Temple Bar

[Parky]

Share price still drifting down - now below £7 - and discount drifting up. No action by the board. A quiet disaster in the making?

[Dod101]

Share price still drifting down - now below £7 - and discount drifting up. No action by the board. A quiet disaster in the making?

I would imagine that it is the continuing non news that is causing people to lose interest. They are or were the last time I looked still invested in liquid enough shares so the discount should be recovered in the event of any liquidation, but we are not there yet. However, the Directors are not doing themselves any favours by the continued delay, that's for sure.

Dod

[Parky]

At last, an announcement from Temple Bar.
https://www.theaic.co.uk/companydata/0P ... 3A00/P4AC5

They are appointing RWC as investment manager (who are they?) and cutting dividend by 25%. At least we know what is happening, but it does not sound like a game changer to me. We will see what the share price does no doubt in the coming days.

[ADrunkenMarcus]

It wasn’t horrific: - 38p dividend equates to a 5.8% yield at 656p share price.

They will need to dig themselves out of a deep hole though.

Best wishes

Mark

[Dod101]

So what happened to their results? As recently as 2 September I think it was they made a holding statement to say they would be announced at the same time as the revised management arrangements. Who indeed are RWC?

I wish I did not hold them I must say. Now the best they can come up with is a continuation of the same policy as before, value investing, a cut to the dividend and the remaining dividend to be supported by their reserves for at least the next two years (well this year and next)

Dod

[scotia]

Who indeed are RWC?

I had a look at their site - full of platitudes but short of detail on their current offerings.
So I looked them up on Hargreaves Lansdown. They appear to offer 147 Offshore Funds.
So I had a look at a few of them - on a 5-year total return basis
RWC UK Focus A GBP 10.27%
RWC Income Opportunities A GBP 6.13%
RWC Global Enhanced Dividend R GBP 7.38 %
RWC Enhanced Income R GPB minus 4.92%
RWC Global Horizon R GBP 64.01%

For comparison a FTSE all share tracker HSBC FTSE All Share Index RET Acc 17.44%
And a world tracker from Vanguard (VWRL) 91.72%

They certainly would not be my choice as a fund manager.

[Dod101]

Who indeed are RWC?

I had a look at their site - full of platitudes but short of detail on their current offerings.
So I looked them up on Hargreaves Lansdown. They appear to offer 147 Offshore Funds.
So I had a look at a few of them - on a 5-year total return basis
RWC UK Focus A GBP 10.27%
RWC Income Opportunities A GBP 6.13%
RWC Global Enhanced Dividend R GBP 7.38 %
RWC Enhanced Income R GPB minus 4.92%
RWC Global Horizon R GBP 64.01%

For comparison a FTSE all share tracker HSBC FTSE All Share Index RET Acc 17.44%
And a world tracker from Vanguard (VWRL) 91.72%

They certainly would not be my choice as a fund manager.

Thanks for that. I do not know if all of these funds are run as value funds but of course they have done very poorly generally for the last several years and unlike say Witan Pacific (now BG China Growth) Temple Bar have decided to continue with their failing style of value investing. This must be an IT to dump except that it is currently on a big discount.

AS you say, their website is a bit short on detail.

Dod

[ADrunkenMarcus]

Yes, “value investing” May be out of style but it needs to come good eventually !

The positive signs in 2018-19 and the accelerated dividend growth we saw have vanished. Virtually all the return since 2001 have been dividends.

Best wishes

Mark.

[Largsviking]

TMP it feels like a slow moving car crash......thanks for all the great input on this board.

Dipping below 07.00 GBP is almost the icing on the cake....that added to a anonymous fund manager.....wow.

I give it another month.....I’m feeling no attachment to this investment or to the board.

[Arborbridge]

The actual paragrpha about the dividends is as follows:-

"Dividend outlook

Having reviewed the Trust’s income position with RWC, the Board intends to recommend a total dividend for the current year of 38.5 pence per ordinary share, with both the third interim dividend and the final dividend recommended to be 8.25p. This new total dividend, unfortunately, represents a cut of 25 per cent. from the previous level. From this base level, however, the Board believes that it will be possible to renew dividend growth going forward. Current projections suggest that there will have to be transfers from reserves to enable the 2020 and the 2021 dividend to be paid, but thereafter the dividend should be covered by earnings."

As 25% cut is very disappointing since the principal advantage of ITs over HYP for income is the reserving aspect to smooth the flow. The TMPL reserves are shown as 1.44 years at the old dividend rate, according to AIC, so this looks over prudent. This cut may be of the same order as my HYP, though that remains to be seen. Let's hope this does not start a rush from all the other income ITs in my basket!

As regards maintaining the value stance, I'm not too bothered about this as TMPL is the only IT of this type I have shares in. I bought it for the value/contrarian gambit knowing that it is a philosophy which must be on the wrong side of the equation for years at a stretch. It's a really hard philosophy to follow for professional managers as they are expected to bring forth gains year by year. In the middle of a crisis would seem strategical the wrong time to throw in the towel.

Mind you, I agree my investment might still be heavily under water in a year or three, but it is only one part of my total basket so I'm sanguine about it.

Arb.

[scotia]

Who indeed are RWC?

I had a look at their site - full of platitudes but short of detail on their current offerings.
So I looked them up on Hargreaves Lansdown. They appear to offer 147 Offshore Funds.
So I had a look at a few of them - on a 5-year total return basis
RWC UK Focus A GBP 10.27%
RWC Income Opportunities A GBP 6.13%
RWC Global Enhanced Dividend R GBP 7.38 %
RWC Enhanced Income R GPB minus 4.92%
RWC Global Horizon R GBP 64.01%

For comparison a FTSE all share tracker HSBC FTSE All Share Index RET Acc 17.44%
And a world tracker from Vanguard (VWRL) 91.72%

They certainly would not be my choice as a fund manager.

Thanks for that. I do not know if all of these funds are run as value funds but of course they have done very poorly generally for the last several years and unlike say Witan Pacific (now BG China Growth) Temple Bar have decided to continue with their failing style of value investing. This must be an IT to dump except that it is currently on a big discount.

AS you say, their website is a bit short on detail.

Dod

I should probably have added that although the HL charting tool listed 147 RWC offshore funds (which appear to be OEICs/Unit Trusts), there were multiple classes of each RWC fund, so there were actually only 16 distinct funds. There was no indication as to which could be value-based (if any), so my selection was made by elimination - I didn't include non-UK country specific funds and I didn't include funds with a track record of less than 5 years. I only included one Global fund. I didn't find RWC listed as an Investment Trust manager.
So on that evidence - why choose RWC? Was the Management of TMPL put out to tender? If so, which fund managers made offers? Was RWC obviously the best (or only) offer? Will details of the process be made public?

[Dod101]

I should probably have added that although the HL charting tool listed 147 RWC offshore funds (which appear to be OEICs/Unit Trusts), there were multiple classes of each RWC fund, so there were actually only 16 distinct funds. There was no indication as to which could be value-based (if any), so my selection was made by elimination - I didn't include non-UK country specific funds and I didn't include funds with a track record of less than 5 years. I only included one Global fund. I didn't find RWC listed as an Investment Trust manager.
So on that evidence - why choose RWC? Was the Management of TMPL put out to tender? If so, which fund managers made offers? Was RWC obviously the best (or only) offer? Will details of the process be made public?

Thanks again. The info from Temple Bar has been terse over the last few months and I doubt very much that we will get much further information. They still do not seem to have released any results despite the fact that they promised they would with the information on the appointment of a new manager. None of this inspires much confidence for me anyway.

Dod

[Wizard]

I was looking at Temple Bar as a potential recovery play, but the attitude of the board, as exhibited by their communication, is a strong disincentive.

[Parky]

Thanks again. The info from Temple Bar has been terse over the last few months and I doubt very much that we will get much further information. They still do not seem to have released any results despite the fact that they promised they would with the information on the appointment of a new manager. None of this inspires much confidence for me anyway.

Dod

Half year report dated 24/9/20
https://www.theaic.co.uk/companydata/0P ... 3A50/P6760

[Dod101]

Thanks again. The info from Temple Bar has been terse over the last few months and I doubt very much that we will get much further information. They still do not seem to have released any results despite the fact that they promised they would with the information on the appointment of a new manager. None of this inspires much confidence for me anyway.

Dod

Half year report dated 24/9/20
https://www.theaic.co.uk/companydata/0P ... 3A50/P6760

Thanks Parky. It does not exactly follow the usual style and is a bit short on detail. GIves an impression of being rushed out. I suppose the fact that the current managers are being replaced means that there is no report from them. All very unsatisfactory I think with no detail of what the new managers intend to do.

Dod

[scotia]

I was looking at Temple Bar as a potential recovery play, but the attitude of the board, as exhibited by their communication, is a strong disincentive.

I have been doing a bit more digging on the two new managers - Nick Purves and Ian Lance
For Nick Purves - see the Trustnet page
https://www2.trustnet.com/managers/factsheet/nick-purves/ima-utoeic/O/00000009DL/
His major task appears to have been the management of the St James's Place Equity Income Fund. Over 5 years its total return is minus 7.75%
And here's a Trustnet page on Ian Lance
https://www2.trustnet.com/managers/factsheet/ian-lance/ima-utoeic/o/00000918av/
Trustnet doesn't seem impressed by his abilities. I'll say no more.

[Dod101]

I was looking at Temple Bar as a potential recovery play, but the attitude of the board, as exhibited by their communication, is a strong disincentive.

I have been doing a bit more digging on the two new managers - Nick Purves and Ian Lance
For Nick Purves - see the Trustnet page
https://www2.trustnet.com/managers/factsheet/nick-purves/ima-utoeic/O/00000009DL/
His major task appears to have been the management of the St James's Place Equity Income Fund. Over 5 years its total return is minus 7.75%
And here's a Trustnet page on Ian Lance
https://www2.trustnet.com/managers/factsheet/ian-lance/ima-utoeic/o/00000918av/
Trustnet doesn't seem impressed by his abilities. I'll say no more.

That is the new manager and the Board does not as I have said seem to be very interested in giving shareholders much info. This is really not encouraging. I think I will get out.

Dod

[Tigger]

Some background info here on the process behind the manager change at TMPL in James Carthew's latest weekly piece for Citywire.

https://citywire.co.uk/investment-trust-insider/news/james-carthew-temple-bar-board-good-value-even-if-investors-want-style-change/a1405951

[Dod101]

Picking up Arb's point re the dividend, the latest half year results show the Investment income for the half year has dropped from £22,387.000 to 30 June 2019 to a mere £8,142,000 for the same period this year. No doubt that reflects the so called UK value shares held in the portfolio, many of which would feature in a well stocked HYP. These shares took the brunt of the dividend cuts. Is it any wonder that they have cut the dividend? They say even with the cut that they will need to use the Revenue Reserves for the remainder of this year and then again for 2021.

I am rather annoyed that they did not ask the outgoing managers to report what they did for the half year to 30 June but no doubt they thought there was not much point in that.

Dod

[Wizard]

Picking up Arb's point re the dividend, the latest half year results show the Investment income for the half year has dropped from £22,387.000 to 30 June 2019 to a mere £8,142,000 for the same period this year. No doubt that reflects the so called UK value shares held in the portfolio, many of which would feature in a well stocked HYP. These shares took the brunt of the dividend cuts. Is it any wonder that they have cut the dividend? They say even with the cut that they will need to use the Revenue Reserves for the remainder of this year and then again for 2021.

I am rather annoyed that they did not ask the outgoing managers to report what they did for the half year to 30 June but no doubt they thought there was not much point in that.

Dod

Which to be fair to HYP investors suggests Temple Bar has done a lot worse on income cuts than any of the HYP investors that have shared their results. I would say the more I read the less inclined I am to buy in to Temple Bar, but I have stopped reading as the decision is made and I will not invest in them. It looks like this car crash may well take a very long time to fix, if indeed it does not become a complete write-off.