Heres a copy of a recent letter to Andreas Rialas of Argo Group (ARGO:LN) the letter speaks for itself
August 29, 2014
FAO: Andreas Rialas, CIO
Cc: Michael Kloter, Chairman
Kyriakos Rialas, CEO
David Fisher, Director
Kenneth Watterson, Director
Argo Group Limited
33-37 Athol Street
Isle of Man
Further to our prior conversations, I would like to confirm I now speak for 15.6% (in aggregate) of Argo Groups outstanding shares. Excluding insiders, this represents 25.0% of Argos external shareholder base. Supporters now include well-respected funds and investors such as Church House Investment Management, XXX Capital Management, Guy Thomas, and over two dozen other Argo shareholders.
I first wrote to you and Kyriakos in Nov-2012. Since then, Argos assets under management have continued to decline, no significant fund realisations have been reported, fee receivables from three separate Argo-managed funds have been written-off, free cash flow has turned negative, additional shareholder funds have been invested in illiquid loans and investments, an emphasis of matter paragraph has been added to the most recent audit report, and the dividend has been eliminated. This performance is reflected in Argos current market capitalisation, which trades at a 34% discount to the companys net cash and investments (and a 45% discount to net tangible assets), while clearly there is no public market recognition of the underlying value of the asset management business. Furthermore, there has been no tangible effort by management to improve investor relations/sentiment, to reduce the current discount to net asset value, or to otherwise enhance and realise shareholder value.
At this point, we believe a sale and/or wind-down of Argo Group now represents the best strategy to maximise and realise underlying intrinsic value for shareholders. Noting the breadth of shareholder support I have received to date, I believe this perspective is shared by a substantial majority of Argos external shareholder base, and I expect this letter will attract new support. I now intend to actively: i) seek out other/larger activist investors to take a stake in Argo, ii) consider requisitioning an EGM to present certain resolutions to shareholders, and/or iii) seek out trade/financial buyers for the companys stake in The Argo Fund, the asset management business, and/or Argo Group itself (the listed company). Of course, a tender offer is also an obvious & immediate way to add value for shareholders.
As I highlighted to you, I would much prefer (as would most shareholders, I suspect) to see you and the rest of the board actively endorse & lead such a value realisation strategy for shareholders. Such a proactive approach would, I believe, maximise overall value and ensure the best possible outcome for Argos shareholders, its business, and its employees.
I am available at any time, of course, for further discussion. Please note I intend to publish this letter shortly.
[NB: i) Church House's Argo stake is held by the Deep Value Investments Fund, managed by Jeroen Bos - if you haven't read it already, I can highly recommend his recent book 'Deep Value Investing', ii) XXX Capital Management is a well-known European hedge fund, which hasn't publicly disclosed a holding in Argo to date, hence the redaction - Argo management are obviously aware of their shareholding & support, and iii) the letter was based on a GBP 14p share price & a higher GBP/USD rate - at the current 13.875p price and exchange rate, Argo now trades at a 36% discount to net cash and investments, and a 47% discount to net tangible assets.]
[If you're relatively unfamiliar with Argo Group at this point, I encourage you to read their latest annual report (while noting the current market cap's only $15.1 million). Some of my previous posts & lett
Like you when the company decided to delay its publication of results I decided to exit my relatively small holding.....I feel if companies manage other peoples money they should present their own results in a timely manner.
My feeling is that Argo is having difficulty maintaining customer interest in its funds and that the valuation of its book assets although far above the present share price is not obviously realisable unless it could sell its interest in Argo Fund and I do not see buyers.The funds seem illiquid.
As a fund manager its record seems at best somewhere between dire & uninspiring.
You may want to first read my preview of Argo Groups (ARGO:LN) interim results here.
My estimate for end-Jun Assets under Management (AUM) was $333.8 mio. Actual AUM was reported at $308.0 m down (5.6)% from end-Dec, but up 1.9% y-o-y. The H1 return estimates I noted for The Argo Fund (TAF), the Argo Distressed Credit Fund (ADCF) & the Argo Local Markets Fund (ALMF) were all spot-on. [And my Argo Real Estate Opportunities Fund (AREO:LN) estimate was derived directly from their published results]. What tripped me up was the Argo Special Situations Fund (SSF) its (20.6)% H1 NAV decline was rather unexpected Thats a loss of nearly $23 m, which accounts for the vast majority of my AUM over-statement (net redemptions presumably explain the rest).
Even with more info to hand, Im not sure I would have anticipated this kind of result anyway. Heres managements explanation: The main contributors to this position were the decline in share price of AREOF; a write down in the value of an investment in the Greek telecommunications company, On Telecoms; a higher valuation ascribed to the investment in TPPI. Now, lets consider each of those components:
- The PT Trans-Pacific Petrochemical Industries (TPPI) gain is no great surprise TPPI was also the main performance contributor for TAF & ADCF this year.
- While AREOs price decline (from EUR 0.0522 to EUR 0.02) may seem fairly irrelevant at this point, the companys share count is high & Argo (Group & funds) own a 73.9% stake. [NB: Argo Group itself only owns a 1.8% AREO stake]. That still translates into a meaningful write-down. If I assume SSFs the only Argo fund invested in AREO - and Im not at all sure thats a correct assumption by my calculation, its loss could total up to $18.8 m.
- As regards On Telecoms, the Greek telecommunications company, it was my understanding that SSFs predecessor funds (ACPF & AHL) had already recorded a complete write-down on their investment in the company.
Considering the points above, Im puzzled how SSF lost almost $23 m..?
Im otherwise encouraged by the improved level of disclosure. Eyeballing the management commentary, it looks to be about 20-25% longer than last years v welcome & heres to more of the same! However, I note a definite emphasis on the more problematic funds (SSF & AREO) thats understandable, but an increased focus on TAF would be far more relevant (considering Argos $19.1 m investment in the fund). Im also disappointed to see no AUM breakout (as promised) by gross subscriptions, performance & gross redemptions. Since Argos AUM is relatively static & returns are provided, arguably this analysis is unnecessary. But thats missing the point, and a bit like management arguing good Investor Relations is also an unnecessary exercise. Investors in listed asset management companies automatically expect such disclosure these days
Moving on, my anticipated non-AREO AUM increase obviously didnt materialize. Average AUM was actually much unchanged y-o-y, as evidenced by $3.9 m of management fees & other income reported in both 2013 & 2012. [Despite the decline, non-AREO AUM (assuming no change from end-Jun) is only down 3.3% vs. the H1 average - which should imply only a small $0.1 m H2 revenue hit]. Of course, youll note AREO revenue is still included for 2013 lets revisit Note 12. in the last annual report:
In the directors view these amounts are fully recoverable although they have concluded that it would not be appropriate to continue to recognise income from these investment management services, going forward, as the timing of such receipts may be outside the control of the Company and AREOF.
Er, my mistake. I simply took that to mean no AREO revenue would be recorded unless payment was actually received. Trust the accountants to utilize a more convoluted approach! In this case, for a number of reasons, their treatments clearly preferabl
I expect Argo Group (ARGO:LN) will be releasing interim results in the next week or so. Ive no desire to be a hostage to fortune, but I think we can make some intelligent assumptions about their results and theres an important issue I want to highlight:
Lets begin with Assets Under Management (AUM). First, I obviously have no idea re subscriptions/redemptions! But rightly or wrongly, my impression is that changes in Argos AUM have been driven primarily by performance, at least in the past couple of years. [NB: See here - at our meeting earlier this year, Andreas Rialas committed to better disclosure re changes in AUM - breaking out gross subscriptions, performance & gross redemptions is standard practice for the majority of Argo's listed peers].
I also have no insight into the performance of the Argo Special Situations Fund (SSF) - lets assume AUM remains unchanged. We then have the Argo Real Estate Opportunities Fund (AREO:LN) which last reported an adjusted NAV of EUR 68.5 mio. For Argos other funds, Ive come across conflicting reports of YTD returns I prefer to be conservative, so Im fairly confident well see the following returns (as of end-June 2013), at a minimum:
The Argo Fund (TAF): +8.6%
Argo Distressed Credit Fund (ADCF): +11.9%
Argo Local Markets Fund (ALMF): (5.3)%
Which would imply the following AUMs:
The Argo Fund: $93.8 mio
Argo Distressed Credit Fund: $34.5 m
Argo Special Situations Fund: $110.3 m
Argo Local Markets Fund: $6.2 m
Argo Real Estate Opportunities Fund: $89.1 m
That would place total AUM at $333.8 m all other things being equal an increase of 2% since yr-end, and a nice 10% y-o-y.
Next, lets consider Cash & Investments. Yr-end cash was $5.1 m, and lets assume free cashflow is unchanged vs. last year at $151 K. [Which should offer some upside - i) receivables (ex-AREO) & payables were a significant negative last year, ii) management fees should be up y-o-y, and iii) further cost savings & efficiencies were identified in the final results]. Lets deduct $104 K & EUR 20 K of Cyprus deposits. [Obviously they're not a complete loss - I'm simply assuming the remaining balances get re-recorded to non-current assets]. We also need to deduct the dividend of GBP 877 K, or approx. $1.3 m. Assuming no other cash movements, this should place cash around $3.9 m.
For investments, Ill assume no change in the SSF holding of $112 K. The AREO share price has fallen from EUR 0.0522 to EUR 0.02, slashing the value of Argos stake by about $0.5 m (to $0.3 m). However, we should also see the $17.6 m stake in TAF increase to $19.1 m. [Considering the value of this holding exceeds Argo's entire market cap, it's worth noting Andreas Rialas also committed to improving the level of disclosure re TAF]. This should place total investments around $19.5 m. I therefore calculate:
$3.9 m Cash + $19.5 m Investments = $23.4 m / 67.4 m Shares / 1.5598 GBP/$ = GBP 22.2p Cash & Investments per share
$23.4 m Cash & Investments + $336.0 m AUM * 3.75% = $36.0 m / 67.4 m Shares / 1.5598 GBP/$ = GBP 34.2p Intrinsic Value per share
[NB: See prior posts re my 3.75% of AUM valuation of Argo's asset management business. Also, note I've marginally increased total AUM here to reflect impact of EUR/$ on AREO's AUM since end-June].
At the current GBP 15p share price (and $15.8 m market cap), this implies:
Price / Cash & Investments = 0.67
Price / Intrinsic Value = 0.44
Upside Potential = 128%
Its also worth mentioning ARGOs technicals look promising ahead of the interims. The sudden share price revaluation back in March (to GBP 17.5p) was quickly reversed in April as shareholders took fright re Cyprus obviously unwarranted, considering Argos v minor losses. Since then, the share price has been slowly but surely retracing this decline, with no sign of shareholders anticipating a poor set of results.
In April, I took a closer look at the universe of UK-listed asset managers. A key piece of research was a (relatively) simple analysis which focused on financial stability & market valuation this study also offered a useful peer comparison with Argo Group Ltd. (ARGO:LN) (& see this recent post).
Frankly, the numbers (plus the rest of this post) speak for themselves, but lets have a taste of the main highlights:
Name Ticker Net Cash/Inv as % of Mkt Cap
F&C Asset Management FCAM (23)%
Liontrust Asset Management LIO 3.9%
Henderson Group HGG 6.2%
Aberdeen Asset Management ADN 7.9%
Jupiter Fund Management JUP 8.4%
Polar Capital Holdings POLR 16%
Ashmore Group ASHM 18%
Miton Group MGR 26%
Schroders SDR 34%
Man Group EMG 55%
Impax Asset Management Group IPX 59%
Charlemagne Capital CCAP 64%
Argo Group ARGO 175%
Its encouraging to see the entire sector now enjoys robust financial health. Only F&C Asset Management (FCAM:LN) is in a net debt position all other companies sport net cash & investments on their balance sheets. But its also clear this healthy financial position is not the key driver of market valuations for Argos peer group, net cash/investments only represents a median 17% of market cap. On the other hand, Argos $23.6 mio of net cash/investments amounts to a whopping 175% of its market cap.
[At Argo's latest GBP 14p share price, net cash/investments still represents an unfortunate 160% of current market cap. To put it another way, you can now buy Argo for 62 cents on the dollar. In reality, the discount's (far) larger - return all cash/investments to shareholders, and obviously Argo's asset management business would continue to have some positive market value].
Asset managers would argue cash is needed for: i) financial stability & potential operating needs, and ii) potential fund seeding & investment. However, shareholder values obviously the over-riding priority, and asset management is ultimately a capital/asset-light business. The best metric to capture this balancing act for the sector is net cash/investments as a % of AUM:
Name Ticker Net Cash/Inv as % of AUM
F&C Asset Management FCAM (0.1)%
Liontrust Asset Management LIO 0.1%
Henderson Group HGG 0.2%
Aberdeen Asset Management ADN 0.2%
Jupiter Fund Management JUP 0.4%
Miton Group MGR 0.7%
Polar Capital Holdings POLR 0.9%
Schroders SDR 0.9%
Ashmore Group ASHM 1.0%
Charlemagne Capital CCAP 1.1%
Impax Asset Management Group IPX 1.4%
Man Group EMG 2.9%
Argo Group ARGO 7.2%
Argos net cash/investments amount to 7.2% of AUM, while the peer group works off a far leaner median of 0.8%. Theres no evidence of a size effect either the smallest companies (MGR, CCAP & IPX) arent much different, with an average of 1.1%. Of course, if one briefly reviews individual manager AUMs, its quite clear this median level of net cash/investments has proved no deterrent to success in the sector
There appears to be no impact on market valuations either - on average, Id expect the sector to (generally) trade on a 2 to 3% of AUM multiple (on an ex-cash/investments basis). Heres my latest snapshot:
Name Ticker Mkt Cap as % of AUM (on ex-Cash/Inv basis)
Polar Capital Holdings POLR 4.9%
Ashmore Group ASHM 4.6%
Jupiter Fund Management JUP 4.5%
Henderson Group HGG 2.5%
Man Group EMG 2.3%
Liontrust Asset Management LIO 2.1%
Aberdeen Asset Management ADN 2.1%
Miton Group MGR 1.9%
Schroders SDR 1.8%
Impax Asset Management Group IPX 1.0%
F&C Asset Management FCAM 0.7%
Charlemagne Capital CCAP 0.6%
Argo Group ARGO (3.1)%
In fact, the peer groups valued at a median 2.1% of AUM I ge
Argo Groups (ARGO:LN) Final Results should be released shortly (Ill try confirm the exact date). In my most recent Argo posts, I published two letters Ive sent to Kyriakos & Andreas Rialas (CEO & CIO, respectively). I encourage you to review both letters before continuing:
Heres the first letter (from Nov-2012)
Argos share price rallied +6.2% in the following week.
And the second letter (from Dec-2012)
This was sent on behalf of myself, Guy Thomas & some other (smaller) shareholders, representing an aggregate 5% shareholding in Argo. The letter focused on a single specific shareholder distribution proposal. ARGO subsequently rallied +6.5% (in the following week). [In fact, the share price is now up an impressive +36% since my November letter. Despite the rally, I believe Argo remains just as compelling an investment proposition - I currently have a 5.4% portfolio stake].
My recommendations & proposal require little (further) explanation, and I expect shareholders will enthusiastically support all efforts to realize & enhance Argos intrinsic value. But I will revisit them in the context of an upcoming results preview plenty of current & prospective shareholders have emailed me about Argo, so I hope youll find this useful. Lets first consider Argos existing funds:
The Argo Fund (TAF, $82 mio AUM): TAF is Argos flagship fund, racking up a great performance over the past dozen years. Despite this, AUM has continued to decline. So, what do TAFs prospects & AUM look like now? Focusing existing fund-raising efforts on TAF is the obvious strategy here so what new resources are required to increase AUM?
Argo Distressed Credit Fund (ADCF, $24 mio): Considering ADCF was launched into the eye of the credit crisis storm, performance has been respectable. However, the funds size begs the question: With the right resources, can fund AUM be doubled/tripled in the medium term, or would a fund merger (e.g. with TAF) make better long-term sense?
Argo Special Situations Fund LP (SSF, $108 mio): This funds a 2012 merger of two other Argo Funds (AHL & ACPF), with its high-water mark (for earning performance fees) reset to zero. SSFs a closed-end fund, with a 3 yr realization period (now about 2.3 yrs, subject to extension). What are the plans/prospects for retaining these AUM (ideally) within a new/rollover investment vehicle?
Argo Real Estate Opportunities Fund (AREOF, $88 mio): AREOFs a listed fund, AREO:LN. AUM is based on an adjusted NAV of EUR 70 mio, now equivalent to $92 mio. But recent loan-related news hasnt been encouraging considering AREOs 82%+ Net LTV, this is unsurprising (but still unwelcome). This presents two distinct threats: i) with AREOs leverage, asset write-downs would have a disproportionate impact on NAV/AUM, and/or ii) AUM could be eliminated if AREOs lenders seized control.
Unless AREOs directors believe an equity fund-raising is viable, the first step here is to de-list a public listings an expensive waste of time & money for a distressed company. Next, Argo needs to pitch its continued appointment as investment manager Im sure this process has already begun. The most likely proposal is to run AREO as a wind-down vehicle, over a number of years, to repay all loans & maximize return for shareholders. This could be a compelling proposition Argo has the necessary AREO/distressed experience, AREOs directors are there to protect shareholders interests, and the banks surely want to avoid taking on (more) direct property investment/management.
Now, lets consider new fund opportunities:
Argo Local Markets Fund (ALMF, $7 mio): This is a new long/short emerging markets local currency bond fund, launched in Nov-2012. Its not clear if the fund was seeded internally, or by clients lets assume it came from Argo. Noting the weekly liquidity, and judging by the multi-billion doll
Argo Group Ltd. (ARGO:LN) has been a consistent Top 7 holding for me since launching the blog last year. It currently represents 4.9% of my portfolio.
It was among the first handful of stocks I wrote up late last year (here & here). I also included it in my Bakerâs Dozen for 2012. I followed up with another detailed write-up in May-12. [btw An asset manager series later that month may add useful context: Parts I, II, III, culminating in a Fortress Investment Group (FIG:US) write-up]. I then briefly revisited Argo in Oct-12 as part of my catalyst series.
I was pleased to note recently my Argo write-ups have actually proved the most popular with readers. Which certainly isnât reflected in the performance of the share price: ARGO is actually down 20% YTD! Considering the UK marketâs progress this year, and based on reader/investor feedback, itâs reasonable to suggest some/all of this price decline might have been avoidedâ¦
This compelled me to write to Argoâs management a month ago with a number of recommendations to enhance shareholder value, improve investor relations & disclosure, and to increase Assets under Management. Iâm pleased to see the letter would appear to have reminded new/existing investors of Argoâs far higher intrinsic value, and its potential â the share price has subsequently rallied +15%. It also garnered some v useful shareholder feedback & support, which prompted me to send this follow-up letter to Argo last week:
âDecember 12, 2012
FAO: Kyriakos Rialas, CEO
Andreas Rialas, CIO
Cc: Michael Kloter, Chairman
Argo Group Limited (ARGO:LN)
33-37 Athol Street
Isle of Man
Dear Kyriakos & Andreas,
Iâve opted to address this letter to you both, as directors & the largest shareholders of Argo. Again, thanks to Kyriakos for his previous reply â Iâm pleased to hear my âobservationsâ¦will [be] take[n] into accountâ. Please note I am writing this letter on behalf of myself, Guy Thomas, and & a number of other shareholders. We currently represent an aggregate 5% shareholding in Argo.
I look forward to your careful consideration of my other recommendations. However, based on feedback to date, there is a widespread & more urgent focus among shareholders on a return of capital â ideally, via my Share Buyback/Tender recommendation. The recent 15% rally in the share price (since my letter) is welcome, but doesnât mitigate the fact ARGO is still down 20% YTD. It also doesnât address shareholdersâ increasing frustration with the companyâs substantial undervaluation.
The current 11.625p share price is a 44% discount to 20.7p of net cash/investments per share, and a massive 63% discount to my latest 31.1p estimate of intrinsic value per share. Argoâs $22.5 million of net cash/investments represents a compelling opportunity to:
- Commit to a minimum return of $12.5 mio to shareholders (approx. equal to Argoâs current market capitalization), within a reasonable time-scale.
- Initiate a tender offer to retire (at least) 1/3 of Argoâs outstanding shares, priced at 17.6p (a 15% discount to current net cash/investments per share). This would cost just $6.4 mio, about half the total commitment. It would also enhance net cash/investments per (remaining) share to 22.2p, and my estimated intrinsic value to 37.8p per share.
- Determine the most efficient return of the balance of the commitment to shareholders â via regular share buybacks, a return of capital, or perhaps a special dividend. Obviously, share buybacks at a continued discount to NAV/intrinsic value would further enhance those values.
- Ensure adequate liquidity (of $10.0 mio) for the continued success of Argoâs business operations & seeding of its funds.
- Allow shareholders to realize the companyâs current market capitalization, while continui
OK, sorry to disappointâ¦ This definitely isnât a review of Ben Affleckâs new movie âArgoâ! [I havenât seen it yet, but itâs on my list - the reviews are uniformly good, and Affleck displayed a sure hand with âThe Townâ.]
No, this post is about Argo Group Ltd. (ARGO:LN), whose share price is also trapped in a rather evil stateâ¦ Specifically, the price has steadily declined 35% in recent months to GBP 10.125p â when the company is profitable & has net cash/investments on hand of GBP 20.9p per share! Operational execution & performance ultimately offer the best escape route for Argo. [Iâm delighted to see Argo has now launched a new liquid emerging market debt fund. This offers attractive exposure, Iâm sure it will clock up a good performance, but real success will come down to the level of fund-raising thatâs achieved.] But there a number of additional actions & strategies that may offer considerable assistance in making this escape. Hereâs a copy of a recent letter I sent to Kyriakos Rialas, CEO of Argo:
âNovember 07, 2012
FAO: Kyriakos Rialas, CEO
Cc: Andreas Rialas, CIO
Cc: Michael Kloter, Chairman
Argo Group Limited
33-37 Athol Street
Isle of Man
Iâve been a shareholder for 18 months now, and have a 4.5% portfolio stake in Argo Group Ltd (ARGO:LN). My stakeâs far smaller than you & your brotherâs, of course, but well in excess of some of your fellow directorsâ stakes. You may be familiar with the Wexboy blog: Iâve posted a no. of Argo articles (for example, here, here & here).
Summarizing my investment perspective may be useful: Argoâs an alternative manager focused on emerging markets, and investing in special situations, property & distressed debt â an investment focus I find v appealing. The past few years & the timing of certain fund launches has proved challenging. However, the performance of The Argo Fund (TAF) (7.8% pa since â00) is testament to the long-term value of your investment process & experience. This is mirrored operationally, with an admirable focus on costs & profitability when faced with declining Assets under Management (AUM) & performance fees. But the market refuses to consider any positive investment thesis â Argoâs share price is now GBP 10.125p & market capâs Â£6.8 million (or $10.9 mio). This seems v shortsighted: i) itâs a 52% discount to Argoâs $22.5 mio (GBP 20.9p per share) of cash/investments, and ii) true alternative fund managers regularly command (ex-cash) valuations of 7.5%+ of AUM. Itâs also worth highlighting Argo remains profitable! In my opinion, a far more sensible (longer term) valuation for Argo is:
GBP 21.2 mio / 67.4 mio shares = GBP 31.4p intrinsic value per share
I only count cash/investments (zero debt), and ignore the remaining net equity. [But I hope to see improved conversion of receivables to cash, which would improve valuation.] Iâve haircut my asset management valuation to 3.75% of AUM, reflecting the more recent trajectory of AUM, revenues & margins vs. the underlying/longer term value of the business (e.g. in a sale transaction â see here). AUM trends, or the stability of Argo Real Estate Opportunities Fund (AREO:LN), might present risk(s) to this valuation, but one could also speculate on a higher valuation based on share buybacks, rising AUM & margins, and a higher market valuation multiple. I consider GBP 31.4p to be a fair median valuation, which offers the prospect of v significant upside potential.
I am writing to put forward some suggestions/recommendations, which I believe might close the current valuation gap & offer shareholders the potential for further intrinsic value enhancement:
i) The Argo Fund: Argo owns 20%+ of TAF â a $16.8
Uhoh, I tell a lie! Avangardco (AVGR:LN) doesn't actually have the cheapest P/E in my portfolio... That honour should go to Argo Group (ARGO:LN) - if you check on an ex-Cash basis - a bloody NEGATIVE P/E of 7.7!
Check the blog for more recent performance & portfolio metrics.
'...I am pleased to see Ashmore trading a little below fair value, while Charlemagne has got about 75% upside currently. This confirms Argo Group (ARGO:LN), which I own, remains the cheapest (alternative) emerging markets manager available. Of course Argo is a micro-cap, so I would prefer to avoid another small-cap manager in my portfolio...'
Read this and more in my latest writeup on (alternative) asset managers on the Wexboy blog.
1) Prior to the first repurchase on 30/03/2010 there were 76,934,620 shares in existence. After the latest repurchase on 07/06/2011 there are currently 70,253,494 shares. That means that the number of shares has shrunk by approximately 9% over the last 14 months. This is a significant factor and bodes well for future eps figures.
2) The directors hold a 35% stake in the company, so their interests are clearly in line with shareholders.
3) The threat of litigation now appears to have ended.
4) The latest accounts showed a satisfactory year in difficult circumstances.
5) The shares yield around 9%.
On a negative point, I do think the company could improve on the communication front. The odd trading update between the interims and finals would not go amiss.
We've all been waiting years for this case to end but does anyone understand how significant it is? As I don't know how major it is, I'm guessing its big to a certain extent otherwise it wouldn't really be mentioned but has anyone heard about any informationn from the company about it?
Would it make a major difference to the company or is it just one of them silly court cases that occur because someone is unhappy with a tiny detail?
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