
2021 increased by 21% to GBP16.7 million. This was despite the
continued absence of meaningful travel-related activity.
Importantly, travel-related activity represented less than 5% of
revenue in Q2 2021 compared to 31% in Q3 2019, demonstrating the
differential between pre-Covid levels and therefore the potential
for increased travel money revenues as Covid restrictions are
relaxed.
The Equals Money product suite for corporate customers achieved
good growth. International Payments experienced strong demand for
its 'own-name multi-currency IBAN' offering and white-label
platform. The Corporate Expenses platform also achieved record
results. Cost control saw headcount remain at around 250 but with a
significantly lower cost footprint, with this now being around
GBP0.9 million of base pay per month compared GBP1.2 million in
January 2020. Net cash at 30 June 2021 was GBP9.2 million.
The Fund notes both the consolidation and the extraordinary
valuations currently being achieved in the Fintech sector. With a
market capitalisation of GBP95 million, shares in Equals trade on
an enterprise value of just 2.25 sales. As the largest shareholder
in Equals with a 22.3% shareholding, Crystal Amber is well placed
to benefit from both improving financial performance and potential
consolidation.
Over the period, shares in Equals were up by 30.1%.
GI Dynamics Inc. ("GI Dynamics")
After delays due to the COVID 19 surge throughout India, the
I-STEP application for the Randomized Clinical Trial in that
country (to be conducted exclusively in conjunction with Apollo
Sugar Clinics) was reviewed by regulators in June 2021. As a
result, the study is expected to commence this quarter. During the
quarter, enrolment for the STEP-1 FDA trial continued, following
the re-opening in the previous quarter as a result of the lifting
of COVID19 restrictions and widespread vaccine access in the
US.
GI Dynamics is in the process of filing its application to
commercialize EndoBarrier under the new Medical Device Regulation
(MDR) which will allow access throughout the EU. The first
milestone toward achieving CE Mark for European regulatory approval
was achieved in November 2020 as GI Dynamics successfully completed
the required ISO Certification audit.
The global pandemic has reaffirmed the importance of gaining
control of the significant risk factors associated with Type II
diabetes and obesity. More than ever, medical professionals and
patients alike are seeking minimally invasive, effective therapies
so help control and resolve both of these chronic conditions. GI
Dynamics is preparing to meet this large unmet clinical need.
Hurricane Energy PLC ("Hurricane")
On 30 April 2021, Hurricane released details of a proposed
financial restructuring under which it was proposed to put the
company's operations into an extended wind down with shareholders'
interests being wiped out almost completely in favour of the
bondholders. On 19 May 2021, Crystal Amber announced that it had
sent a requisition notice to Hurricane requiring it to convene a
general meeting to remove the five non-executive directors and
appoint John Wright and David Craik as directors. On 24 May 2021,
the High Court of Justice ordered that the board of Hurricane hold
a meeting of shareholders in order to vote on the Restructure Plan.
At that shareholder meeting on 11 June 2021, shareholders rejected
the plan by 92.3% to 7.7%.
Between 21 and 23 June 2021, at the sanction hearing, Crystal
Amber argued that the proposed restructuring plan should be
rejected, that the board had been both evasive and obstructive and
that the plan was not in the interests of all stakeholders. The
Fund also gave evidence that Bluewater Energy Services B.V. (from
whom Hurricane leases the FPSO - Floating Production Storage and
Offloading - vessel) made contact directly with Crystal Amber in
which it stated that it remained very keen to progress discussions
and investigate solutions and proposals to extend the charter
beyond June 2022.
On 28 June 2021, in his judgment, Mr Justice Zacaroli stated
that Hurricane is profitable and anticipated to remain so for at
least the next year, that Hurricane's evidence was that the P6 well
is likely to remain economically viable until early 2024 and that
there are reasonable grounds to believe that Hurricane will be able
to negotiate an extension of the Charter on terms which enable it
to continue extracting oil from the P6 well beyond July 2022.
Crucially, the Court found that there is a realistic prospect that
Hurricane will be able to discharge its obligations to the
bondholders. The High Court of Justice therefore rejected the
highly dilutive and costly restructuring plan.
On 30 June 2021, Hurricane's five non-executive directors
resigned with immediate effect and in their stead, directors
nominated by Crystal Amber, Alan John Wright and David Craik were
appointed to its board, with Mr Wright installed as Interim
Chairman. As a result, the general meeting scheduled for 5 July
2021 was no longer necessary and Crystal Amber therefore withdrew
its requisition.
Crystal Amber regards Lancaster as one of the most prolific
production wells in the North Sea. Crystal Amber would refer market
participants to Hurricane's Restructuring Business Plan
Presentation dated 24 May 2021, which is available on the company's
website. The presentation sets out Hurricane's long-range forecast
of production from its existing P6 Well. By February 2024, this is
estimated to deliver 8.4 million barrels of oil. Based on the
forward curve for oil prices, this would generate approximately
$600 million of revenue. Based on historic margins, this would
deliver operating cash flows of in excess of $250 million. Crystal
Amber further notes that actual production for June 2021 exceeded
Hurricane's forecast with 10,640 barrels per day being produced as
against a budget of 9,700 barrels a day. Were this trend to
continue, a further $28 million of revenue would be achieved, in
addition to the $285 million expected over the next 12 months.
During July 2021, Crystal Amber has been in regular dialogue
with the newly constituted board of Hurricane. Since September 2020
(when the convertible bond was trading at a 70 per cent. discount),
Crystal Amber has urged Hurricane to use a significant proportion
of its cash to buy in bonds. The High Court of Justice stated that
"the possibility of buying back bonds in the market is, on the face
of it, an attractive one, given that the Bonds have been trading at
a substantial discount to face value." On 5 July 2021, the bonds
were trading at a 50 per cent. discount but the discount has
recently narrowed to 37 per cent. Crystal Amber has requested to
the board of Hurricane that it immediately embarks on a substantial
purchase of these bonds. As well as saving the payment of the
annual interest rate of 7.5 per cent., buying back bonds at a
discount, will significantly reduce Hurricane's net
indebtedness.
Over the period, shares in Hurricane were up by 16.1%.
Transactions in Own Shares
During the quarter, the Fund bought back a total of 150,000 of
its own ordinary shares at an average price of 107.1 p per share as
part of its buyback programme.
For further enquiries please contact:
Crystal Amber Fund Limited
Chris Waldron (Chairman)
Tel: 01481 742 742
www.crystalamber.com
Allenby Capital Limited - Nominated Adviser
David Worlidge/Liz Kirchner
Tel: 020 3328 5656
Winterflood Investment Trusts - Broker
Joe Winkley/Neil Langford
Tel: 020 3100 0160
Crystal Amber Advisers (UK) LLP - Investment Adviser
Richard Bernstein
Tel: 020 7478 9080
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
NAVDKQBDKBKBBFK
(END) Dow Jones Newswires
August 05, 2021 02:00 ET (06:00 GMT)
Crystal Amber (LSE:CRS)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024
Crystal Amber (LSE:CRS)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024