Investment Matters

Company news: Next DC, 360 Capital Group, Moreton Resources and Here, There & Everywhere

Next DC (NXT.ASX) the tenant (and minority shareholder) of 360 Capital Group (TGP.ASX) controlled Asia Pacific Data Centers (AJD.ASX) announced that it intends to convene an Extraordinary Meeting of AJD security holders with the objective of winding up the Trust and distributing the net cash proceeds to all members.  Given NXT has the first right of refusal to purchase these assets (in its lease agreements) it possibly thinks it will be able to buy these assets off AJD at the conclusion of this process. And more cheaply than simply offering to buy the trust itself.

In a sense, this comes as no surprise as (in my opinion) NXT have shown a tendency to act in their own best interest rather than the best interest of AJD holders.  And despite NXT’s consistent toting of “corporate governance concerns” relating to TGP’s involvement they are horribly conflicted themselves in their own dealings with AJD.

First Samuel clients have an investment in unsecured TGP debt which was used to help finance the offer of AJD, which has now concluded.

Happily, Moreton Resources (MRV.ASX) announced this week it has turned its first Silver Ounces. This week it completed a 4,354oz production, smelting, and refining process at it Granite Belt project, for the first time.  This marks the first sales revenue in the history of MRV, and moves this hard working business from being an explorer to a producer for the first time.  We expect the company to build upon these strong foundations, and it will be cashflow positive and profitable through CY-18.

Here, There & Everywhere (HT1.ASX) responded to media rumours that it was looking at privatisation offers from private equity, it is not.  It announced that it on track to meet market EBITDA (Earnings, before Interest, Tax, Depreciation and Amortisation) guidance of $118-119m. This led to a strong pick up in the share price (+5.5% week to date) after a period of weakness.  We still like the mix of radio and outdoor assets that HT1 has, and given its very low price, and strong cash generation, are prepared to give it some time to combine these businesses to maximise their potential.