Artemis

Sophisticated and complex high-risk tax-sensitive investments in small companies: handle with care
scotia
Posts: 48
Joined: November 4th, 2016, 8:43 pm

Artemis

Postby scotia » December 14th, 2016, 2:41 pm

A pleasing set of results from Artemis :-
http://www.lse.co.uk/share-regulatory-n ... ial_Report

This VCT had a rocky start, but now seems to be performing well above average. However currently it does not seem likely that Artemis will carry out another fund raise. There will be a continuation vote in 2017, and the Chairman's view of this is:-

In accordance with the Company's Articles of Association (the 'Articles'), the Directors are required to put forward an ordinary resolution for the continuation of the Company as a VCT every five years. The last continuation vote was held on 31 January 2012 and the next continuation vote will take place at the AGM being held on 1 February 2017. Since January 2012 the Company's assets have increased from £35.6 million to £38.4 million (as at 30 September 2016). Over the same period £24.4 million has been returned in dividends and a further £4.3 million paid out in share buy backs.


There will be a 2p dividend plus an 8p special dividend - i.e. returning cash to shareholders from recent sales. They make a statement on this policy:-

Additionally, changes to the VCT regulations have reduced the universe of companies in which VCTs can invest and restricted the ability to make further investments in existing holdings. This has resulted in the Company distributing the cash as special dividends. The Board continues to be of the view that new investments should take priority and shareholders should be aware that were more investment opportunities to arise, at acceptable valuations, special dividends may not be paid in future.

Karellan
Posts: 37
Joined: November 4th, 2016, 2:42 pm

Re: Artemis

Postby Karellan » December 15th, 2016, 10:56 am

As you say a rocky start. Its one of earlier ones that I bought in 2004 at 40% tax relief mainly because of the good name of Artemis. One of a pair of 40M issues. After some capital loss the two were merged . I recall some while ago that they said that they were not going to raise any more funds. At some time there was also a resolution to alter the incentive scheme that was rather generous to the managers. After a lot of shareholder action it was scrapped thankfully.

Somewhere between then and now it has produced a good dividend stream and has paid me back more than I paid for it then redeeming the Artemis name. Its an example of shareholders getting their way and is worth remembering that it can be done.

Karellan
Posts: 37
Joined: November 4th, 2016, 2:42 pm

Re: Artemis

Postby Karellan » December 27th, 2016, 2:06 pm

I wondered what the general feeling was about the continuation vote as I find myself somewhat undecided ?

Retiringat51
Posts: 20
Joined: November 4th, 2016, 6:08 pm

Re: Artemis

Postby Retiringat51 » December 27th, 2016, 6:12 pm

I'd vote for continuation and would invest more if there was a new fundraise.

Currently top of the All VCTs class over 1 and 3 years and 2nd over 5 years. Divis have been excellent too.

Karellan
Posts: 37
Joined: November 4th, 2016, 2:42 pm

Re: Artemis

Postby Karellan » December 27th, 2016, 8:15 pm

It seems to kick out dividends despite its troubled past. I dont believe that they have any plans ever to raise more so its an oddity , just one VCT fund within Artemis and it makes me wonder what sort of commitment they would have to this backwater in their structure. I did wonder whether this was the reasoning behing their attempt to alter the incentive scheme. The AIM market is a little more mercurial that private equity valuations but they believe they have some good developing firms under their wing. Somehow I cannot come down one side or another.

scotia
Posts: 48
Joined: November 4th, 2016, 8:43 pm

Re: Artemis

Postby scotia » December 27th, 2016, 10:00 pm

Artemis is one of my wife's (first) VCT holdings from 2005. In February the 5 year term on the 50% buy back in 2012 will be complete - so she could get out with an approx. 10% discount to NAV - or vote against a continuance, and get closer to NAV over an extended period. But with no pressure to reduce her VCT holdings, I expect she will do neither - and hope for a profitable continuance. From April 2005 to July 2016 the XIRR has been approx. 8.7% - this includes the 40% initial tax rebate and the further 30% tax rebate on approx. 50% of the shares in the 2012 buy-back. However this figure was significantly affected by a very shaky start - so recent performance has been good.

This VCT can't be a big deal for Artemis, so I suspect they are under no pressure to continue - hence I don't think they are over-egging future possible gains. So If I were a holder, I think I would be voting for a continuance.

Retiringat51
Posts: 20
Joined: November 4th, 2016, 6:08 pm

Re: Artemis

Postby Retiringat51 » December 27th, 2016, 10:14 pm

There was a change of lead manager in 2006. Andy Gray has been in post since then and performance has indeed been good.

I had cursed Artemis for the misjudged attempt to extract enhanced fees at a time when performance under the previous manager (a "Partner" - can't recall the name of the fellow in question) had been quite dire. A veritable turnaround.

Karellan
Posts: 37
Joined: November 4th, 2016, 2:42 pm

Re: Artemis

Postby Karellan » December 30th, 2016, 9:53 am

I do recall that early on one of the investment managers said in the company report that performance had been dissapointing (possibly about the time of initial capital losses). This impressed me that they could be so honest and I was happy to remain. When you see that some VCTs want brownie points for tax relief , paying a dividend or managing to print a company report in three colours... It was refreshing but I was very surprised by the attempt at the enhanced incentive scheme.

rhowitt
Posts: 1
Joined: November 7th, 2016, 7:51 am

Re: Artemis

Postby rhowitt » January 11th, 2017, 5:47 am

I bought Artemis in the 40% era and more recently have successfully bought second hand in our SIPP and ISAs. 2or 3 years ago having read the annual reports for some years I got the sense that the manager and board were adopting a sensible pragmatic approach to the changing landscape of the AIM market. I felt that AIM share prices began to reflect the worth of some of the companies and in some cases very fully value them. Artemis seemed to react to this by reducing some holdings which seemed to be fully valued, and being careful about new acquisitions. Excess cash was paid out in the form of special dividends. Legislation has further restricted Artemis's ability to invest further but with some decent companies in the portfolio and a good pragmatic approach I am firmly handing on to my holdings.


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