QuotedData’s morning briefing 3 December 2024 – HGT, CRS, PSH, LTI, PRSR, DLN, AIRE
In QuotedData’s morning briefing 3 December 2024:
- HgCapital Trust (HGT) Hg, the manager of HgCapital Trust, today announced that it has agreed the sale of Dext Software Ltd, a leading bookkeeping automation platform provider, to IRIS Software Group, a leading global provider of accountancy, education management, HR and payroll solutions. The terms of the transaction have not been disclosed and completion is subject to closing conditions.This transaction values HGT’s investment in Dext at approximately £32.7m. This would represent an uplift of £3.6m (13% or 0.8 pence per share) over the carrying value of £29.1m in the NAV at 30 September 2024. Note that these figures only relate to HgT’s share of Hg’s overall investment in Dext.
- Crystal Amber Fund (CRS) announced that as part of its ongoing commitment to its portfolio company Morphic Medical, the fund has today invested US$500,000 in the company, taking the total invested in Morphic Medical in the last 12 months to US$7m. As announced on 31 July 2024, CRS has been and continues to be the sole provider of finance to Morphic. The US$7m invested has been provided to Morphic in the form of unsecured interest bearing loan notes (CLN) convertible into ordinary shares in Morphic Medical in cash instalments during 2024. The fund anticipates providing up to an additional US$4m in instalments as CLNs over the next few months. The investments are to provide Morphic with capital to continue to progress its commercial objectives, obtain regulatory approvals and to build up inventory ahead of anticipated sales.
- Pershing Square Holdings (PSH) has announced its intention to delist from Euronext Amsterdam. The board of PSH has carried out a review of the Euronext Amsterdam listing to examine the number of shares held on the register and the costs of maintaining the listing. Following this review, the board has concluded that the advantages of consolidating trading on the London Stock Exchange, combined with the reduction of administrative and compliance burdens associated with maintaining a secondary listing in Amsterdam, now outweigh the benefits of retaining the Euronext listing. “The board has been monitoring the company’s listing arrangements for some time and in January 2024 engaged outside advisors to review the company’s listing on the Euronext Amsterdam in light of the fact that the majority of the trading of PSH’s shares occurs on the London Stock Exchange,” said PSH chairman Rupert Morley. “We concluded that delisting from Euronext Amsterdam and consolidating trading on the London Stock Exchange would reduce regulatory complexity and improve liquidity of PSH’s shares which would be to the benefit of PSH shareholders.” The LSE listing of PSH represents the substantial majority of the fund’s listed trading volume. PSH will continue to be listed on the main market of the LSE in sterling and USD.
- Lindsell Train Investment Trust (LTI) announced its interim results for the six months to 30 September 2024. The company’s NAV total return dropped 1.9%. This compared with the 2.8% total return of the MSCI World index. The share price total return was 2.7%, narrowing the discount to 19.3%. Commenting on the performance, the chairman noted: “The six months were characterised by the steady fall in the valuation of LTL, the company’s unlisted investment in its Investment Manager. LTL’s total return over the period was minus 8.4% and proved to be the biggest detrimental contributor to the company’s performance, resulting in the holding falling from 34% of NAV six months earlier to 31% on 30 September 2024. The decline in valuation reflected a contraction in LTL’s funds under management. LTL’s strategies have suffered from disappointing relative performance in recent years and some of its clients have understandably responded by withdrawing funds, with LTL’s FUM falling from £15.2bn to £13.4bn over the six months to 30 September 2024. A good proportion of clients, including the company, have experienced LTL’s successful longer-term performance and remain loyal supporters of its differentiated investment approach.”
- PRS REIT (PRSR) says that it is in active discussions with a number of interested parties over a sale of the company and has made available a dataroom for due diligence. It adds an update on the process will be given in the first quarter of 2025.
- Derwent London (DLN) has acquired the remaining 50% stake in its proposed 50 Baker Street development scheme from Lazari Investments, its joint venture partner, for £44.4m. This reflects a 4.2% net initial yield at the current passing income of £2.0m per annum (based on 50%). The site has planning consent for a 240,000 sq ft office-led scheme, which is nearly double the existing floor area. DLN says that the decision to acquire full control of 50 Baker Street was taken following the pre-letting of its adjacent 25 Baker Street project and its confidence in the strength of the West End occupational market.
- Alternative Income REIT (AIRE) has completed the acquisition of the Champneys Beauty School, part of the Champneys Spa Resort in Tring for £2.5m. The price reflects a net initial yield of 6.5% and the asset has been acquired with a weighted unexpired lease term of 14.9 years. The lease is subject to five-yearly upward only rent reviews linked to CPI subject to a cap of 4% and a collar of 2% per annum. The acquisition reinvests the remainder of the net proceeds from the group’s last property disposal. The property is fully let to Champneys Tring Limited, the beauty and health brand. Champneys has occupied the property since 1976 and it has been used as either staff accommodation or for training purposes. The building comprises a total of 5,855 sq ft of treatment and training rooms, together with a large car park on a 1.75 acre site. The property has previously been granted planning consent for change of use to residential use.