Company News

Guide to Venture Capital Trusts and Foresight VCTs

The Association of Investment Companies (AIC) have just published a guide to Venture Capital Trusts entitled "Going for Growth".  It provides a good overview of this specialist sector of the market. It can be found here: http://www.theaic.co.uk/sites/default/files/uploads/files/AICVCTConsumerguide.pdf It includes a number of examples of successful investments made by VCT managers including that made by Foresight in Procam. However, the dangers of VCT investment were highlighted recently by the events at Foresight 2 VCT who recently held their Annual General Meeting. In their ...

Naibu and Majestic Wine – AIM companies losing directors.

The latest announcement (on the 18th February) from Chinese company Naibu (NBU) is that the non-executive directors have been unable to obtain any information about the company's trading position from the two executive directors (Lin Huoyan or Lin Congdeng). The former finance director, Zhen Li, resigned at the end of last year and the shares were subsequently suspended at the request of the non-executive directors on the 9th January pending clarification of its financial position. It seems the two executive directors have ...

Rolls-Royce Results and a New Director

Rolls-Royce Plc published their full year results today (13/2/2015). How does this champion of British industry and one of the FTSE mega caps (market cap £17bn) now look? Like all such large companies one could spend hours analysing the accounts because the initial "headline" data provided by the company in the announcement tends to err on the positive side. So the "highlights" are given as "Record order book of £73.7bn (that's slightly up at 3% on the prior year), underlying revenue and ...

Beating the index – Fundsmith results and newsletter

Terry Smith has recently issued his annual newsletter to investors in his Fundsmith Equity Fund. Those who invested primarily in UK focussed index trackers last year (FTSE-AllShare down 2.5%) will be possibly annoyed to discover that Mr Smith managed to achieve a total return of 23.3% last year. He had the advantage of being invested in global equities perhaps which generally did better than UK stocks, but he still managed to outperform his benchmark which is the MSCI World Index. How did ...

ScS Group listing – a pre-pack phoenix relists

Upholstery and flooring retailer ScS Group Plc (SCS) joined the main market of the LSE on the 28th January.  At the placing price of 175p the market cap was £70m.  Now you may recall that this company used to be listed a few years ago, but went into administration in July 2008. It's useful to look back at what happened then and at some aspects of the current business in case you are considering an investment in the company. In 2008 the ...

HSS Hire and other IPOs

I am sometimes accused by my wife and colleagues of being a "wet blanket". In other words immune to the excitement of new ventures or ideas. But when it comes to IPOs that's probably the right frame of mind to have. I shall proceed to throw some cold water over the IPO of HSS Hire which is listing in early February if all goes according to plan - the prospectus for which is now available. Academics Elroy Dimson and Paul Marsh have recently ...

Monitise crashes to earth

Monitise made an announcement yesterday (22/1/2015) that prompted the share price to crash. It's 14p at the time of writing when it had been over 60p earlier in the year, and had been declining steadily over recent months. Questor in the Daily Telegraph said on the following morning that "A buyer may come out of the woodwork but we recommend taking what you can - Sell". One cannot be blunter than that. The company announcement indicated that revenue growth will be flat ...

Corporate Governance at Quindell, and news on Aero Inventory

I won't even attempt to discuss the past history of events at Quindell in this article. But recent ones suggest that it is likely to remain a controversial company. After the departure of founder and former Executive Chairman Rob Terry, Richard Rose has been appointed as Chairman and Jim Sutcliffe has been appointed as Deputy Chairman and Strategy Director. Shareholders no doubt welcomed these experienced hands to take charge of this company after past events. But there are a couple of problems ...

Naibu suspended

On Friday (9/1/2015) the shares of Chinese clothing company Naibu (NBU) were suspended  at the request of the non-executive directors "pending clarification of its trading position". The CFO had resigned on the 31st December and the trading update on the 24th November hinted the dividend might not be paid and profits reduced. The best comments on this event were probably those of Paul Scott who writes for Stockopedia. He has been consistently critical of Chinese companies listed on AIM and his words ...

Charles Stanley loses Finance Director

Charles Stanley announced yesterday (9/1/2014) that its Finance Director James Rawlingson was "leaving with immediate effect".  This follows the appointment of a new CEO in December after the publication of a dire set of half year results at the end of November. Funds under management were static and revenue from the Financial Services Division and platform Charles Stanley Direct were up substantially but higher costs resulted in a loss before tax of £3.9 million. The dividend was maintained at the half ...

Lloyds Banking Group ECN Scandal

Lloyds Bank issued Enhanced Capital Notes (ECNs) as part of its refinancing during the banking crisis. These were taken up by many retail investors. They were convertible bonds that the bank has the right to convert to equity or buy back if its core capital falls below a certain level. During recent Bank of England stress test, regulators ruled that the bonds no longer constituted part of the bank’s capital, triggering the possibility of redemption which Lloyds Bank is proposing to ...

Ignoring the UK Corporate Governance Code

Last week there were Annual General Meetings of the Baronsmead 1 and 2 VCTs (BDV and BVT) and the British Empire Securities and General Trust (BTEM) on the same day. These companies are all investment trusts although the latter is of course somewhat different in nature to the two Venture Capital Trusts. They do have one thing in common though - they both claim to be able to report against the AIC Corporate Governance Code rather than the UK Corporate Governance ...