Salvus Strategic Investments Limited

[paul29]

Salvus Strategic Investments Limited
MONTHLY: SAM:
Monthly update Monthly update: Month ending July 31 2005 Manager's comment: The New Zealand Smaller Company Capital Index rose 3.8% in July versus SSI'sNAV rise of 1.4%, resulting in an under performance of 2.4%. The main reason for this under performance was corporate activity in stocks the fund does not hold, not ably the proposed merger of Wrightson with Pyne Gould Guinness. The good news is that most of July's under peformance was reversed in the first week of August when two large holdings for the fund appreciated significantly(42 Below and Skellmax). Of the core holdings; 42 Below and Methven under performed the benchmark (for no particular reason) while Abano Healthcare and Provenco continued to outperform. Abano announced a share buyback following the sale of its aged-care facilities and the acquisition of Bay Audiology. Over the month the fund continued to be active and increased its weighting in Abano Healthcare and Lyttelton Port. Year to August 5, the benchmark has increased 1.8% versus SSI's NAV rise of5.2%, resulting in an out performance of 3.4%.



Significant holdings:
Hallenstein Glasson: 8.9%
Provenco: 8.6%
Abano Healthcare 8.5%
Lyttleton Port: 6.4%
42 Below: 5.6%
Methven: 5.4%
Mainfreight: 5.2%
Cash: 4%

Number of holdings: 23

The unaudited net asset value per ordinary share of the Company as at 19 August 2005 was $1.0561. The unaudited diluted net asset value per ordinary share as at 19 August 2005 was $1.0561. The diluted net asset value describes the effect of all warrant holders exercising their warrants when the share price is greater than the exercise price of $1.00.

[Snoopy]

Salvus Strategic Investments Limited
MONTHLY: SAM:

Significant holdings:
Hallenstein Glasson: 8.9%
Provenco: 8.6%
Abano Healthcare 8.5%
Lyttleton Port: 6.4%
42 Below: 5.6%
Methven: 5.4%
Mainfreight: 5.2%
Cash: 4%

Number of holdings: 23

The unaudited net asset value per ordinary share of the Company as at 19 August 2005 was $1.0561. The unaudited diluted net asset value per ordinary share as at 19 August 2005 was $1.0561. The diluted net asset value describes the effect of all warrant holders exercising their warrants when the share price is greater than the exercise price of $1.00.

No comment for quite an few years on this one! But my how the portfolio has changed in that time.

SAM's five largest holdings in terms of the percentage of Salvus capital invested in them are currently:

Abano Healthcare [ABA] 17.6%
Methven [MVN] 16.5%
NZOG [MVN] 15.8%
Energy World Corporation [EWC] 7.9%
Syft Technologies [Unlisted] 7.0%

The claim is that these core holdings account for 73% of company net assets. However, by my arithmetic, those five only add up to 64.8%. I would be grateful if anyone can point out where the maths has gone wrong! There are minor listed holdings that SAM admit to as well, namely Comvita, Provenco and HallensteinGlasson. I am sure there are others too, but apparently SAM are restricted in their investment horizon to the universe of NZX shares only (?) Oh and I have omitted their second biggest holding (17.3%) that is listed under the monicker 'CASH'.

I have been running my ruler over this listed managed fund. That is because SAM have evolved into a kind of healthcare and energy play. And I am possibly a bit shy on both of those market areas within my own portfolio. Current NTA backing per share is around 82c. And the share currently trades at a discount of over 10% on that.

So does anyone have an opinion to voice on SAM? Worth more of a look? Or just crook?

SNOOPY

discl: no SAM units held

[paul29]

Hi SNOOPY I would like to know how many NZOG shares they hold ?

Core holdings as at 23 January 2009:

Abano Healthcare Group 18.0%
Methven 16.6%
New Zealand Oil & Gas 16.6 %
Energy World Corporation 5.5%
Syft Technologies 5.8%
Cash 18.2%

- New Zealand Oil & Gas Ltd (NZO) - Tui production continues to exceed
expectations and remains profitable even at current oil prices. When the Tui
oil field was sanctioned in 2006, the oil price was at US$50 a barrel or
NZ$75 equivalent. At the time of writing, the Tapis oil price is US$49 a
barrel which using current spot rates equates to NZ$93. Therefore, the
significant depreciation of the NZD versus the USD has partly offset the
weakness in the USD denominated oil price. The company also announced an
offtake agreement with Vector for the LNG component of the Kupe Gas
condensate field in which NZO has a 15% stake and announced its promotion to
the NZX15 Index.

The combined value of the company's net cash and their investment in the Pike
River Coal (PRC) field currently accounts for approximately 60% of the
current share price. This implies that the market is assigning little value
to both the Tui and Kupe projects. From a fundamental perspective, Tui
production continues to exceed expectations and the company continues to
de-risk as PRC makes the transition from explorer to producer and Kupe gets
closer to production in second half of 2009.

The company's strong balance sheet should allow it to transform its future
growth profile by taking advantage of the opportunities that are currently
presenting themselves in the current market environment. An example of this
is the recent announcement of the acquisition of a 14.7% shareholding in Pan
Pacific Petroleum (PPP). The company has indicated that it is looking for a
strategic stake in PPP, with the expectation that it will further increase
its shareholding now that the Australian Foreign Investment Review Board
approval has been granted. The acquisition provides NZO with a greater
exposure to the Tui oil field at a relatively attractive price

[Snoopy]

Hi SNOOPY I would like to know how many NZOG shares they hold ?

Core holdings as at 23 January 2009:

Abano Healthcare Group 18.0%
Methven 16.6%
New Zealand Oil & Gas 16.6 %
Energy World Corporation 5.5%
Syft Technologies 5.8%
Cash 18.2%

For that Paul, we need to know the number of shares in SAM currently on issue and the net tangible asset backing of those shares. With the assistance of the Stocknessmonster....

Based on an NTA of 80.31c and 20,889,847 shares on issue, I calculate the total value of all of the company's holdings as:

0.8031 x 20,889,847= $16.777m

If 16.6% of those are in NZO, then the total value of SAM's NZO holding is:

$16.777m x0.166= $2.785m

Based on an NZO share price of $1.28 than means SAM owns:

$2.785m/$1.28 = 2.176m NZO shares.

SNOOPY

[PLYNCH]

Someone wants out. SAM looks to be good buying at .50c a 36% discount to NTA.

[Contrarian]

Gidday
Check out MMA on ASX something like 50% of NTA & 80% of NTA is cash...

They are called Contrarian.

[PLYNCH]

Hi I already have MMA but I paid abit more than todays price.

[Snoopy]

I have been running my ruler over this listed managed fund. That is because SAM have evolved into a kind of healthcare and energy play. And I am possibly a bit shy on both of those market areas within my own portfolio. Current NTA backing per share is around 82c. And the share currently trades at a discount of over 10% on that.

So does anyone have an opinion to voice on SAM? Worth more of a look? Or just crook?

The directors have answered their own question and are suggesting unitholders have a vote on winding this investment vehicle up. The idea behind the company of taking a longer term more value based approach was good. The execution of this strategy has taken quite another path. They became a vehicle for gambling on the price of energy. Who knows how much has been written off over the years on Syft Technologies (selling technology to the oil companies) , NZO with the ultimately disastrous Pike River investment and Energy World Corporation?

In between times they somehow managed to buy HLG high and sell it low, without waiting for the business cycle to come through. A couple of managers have been kept on the cream for several years, but it looks like those who have held units from day 1 will receive very little return on their investment. I would be tempted to blame the managers, but my feeling is that they were behaving rationally by seeking out the short term returns they were being rewarded for, while forgetting about the founding charter of the funds existence. I think the directors are to blame for not realising the manager's incentives were all wrong.

Shame on all you Salvus directors, your conduct has been far below par. The only mitigating factor is that many unlisted share funds are equally badly managed.

SNOOPY

discl: do not hold and never have.

[tim23]

Hoped Milford would initiate a shake up and its happening, excellent!

[tim23]

Not selling to Simon Wallace at 78c, better to wait until the unwinding process develops maybe Simon wants to use the company as listing vehicle?