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Marwyn Value Investors Limited - Interim Results



Marwyn Value Investors Limited

(the "Company")


Unaudited Interim Results 2019


Marwyn Value Investors Limited announces its unaudited, interim results for the period ended 30 June 2019



  • For the six months ended 30 June 2019, the Net Asset Value ("NAV") per ordinary share decreased by 1.7%, compared with an increase in value of the FTSE All-Share of 12.9% over the same period. The NAV per realisation share over the period decreased by 4.1%.
  • The decrease in NAV per ordinary share and realisation share over the period was primarily attributable to a decrease in the share price of Zegona Communications plc ("Zegona"), a write down of the value of the Le Chameau Group plc ("LCG") investment and operational expenses, partially offset by an increase in the share price of BCA Marketplace plc ("BCA").
  • The Company's strategy has delivered a 172.5% NAV total return to ordinary shareholders from inception in March 2006 to 30 June 20191, compared with a total return of 121.3% for the FTSE All-Share Index over the same period. The NAV total return attributable to realisation shareholders from inception on 30 November 2016 to 30 June 2019 is a decrease of 11.2%.



Distributions to shareholders

  • Under the Company's buy-back scheme which commenced in October 2018, £1.46 million has been distributed to ordinary shareholders in each of the first three quarters of 2019 with a total of 3,408,853 ordinary shares re-purchased at an average price of 128.56p per share. These have all been converted into exchange shares with the corresponding limited partnership interests cancelled.
  • In January 2019, Marwyn Value Investors LP ("MVI LP") made a partial offer to institutional shareholders for ordinary shares in the Company, conducted by way of a reverse bookbuild. Pursuant to this offer, MVI LP acquired 4,030,625 ordinary shares at a price of 130p per share for a total consideration of £5.2 million.
  • To the date of this report, a total of £55.3 million has been returned to ordinary shareholders since the implementation of the Ordinary Share Distribution Policy in November 2013 (including the partial offer in January 2019 and shares purchased under the buy-back scheme in Q3 2019).


Portfolio Companies

  • BCA has reached an agreement with TDR Capital LLP ("TDR") on the terms of an all cash offer for the entire issued share capital of BCA at 243 pence per share (inclusive of the 6.65p per share dividend to be paid to BCA shareholders on 30 September 2019). TDR's cash offer is expected be effected by way of a scheme of arrangement, approved by BCA shareholders on 29 July 2019. The FCA has also approved the acquisition, however, at the time of writing, the offer remains subject to certain other conditions including approval by the European Commission. The offer represents an implied enterprise value multiple of 12.5x adjusted EBITDA for the year ended 31 March 2019 and the offer price represents a premium of almost 25% to BCA's share price immediately prior to the offer announcement.

 BCA once again reported impressive results in its financial year ended 31 March 2019, with total revenue for the group increasing 24.5% to £3,028 million and adjusted EBITDA increasing by 7.8% to £172 million both of which exceeded market expectations for the fourth consecutive year. 

  • Zegona is now the largest shareholder in Euskaltel S.A. ("Euskaltel"), having increasing its stake to over 20% using the proceeds of a £100.5 million equity raise completed in February 2019. Three Zegona-led appointments have since been made to the board of Euskaltel - in June, Zegona announced Jose Miguel Garcia as Euskaltel CEO, along with the appointment of Eamonn O'Hare and the re-appointment of Robert Samuelson as proprietary directors. Zegona reported profit for the year ended 31 December 2018 of €10 million, predominantly the result of an increase in the market value of its investment in Euskaltel.
  • Safe Harbour Holdings plc ("Safe Harbour") continues to evaluate a number of platform acquisition targets engaged in B2B distribution and/or the business services sector and has strengthened its management team with the appointment of James Brotherton as Chief Financial Officer and executive director, joining from Tyman plc where he had been CFO since 2010. Safe Harbour continues to assess a wide universe of assets across a number of sectors that it believes are commercially attractive.
  • Wilmcote Holdings plc ("Wilmcote") announced that it is in discussions with Arclin, Inc, regarding a potential acquisition. Kevin Dangerfield was appointed as Chief Financial Officer and executive director of Wilmcote, effective 1 July 2019, joining from Laird plc. Wilmcote continues to pursue its platform acquisition.
  • LCG continues to review its strategic options with the support of Financo, a boutique investment bank. Alongside this, a specialist consultant has been engaged to review LCG's strategy and operations, to undertake an in-depth cost review and to implement a cost saving programme.

 Despite the investment in new products and growth through new online channels, LCG remains dependent on its traditional retail channel. Year-to-date trading conditions in this channel have been particularly difficult across the sector. Uncertain economic conditions are likely to continue in the medium term, creating a difficult headwind for the core business. Consequently, the Manager has applied a prudent valuation approach and the value of the Company's investment in LCG was subsequently been written down to nil post period end.


Chairman, Robert Ware, commented:

"We were pleased to see TDR's offer for BCA which justifies our continued support for the business and belief it has been consistently undervalued, demonstrated by the significant premium of the offer price to the prevailing share price along with another year of impressive annual results. The Zegona team has made significant progress within the period, becoming the largest shareholder in Euskaltel and recommending the appointment of Jose Miguel Garcia as Euskaltel's new CEO. Euskaltel's shareholders have also confirmed the appointment of both of Zegona's executive directors to Euskaltel's board. Wilmcote and Safe Harbour, already led by sector-leading management teams, have strengthened their boards this year through the appointment of high calibre executive directors and continue to actively pursue their platform acquisitions. We look forward to a productive year ahead with our portfolio companies."




1  The inception to date movement is based on the combined weighted average NAV of Marwyn Value Investors I, II and B shares prior to their amalgamation, using the conversion ratio published on 17 April 2008.

Total return assumes the reinvestment of dividends paid to shareholders into the Company at NAV and is calculated on a cum-income basis.