Last close As at 06/08/2026
GBP1.33
▲ 3.00 (2.31%)
Market capitalisation
GBP137m
Research: Investment Companies
Baker Steel Resources Trust’s (BSRT’s) recently published June 2023 NAV, reflecting the usual half yearly review of portfolio valuations, resulted in a 5.2% NAV decline versus end-May 2023 (bringing the year-to-date fall to c 18%). This fall was mainly the result of lower listed peer multiples and updated royalty models, with key individual drivers being Futura Resources (fair value down c 17% in sterling terms during June 2023), Kanga Potash (down 21%), Caledonia Mining Corporation (down 6%) and Nussir (down 11%). A major positive contributor was Cemos (revalued upwards by 9%). BSRT is trading at a 38% discount to last reported NAV.
Baker Steel Resources Trust |
Valuation headwinds reflected in June 2023 NAV |
Investment trusts |
17 July 2023 |
Analyst
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Baker Steel Resources Trust’s (BSRT’s) recently published June 2023 NAV, reflecting the usual half yearly review of portfolio valuations, resulted in a 5.2% NAV decline versus end-May 2023 (bringing the year-to-date fall to c 18%). This fall was mainly the result of lower listed peer multiples and updated royalty models, with key individual drivers being Futura Resources (fair value down c 17% in sterling terms during June 2023), Kanga Potash (down 21%), Caledonia Mining Corporation (down 6%) and Nussir (down 11%). A major positive contributor was Cemos (revalued upwards by 9%). BSRT is trading at a 38% discount to last reported NAV.
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NAV total return contribution of major holdings in H123 (pp) |
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Source: Company data, Edison Investment Research calculations; Note: *Contribution of Polar Acquisition to end-March 2023 (last available data). |
Futura fund-raising still pending
As discussed in our June note, a key potential NAV catalyst for BSRT is the outcome of the fund-raising process for Futura Resources (25% of BSRT’s NAV at end-June 2023). Management highlighted in the June monthly NAV release that ‘the success or otherwise of such financing during the third quarter of 2023 could have a material impact on the valuation of Futura’. Given that none of the pursued financing options had been completed by end-June 2023, management decided to reduce Futura’s fair value by 24% in H123, which reflects the decline in an index of listed comparable companies (the equity part of the investment), as well as lower spot and near-term forward coking coal prices (gross revenue royalty).
Cemos: Higher peer multiples and updated forecasts
The only major holding revalued upwards during the interim valuations review was Cemos, a cement producer in Morocco. The positive revaluation was assisted by higher valuations of local listed cement companies, as well as updated production and earnings forecasts for 2023 (no details with respect to the latter were shared in the announcement). As a result, Cemos now represents 29% of BSRT’s NAV at end-June 2023. For further details on recent project developments, please see our June note.
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Research: Healthcare
Oxford Cannabinoid Technologies (OCT) is focused on developing cannabinoid medicines for the treatment of pain and other indications. Lead asset OCT461201 is a synthetic, endocannabinoid system-targeting new chemical entity (NCE) being developed for the treatment of neuropathic pain associated with chemotherapy-induced peripheral neuropathy (CIPN) and visceral pain in irritable bowel syndrome (IBS). Preclinical studies have demonstrated positive early signals of efficacy in pain indications and IBS models. Patient enrolment for OCT’s UK Phase I dose-escalation and safety study of OCT461201 in healthy volunteers started in May 2023, and management believes this programme will be Phase II ready in Q3 CY23. OCT has three other active programmes in early stages of development, which involve synthetic phytocannabinoids and cannabinoid derivatives. We value OCT at £26.1m or 2.7p/share.