Last close As at 05/08/2026
GBP11.76
▲ −3.98 (−0.34%)
Market capitalisation
—
Research: Investment Companies
Ocean Wilsons Holdings’ (OCN’s) strategic review remains ongoing. Despite the review and the potential for value realisation, OCN still trades at a c 51% discount to its value, which we believe is 2,564p.
Ocean Wilsons Holdings |
Strategic options being considered |
Q323 results update |
Investment companies |
2 February 2024 |
Share price performance
Business description
Next events
Analyst
Ocean Wilsons Holdings is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||
Ocean Wilsons Holdings’ (OCN’s) strategic review remains ongoing. Despite the review and the potential for value realisation, OCN still trades at a c 51% discount to its value, which we believe is 2,564p.
Year end |
Revenue (US$m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/21 |
396.4 |
110.8 |
181.2 |
70.0 |
7.7 |
5.0 |
12/22 |
440.1 |
38.5 |
(51.9) |
70.0 |
N/A |
5.0 |
12/23e |
472.6 |
107.2 |
159.2 |
70.0 |
8.8 |
5.0 |
12/24e |
521.7 |
135.5 |
214.7 |
100.0 |
6.5 |
7.1 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Strategic review expanding and ongoing
On 12 June, OCN confirmed that it was in the early stages of a strategic review involving the company’s investment in PORT3 and that all potential strategic options would be considered. The interim statement went on to say that the review would ‘provide a platform for us to optimise our asset mix, enhance returns and drive growth in the longer term’. OCN’s November Q323 update stated that its appointed adviser had received several ‘highly conditional’ non-binding offers for OW Overseas (Investments) Limited, which is the holding company that has a 57% stake in PORT3. The company said that an update would be released in due course.
Underlying operations trade well
At the Q3 trading update, OCN confirmed that the trading value of its 57% share in Wilson Sons was worth US$679.4m, which equated to US$19.21 (£15.74) per Ocean Wilsons share. Its investment portfolio was valued at US$297.8m or US$8.42 (£6.90) per Ocean Wilsons share. The implied net asset value of OCN, including US$2.7m of cash, was US$27.71, or £22.70 per share. In the first nine months of 2023, the value of the investment portfolio increased by US$11m, or 3.7%. PORT3 has also traded well in Q3 with revenue up 8.3% to US$356.4m and EBITDA up 14.2% to US$153.1m.
Valuation: OCN trades at a c 51% discount
To value OCN we have taken the last published equity value (30 June 2023), excluding minorities, of US$565.2m, or £444.1m. We have then subtracted the equity value at the same date of OCN’s 57% stake in PORT3 of £206.2m, leaving an equity value of OCN (ex PORT3) of £237.9m. We have then added back the current market value of OCN’s 57% stake in PORT3 and arrived at a market value of OCN of £906.7m (or 2,564p/share), against a current market capitalisation of £443.8m (1,255p/share). This implies that OCN trades at a 51.1% discount to its market price value. Our forecasts have been updated to reflect the Q323 results.
Huge discount remains despite 2023 bounce
Despite a c 50% bounce in OCN’s share price since 9 June 2023, we believe the shares still trade at a c 51% discount to our valuation of 2,564p/share. A resolution to the strategic review currently being undertaken may crystalise the inherent discount in the share price versus its valuation.
Sum-of-the-parts valuation implies significant upside
OCN is an investment company that has held a 57% strategic stake in the Brazilian-listed port services company Wilson Sons (PORT3) for many years. It also holds a portfolio of mainly listed, but some unlisted, investments.
In Exhibit 1 we attempt to value OCN. Firstly, we took the last published equity value (30 June 2023), excluding minorities, of OCN of US$565.2m, or £444.1m. Secondly, we subtracted the equity value at the same date of OCN’s 57% stake in PORT3 of £206.2m, leaving an equity value of OCN (ex PORT3) of £237.9m. Finally, we added back the current market value of OCN’s 57% stake in PORT3 and arrived at a market value of OCN of £906.7m (or 2,564p/share) against a current market capitalisation of £443.8m (1,255p/share). This implies that OCN trades at a 51.1% discount to its market price value despite the bounce in the share price this year, from a low of 820p on 9 June to the current level. This calculation does not include any potential increase in the value of the investment portfolio since the last published date of 30 June, nor any additional profit accrued from its holding in PORT3 since that date.
The PORT3 share price has bounced in recent months following the announcement that OCN is considering its strategic options relating to the PORT3 position within the group. PORT3 is trading on a 2023 EV/EBITDA multiple of c 10.0x, which is close to the average multiple of a group of international peers (FY23 average of 10.5x) and so we consider this to be relatively conservative given the M&A upside of this particular asset at the moment and the significant growth that PORT3 has demonstrated throughout 2023. For reference, we estimate that each 0.5x of EV/EBITDA ratio added raises the total value of OCN by £44.3m or 125p/share.
Exhibit 1: Market value of Ocean Wilsons
Entity |
Currency m |
(p/share) |
|
Ocean Wilsons (OCN) |
|||
Total equity/NAV, ex minorities, (US$m - 30 June) |
565.2 |
||
Total equity/NAV, ex minorities, (£m - 30 June) |
444.1 |
||
Wilson Sons (PORT3) |
|||
Total equity/NAV (BRLm - 30 June) |
2,278.9 |
||
Total equity (100%, £m - 30 June) |
361.7 |
||
Minus 57% of equity, £m - 30 June |
(206.2) |
||
Equity value of OCN, ex PORT3 equity value (£m) |
237.9 |
||
Add, 57% of Wilson Sons market cap (£m) |
668.8 |
||
Total value of Ocean Wilsons (OCN) at market price (£m) |
906.7 |
2,564 |
|
Current market value of Ocean Wilsons (£m) |
443.8 |
1,255 |
|
OCN discount to market value |
-51.1% |
-51.1% |
Source: Edison Investment Research
Another way to highlight OCN’s value (based on the same figures) is to look at the current value of OCN’s 57% stake in PORT3 (£668.8m) and compare it to the current value of OCN (£443.8m). In effect, investors would get a controlling stake in PORT3 at a one-third discount and would receive the rest of OCN’s assets for free.
Exhibit 2: Financial summary
US$m |
2019 |
2020 |
2021 |
2022 |
2023e |
2024e |
2025e |
||
31-December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
|||||||||
Revenue |
|
|
406.1 |
352.8 |
396.4 |
440.1 |
472.6 |
521.7 |
584.0 |
EBITDA |
|
|
132.0 |
131.5 |
158.8 |
176.8 |
186.6 |
214.3 |
238.7 |
Normalised operating profit |
|
|
69.3 |
70.2 |
97.4 |
112.4 |
115.3 |
143.0 |
167.4 |
Share-based payments |
(0.4) |
(0.1) |
(0.4) |
(0.3) |
(0.3) |
(0.3) |
(0.3) |
||
Reported operating profit |
68.9 |
70.0 |
97.0 |
112.1 |
115.0 |
142.7 |
167.1 |
||
Net Interest |
(21.7) |
(21.6) |
(26.1) |
(26.1) |
(28.1) |
(28.3) |
(22.9) |
||
Joint ventures & associates (post tax) |
0.6 |
(4.1) |
(5.0) |
3.2 |
12.1 |
12.1 |
12.1 |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
82.9 |
74.7 |
110.8 |
38.5 |
107.2 |
135.5 |
165.2 |
Profit Before Tax (reported) |
|
|
82.5 |
74.6 |
110.4 |
38.1 |
106.9 |
135.2 |
164.9 |
Reported tax |
(21.5) |
(26.6) |
(27.9) |
(26.7) |
(19.2) |
(24.3) |
(29.7) |
||
Profit After Tax (norm) |
61.4 |
48.1 |
82.8 |
11.8 |
87.9 |
111.2 |
135.5 |
||
Profit After Tax (reported) |
61.0 |
48.0 |
82.5 |
11.5 |
87.6 |
110.9 |
135.2 |
||
Minority interests |
(14.2) |
(9.3) |
(18.8) |
(30.2) |
(31.6) |
(35.3) |
(39.5) |
||
Net income (normalised) |
47.2 |
38.8 |
64.1 |
(18.3) |
56.3 |
75.9 |
95.9 |
||
Net income (reported) |
46.9 |
38.7 |
63.7 |
(18.7) |
56.0 |
75.6 |
95.6 |
||
Basic average number of shares outstanding (m) |
35 |
35 |
35 |
35 |
35 |
35 |
35 |
||
EPS - basic normalised (c) |
|
|
133.53 |
109.83 |
181.19 |
(51.88) |
159.24 |
214.66 |
271.32 |
EPS - diluted normalised (c) |
|
|
133.53 |
109.83 |
181.19 |
(51.88) |
159.24 |
214.66 |
271.32 |
EPS - basic reported (c) |
|
|
132.49 |
109.47 |
180.15 |
(52.82) |
158.39 |
213.81 |
270.47 |
Dividend (c) |
70.00 |
70.00 |
70.00 |
70.00 |
70.00 |
100.00 |
125.00 |
||
Revenue growth (%) |
14.4 |
(0.2) |
(28.9) |
21.0 |
50.9 |
(1.8) |
0.0 |
||
EBITDA Margin (%) |
32.5 |
37.3 |
40.1 |
40.2 |
39.5 |
41.1 |
40.9 |
||
Normalised Operating Margin |
17.1 |
19.9 |
24.6 |
25.5 |
24.4 |
27.4 |
28.7 |
||
BALANCE SHEET |
|
||||||||
Fixed Assets |
|
|
981.0 |
861.1 |
861.8 |
931.3 |
953.5 |
973.7 |
993.9 |
Intangible Assets |
36.4 |
30.4 |
28.3 |
27.8 |
41.3 |
57.7 |
74.1 |
||
Tangible Assets |
627.0 |
579.1 |
563.1 |
589.6 |
581.3 |
573.0 |
564.7 |
||
Investments & other |
317.6 |
251.6 |
270.5 |
313.8 |
330.9 |
343.0 |
355.1 |
||
Current Assets |
|
|
460.6 |
492.8 |
518.5 |
470.0 |
493.2 |
546.0 |
614.4 |
Debtors |
56.7 |
47.8 |
59.4 |
67.1 |
70.9 |
78.3 |
87.6 |
||
Cash & cash equivalents |
378.3 |
422.5 |
433.8 |
368.4 |
387.8 |
433.2 |
492.3 |
||
Other |
25.5 |
22.5 |
25.4 |
34.5 |
34.5 |
34.5 |
34.5 |
||
Current Liabilities |
|
|
(115.7) |
(124.3) |
(131.3) |
(153.2) |
(151.3) |
(163.0) |
(176.8) |
Creditors |
(56.6) |
(41.1) |
(58.5) |
(58.3) |
(63.8) |
(70.4) |
(78.8) |
||
Tax and social security |
(0.5) |
(6.3) |
(8.1) |
(10.3) |
(2.9) |
(8.0) |
(13.3) |
||
Short term borrowings |
(36.6) |
(58.7) |
(45.3) |
(59.9) |
(59.9) |
(59.9) |
(59.9) |
||
Other |
(21.9) |
(18.2) |
(19.4) |
(24.7) |
(24.7) |
(24.7) |
(24.7) |
||
Long Term Liabilities |
|
|
(540.1) |
(485.9) |
(465.4) |
(493.9) |
(493.9) |
(493.9) |
(493.9) |
Long term borrowings |
(298.3) |
(284.0) |
(256.3) |
(262.0) |
(262.0) |
(262.0) |
(262.0) |
||
Other long term liabilities |
(241.7) |
(201.9) |
(209.1) |
(231.9) |
(231.9) |
(231.9) |
(231.9) |
||
Net Assets |
|
|
785.9 |
743.7 |
783.7 |
754.1 |
801.6 |
862.7 |
937.6 |
Minority interests |
(216.1) |
(187.9) |
(190.0) |
(199.5) |
(199.5) |
(199.5) |
(199.5) |
||
Shareholders' equity |
|
|
569.8 |
555.8 |
593.7 |
554.6 |
602.1 |
663.2 |
738.1 |
CASH FLOW |
|||||||||
Op Cash Flow before WC and tax |
123.8 |
109.3 |
143.9 |
75.9 |
158.9 |
182.2 |
206.5 |
||
Returns on investment and other |
(34.7) |
(33.4) |
(49.5) |
47.9 |
(11.0) |
(12.2) |
(12.2) |
||
Working capital |
10.4 |
21.6 |
1.0 |
(22.6) |
0.5 |
(2.6) |
(3.3) |
||
Exceptional & other |
(0.4) |
11.9 |
9.1 |
(4.7) |
(13.5) |
(11.8) |
(11.8) |
||
Tax |
(23.3) |
(29.1) |
(27.3) |
(22.1) |
(26.7) |
(19.2) |
(24.3) |
||
Other |
59.6 |
48.1 |
54.0 |
52.7 |
47.3 |
52.7 |
52.6 |
||
Net operating cash flow |
|
|
135.3 |
128.4 |
131.3 |
127.2 |
155.6 |
189.1 |
207.5 |
Capex |
(86.4) |
(58.2) |
(48.4) |
(63.9) |
(61.6) |
(61.6) |
(61.6) |
||
Acquisitions/disposals |
23.0 |
(13.5) |
(13.5) |
57.4 |
(28.0) |
0.0 |
0.0 |
||
Net interest |
(29.0) |
(22.7) |
(25.2) |
(30.1) |
(28.1) |
(28.3) |
(22.9) |
||
Equity financing |
21.1 |
22.7 |
(40.1) |
3.0 |
(6.0) |
(6.0) |
(6.0) |
||
Dividends |
(42.2) |
(42.2) |
(42.6) |
(49.9) |
(49.7) |
(49.8) |
(60.4) |
||
Net Cash Flow |
21.9 |
14.5 |
(38.5) |
43.7 |
(17.9) |
43.4 |
56.6 |
||
Opening net debt/(cash) |
|
|
263.5 |
266.0 |
279.4 |
273.0 |
246.2 |
257.0 |
213.6 |
FX |
(3.2) |
(20.2) |
3.8 |
3.5 |
7.0 |
0.0 |
0.0 |
||
Other non-cash movements |
(21.2) |
(7.7) |
41.1 |
(20.3) |
0.0 |
0.0 |
0.0 |
||
Closing net debt/(cash) |
|
|
266.0 |
279.4 |
273.0 |
246.2 |
257.0 |
213.6 |
157.1 |
|
Source: Company accounts, Edison Investment Research |
|||||||||
|
|
Investment Companies
Research: TMT
Vection Technologies’ H124 activity report shows sustained momentum, with the group delivering 37% y-o-y revenue growth to A$11.9m. Total contract value (TCV) of A$16.7m was up 67% y-o-y, providing strong revenue visibility for the rest of FY24. As with Q1, we believe growth has been driven by the expansion of existing low-margin, one-off transactions into large multi-year deals. Expanding deals, rather than relying on new wins, underpin the opportunity for operationally geared growth, with management expecting to see the benefits of recent cost reduction measures in H2.