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INVESTSMART GROUP LIMITED — Net Asset Value 2012
Aug 13, 2012
65130_rns_2012-08-13_04544936-be8f-4ba6-9cbe-25d2f0f2982a.pdf
Net Asset Value
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Merricks Capital Special Opportunity Fund Limited
NTA Release as at 31 Jul 2012
Overview
On 1 August 2010, Merricks Capital Pty Limited (Merricks) became the Manager of the Merricks Capital Special Opportunity Fund Limited (Fund) (formerly known as Fat Prophets Australia Fund Limited). On 1 October 2010 the Fund announced its new Investment Mandate.
The Fund has a few select investments at any given time and focuses on investments in small to mid-cap Australian listed companies. The types of investments that the Fund targets are:
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Obtaining a strategic stake in a desired small to medium listed company via placement of new securities or acquisition of shares.
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Construction of unlisted convertible securities, offering equity-type returns but with debt security characteristics.
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Combining with other investors to acquire a significant stake in a company with a view to actively agitating for change, which could release hidden value to all shareholders.
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Investments that reward the provision of liquidity.
The Fund’s core strength is that it has semi-permanent capital. Merricks seeks to make investments that allows the Fund to maximise the use of its semi-permanent capital, resulting in both capital gains and the payment of regular and consistent dividends.
Net Tangible Asset Backing *
| Performance | Net Asset Backing | Monthly Return |
|---|---|---|
| Pre Tax NTA | 0.57 Per Share | -24.45% |
| Post Tax NTA | 0.73 Per Share | -14.85% |
| ASX 300 Accumulation Index | 4.20% | |
| Asset Allocation | ||
| Investment | Weight | |
| Cash | -0.33% | |
| Shareholdings | 100.33% |
Asset Allocation
Invested Portfolio
| Company | Code | Weight |
|---|---|---|
| Digital Harbour Mezzanine Loan | - | 47.58% |
| ING Real Estate Entertainment Funds | IEF ASX | 33.76% |
| Straits Resources Ltd | SRQ ASX | 16.40% |
| Molopo Energy Ltd | MPO ASX | 1.53% |
| Aziana Ltd | AZK ASX | 0.73% |
Fund Service Providers Fund Information
Contact
Administrator White Outsourcing Pty Ltd Inception Date April 2005 Adam Lindell +61 3 8319 8111 Auditor Ernst & Young ASX Stock Code MEF [email protected] FUM $16M AUD www.merrickscapital.com
Disclaimer
This report has been prepared solely for the benefit of the Shareholders of Merricks Capital Special Opportunity Fund Limited (Fund). It summarises information on the financial products held by the Fund as at the stated date. The financial products may and will change after the issue of this report. No assurance can be given by the Fund or by Merricks Capital Pty Limited (Merricks) as to the accuracy and completeness of the information used to compile this report. Past performance is not necessarily indicative of future performance. By making this report available, the Fund and Merricks are not providing any general advice or personal advice within the meaning of section 766B of the Corporations Act regarding the Fund, any potential investment in the Fund or any investments or potential investments of the Fund. This report is made without consideration of any specific person's investment objectives, financial situation or needs. The Fund, Merricks and directors and employees of the Fund and Merricks do not accept any liability for the results of any action taken or not taken on the basis of the information contained in this report, any negligent miss-statements, errors or omissions.
Merricks Capital Special Opportunity Fund Limited NTA Release as at 31 Jul 2012
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* Deferred Tax Assets
In the Net Tangible Asset Backing table above, the pre-tax NTA, calculated in accordance with ASX Listing Rule 19.12, excludes $4.708million (approx. 16.5 cents per share) of deferred tax assets; total unaudited deferred tax assets as at 31 July 2012 are $5.322million, of which some $0.614million are included in the above calculation. Excluding all deferred tax assets, NTA per share at 31 July 2012 would be approximately $15.5million or 54.4 cents/share. The after tax NTA of $0.73/share includes all deferred tax assets, since an audited opinion on their carrying value has not yet been finalised.
The audited financial statements for the year to 30 June 2012 are currently in the process of being prepared. The directors of MEF wish to note that based on Australian Accounting Standards, it is highly probable that a significant proportion of the currently unaudited deferred tax asset balance of $3.797million as at 30 June 2012 will be written off. Whilst potentially not present on the audited Statement of Financial Position of the Company when it is publicly released, the benefit of these losses will still be available to the Company in future, if income of an appropriate nature is earned. A fuller exposition of the tax position will be available in the 2012 Annual Report and Financial Statements.
The balance of deferred tax assets grew significantly in the month of July 2012 as a result of the sharp decline in price of the Company’s holding in Straits Resources Limited from $0.36/share to $0.11/share; this was the primary contributor to the 24% decrease in unaudited pre-tax NTA per share during the month of July 2012.