Stock Market Review - Santumas Shareholdings plc
Although Santumas Shareholdings plc is among one of the oldest Maltese public companies, over the years it has been given very little coverage by the press and financial columnists. The company was originally formed as the Malta New Issue Investment Co.
Although Santumas Shareholdings plc is among one of the oldest Maltese public companies, over the years it has been given very little coverage by the press and financial columnists.
The company was originally formed as the Malta New Issue Investment Co. Ltd on April 29, 1963. Its name was then changed to Malta Shareholdings Ltd in May 1965 and converted into a public company with the aim of carrying on the business of a finance trust. Malta Shareholdings Ltd issued shares to the public in November 1968 with some of the public shareholders who had subscribed to some shares at the time still on the company's share register today. Shortly after the public share issue, Malta Shareholdings Ltd acquired Marsascala Development Ltd. The main asset of this fully-owned subsidiary was the Ta' Santumas plot of land in Marsascala.
In September 1978, Malta Shareholdings Ltd changed its name to Santumas Shareholdings Ltd and the objectives of the company also provided for property development, with the main property being the Santumas Estate in Marsascala.
Calpabrin Properties (Investments) Ltd merged into Santumas Shareholdings Ltd in April 1987 and Marsascala Development Ltd and Santumas Contractors Ltd then merged into Santumas Shareholdings Ltd in 1989.
On May 9, 1996 the company became licensed as a collective investment scheme by the Malta Financial Services Centre (today replaced by the Malta Financial Services Authority).
The company was registered as a public limited liability company under the Companies Act of 1995 on December 24, 1997, thereby changing its name to Santumas Shareholdings plc.
In December 2003 Santumas Shareholdings plc obtained a listing on the Malta Stock Exchange as a closed-ended collective investment scheme.
Similar to a limited liability company, a close-ended scheme has a fixed number of shares and once listed the shares become transferrable on the secondary market of the Stock Exchange. On the other hand, in an open-ended scheme, shares are created each time new money is invested and cancelled when units in the fund are redeemed by the manager. Therefore shares in an open-ended are not tradeable on the Stock Exchange and as a result the share price of an open-ended scheme reflects the net asset value of the fund while the share price of a close-ended scheme traded on the exchange is determined by the demand and supply forces in the market. The most common open-ended schemes in Malta are run by the two major banks, namely the underlying funds within the La Valette Funds Sicav plc and the HSBC No-Load Funds SICAV plc.
The financial year of Santumas runs from May 1 to April 30 and the latest published financial report covering the results for the six months ended October 31, 2008 provides details of the current underlying investment portfolio held by the scheme. This was valued at €5.8 million as at October 31, 2008. Almost 59 per cent of the portfolio is in financial assets (mainly banks and investment funds) with the balance of 41 per cent in property (primarily development land with a value of €1.3 million). During the six-month period to October 31, 2008, Santumas generated a profit after tax of €2.2 million, principally as a result of the profit of €3.5 million from the sale of investment properties.
This helped to offset the €0.7 million decline in the fair value of financial assets following the sharp correction in local and international equity markets up to October 31. The sale of property had originally been mentioned in November 2005 when Santumas had stated via a Malta Stock Exchange company announcement that "it had entered into a preliminary agreement for the sale of certain immovable property and other rights to a third party for a total gross consideration of €3.54 million". This agreement related to property in Marsascala in the vicinity of the Jerma Palace Hotel. The agreement was confirmed via another company announcement on July 25, 2008, in which Santumas reported that the sale of property in Marsascala was executed for a consideration of €3.19 million net of final withholding tax. This sale boosted the net asset value per share from €2.549 to €4.352 at the time (the latest published net asset value of the company as at December 31, 2008 is of €3.641).
This extraordinary gain led to the company distributing a special dividend of €0.2334 per share on October 9, 2008 apart from the ordinary net dividend of €0.0466 per share in respect of the year ended April 30, 2008. In the April 2008 Annual Report, the directors explained that the dividend position will be reviewed again at the half-year stage given the company's very low level of debt and healthy cash position. However, no interim dividend was declared last October despite the company's net cash balance of €1 million.
The half-year report also reveals that there were 242 Santumas shareholders as at October 31, 2008. Only 50 shareholders have a holding of over 5,000 shares each) and between them own 86.2 per cent of the total issued share capital of 1,665,176 shares. The largest shareholder is Mercury plc with a 31 per cent equity stake.
Since the listing of Santumas on the MSE five years ago, 235,940 shares were traded through the Borża mechanism with the share price climbing from €1.93 to the most recent trades effected last week, on January 20, at €3.20. This mirrors the growth in the net asset value per share from €1.93 in December 2003 to €3.641 on December 31, 2008. The share price appreciation over the past five calendar years represents a growth of 13 per cent per annum to shareholders. During the same period the performance of the MSE Share Index stood at 10.2 per cent per annum despite the very sharp setback last year.
• Rizzo, Farrugia & Co. (Stockbrokers) Ltd, RFC, are members of the Malta Stock Exchange and licensed by the Malta Financial Services Authority. This report has been prepared in accordance with legal requirements. It has not been disclosed to the issuer/s herein mentioned before its publication. It is based on public information only and is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The author and other relevant persons may not trade in the securities to which this report relates (other than executing unsolicited client orders) until such time as the recipients of this report have had a reasonable opportunity to act thereon. RFC, its directors, the author of this report, other employees or RFC on behalf of its clients have holdings in the securities herein mentioned and may at any time make purchases and/or sales in them as principal or agent. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Neither RFC nor any of its directors or employees accept any liability for any loss or damage arising out of the use of all or any part thereof and no representation or warranty is provided in respect of the reliability of the information contained in this report.
© 2008 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved.
http://www.rfstockbrokers.com
• Mr Rizzo is director of Rizzo, Farrugia & Co. (Stockbrokers) Ltd.
The company was originally formed as the Malta New Issue Investment Co. Ltd on April 29, 1963. Its name was then changed to Malta Shareholdings Ltd in May 1965 and converted into a public company with the aim of carrying on the business of a finance trust. Malta Shareholdings Ltd issued shares to the public in November 1968 with some of the public shareholders who had subscribed to some shares at the time still on the company's share register today. Shortly after the public share issue, Malta Shareholdings Ltd acquired Marsascala Development Ltd. The main asset of this fully-owned subsidiary was the Ta' Santumas plot of land in Marsascala.
In September 1978, Malta Shareholdings Ltd changed its name to Santumas Shareholdings Ltd and the objectives of the company also provided for property development, with the main property being the Santumas Estate in Marsascala.
Calpabrin Properties (Investments) Ltd merged into Santumas Shareholdings Ltd in April 1987 and Marsascala Development Ltd and Santumas Contractors Ltd then merged into Santumas Shareholdings Ltd in 1989.
On May 9, 1996 the company became licensed as a collective investment scheme by the Malta Financial Services Centre (today replaced by the Malta Financial Services Authority).
The company was registered as a public limited liability company under the Companies Act of 1995 on December 24, 1997, thereby changing its name to Santumas Shareholdings plc.
In December 2003 Santumas Shareholdings plc obtained a listing on the Malta Stock Exchange as a closed-ended collective investment scheme.
Similar to a limited liability company, a close-ended scheme has a fixed number of shares and once listed the shares become transferrable on the secondary market of the Stock Exchange. On the other hand, in an open-ended scheme, shares are created each time new money is invested and cancelled when units in the fund are redeemed by the manager. Therefore shares in an open-ended are not tradeable on the Stock Exchange and as a result the share price of an open-ended scheme reflects the net asset value of the fund while the share price of a close-ended scheme traded on the exchange is determined by the demand and supply forces in the market. The most common open-ended schemes in Malta are run by the two major banks, namely the underlying funds within the La Valette Funds Sicav plc and the HSBC No-Load Funds SICAV plc.
The financial year of Santumas runs from May 1 to April 30 and the latest published financial report covering the results for the six months ended October 31, 2008 provides details of the current underlying investment portfolio held by the scheme. This was valued at €5.8 million as at October 31, 2008. Almost 59 per cent of the portfolio is in financial assets (mainly banks and investment funds) with the balance of 41 per cent in property (primarily development land with a value of €1.3 million). During the six-month period to October 31, 2008, Santumas generated a profit after tax of €2.2 million, principally as a result of the profit of €3.5 million from the sale of investment properties.
This helped to offset the €0.7 million decline in the fair value of financial assets following the sharp correction in local and international equity markets up to October 31. The sale of property had originally been mentioned in November 2005 when Santumas had stated via a Malta Stock Exchange company announcement that "it had entered into a preliminary agreement for the sale of certain immovable property and other rights to a third party for a total gross consideration of €3.54 million". This agreement related to property in Marsascala in the vicinity of the Jerma Palace Hotel. The agreement was confirmed via another company announcement on July 25, 2008, in which Santumas reported that the sale of property in Marsascala was executed for a consideration of €3.19 million net of final withholding tax. This sale boosted the net asset value per share from €2.549 to €4.352 at the time (the latest published net asset value of the company as at December 31, 2008 is of €3.641).
This extraordinary gain led to the company distributing a special dividend of €0.2334 per share on October 9, 2008 apart from the ordinary net dividend of €0.0466 per share in respect of the year ended April 30, 2008. In the April 2008 Annual Report, the directors explained that the dividend position will be reviewed again at the half-year stage given the company's very low level of debt and healthy cash position. However, no interim dividend was declared last October despite the company's net cash balance of €1 million.
The half-year report also reveals that there were 242 Santumas shareholders as at October 31, 2008. Only 50 shareholders have a holding of over 5,000 shares each) and between them own 86.2 per cent of the total issued share capital of 1,665,176 shares. The largest shareholder is Mercury plc with a 31 per cent equity stake.
Since the listing of Santumas on the MSE five years ago, 235,940 shares were traded through the Borża mechanism with the share price climbing from €1.93 to the most recent trades effected last week, on January 20, at €3.20. This mirrors the growth in the net asset value per share from €1.93 in December 2003 to €3.641 on December 31, 2008. The share price appreciation over the past five calendar years represents a growth of 13 per cent per annum to shareholders. During the same period the performance of the MSE Share Index stood at 10.2 per cent per annum despite the very sharp setback last year.
• Rizzo, Farrugia & Co. (Stockbrokers) Ltd, RFC, are members of the Malta Stock Exchange and licensed by the Malta Financial Services Authority. This report has been prepared in accordance with legal requirements. It has not been disclosed to the issuer/s herein mentioned before its publication. It is based on public information only and is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The author and other relevant persons may not trade in the securities to which this report relates (other than executing unsolicited client orders) until such time as the recipients of this report have had a reasonable opportunity to act thereon. RFC, its directors, the author of this report, other employees or RFC on behalf of its clients have holdings in the securities herein mentioned and may at any time make purchases and/or sales in them as principal or agent. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Neither RFC nor any of its directors or employees accept any liability for any loss or damage arising out of the use of all or any part thereof and no representation or warranty is provided in respect of the reliability of the information contained in this report.
© 2008 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved.
http://www.rfstockbrokers.com
• Mr Rizzo is director of Rizzo, Farrugia & Co. (Stockbrokers) Ltd.