Thursday 2 July 2009
Chairman's update for shareholders - 2 July 2009
Investment performance
Although Starvest has maintained its position this quarter, the
investment performance has been mixed. At 30 June 2009, the closing
portfolio net asset value was marginally ahead at £4.3m, a 10%
increase in the nine months since 30 September 2008. However, the
net asset value per share has not moved in the quarter since 31 March
2009.
Starvest now uses closing bid prices or the Directors' lower
valuation, if deemed appropriate. This prudent valuation basis first
adopted when preparing the Starvest annual financial statements at 30
September 2008 has proved to be fully justified.
Company statistics
30 June 31 March 31 December 30 September
2009 2009 2008 2008
At BID at BID
At BID at BID values values
values values
Trading portfolio value £4.3m £4.25m £3.92m £3.9m
Company asset value net £3.62m £3.62m £3.23m £3.4m
of debt
Net asset value - fully 10.01 10.01 8.98 pence 9.06 pence
diluted per share pence pence
Share price - mid 9.5 pence 6.25 pence 6 pence 12.25p
Share price discount to 5% 37% 33% 35% premium
fully diluted net asset
value
Market capitalisation £3.31m £2.18m £2.09m £4.28m
Comment
Market conditions remain fragile. However, there are early signs
that underlying prices for raw materials are hardening which in due
course will impact on share prices. For example, in July 2008 the
price of nickel was $22,000 per tonne; by October 2008 it had fallen
to $9,000 since when it has gradually recovered to $16,000. Although
even at this level it may be below the cost of production for many
miners, it remains a positive change.
The junior explorers in which Starvest is predominantly invested are
not generating cash, rather they are consumers of cash as they
continue with their exploration programmes towards establishing
proven resources. In the economic circumstances of the past year it
has been extremely difficult for many of them to raise the essential
new cash except at a discount to those market prices which were
common a year ago. These tough circumstances continue so it is
unsurprising that the values of some investments have fallen and will
take time to recover.
On the other hand, we are delighted to note that some of our investee
companies are making significant advances with their programmes, some
even drawing close to generating revenue so we hope for share price
improvements in the near future.
The Board continues to believe that it has within its portfolio
investments with considerable potential and is hoping for an upturn
during 2010, possibly earlier for some.
Shareholders who wish to receive electronic copies of announcements
are invited to register their email address on the home page of the
Company website: www.starvest.co.uk.
R Bruce Rowan
Chairman & Chief Executive
2 July 2009
Enquiries to:
Bruce Rowan, Chairman 020 7486 3997 or John Watkins, Finance Director
07768 512404; john@starvest.co.uk
Gerry Beaney or Colin Aaronson Grant Thornton UK LLP 020 7383 5100
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