REG-Crystal Amber Fund Limited: Monthly Net Asset Value <Origin Href="QuoteRef">CRSL.L</Origin>

Crystal Amber FundAnnouncement

08/01/2018 07:05

8 January 2018
 

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 31 December 2017 was 190.69 pence (30 November 2017: 186.55 pence
per share). 

The proportion of the Fund’s NAV at 31 December 2017 represented by the ten
largest shareholdings, other investments and cash (including accruals), was as
follows:

 Top ten shareholdings          Pence per share  Percentage of investee equity held  
 Hurricane Energy plc                 49.9                      8.0%                 
 Northgate plc                        26.9                      5.2%                 
 FairFX Group plc                     19.0                      15.3%                
 STV Group plc                        18.4                      14.5%                
 NCC Group plc                        13.4                      2.0%                 
 Ocado Group plc                      13.2                      0.5%                 
 Leaf Clean Energy Co.                10.1                      29.9%                
 Sutton Harbour Holdings plc          7.9                       29.3%                
 GI Dynamics Inc                      4.3                       46.7%                
 Camellia plc                         2.9                       0.9%                 
 Total of ten largest holdings       166.0                                           
 Other investments                    26.1                                           
 Cash and accruals                    -1.4                                           
 Total NAV                           190.7                                           

Investment Adviser’s commentary on the portfolio

Over the quarter to 31 December 2017, NAV per share decreased by 6.1%. 
Taking into account the 2.5p per share dividend accrued during the period, NAV
per share decreased by 4.9%.  

The top contributors over the quarter were Ocado Group plc (+1.7%) and FairFX
Group plc (+1.0%).  The main detractors were Northgate plc (-1.6%), Leaf
Clean Energy Co. (-1.5%), GI Dynamics Inc (-1.4%) and Hurricane Energy plc
(-1.4%).

Hurricane Energy plc (“Hurricane”)

Hurricane’s share price fell by 5.3% over the quarter. The Fund notes with
regret the circumstances surrounding the resignation of Hurricane’s
Chairman, Rob Arnott. The company also announced the establishment of a
Listing and Governance Committee and the appointment of an Interim Chairman. 
The Fund has engaged with Hurricane’s Board to improve the company’s
governance and to release value. The Fund welcomes the company’s
announcement in December that it intends to become fully compliant with UK
Corporate Governance Code Provision B.1.2 regarding the appointment of
non-executive directors and its statement that the director nomination
processes, succession planning and Board evaluations are integral parts of a
well-functioning, effective Board, and will form part of the ongoing Board
strengthening activities.

In December, the company published an updated Competent Person’s Report,
which acted as a positive catalyst for the stock. The report primarily covers
the Halifax, Lincoln and Warwick assets, and raises the estimate of
Hurricane’s total 2P Reserves plus 2C Contingent Resources to 2.6 billion
barrels of oil equivalent.

Hurricane remains on track to achieve “first oil” from its Early
Production System at Lancaster in the first half of 2019, and in December it
hosted a visit to the floating production, storage and offloading vessel in
Dubai that will form the basis of the development once its upgrades are
complete.

Northgate plc (“Northgate”)

At its Capital Markets Day in October, Northgate’s new management team laid
out in considerable detail its strategy to return the UK business to growth
and its three-year growth and margin expectations for the UK and Spain. These
imply earnings growth above analyst forecasts.  However, the share price fell
by 12.1% over the quarter following earnings downgrades after the H1 results,
largely driven by lower forecasts of profit from the sale of vehicles, despite
residual values having remained stable to date.

The Fund is supportive of management’s efforts to arrest market share losses
in the UK, optimise the vehicle hire site network, and maximise the
opportunity presented by the Van Monster retail network and brand. In Spain,
Northgate is the clear leader in the LCV flexible hire market, with a strong
brand, good geographic coverage and attractive return on assets – management
expects to achieve >10% CAGR in vehicles-on-hire over the next three years,
together with the consequent further growth in margins.

The Fund believes that the considerable value of Northgate’s Spanish
business is not reflected in its share price and that options to release the
value of this asset should be explored, including ways that could preserve
procurement synergies with the UK, e.g. a partial listing in Spain.

Ocado Group plc (“Ocado”)

The Fund’s investment thesis is based on the returns arising from Ocado’s
technology investment (the Ocado Smart Platform (“OSP”)) and Ocado’s
ability to monetise this through international partnerships. The Fund believes
that Ocado offers a scalable, efficient solution to major food retailers.  In
November, Ocado announced its first major international partnership deal for
the OSP, with Casino in France.  Ocado’s share price increased by 35.7%
over the quarter.

Sutton Harbour Holdings plc (“Sutton Harbour”)

On 7 December 2017, the board of Sutton Harbour recommended to its
shareholders a partial cash offer from FB Investors LLP for up to 70% of its
share capital, which concludes the strategic review process undertaken in
conjunction with Rothschild. The Fund has accepted this offer. On 3 January
2018, the partial offer was declared wholly unconditional. Sutton Harbour’s
share price increased by 7.6% over the quarter.  

Transactions in Own Shares

Over the quarter, the Fund bought back 322,482 of its own shares at an average
price of 180.1p per share as part of its buyback programme.  These shares are
held in Treasury.

For further enquiries please contact:

Crystal Amber Fund Limited

Chris Waldron (Chairman)

Tel: 01481 716 000

www.crystalamber.com

Allenby Capital Limited - Nominated Adviser

David Worlidge/James Thomas/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



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