Damille Investments Limited
Interim Management Statement
Interim Management Statement for the period 1 January 2012 to 17 May 2012.
Damille Investments Limited (LSE:DIL) (the "Company" or "DIL") is a Guernsey registered, closed-ended investment company which listed on the Specialist Fund Market of the London Stock Exchange and the Channel Island Stock Exchange on 30 March 2010 (the "Admission Date").
The Company is pleased to announce that the unaudited Net Asset Value ("NAV") per share as at 30 April 2012 was 68.68p. The NAV as at 30 April 2012 is stated after returns of capital to shareholders amounting to 44p per share (£15.7m) to 30 April 2012.
The NAV per share as at 30 April 2012 of 68.68p when combined with the return of capital of 44p per share to 30 April 2012 is an increase since Admission of 12.68%. This represents an increase of 18.24% from the Initial NAV*. Compared to the NAV per share as at 31 December 2011**, the NAV per share as at 30 April 2012** has increased by 1.45%.
The NAV is based on bid prices and shareholders should note the wide spreads quoted on some of our key investments, including Rapid Realisations Fund Limited, Loudwater Trust Limited and EIH plc and that these funds trade at discounts to their own NAVs.
The directors are pleased with this performance.
* NAV at launch after costs.
**including distributions up to that date.
Investment Objectives and Policy
The investment objective of the Company is to invest in a concentrated portfolio of equity securities of issuers primarily with an equity market capitalisation of below £100 million that the Company's Executive Directors, Brett Miller and Rhys Davies (the "Executive Directors"), consider can be properly valued using NAV valuation points. In the opinion of the Company, many of these companies would benefit from implementing certain measures to optimise their balance sheets and align management and shareholder interests. Such companies are expected to be, but will not be limited to, closed-ended investment funds and investment companies.
The Company has a fixed life of four years from the Admission Date and it firmly intends to return to shareholders the net capital proceeds of all material profitable realisations from its investments promptly following their receipt, subject to compliance with The Companies (Guernsey) Law, 2008, as amended.
Financial Highlights and Investment Review by Damille Partners Limited
During the period 1 January 2012 to 17 May 2012, the Company invested £2,688,750 (before broking commissions) in two top up investments in existing holdings. One holding was disposed of in its entirety generating a small loss. One extremely minor holding was partially disposed of realising a gain of 35%. In addition, the Company received capital returns from investee companies during the period amounting to £1,603,795.
The Company now holds notifiable shareholdings in four companies, three of which the Executive Directors have sought and obtained board representation. Brief summaries of the key developments at these four companies during the period follow:
EIH plc ("EIH")
In April 2010, the Company acquired 11,450,000 shares in EIH. The Executive Directors as well as one other individual were appointed to the board of EIH on 17 May 2010, replacing the previous board in its entirety. At the Annual General Meeting of EIH held on 28 June 2010 a new investment policy was adopted as follows:
"The Company shall not make any new investments, save for commitments already entered into. The Company will actively manage its investments and seek to realise such investments in a managed way at an appropriate time, returning proceeds to Shareholders as soon as practicable"
Since the Company acquired its shareholding in EIH, EIH has returned capital of US$0.18 per share.
As at 16 May 2012 the share price of EIH was US$0.55 versus cost to the Company of US$0.32 after the US$0.18 per share capital distributions.
Rapid Realisations Fund Limited ("RRF")
The Company acquired 10,000,000 shares in RRF on 26 May 2010 and immediately thereafter sought to change the investment strategy and seek board representation. On 25 June 2010 the Executive Directors were invited to join the board and as of today's date the board of RRF is comprised of Brett Miller, Rhys Davies and one independent director. Also on 25 June 2010, the RRF board announced that it had resolved to adopt the following policies which were subsequently approved by RRF shareholders via a resolution at the Annual General Meeting of RRF held on 14 September 2010:
"The investment objective and policy of the Company be amended to manage the realisation of the Company's investment portfolio and to maximise the return of invested capital to shareholders during the period ending on 30 September 2013. During this period the Company shall not make any new investments."
During the period RRF announced returns of capital amounting to 12p per RRF share.
DIL paid 46.02p per share on 26 May 2010 and by 16 May 2012, RRF had announced capital distributions amounting to 69p per share. As of 16 May 2012 the share price of RRF was 7.5p.
Blackstar Group SE ("Blackstar")
In March 2011, DIL acquired 5,820,000 shares in Blackstar representing approximately 7.78 % of the issued share capital of Blackstar. The average price paid was 77.05p per share. In February 2012, DIL acquired a further 3,000,000 shares at an average price of 73.625p per share.
On 3 May 2012, Blackstar announced that its intrinsic net asset value per share as at 30 April 2012 was 104p per share.
Blackstar's shares were quoted at 74p per share at close of business on 16 May 2012. The average cost per Blackstar share, taking into account dividends to date is 68.48p.
Loudwater Trust Limited ("LWT")
On 24 March 2011, DIL acquired 16,650,000 shares in LWT, representing 27.64% of the issued share capital of LWT. The price paid was 30p per share.
LWT's investment policy is to return cash proceeds of all realisations to investors, subject to the retention of sufficient cash for follow-on investments in existing portfolio companies where the Investment Adviser believes further funding is required.
The Executive Directors of DIL were appointed to the board of LWT on 20 May 2011. On 27 April 2012 four other directors of LWT resigned and the board is now comprised of Brett Miller, Rhys Davies and an independent director.
On 10 February 2012, DIL received 4.15p per LWT share by way of return of capital.
On 30 March 2012, DIL received 3.08p per LWT share by way of return of capital.
On 27 April 2012, LWT announced that its NAV per share as at 30 March 2012 was 44.95p.
LWT's shares were quoted at 28p per share at close of business on 16 May 2012 versus a cost to DIL of 15.77p per share, adjusted for the 14.23p per share capital return.
Trinity Capital plc ("Trinity")
In October and November 2010, DIL acquired a total of 5,618,000 shares in Trinity at an average price of 64.25p per share (before broking costs). On 7 March 2012, DIL acquired a further 3,000,000 shares at an average price of 16p per share.
On 24 March 2009, Trinity's shareholders approved the following investment policy:
"The Company shall promptly but having due regard to all applicable legal, governmental and regulatory constraints and with a view to maximising shareholder value, dispose of all its assets in an orderly fashion.
If the Company's Ordinary Shares are trading at a price below the NAV per Ordinary Share, the Company shall immediately affect a return of capital through a cash distribution to Shareholders.
The Company shall continue to seek new investment opportunities. If the Company's Ordinary Shares are trading at a price above the NAV per Ordinary Share, the Board will selectively determine, on a periodic basis, whether or not to make new investments."
Trinity's shares were quoted at 15.5p per share at close of business on 16 May 2012 versus an average cost cost to DIL of 9.64p after the total capital distributions of 58p to date on the initial shares acquired.
The Company has invested 91.60% of the net funds raised and the Executive Directors wish to announce that apart from possible follow on investments, the investment period is now concluded and the focus is on realisations and maximising the cash returns from the existing investment portfolio. Whilst market conditions are extremely uncertain and thus don't provide the best background for realisations, the directors believe that the key investments outlined above were bought well, have performed and are continuing to perform strongly, and the directors expect further distributions from those companies in the next six months which in turn will be passed on to the Company's shareholders.
At 30 April 2012, the Company's assets were allocated in the following approximate proportions:
Notifiable shareholdings: 68.66%
11,450,000 shares in EIH plc: 15.78%
10,000,000 shares in Rapid Realisations Fund Limited: 6.30%
8,820,000 shares in Blackstar Group SE: 27.62%
16,650,000 shares in Loudwater Trust Limited: 18.96%
Non-Notifiable shareholdings: 23.26%
8,618,000 shares in Trinity Capital plc: 5.61%
Other non-notifiable holdings: 17.65%
This document is for information purposes only. It is not, and is not intended to be an invitation, inducement, offer, or solicitation, to deal in the shares of the company. The price of shares in the company and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of shares in the company. An investment in the company should be considered only as part of a balanced portfolio of which it should not form a disproportionate part.
By order of the Board
Damille Investments Limited
Administrative Enquiries: Shareholder Enquiries:
Anson Fund Managers Limited Nimrod Capital LLP
Tel: +44(0)1481 722260 Tel: +44(0)20 3355 6855
17 May 2012
E&OE - In Transmission
END OF ANNOUNCEMENT
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