This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

Hornby, BHP Billiton, Pan African, and Share Radio

A few items of miscellaneous news worthy of comment:

  1. Investor Alexander Anton has launched a campaign to have Chairman Roger Canham removed from the board of Hornby (HRN) and get himself appointed as director. A requisition for a General Meeting of the company has been submitted accordingly. Hornby, the maker of train sets and toys, has had a poor financial performance in recent years with production difficulties, consistent losses, and a turnaround plan that is not obviously working. Mr Anton was involved in the revolution at Victoria a few years ago, with a very positive result, so he has experience of boardroom coups. He complains that Mr Canham’s position as Chairman of Hornby is inappropriate when he is also Chairman of Phoenix Asset Managment, who are the largest investor in Hornby. More will follow on this story.
  2. Another activist investor which ShareSoc has been involved with in the past is Elliott Advisors. They are attacking a much bigger fish than Hornby in that they have suggested that BHP Billiton (BHP) should be broken up. They wish to simplify the company, such as dropping the dual UK/Austalian company set-up, and suggest disposing of certain assets such as its US oil business and concentrating on its Australian mining activities. The company did spin off some of its metals businesses as South32 in 2015. Elliott has a 4% stake in BHP at present. This may be a long-running saga if the past tactics of Elliott are repeated, so we will no doubt hear more on that also.
  3. South African gold mining company Pan African Resources (PAF) announced a placing today (12/4/2017) to raise cash for the development of a new “tailings” project. The placing was at 14p when the previous day’s close was at 16p, i.e. a 12% discount. The share price trend also suggests that news about a possible placing had leaked out some days before, as happens very often. This is a placing, not a rights issue, with no accompanying “open offer” so minority shareholders are diluted and prejudiced in favour of institutions. The brokers involved were Numis, Hannam and Peel Hunt. ShareSoc has made lots of negative comments in the past about such placings in AIM company shares which we think should be reformed. It is particularly annoying when one personally holds the shares as I do in this case. I shall be complaining to the company Chairman.
  4. Financial news radio station Share Radio is apparently to close. Gavin Oldham, who set it up in 2014 and personally funded it, has apparently decided it is not financially viable according to a press report. It is disappointing to learn that a service that some people found useful is to disappear although I cannot say I used it much myself. Audio is a slow way of communicating information in comparison with the printed form which I suggest is one of the difficulties of the concept. Plus actually establishing a new business always requires enormous investment in building a customer base (an audience in this case). Well at least it’s not listed on AIM where unproven business models still abound.

Roger Lawson

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.