Somers: Change Of Director & Financial Results
In a filing with the Bermuda Stock Exchange [BSX], Somers Limited a financial services investment holding company, advised that Duncan Saville has retired from Somers Limited Board with effect from 6 February 2019.
In a filing with the BSX, Somers Limited announced financial Results for the quarter ended December 31, 2018.
The full filing stated:
Somers Limited, a financial services investment holding company, is pleased to announce its results for the quarter ended December 31, 2018.
Overview of the quarter ended December 31, 2018:
- Net asset value [“NAV”] per share of $17.30 as at December 31, 2018 [September 30, 2018: $18.15]; and
- Shareholders’ equity of $346.9 million as at December 31, 2018 [September 30, 2018: $364.1 million].
Investment highlights for the quarter ended December 31, 2018:
- Waverton Investment Management Limited [“Waverton”] AuM at December 31, 2018 of £5.4 billion [September 30, 2018: £5.9 billion]; and
- PCF Group plc [“PCF”] completed the acquisition of Azule Lmited.
Commenting on the financial results, Warren McLeland, Chairman of Somers said: “The first quarter of the year was characterised by negative stock market movements which adversely impacted a number of our investments and their resultant valuations. This coupled with continued weakness in a number of currencies against the US Dollar led to a decrease in the Company’s net asset value. Stock markets have rebounded in 2019 and despite increased volatility in the markets we believe our investments are well placed.
“Post the quarter end we announced that Somers had agreed to sell its investment in BCB subject to regulatory and Governmental approvals. We intend to update shareholders on the use of the proceeds once the transaction has completed. Somers has also agreed to sell its investment in Stockdale Securities which is also conditional on UK regulatory approvals. Upon completion these sales will give the Company increased capital and flexibility moving forward.”
Summary of Somers’ results for the quarter ended December 31, 2018
Introduction
Somers recorded a loss of $16.8 million [2017: profit of $15.5 million] during the quarter due primarily to valuation decreases at a number of our investments and continued weakness in both the Australian Dollar and Sterling against the US Dollar. Quarterly loss per share was $0.84 [2017: earnings per share of $0.80]. The Company’s net asset value per share ended the quarter at $17.30 [September 30, 2018: $18.15].
During the quarter there was a $10.3 million valuation loss on the Company’s investment portfolio [2017: gain of $14.5 million]. The loss was principally due to decreases in the value of BCB, PCF and Waverton which were driven by negative stock market movements during the quarter. Offsetting these decreases was an increase in the valuation of Resimac.
The Company received dividend income of $0.2 from West Hamilton [2017: $1.3 million].
Net foreign exchange losses were $5.5 million for the quarter. As at December 31, 2018, 72% of Somers’ investment portfolio is denominated in foreign currencies, primarily Sterling and the Australian Dollar and none of the investments are currently hedged. Over the course of the quarter Sterling depreciated by 2.2% while the Australian Dollar depreciated by 2.5% versus the Dollar. These exchange losses were all unrealised.
Total assets decreased to $395.7 million [September 30, 2018 $407.3 million] due primarily to the valuation and currency movements outlined above. The investment portfolio was $392.9 million as at December 31, 2018 [September 30, 2018: $403.0 million] with equity investments accounting for almost 98% of this total. Within investments, Resimac at $132.3 million, BCB at $83.1 million, Waverton at $73.0 million and PCF at $52.8 million together represent 86.9% of total investments.
Borrowings
Total borrowings were $47.2 million at December 31, 2018 [September 30, 2018: $41.5 million].
Shareholders’ Equity
Shareholders’ equity ended the quarter at $346.9 million [September 30, 2018: $364.1 million]. During the quarter Somers bought back a total of 744 shares at an average cost per share of $16.00 and the number of shares in issue as at December 31, 2018 was 20,057,517.
Somers’ share price ended the period at $15.50, a discount of 10.4% to the Company’s NAV per share.
Directors and Officers Interest in Somers’ Share Capital
At December 31, 2018 the Directors and Officers of the Company and their related interests had combined interests totalling 9,997,070 common shares out of 20,057,517 common shares in issue on that date. No rights to subscribe to shares or debt securities in the Company was granted to, or exercised by, any Director or Officer of the Company during the quarter.
